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Front Page » Business & Finance » Palmetto Bay grand plan reduces scale with new team

Palmetto Bay grand plan reduces scale with new team

Written by on December 24, 2019
Palmetto Bay grand plan reduces scale with new team

Palmetto Bay has resumed talks with real estate firm NAI Miami, the second-ranked proposer on a project to redevelop the village’s downtown area, after its first choice abruptly pulled out of negotiations.

Village council members voted unanimously Nov. 4 to reconsider a proposal from NAI and terminate dialogue with first-ranked i3 Interests LLC, whose unsolicited $72 million project proposal in 2018 sparked a bid request by the municipality.

NAI, the only other respondent to the request, is to present updated plans to the village by February and begin talks with a task force the council created to negotiate with i3, Mayor Karyn Cunningham said.

“I think the presentation will look a little different than what they originally submitted,” she told Miami Today.

Compared to i3’s proposal, NAI’s first bid to the village was modest. Plans from i3 included a three-tier entertainment center housing a movie theater, an expanded village hall, mid-range hotel, parking garage, senior housing, retail, restaurants and public space.

NAI’s $14 million proposal, conversely, would have required the village to take on debt, omitted costs for a hotel and had no entertainment, senior housing or village square pieces.

But according to NAI principal Josh Rodstein, his firm’s plan was and remains more realistic.

“What [i3] proposed for this site was putting 10 pounds in a five-pound bag,” he said. “When all was said and done, you wouldn’t be happy with the project. There were some components we thought [would] fail.”

Mr. Rodstein said his firm’s plan includes more on-street parking, which would benefit surface-level retail planned for the area. He talked of a 270-space garage with 40 or so apartments built above it for seniors and an up to 5,000-square-foot facility nearby with retail and dining.

NAI also has several parties interested in developing the hotel part, he said – but the idea for a movie theater? Overkill.

“Putting an entertainment facility there was just creating way too much activity in the area for parking and the like, just made it too difficult,” he said. “Our thought was you’re trying to put a little too much on approximately four, maybe five acres.”

While NAI’s solution “won’t be nearly as glamorous or unique as the i3 project,” Councilman David Singer said, something must be done to redevelop the village’s center.

“We have a downtown area that’s blighted and needs improvement,” he said. “It’s an area needed by the residents who have been calling for entertainment, restaurants and walkability for years, and it’s never gotten the attention it deserves.”

Talks with i3 all but died Oct. 7 when the firm’s principal, Rene Joubert, sent an email to the village expressing displeasure over hearing that Village Manager Ed Silva would exit his position six months earlier than his contract with the municipality provided.

Upon learning that Mr. Silva was “being terminated,” Mr. Joubert wrote, the firm’s “understanding of and confidence in the village’s plan to proceed” was irrevocably damaged.

“We are very disappointed to get to this point as we have spent many hours and days cultivating a plan and, even more importantly, a relationship of trust with many residents and the council,” he wrote. “This termination, after all of these months of work and establishing a path forward, unfortunately creates uncertainty that we aren’t able to navigate.”

By early October, i3 had spent upwards of $100,000 on planning, design and other preliminary expenses related to the project, Mr. Singer and Vice Mayor John DuBois said.

“I would be shocked – floored – if they ever went to Palmetto Bay again,” Mr. Singer said. “I think they learned that Palmetto Bay is not the most friendly council [with which] to do development.”

Ms. Cunningham, Mr. DuBois and Councilman Patrick Fiore said that while Mr. Silva’s pending departure was indeed informed by the council’s majority wishes, he wasn’t terminated but had resigned, effective Jan. 15, and would receive a severance package of about $60,000 plus some benefits.

Mr. Singer cast the sole “no” vote, but he wasn’t alone in opposing the decision.

“I made the argument for him to finish his contract,” Mr. Fiore said. “We’re at a critical juncture [and] need a continuous hand at the helm. Since the contract wasn’t renewable, we had plenty of time to search for a new manager and didn’t have to pay any severance.”

But paying a severance now could help the village avoid upheaval in leadership during its next budgeting process in June, the same month Mr. Silva’s contract would have otherwise expired, Ms. Cunningham said.

“How do you, right in the process of that, plug in a new position?” she said. “Personally, I’m ready to move in a different administrative leadership direction.”

Former Palmetto Bay Police Commander Greg Truitt will serve as interim village manager.

Mr. DuBois, whom Ms. Cunningham appointed as her liaison to the task force, said that Mr. Joubert told him in a follow-up meeting that while Mr. Silva’s discontinued involvement in the process was jarring to the firm, it wasn’t the only reason i3 Interests withdrew.

Another reason for i3’s sudden trepidation, Mr. DuBois said, was due to a move by village resident and task force member Don Waters, whom he described as “a heavy-duty real estate developer very familiar with structural issues.”

In one of just two meetings the task force held since its July 15 creation (and the only one to establish quorum), he said, Mr. Waters submitted to i3 an outline for a business relationship that deviated in parts from traditional public-private arrangements.

“It suggested a pure land lease with no risk to the village, and i3 would basically pay us monthly rent it would then use for the project, which – regardless of where the project could have ended up, was kind of an aggressive opening bid on our part,” Mr. DuBois said. “That’s not to say they were inflexible, but that was the first red flag that came up for i3 that this wasn’t necessarily going to be what they thought.”

The idea that a multimillion-dollar deal could fall through because one person was no longer involved, he said, was ridiculous.

“You don’t do a $60 million deal contingent on one person,” he said. “There’s plenty of bench depth, and business people don’t’ take that kind of risk.”

“It’s unfortunate when you have a lot of people take a shot at us as a council, blaming it on one termination – resignation of the manager,” he said. “The manager, at the end of the day, does what the council wants. If the council says we like the project, make it work, regardless of who’s in that seat, their job is to make it work.”

Mr. Silva, Councilwoman Marsha Matson, NAI Miami and i3 Interests did not respond to requests for comment.

7 Responses to Palmetto Bay grand plan reduces scale with new team

  1. Jerry Johnson

    December 25, 2019 at 3:11 pm

    I agree with the premise of the article that the original i3 proposal was too aggressive for the current (dis-functional?) Village of Palmetto Bay Council. Task Force Chairman Mr. Don Waters’s proposal of a land lease was brilliant and is what killed the i3 deal, not Village Manager Silva’s (forced?) resignation. Mr. Waters’s proposal protected the Village from an overly aggressive developer. But bottom line the Village should NOT give up it’s valuable land to any developer until the Village comes to its senses and begs the County to complete the traffic grid to remove the current traffic bottlenecks within the Village that have directly created the current traffic angst that affects all County residents, and lack of appreciation of property values of certain cut thru area within the Village. The Village has been complicit in wasting $15,000,000.00 that was to be used or has already been spent on infrastructure improvements(?) within the Village directly because of past and present Councils and the current District 8 Commissioner’s nixing of the County’s repeated requests for grid completion. The Village also has to solve the Downtown Urban Village modifications they have been working on for two years before they even consider approving any major developments.

  2. Yesid

    December 26, 2019 at 8:37 am

    Se merece un remodelación para beneficio de la comunidad, lo más importante pensar en los niños y las personas de de juventud avanzada.

  3. Mercedes Fuentes

    December 26, 2019 at 8:51 am

    It looks like the developer made the right decision to pull out. Better to limit one’s loss to $100,000 than risk everything on what appears to be a very corrupt local government.

  4. David Singer

    December 26, 2019 at 11:39 am

    Jerry Johnson I spoke to I3. The reason they withdrew their request was directly associated with the Village Managers termination. They didn’t have any faith in the Council and didn’t want to waste anymore money. Now unless you spoke to I3 directly all other opinions are just strictly conjecture.

    David Singer

  5. Jerry Johnson

    December 26, 2019 at 12:35 pm

    Had the land lease proposal been financially viable to i3 and its lenders, i3 would not have pulled out. To insinuate/suggest i3 may have had a side agreement with the Village Manager is not fair to the Village Manager and seems to invite controversy.

  6. Dawson Allen

    December 30, 2019 at 1:06 am

    The senior housing is a good idea. I’ve seen senior citizens sleeping in cars in PB and CB. It makes me feel ashamed that a technology called “house” that’s been around for tens of thousands of years can be so difficult for an advanced civilization to build because we don’t want to walk 40 yards to our parked cars.

  7. Kevin Crowder

    January 3, 2020 at 5:57 pm

    This is what happens when local governments not experienced in P3 try to do it themselves