Delayed by covid, Riverside Wharf seeks new city deadline

The Covid-19 pandemic has led to a delay in the construction of a major mixed-use project, Riverside Wharf, from a public-private partnership involving the City of Miami.

That delay has triggered the need to extend the deadline to the private development company, a move expected to be considered today (1/13) by the city commission.

The meeting agenda includes a resolution extending the deadline to Riverside Wharf LLC, whose ambitious project includes a luxury hotel and marina on the Miami River in Downtown Miami.

The wording of the resolution has the city commission “finding that the Novel Coronavirus Disease 2019 pandemic is a force majeure event that has delayed the performance of Riverside Wharf, LLC’s … obligation to obtain permits for the proposed development of the City-owned property located at 236 and 298 Southwest North River Drive.”

Force majeure is a legal term commonly found in contracts that frees both parties from obligation if an extraordinary event prevents one or both parties from performing. These events must be unforeseeable and unavoidable, and are considered “an act of god.”

The riverfront property is owned by the city and was leased to Riverside Wharf LLC on May 16, 2017. The lease was approved by voter referendum in 2016.

A new provision of the city charter provides that “[a]ny lease for the development of improvements of city-owned property which has been approved by voter referendum shall require additional voter referendum approval for a development on city-owned property where the developer has not obtained the necessary building permits within four years of the effective date of the lease.”

The charter also provides that the deadline “shall not be applicable when the delay in the performance of any obligation is as a result of force majeure, or litigation that questions the validity of the vote, or the city commission action to place the question for referendum, then the performance of such obligation shall be extended by the length of the delay.”

A background memo notes on March 11, 2020, the World Health Organization declared Covid-19 a pandemic and the city declared a state of local emergency due to the pandemic on March 12, 2020.

The effective date of the lease is May 16, 2017, and the deadline for obtaining the necessary building permits expired May 16, 2021. The tenant has not yet obtained the necessary building permits for the project.

Riverside Wharf LLC submitted information concerning the manner in which Covid-19 caused force majeure delays, including “that the preparation and finalization of the plans necessary for permit approvals was significantly impaired by office closures, staffing issues, and safety considerations resulting from Covid-19, as well as the industry-wide impacts of Covid-19, which affected the design of the proposed development,” the memo reads.

If approved, the resolution would authorize a force majeure extension of the deadline equal to 18 months for the tenant to obtain necessary building permits on or before Nov. 16, 2022, and the lease would also require an amendment to reflect updated deadlines for plan submittal, construction commencement, and construction completion.

Expected to take three years to complete, Riverside Wharf is to be a 200,000-square-foot, two-tower development anchored by a 165-room Dream Miami luxury hotel.

The complex is to feature the rebirth and expansion of The Wharf Miami, 16,000 square feet of restaurants, a 2,000-square-foot event hall, a 30,000-square-foot nightclub and rooftop day club, and a private marina capable of accommodating megayachts.

Developed by Alex Mantecon of MV Real Estate Holdings and Driftwood Capital, the 10-story, $185 million mixed-use development is to rise on the current site of The Wharf Miami, south of the First Street bridge.

The 1.5-acre assemblage is the culmination of the vision established in the city’s 2016 voter referendum approval for the development of food and beverage establishments along the waterfront.