Hyatt Regency redevelopment to net $25 million for affordable housing

In November, voters in the City of Miami will determine the fate of a new plan to revive a crucial city-owned property in the heart of downtown.
If approved, the sweeping development would bring three new towers to the riverfront, including a new hotel and an improved public walkway along the Miami River.

Near the end of an exhaustive daylong meeting July 28, the Miami City Commission voted 4 to 1 in approving two resolutions related to the new Hyatt hotel proposal and extended lease, and the ballot wording for the special election Nov. 8.

Commissioner Joe Carollo cast the only no vote, citing serious concerns about increasing traffic in an already-tangled and congested area.

Mr. Carollo, along with other commissioners, also pushed for a much more substantial financial contribution from the private developer into city coffers to help build critically needed affordable housing.

The original deal worked out between the City of Miami and owner-developer HRM Owner LLC called for the company to make a contribution of $5.4 million to the city’s Affordable Housing Trust Fund.

After 11th hour talks, and the urging of the city commissioners, the developer agreed to make it a $25 million contribution.

The City of Miami owns the land that is home to the aging and dated James L. Knight Convention Center and its private partner next door, the Hyatt Regency Hotel.

The 4-to-1 vote approved two resolutions.

The first has the commission submit to voters a proposed amendment to the city charter to authorize the commission by four-fifths vote to waive competitive bidding and execute an amended lease with existing tenant HRM Owner LLC to provide a new 99-year term and expand the lease to include the existing Hyatt Hotel and James L. Knight Convention Center property at 298, 300, 330 and 400 SE Second Ave.

The new lease would provide for redevelopment to include at least a 615-key hotel, 188,000 square feet of convention/meeting space, 1,500 residential apartments, parking, additional public open space, and an expanded public riverwalk, all at no cost to the city.

The second resolution directs the city attorney to prepare the proposed amendment to the charter and approve the ballot language for a special election Nov. 8.

The charter requires that the sale or lease of waterfront property owned by the city must be approved by voters.

With a couple of late tweaks made July 28, the ballot proposal now asks city voters:

“Shall Miami’s Charter be amended authorizing city to amend existing riverfront Hyatt lease with HRM Owner LLC, including adjacent Knight Center property, extending to 99 years, waiving bidding, and requiring, at no cost to city:

■Public riverfront greenspace;

■New Hyatt Hotel, additional parking, convention space, and apartments;

■Increased annual rent to city from $250,000 to minimum $2,500,000 or 2.5% of gross revenues, whichever greater;

■Minimum $25 million affordable housing contribution;

■Expanded public riverwalk?”

For years city officials have considered plans designed to improve vehicular traffic flow in the area and an improved pedestrian experience including better public access to the river. Those plans were not pursued.

A background memo details the history of the site.

The city entered into a long-term lease on Sept. 13, 1979.

On Oct. 28, 2021, the city commission, in anticipation of pursuing a redevelopment or significant renovation, authorized assignment of the original lease from Hyatt Equities LLC to HRM Owner LLC.

The original lease has a remaining term, including renewals, of about 50 years, and would require additional renovations.
Last October, city and Hyatt officials announced that Hyatt was bringing in a new partner.

The city owns the 4.2-acre riverfront site on Second Avenue, adjacent to the Brickell Avenue Bridge.

In 2018, Hyatt Equities LLC wanted an extended lease in order to build a new Hyatt Regency hotel and two residential towers, a plan that included demolishing the convention center.

Hyatt officials met some resistance, and commissioners pushed for a better offer.

Time ran out in the summer of 2018 and the matter never made it onto a city ballot, required by charter for lease of city-owned waterfront properties.

City officials reported then that it was Hyatt that pulled the item from consideration.

“The item was pulled by Hyatt so that Hyatt could continue to work on plans, with their architect, and work on the actual lease agreement, and the development process (including their own selection process for a developer, a formal development order, an operating agreement with their future development partner, etc.),” said city representatives.

Last fall, commissioners approved a request from Hyatt to assign its interest in the lease to a new entity, HRM Owner LLC, indirectly be owned 50% by a subsidiary of Hyatt Hotels Corp. and 50% by a subsidiary of KA Platform Holdco LLC (Gencom).

A document explaining the joint venture said, “Hyatt Equities is seeking to redevelop the Hotel and the Convention Center into a world-class, mixed use project which will include one or more high-end, Hyatt branded hotels, and potentially multi-family housing and/or retail components, such components to be determined.

“To facilitate a potential redevelopment, Hyatt Equities has been seeking a partnership with an experienced hotel and hospitality focused developer to help pursue, finance and facilitate the potential redevelopment project.

“After discussions with several potential developers, Hyatt has selected the Miami based investment firm, Gencom,” it reads.

The new development will be called Miami RiverBridge, and the privately funded redevelopment is expected to cost at least $1.5 billion.