Major Watson Island developments’ leases advance

Miami is drafting ballot language to put the future development of Watson Island to a public vote in November after commissioners were assured two deals will include an enhanced, city-wide benefits package.

On July 11, the city commission unanimously authorized that two charter amendments be drafted and possibly proposed to voters this fall. If a majority of residents approve in November, two new projects, including luxury condo towers, office space and a 13.3-acre public waterfront park, will receive the green light to rise on either side of Watson Island.

Initially, on June 27, the commission voted 4-1 to defer the two proposed amendments as Chairwoman Christine King requested an enhanced community benefits package that would divide revenue from the projects among all districts, particularly the most disadvantaged.

“I have worked with both teams, and I believe that we have a significant community benefits package carved out where the districts will receive money for affordable housing,” Ms. King started the discussion at last week’s meeting.

Commissioner Damian Pardo, the legislation’s sponsor and representative for District Two where the island is located, detailed myriad public benefits that would come as part of the development deals. He started with the portion of Watson Island that lies east of the MacArthur Causeway.

“The current situation is a lease with ESJ Capital. It has the Jungle Island theme park, Joia beach, the ballroom event space, and it has the right to expand the private theme park and build a 300-room hotel and extend its lease to 2114,” Mr. Pardo said.

The proposed charter amendment would replace that lease with an agreement with Ecoresiliency, a partnership between Terra Group and ESJ Capital. According to Mr. Pardo, the city would sell 5.4 acres at fair market value, approximately $110 million, and the developers would pay the city up front for the cost of the park to be built on the remaining acreage.

“This is the biggest piece of this transaction … it returns the majority of land to the city, which is 13 acres as a world-class public waterfront park, including a public beach and parking garage. The park is exceptional. It has probably the best resiliency features I’ve seen out there,” Mr. Pardo said.

“The group would construct the park for approximately $37 million at its cost and carry the maintenance cost, which is about $2 million a year, plus a 3% increase going forward. The 5.4 acres would be developed with two 300-condo towers,” he continued. “The model they’re proposing here is a regenerative model that takes stormwater, which is usually a liability and usually very difficult to deal with, and makes it an asset in terms of its filtration.”

The second charter amendment would update development plans proposed by BH3 Management for the west side of Watson Island and alter the master development agreement for the 10.8-acre Flagstone Island Gardens site at 888 MacArthur Causeway.

The proposal would extend the lease with BH3 from 75 to 99 years and change the form of ownership from timeshares to condominiums. It also seeks approval to use portions of the lease space for co-working offices or similar uses.

City Manager Arthur Noriega noted that the items before the commission only requested the law department to draft the ballot language. “So, you don’t have an agreement before you, per se. That’ll come later,” said Mr. Noriega.

“We haven’t solidified the deal, but this is what we’re working with. I’m sure we’ll tweak it before it has to go before the voters,” Ms. King said about the anticipated community benefits package.

“What happens with a lot of these projects is, first, the voters will vote whether they want us to proceed with these two items in terms of the referendum, and at that point, we’re going to do the deep dive on the agreements,” Mr. Noriega added. “We’re doing a lot of that already as a preamble, but that’s when the final ingredients will get placed into the agreements, especially from a public benefits perspective.”

“In my opinion, at last, we are going to have a comprehensive development on Watson Island because we have been very unlucky with the actors that we have picked to develop that valuable piece of land,” Commissioner Manolo Reyes expressed. “This development is not only to benefit people that live on Watson Island. The community is going to have a park. They’re going to have restaurants and a place [to] come and spend the afternoon or spend the whole day with their family,” he said.

“We’re doing everything that we can to tick all of the boxes that are important to our constituents: resiliency, preserving our bay, addressing affordable housing in the entirety of the city of Miami, getting green space, park space.” Ms. King said.

Once ballot language is drafted, the commission must approve it and then voters will decide in November whether the projects come to fruition.