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Front Page » Top Stories » Sonesta Mikado Hotel To Start Work In June Once 16 Million Rebate Is In Hand

Sonesta Mikado Hotel To Start Work In June Once 16 Million Rebate Is In Hand

Written by on May 14, 2009

By Yudislaidy Fernandez
Construction on the $100-plus million, 36-story Sonesta Mikado Hotel in the Omni area will start in June, says Miami developer Tibor Hollo — right after a city vote to give the hotel a $16 million tax rebate.

The mixed-use hotel comes before the Omni Community Redevelopment Agency next week, when Miami commissioners acting as the agency’s board are to decide on the rebate of tax increment financing.

The Zyscovich Architects-designed hotel, at 1701 NE 4th Ave., is to have about 252 hotel rooms and 120 suites managed by Sonesta, said Mr. Hollo, chairman and president of Florida East Coast Realty.

Mr. Hollo said he hopes the luxury project — with amenities such as a 20,000-square-foot, full-service spa, upscale restaurant and about 40,000 square feet slated for medical offices — becomes a catalyst to jump start development downtown.

"Nothing is moving," he said. "You used to see hundreds of cranes and now you see none."

An estimated 300 people are to be hired in the hotel — to be completed in 22 months — and another 600 are to do construction, he said.

"For construction, we’ll be hiring all local contractors. We are not hiring outside," he said.

The project’s value and job creation are some elements that could make it eligible to receive a rebate from the Community Redevelopment Agency.

Executive Director Jim Villacorta said the agency has long thought of rebates as an incentive for developers to build within the agency’s boundaries, encouraging them to build projects faster and get them on the tax roll.

The redevelopment agency fills its coffers by setting a base value for the area’s real property and receiving for agency use the tax increment above the base level as property values rise.

"We are not giving them money up front," Mr. Villacorta said. "If they don’t build, they don’t get anything."

Last month, the agency reached its first tax rebate agreement with Miami developer Ignacio Garcia Du-Quesne, who plans a $200 million retail and office project known as Bayview Market, also in the Omni area. He plans to begin work next year, he says.

Bayview Market is eligible for a 50% tax rebate once completed, totaling up to $20 million.

Mr. Hollo says he is awaiting the redevelopment agency’s May 18 vote before he can begin construction on the multi-million dollar project, for which he says he has financing in place.

Agency officials have voiced interest in the project because of the hospitality jobs it would yield and the medical tourism it could attract to the Omni area.

But inherited debt already limits the agency’s funds.

The agency spent close to half of the Omni redevelopment district’s $14.5 million budget this year to pay off construction loans the city inherited from Miami-Dade County for the Adrienne Arsht Center for the Performing Arts. That contribution is to continue annually.

The upscale Asian-themed hotel is to be managed by Boston-based Sonesta, a company that operates a hotel in Coconut Grove and formerly owned one in Key Biscayne.

"It will be a very lovely urban hotel, resort," said Stephanie Sonnabend, president and CEO of Sonesta International Hotels Corp., "something the Sonesta has been involved in for many years in Coconut Grove."

Other amenities include a recreation deck, bar and grill, and 14,000 square feet designed for meetings.

With very little development rising in Miami, she said, the company is optimistic about this venture with a longtime developer.

"If anyone can do this, it is Tibor Hollo," she said. "He has such a strong development record." Miami-based Florida East Coast Realty says it has built more than 55 million square feet of developments in the past five decades.

Said Ms. Sonnabend: "We really see this [area] as a growing and exciting destination part of Miami."