Towering Hyatt Proposal Heads To Miami Commission

Posted on 27 July 2022 by Law360

Plans to replace Miami’s aging downtown convention center and the neighboring Hyatt Regency hotel with a three-tower development featuring a new Hyatt hotel, expanded meeting space and more than new 1,800 apartments alongside the Miami River could take a big step forward on Thursday.

The Miami City Commission is slated to decide whether to put a question on the Nov. 8 general election ballot seeking voters’ permission to move forward with the no-bid proposal and an amended lease of the city-owned land under both of the current buildings, which both opened in 1982.

Chicago-based Hyatt Hotels Corp. and Gencom, a Miami-based real estate investment and development firm, have said they plan to invest more than $1.5 billion in the so-called Miami Riverbridge proposal with no request for public subsidies.

Their plans call for two 61-story towers and a third supertall tower rising from a podium featuring about 190,000 square feet of Class A meeting space, 50% more than in the current James L. Knight Center, according to the developers.

In a statement announcing the plans earlier this year, Phil Keb, executive vice president of development at Gencom, said the project’s “privately financed upgrades will help ensure the Hyatt hotel site remains a critical economic engine for decades to come, while unlocking benefits in the form of new public space along the Riverwalk, improved access, upscale housing, and increased revenue for the city.”

If approved, towers one and two will include 682 apartments, a 615-room Hyatt Regency and 264 serviced apartments, according to the proposal. A skybridge connecting those towers would feature an upscale restaurant 700 feet above the city’s downtown. The third tower, expected to be one of Miami’s tallest, would include 860 more apartments. The plans also include 12,000 square feet of food and beverage and retail space, 1,100 parking spaces and 20,000 square feet of coworking space in the podium.

The design opens up more than 50,000 square feet of new public space connecting to a new 480-foot stretch of the Riverwalk, the companies said. Access to the site, which sits beside the busy Brickell Avenue drawbridge, will be greatly improved through a large arrival and drop-off area within the property’s footprint, as well as an upgraded covered pedestrian bridge connecting to the elevated Metromover tram’s Knight Center Station, according to the proposal. The developers said they also plan to investigate having a ferry dock at the complex.

According to Bernardo Fort Brescia, co-founder of the Arquitectonica architecture firm that designed the Riverbridge, the proposed project site “represents a nexus between the Brickell Financial District and the Central Business District, and it sits at a vital entry point for many people entering the urban core.”

“The new vision for this development will enhance the flow in and out of downtown and create vital public space along the Miami River, which is growing in importance as more people take residence in the neighborhood,” Brescia said in the companies’ announcement.

Under their proposal, Hyatt’s current lease, which has about 45 years remaining, would be replaced with a new 99-year term deal that calls for a minimum annual rent payment of the greater of $2.5 million or 2.5% of gross revenues, replacing the current minimum of $250,000. It also calls for a one-time payment of $5.4 million to the city’s Affordable Housing Trust Fund, public records show.

In October, the Miami City Commission authorized a transfer of the current lease to HRM LLC, a joint venture between Hyatt and Gencom. The hotel chain explained in its application to the city that it was seeking to redevelop its hotel and the Knight Center into a “world-class, mixed-use project.” It said it had been seeking an experienced hospitality-focused developer to team with on the project and tapped Gencom, which was founded in 1987 by Karim Alibhai and has developed a portfolio of luxury hotel and hospitality-related residential projects.

According to that filing, Hyatt retained a 50% ownership interest in HRM, while Gencom’s interest is divided between a 49.99% interest for one entity and 0.01% for another. Gencom will act as an “administrative manager,” but Hyatt retains approval rights over certain major decisions of the development, the documents show.

In their announcement of the plans, the companies noted they expect to meet growing demand in the area from residents and visitors. They cited research from the Miami Downtown Development Authority that found the city’s downtown attracts 6 million visitors annually and is home to 120,000 people, with 95% of existing apartments currently occupied.