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HomeMy WebLinkAboutEnvironmental Impact AnalysisWEISS SEPOTA HELFMAN PASTORIZA COLE & BONISKE, P.L. ATTORNEYS AT LAW MITCHELL BIERMAN, P.A. NINA L. BON ISKE, P.A. MITCHELL J. BURNSTEIN, P.A. JAMIE ALAN COLE, P.A. STEPHEN J. HELFMAN, P.A. GILBERTO PASTORIZA, P.A. MICHAEL S. POPOK, P.A. JOSEPH H. SEROTA, P.A. SUSAN L. TREVARTHEN, P.A. RICHARD JAY WEISS, P.A. DAVID M. WOLPIN, P.A. DANIEL L. ABBOTT GARY L. BROWN IGNACIO G. DEL VALLE .ALAN L. GABRIEL DOUGLAS R. GONZALES MATTHEW H. MANDEL ALEXANDER L. PALE NZUELA-MAURI SCOTT A. ROBIN BRETT J. SCHNEIDER EDWARD G. GUEDES LORI ADELSON* LILLIAN M. ARANGO* CARLA M. BARROW* VIA HAND DELIVERY Ms. Ana Gelabert-Sanchez Planning Department City of Miami 444 S.W. 2nd Avenue Miami, Florida 33.131 Re: Paradise Dairy Acquisitions, LLC; Public Hearing Applications, File Nos. 08-01321u, 08-01320zc Dear Ms. Gelabert-Sanchez: Enclosed please find an economic impact analysis prepared for the captioned applications by Miami Economic Associates, Inc. The results of this analysis were described at first reading before the City Commission. In short, the analysis describes some of the problems associated with the current industrial zoning and comprehensive plan designation at this location, both in the long and shortterm, and concludes that mixed use development incorporating housing, retail and office will resialt in greater employment and ad valorem tax revenue to the City. Please sock that it becomes part of the hearing file for these applications. RAQUEL ELEJABARRIETA A PROFESSIONAL LIMITED. LIABILITY COMPANY CHAD S. FRIEDMAN INCLUDING PROFESSIONAL ASSOCIATIONS MACADAM J. GLINN R. BRIAN JOHNSON MIAMI-DADE OFFICE JOHN J. KENDRICK IN HARLENE SILVERN KENNEDY"� 2525 PONCE DE LEON BOULEVARD KAREN LIEBERMAN*:.`C� SUITE 700 JOHANNA M. LUNDGREN l,.i,- KATHRYN M. MEHAFFEY i�"°•: CORAL GABLES, FLORIDA 33134 HARRIS S. NIZEL MATTHEW PEARL JOHN J. QUICK TELEPHONE 305-854-0800 ANTHONY L. RECIO FACSIMILE 305-854-2323 AMY J. SANTIAGO DANIEL A. SEIGEL WWW.WSH-LAW.COM GAIL D. SEROTA* JONATHAN C. SHAMRES BROWARD OFFICE ESTRELLITA S. SIBILA 200 EAST BROWARD BOULEVARD * SUITE 1900 ANTHONY C. SOROKA FORT LAUDERDALE, FLORIDA 33301 EDUARDO.M. SOTO TELEPHONE 9S4-763-4242 * FACSIMILE 954-764-7770 MICHAEL L. STINES NANCY STUPARICH* CHRISTOPHER J. YOLK *OF COUNSEL MICHELLE D. VOS MARLON J. WEISS LAURA K. WENDELL* JAMES E. WHITE DEREK R. YOUNG August 21, 2009 Re: Paradise Dairy Acquisitions, LLC; Public Hearing Applications, File Nos. 08-01321u, 08-01320zc Dear Ms. Gelabert-Sanchez: Enclosed please find an economic impact analysis prepared for the captioned applications by Miami Economic Associates, Inc. The results of this analysis were described at first reading before the City Commission. In short, the analysis describes some of the problems associated with the current industrial zoning and comprehensive plan designation at this location, both in the long and shortterm, and concludes that mixed use development incorporating housing, retail and office will resialt in greater employment and ad valorem tax revenue to the City. Please sock that it becomes part of the hearing file for these applications. Ms. Ana Gelabert-Sanchez August 21, 2009 Page 2 Thank you for your attention to this matter. Please call me if you have any questions. Very truly yours, Tony Recio TR/ms 676028 Enclosure cc: Teresita Fernandez, Hearing Boards (w/enc.) WEISS SEKOTA HELFMAN PASTORIZA COLE & BONISKE, P.L. June 21, 2009 Mr, Mitchell Friedman Paradise Dairy Acquisition Group Miami, Florida Dear Mr. Friedman: Miami Economic Associates, Inc. (MEAT) has performed an analysis to evaluate whether it would be economically and/or fiscally beneficial to the City of Miami to re -designate the so-called MacArthur Dairy property in the City of Miami from Industrial to Restricted Commercial on the City's Future Land Use Map and then re -zone it from Industrial to C- 1. Based on our analysis, we believe that the proposed re -designation and re -zoning of the property is, indeed, merited in terms of economic and fiscal considerations. The purpose of this letter, which is organized as shown below, is to apprise you of the findings of our analysis. SectionPage �F_ Pro ert Description 1 Purpose of the Proposed Re-desi nation/Re-tonin 2 Limited Demand for Industrial) - Des ig nated/Zoned Property 2 Economic and Fiscal Benefits 5 Closing_ _ 7 Property Description The so-called McArthur Dairy property ("the subject property") is comprised of multiple parcels totaling approximately 5.1 acres. It is located east of N.W. 7" Avenue between N.W. 26th Street and N.W.23`d Street. Two of the parcels consisting of 4 of the total 5.1 6861 S.W. 89+h Terrace Miami, Florida 33156 Tei. 13051669-0229 Fax: (8661496-6107 Entail, meainkCM6eiisouth.net Mr. Mitchell Friedman Paradise Dairy Acquisition Croup June 21, 2009 Fuge 2 acres comprise a rectangular -shaped tract that is bounded by N.W. 71" Avenue on the west, N.W. 261" Street on the north, Interstate 95 on the east and N.W. 241" Street. The remaining 1.1 acres, which are located south of N.W. 24`" Street, comprise an irregularly-shaped tract that has no frontage on N.W. 7"' Avenue While the eastern boundary of both parcels is the Interstate 95 right-of-way, neither is characterized by good accessibility from the regional highway network. The closest access point to that roadway system is located in the vicinity of the intersection of N.W. 12`" Avenue and N.W. 12`h Street to the south. However, only eastbound access of State Road 836 is possible there. To access westbound State Road 836, it is necessary to go to N.W. 17th Avenue in the vicinity of N.W. 12"' Street. Further, traffic is frequently congested in the areas intervening between the points of access to the regional highway network just enumerated and the tracts that comprise the subject property. Accordingly, the most appropriate uses for the tracts would be those that derive their market support from the area immediately surrounding them. In this regard, the subject property is well - located due to its proximity to Miami -Dade County's criminal justice complex, the Jackson -Cedars medical complex and the prospective University of Miami biomedical campus. The subject property is currently designated for Industrial use on the City's Future Land Use Map. According to the City's comprehensive plan, the "Industrial" designation generally includes activities that would otherwise generate excessive amounts of noise, smoke, fumes, illumination, traffic, hazardous wastes, or negative visual impact unless properly controlled. Residential uses are not allowed in areas designated for Industrial use on the City's Future Land Use Map. The subject property is zoned "Industrial". The Industrial District applies to "manufacturing, processing, assembly and storage activities" that "shall generally be located where directly served by major transit facilities". It should be noted that the subject property is not located in such an area since it is not immediately accessible from the regional highway network nor served by rail any longer. Subject to the above description of the intent of the Industrial District, it permits the development of retail and office uses because the "I" zoning district allows all use allowed in the C-2 zoning district except "non -transient residential uses" and the C-2 zoning district allows all uses allowed in the C-1 zoning district, which include office and retail. Purpose of the Proposed. Re-designation/Re-zoning By re -designating the subject property from Industrial to Restricted Commercial and re- zoning it from Industrial to C-1, the development of non -transient residential units on all or a portion of the property would be allowed. This, in turn, would enable Paradise Dairy Acquisition Group (PDAG) to develop approximately 150 workforce residential units together with ground level retail on the 1.1 -acre tract south of N,W. 24th Street while leaving the 4 -acre tract for non-residential uses. We understand that PDAG's conceptual plans for the 4 -acre tract would include the development of 150,000 square feet of office space together with additional ground level retail space. Under its concept for the subject property, a total of approximately 90,000 square feet of retail space would be Miami Economic Associates, Inc. 6861 S.W. 891h Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (866) 496.6107 Email: meaink@bellsouth.net Mr. Mitchell Friedman Paradise Dairy Acquisition Group June 21, 2009 Page 3 constructed, inclusive of space on both the 1.1 -acre and 4 -acre tracts. As the conceptual development plan demonstrates, the land use and zoning designations being sought would provide for the flexibility to respond to market conditions as they emerge in the near to mid term future. Limited Demand for Industrially-Designated/Zoned Property The conceptual plan that PDAG has formulated for the subject property responds to the market factors that Would govern its development, which are as follows: PDAG has attempted to market the subject property for the past several years for industrial and/or office use. Greatest interest in the property to date has been expressed by the Veterans Administration, which seeks to use it for hospital employee parking. This use would result at best in the creation of only in a very small number of jobs. During that time the property has been marketed, there has also been interest for the 4 -acre tract from two potential industrial users, neither of which was prepared to acquire the property for an amount consistent with its market value. The Miami -Dade County Property Appraiser estimates its value approximates $2.6 million, or just under $15 per square foot. To place this figure in perspective, industrial land sales at $15 per square foot have not been recorded on a frequent basis anywhere in Miami -Dade County including in the Airport West/Doral area, Miami -Dade County's most active and highest priced industrial market sector. The highest prices paid for land in the Airport West/Doral area on a frequent basis has approximated $12 per square foot. According to data compiled by the Commercial and Industrial Association of South Florida (CIASF), approximately 7.5 square feet of industrial space were constructed in Miami -Dade County during the four year period from 2004 through 2007. Of this amount, only 253,000 square feet, or 3 percent, were built in the Central portion of the County, which the Association defines as the area bounded by N.W. 103`d Street on the north, Biscayne Bay on the east, N.W. 12`h Street on the south and N.W. 37'h Avenue on the west. The Planning Department of Miami -Dade County estimates that the defined area contains 123 acres of vacant land designated for industrial use. It further estimates that this vacant land is not likely to be fully depleted for more than 30 years at the area's historic absorption rate of 4.3 acres per year. Further evidence of the low level of demand for industrial space in the defined area are the facts that: 1) it has, according to CIASF, a vacancy rate in excess of 10 percent, which is among the highest of any market sector within Miami -Dade County: and 2) the average sales price per square foot of finished industrial space in the area is $49, the lowest for any market sector within Miami -Dade County. The low sales price per square foot for industrial space within the area, in turn, reflects the low level of rents being paid. The prevailing level of rents in the area is too low to support new construction. The market value of $15 per square foot estimated by the Property Appraiser for subject property anticipates that the highest and best use for the property is for office Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tei: (305) 669-0229 Fax: (866) 496-6107 Email: meaink@bellsouth.net Mr. Mitchell Friedman Paradise Dairy Acquisition Group June 21, 2009 Page 4 and/or retail use not industrial. During the period of time that PDAG the subject property has been exposed to the market no interest has been expressed from office developers or office -space users. CIASF estimates that there are currently 61.5 million square feet of speculative, non- medical office space in Miami -Dade County in structures comprised of at least 5,000 square feet. Approximately 3.5- million- square--feet,or--about-5-percent-of-this space,- - — - -- - - - were added in the 5 -year period from 2002 through 2006, which equates to an average annual rate of construction that approximates 700,000 square feet per year. None of the space constructed during the 2002-2006 period has been in the vicinity of the subject property. Since 2006, the level of office construction activity in Miami - Dade County has increased, owing to the fact the there are now several major office projects underway in the City's Central Business District and along Brickell Avenue; however, there is still no office development activity in the vicinity of the subject property. It is also questionable whether the increased level of office construction will be sustained in the near to mid-term future given current economic conditions and the reductions in force that many businesses are currently implementing. The data compiled by CIASF does not include medical office space, There have been significant amounts of such space built in the area immediately surrounding the Jackson -Cedars medical complex in recent years with additional space currently under construction. • Given the thousands of people who work in vicinity of the subject site including at the Miami -Dade County criminal justice facilities and the Jackson -Cedars medical complex, there could potentially be interest in developing retail space on the 4 -acre tract. However, there is not likely to be significant interest in 1.1 -acre tract for a free- standing retail use because it lacks frontage on N.W. 7th Avenue. MEAI also doubts that the 4 -acre tract will be attractive for the type of high intensity retail use that would be required to justify its value. A single -story retail project with surface parking would only yield 40,000 to 50,000 square feet of rentable space, which would be insufficient to produce an adequate return on the acquisition of land valued at $2.6 million. A multi -story project with structured parking, such as those that stack "big boxes", would be required to accomplish that. However, the fact that the surrounding area lacks a significant residential population, in large part because of the zoning currently in place, and that site has only marginal accessibility from the regional highway network are two factors that would mitigate against such development. Also taken into consideration is the potential competition that such development would face from the retail uses at Midtown Miami and from proposed Biscayne Marketplace projects. • As has been well-documented by both the City of Miami's Department of Community Development and Miami -Dade County Planning and Housing Departments, there is a significant amount of unmet demand for workforce housing within the City of Miami specifically and Miami -Dade County generally, including among the thousands of people who work in the vicinity of the subject property at the Miami -Dade criminal Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tet. (305) 669.0229 Fax: (866) 496-6107 Email: meainkc@bellsouth.net Mr. Mitchell Friedman Paradise Dairy Acquisition Group June 21, 2009 Page 5 justice facilities and the Jackson -Cedars medical complex. Unlike office an retail uses the development of which will require the stimulus of the University of Miami's Biotech campus for their market support, the market support for residential use already exists. The conceptual development program proposed by PDAG would allow value to be realized from the subject property in the short term through the development of the affordably -priced residential units and ground level retail space on the 1.1 -acre tract. This, in turn, would allow the 4 -acre tract to remain undeveloped until it can potentially be put into its higher and best use, i.e, a mixed use project comprised of office and retail space. Otherwise, there would be significant pressure on PDAG to dispose of the property at a below market value price to a retail or industrial developer. Under that scenario, it is questionable whether the 1.1 acre tract would ever be developed. Further, it would result in development that would fail to maximize potential employment opportunities for City of Miami residents and City ad valorem revenues. Economic and Fiscal Benefits The buffeted paragraphs that follow compare the economic and fiscal benefits that would accrue to the City of Miami and its residents if the subject property were developed in accordance with PDAG's conceptual plan with those that accrue from its development of industrial or retail uses. Table 1 estimates the number of workers that the subject property would accommodate under the 3 development scenarios described below. The ratios used for employment per 1,000 square feet of space are those generally accepted by the State of Florida Department Community Affairs and Florida Department of Transportation. o Scenario 1: The entirety of the 5.1 acres are developed with industrial space, which, assuming the conventional FAR for such development, would result in the construction of approximately 80,000 square feet of space o Scenario 2: The entirety of the 5.1 acres are developed with single -story retail space supported by surface parking, which, assuming the conventional FAR for such development, would result in 50,000 square feet of space; and o Scenario 3: The site is developed in accordance with PDAG's conceptual plan with 90,000 square feet of retail space and 150,000 square feet of office space (supported by structured parking) together with 150 affordable residential units. Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tei: (305) 669-0229 Fax: (866) 496.6107 Ernail: rmeaink@beilsouth.net Mr. Mitchell Friedman Paradise Dairy Acquisition Group June 21, 2009 Page 6 Table 1 Estimated Employment Alternative Development Scenarios MacArthur Property Development Program Employment/ 1,000 S.F.Employment Scenario 1 80,000 square feet of industrial space 1.25 workers 100 __— Scenario 2 50,000 square feet of retail space 2.0 workers 100 Scenario 3 _ 90,000 square feet _of retails ace 2.0 workers 180 150,000 square feet of office space 4,0 workers _ 600 150 residential units N/A 6 k Total Scenario 3 � 686 Permanent employment on-site. Approximately 25 to 30 contract workers would also provide landscaping, exterminating and other services to the project. In reviewing Table 1, it should be remembered that retail jobs, while accessible in terms of skill levels to the largest portion of the population, are generally lower - paying, producing wages and salaries that average $25,000 per year. Office and industrial jobs typically average annual wages and salaries exceeding $45,000 per year. Scenario 3 would produce a range of jobs opportunities both in terms of the skill levels required and the incomes earned. • Table 2 compares the ad valorem revenues that would be generated for the City of Miami under the 3 scenarios described above. The taxable values used in this comparative analysis are based on a review of comparable projects. The analysis also assumes the City's current millage rate, which equates to $7.6740 per $1,000 of taxable value. (Space Intentionally Left Blank) Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669.0229 Fax: (866) 496.6107 Email: rneaink@belisouth.net Mr. Mitchell Friedman Paradise Dairy Acquisition Group June 21, 2000 Page 7 Table 2 Estimated City of Miami Ad Valorem Revenue Alternative Development Scenarios MacArthur Pro er_.t�__._,_ Development Program �- -_ _ Taxable Value City of Miami^ Ad Valorem Revenue Scenario 1 80,000 square feet of industrials ace _ I 58,000,000 $61,392 Scenario 2 50,000 square feet of retail space 7,500,000 _ $57,555 Scenario 3 _ 90,000 square feet of retail space $9,000,000 $69,066 150,000 square feet of office space $22,500,000 $172,665 150 residential units $26,250,000 $201.443 Total Scenario 3 $57,750,000 —(—T $443,174 • The following points should be noted in reviewing Table 2: PDAG`s proposed residential use in Scenario 3 by itself would produce more than 3 tunes the ad valorem revenues for the City of Miami than either Scenario 1 or 2. It is also the use most likely to be developed in the near term future from a market standpoint. Finally, it would produce more than 9 times the ad valorem revenues for the City of Miami than accrue to the City from the subject property now. o PDAG`s overall development program when fully developed would produce more than 7 times the ad valorem revenues for the City of Miami than either Scenario 1 or 2. It would also produce more than 17 times the revenues the City derives from the subject property now. Closing MEAT firmly believes that the proposed re -designation and rezoning of the subject property would be highly beneficial for the City of Miami and its residents both economically and fiscally. Sincerely, Miami Economic Associates, Inc. Andrew Doikart President Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (866) 4966107 Email: meaink@bellsouth.net