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Home My WebLink AboutSubmittal-Art NoriegaP141 Miami Commercial Real Estate Services, Worldwide. June 22, 2011 To: Arthur Noriega, CEO Miami Parking Authority From: Jeremy S. Larkin, President Cc: Rolando Tapanes, Director - Miami Parking Authority Lisa Tenn, Retail Leasing Associate tel 305 938 4000 fax 305 938 4002 office@naimiami.com www.naimiami.com 9655 South Dixie Highway Suite 300 Miami, FL 33156 Submitted Into the public recorr l fp connection with item m. f on to (2'3 I I Priscilla A. Thompson City Clerk Re: Retail Space at The Baseball Entertainment District (Florida Marlins Stadium) Please use this memo as a status update of where we stand in the leasing process today. Attached are reports related to detailed information on: 1. The Retail Prospect List 2. Memo Regarding Physical Constraints of BED -Miami 3. Current marketing brochure (Work -in -progress) The Flavor of BED - Miami The intent of BED - Miami was to: 1. Create a dynamic and interesting environment for the ballpark attendee to enhance their pregame and postgame experience with the intent to extend their visit on both ends of their trip. 2. Present a flavor of the metropolitan Miami market to the ballpark attendee. 3. Provide additional retail, restaurant and entertainment support to the immediate neighborhood and the surrounding neighborhoods including, but not limited to the Health District, the Biscayne Corridor, Downtown Miami, Brickell, Coconut Grove and Coral Gables. To provide some background, when the project was initiated, an analysis of the neighborhood was conducted and a profile of the typical ballpark attendee was obtained from the Florida Marlins organization. - aQJ 2 - �(II2 m Q• l rt nor r l erg Indntduti ^nAmbor Of cocky r+.....r Build on the power of our network. T"' Over 300 offices worldwide. www.naimiami.com The Ballpark Entertainment District "BED -Miami" Ground Floor Retail Space For Lease N4IMiami Commercial Real Estate Services, Worldwide. Build on the power of our network."' • nUIf 1111111 I`mil/ Submitted Into the public recorg In connection wIth item' `', on 6120 I !I Priscilla A. Thompson City Clerk Contact Information Jeremy S. Larkin - Ext 102 Lisa A. Tenn - Ext 129 Phone 305.938.4000 jlarkin@naimiami.com Itenn@naimiami.com Airport West Grapeland Heights Population: 14,004 Dolphin,Expressway, West Flagler Population: 41.012 Coral Way Population: 69,041 Midtd Popul r , ` 1), • '',..,'�' rf ' mow. �'1. .r+r ;Little.Havana - Population:49,206 Roads Population: 7,327 Bay. Heights Ballpark Highlights: The future home of the Marlins will be a first-class baseball stadium that will be owned by Miami -Dade County. ;t wail be constructed on approximately 17 acres of the historic 42-acre Orange Bowl site in the Little Havana section of Miami. The ballpark will have n retractable roof, a natural grass playing field and 37,000 seats, includ ing approximately 3,000 club seats and 60 private suites. The site is less than two mias from downtown Miami, only three-quarters of a mile from the westbound SR 836 exit at 12th Avenue, and 0.4 miles from the eastbound exit at 17th Avenue. Via Interstate 95, the site is 1.25 miles from the NW 8th Street exit. The state-c; .the -art retractable roof will ensure that Marlins fans never again have to worry about the unpredictable Miami waiher. Roof and air conditioning will provide a cool, comfortable environment every day. At the ballpark, it will always be 75 and sunny! No more swc ^ring! No more rain delays! The ballpark will feature an open 360-degree Promenade Level, giving fans a live view of the playing field no matter where they are. The Taste of Miami concession stands will provide diverse and tasty culinary dE ,ghts, and will be located in left field next to a signature bar looking out at Miami's skyline. Parking will surround the ballpark and accommodate 5,700 cars. A majority of season ticket packages come with a reserved parking space right next door to the ballpark. gat. • 100 ,.Downtown CBD •:Population: t 8,900 otx ��i,. • y `'Brickell Population: ,28,500 r) ,rru--)+lr:_tphtcs: 2010 Population By Race: V'`JP'llte: f -;l<1c.'k, or A.!r war rlrr ler :an: r\rilorIc,1r1 Ir;:iiiri or :il.lsf:ct NalNVo. r•J,i,vr rIE.T.v tu.,r+ :.{r+ ;i '<u iiic Islti,rIcier : itln,r l}:i: •.. I11iir I ;,t,:f? '010 Population By Hispanic Origin: \Irm I -,.,I •nirck: or .tt+rc,.:!: I; r Mtn :: i)r Ltfin;r t'u�=;rtc t ►ic:�irr t__}lhilr i list,iinic.: cu Latinu. 75 272 :) 53 n1; 59,6 1 4,3(4 966 1 ,455 ,1,557 28,319 Traffic Count: Dolphin Lxfirt?sS,Niiy (R 836), 117,000 cars daily 195 Nurti t of SR 83h: 208,000 cars daily I05 South ::I ; f 1 836: 165,500 cars daily Port of Miami Annual Cruise Passengers: Miami International Airport Annual Passengers: 1 01.; 625 1 ,t).! 5 12 241 8,1.1() 1 (0,442 2,1 905 4.71,537 2,425 4,793 71,245 07,074 Ifni, '9-7 91 791,4 't 35,000 1.02 1 f ';-) 19, 70.1 12.963 288,308 56, 725 231,644 3,993 10,263 112,880 104,507 rink. 488,186 53, 6►51 2 79, 415 330,185 96,959 1,633 3,230 256 25,232 .0. 7 82 4 7, 328,862 5,685 15,287 160,96' 13/.9. 1,144,470 October -December 2010 (an increase of 20% over 2010) 4.15 million 2009-2010 Over 9 million 1st quarter 2011 (an increase of 6,1 % over 2010) 35.7 million - 2010 (a world record) _J rt <"u m 98Q cn •cp 127 8 roo d. C� 3 0-0 Er -moo itr Features: 53,281 sq. ft. of around leve LEED Certified Space is located on the ground level of Parking Garages 1, 2 and Ideally suited for full service restaurants, entertainment venues and retail use Outside seating capacity - Pedestrian friendly atmosphere Access 24 hours per day, 7 days per week, 365 days annually Excellent frontage on NW 7th Street On site at the new state of the art Marlins Stadium Trolley service to and from the 2 miles from Downtown Miami Eas access from Interstate 95 and SR 836 -NW 7th Street The immediate neighborhood is a densely populated, heavily Hispanic, middle to lower middle income neighborhood. The new profile of the Florida Marlins season ticket holder, to date, is a Miami -Dade County resident in middle to upper income levels and not as heavily Hispanic. Based on the above, initial targeted uses were higher -end entertainment, restaurant and retail uses, as well as a national search was conducted for ballpark related concepts. For example, Sluggers, a famous bar and restaurant adjacent to Wrigley Field in Chicago conducted a site visit and initially expressed a high level of interest. After conducting the site visit and researching the immediate market, they rejected the site. The reason for the rejection is they stated in the offseason in Chicago they struggled to remain profitable. Comparing their Chicago market to this market, they did not believe the operation would be able to remain profitable. Multiple other higher -end entertainment, restaurant and retail uses were contacted and rejected the site because of the immediate demographics, indicating they needed to be profitable 365 days per year and not just the 81 days when baseball is played. They recognized there would be additional activities at the stadium but since there were no committed events, they could not rely on this potential activity. As an example, the stadium would be a great venue to put the main operations of Calle Oche as it provides a large plaza, excellent parking and some protection in the event of inclement weather. Based on these rejections, our target was adjusted to more moderately priced entertainment, restaurant and retail uses which are designed to serve and found desirable by the immediate and surrounding areas but still will have an interest to the ballpark attendee. Based on recent meetings with the Florida Marlins, their initial concept for their lead restaurant was a high -end dining experience. However, after multiple unsuccessful attempts to secure this, they have adjusted their targets downward to a more moderately priced restaurant/sports bar which they believe they have secured and should announce soon. Retail Prospect Status The Retail Prospect List breaks down the level of interests into: 1. Letters of Intent ("LOI") — Those retailers/restaurants who have submitted offers to lease space. 2. Parties Expressing Interest — Those retailers/restaurants who are interested in leasing space but are either waiting for "Lead Tenants to be identified", more information on condition of the premises or who have not made the formal decision to submit an offer to lease space. Based on the LOI's in our possession, just over 58% of the retail space in BED -Miami is in a position to be committed to retail and restaurant uses which are suited for the Submitted into the public NA Miami Commercial Real Estate Services, Worldwide. recorg in connection with item 3 A. ti on6,1"zii Priscilla A. Thompson City Clerk neighborhood and the stadium to give the community a flavor of Miami. When you add in the Parties Expressing Interest, we are over 100% because a number of the proposed uses are in direct conflict with the LOI's and we would only select one use of each type and a percentage of those expressing interest will fall out prior to going to LOI or lease. Based on the activity to date with the constraints of the marketing effort, we feel comfortable that substantially all of the space could be committed to prior to year- end. Proposed Uses for some of the larger spaces include, but are not limited: Presidente Market & Cafe: Proposed to occupy 8,438 square feet, they have custom designed a neighborhood market and Latin cafe. The cafe will take approximately '/2 of the space facing the plaza and the remainder facing the western side of Parking Garage #1. The concept will be flexible so during baseball season, the cafe will expand and the Market will be reduced and in the offseaon, this will reverse. Pollo Tropical — Concept Store: An "elevated" Pollo Tropical where the order is taken in the traditional way, then the customer takes a seat. Waiters bring the food, then check back and offer dessert, drink refills, etc. Payments are handled at the table for the additional services. Menchie's Frozen Yogurt Other ice cream and frozen yogurt stores offer a limited amount of choices and charge customers for every flavor or topping they ordered. Menchie's customers are able to serve themselves the perfect yogurt mix by choosing from a wide variety of delicious flavors, and more than 40 toppings with everything from chocolates, candies, and hot fudge, to granola and fresh seasonal fruit. TGI Fridays Owned by Carlson Restaurants, Inc., T.G.I. Friday's offers a casual dining experience unlike any other, where you can expect great food, drinks and plenty of fun to go around at 928 locations in 44 states and 61 countries Teriyaki Experience Designed to be a full service restaurant with full liquor utilizing hostess, bartender, and wait staff. They specializing in Japanese and Asian style meals and dishes served by wait staff. NAI Miami Commercial Real Estate Services, Worldwide. Submitted Into the public record in connection with item' iM. on 012111 Priscilla A. Thompson City Clerk Sonic Beach Located at The Gallery at Beach Place, Sonic Beach is a Sonic eatery open 24/7, with indoor seating and waitress service. Wine, beer and liquor will be offered at the 5,500- square-foot restaurant. Current Obstacles to Complete the Leasing Process The current obstacle is we cannot go further with the leasing process without specific direction as to: 1. Approved/desired uses. 2. An agreed upon pricing structure and standard delivery condition of the space: a. Base Rent b. Percentage Rent c. Real Estate Taxes — Is this facility taxable or exempt? d. Insurance — Is this covered under the municipal trust or is it privately insured? e. Common Area Maintenance — Fixed amount (suggested) or a pro-rata share of actual. f. Condition of Unit on delivery — Standards for delivery g. Above standard tenant improvement allowances — Standards for approval and source of funds h. Physical obstacles of completing tenant build -outs — See Memo Regarding Physical Constraints of BED -Miami. 3. Marketing Budget — Desired level beyond what has already been committed. The other issue is TIME. Opening Date is a date certain. From where we are to a store opening on Opening Day is approximately 270 days. The typical time frame is: Finalize LOI 10 - 30 days Draft lease 3 - 5 days Review lease by COM 1 - 14 days [Based on other time demands] Negotiate lease 7 - 60 days Draw plans 15 - 30 days Permitting 30 - 90 days Construction 60 - 120 days Stocking 14 - 30 days Soft Opening 14 - 30 days Total 154 - 409 days NAI Miami Commercial Real Estate Services, Worldwide. Submitted Into the pubk recorl i, connection with item on _Iz3/1i Priscilla A. Thompson City Clerk The restaurants will fall in the longer lead times. So, as of today, unless everything goes as quickly as possible, we are cutting it close and are probably already past that timeframe based on a realistic standard. Physical Assessment and Expected Costs to Deliver Retail Space After walking through BED -Miami with Robert Fenton, project manager, to determine the current physical condition of the retail space and obtain an expectation of how the spaces will be finished for delivery, the following assessment is provided. Typical Retailer Expectations Typically, when retailers and restaurants are leasing in newly built properties, they have an expectation of how the space will be delivered to them to finish it for their specific need. The most common standard of expectation is referred to in the industry as a "Vanilla Shell". The typical details of a Vanilla Shell are attached as Exhibit A. This Vanilla Shell is generally considered additional construction above and beyond a typical building shell. The building shell is generally the slab, exterior walls, roof structure, roof and basic electric and telephone rooms to serve the building tenants plus water, sewer and gas connections at the edge of the building or adjacent to it. Estimated Cost to Build Out a Vanilla Shell at BED -Miami Based on the Vanilla Shell specified in Exhibit A, the current estimated cost to build this is approximately $30.00 - $35.00 per square foot. Robert Fenton has advised us the current plans call for the retail space to be delivered with no walls, no services, and no slab. In addition, the building slab tenants are required to install is an atypical slab for a standard retail building. Because the parking garage is being built below the water table, a reinforced, 10" slab which must be pinned into the parking garage's structural element must be used. Based on the engineer's design and Mr. Fenton's bids, the estimated cost per square foot just for the slab is $20.00 - $25.00 per square foot. In order for BED -Miami to deliver a Vanilla Shell, it is expected to cost: Vanilla Shell $30.00 - $35.00 per square foot Slab $20.00 - $25.00 per square foot Total Cost $50.00 - $60.00 per square foot NA Miami Commercial Real Estate Services, Worldwide. Submitted Into the public record in, connection with item on G (2 / 1 Priscilla A. Thompson City Clerk take various forms including reduced base rent for a period of time, free rent for a period of time and direct cash payments. When direct cash payments are used, the allowance is generally recaptured over the initial lease term by amortizing it with an interest factor. In addition, it is typical to include a percentage rent factor on locations such as BED -Miami because the base rent will be set at a low level to compensate the tenant for taking the risk and the percentage rent will be allow the landlord to participate with the tenant in the event their sales levels exceed expectations. Physical Conditions During the site visit, certain conditions were observed which are typical for a retail user's space. They include: Sewer: There are 4" sewer lines running the length of the units which are easily accessible. Gas: There are natural gas lines which terminate adjacent to each parking garage. This will permit any gas user to easily route a gas line to their unit for their use overhead. Water: There are 2" water lines immediately behind the retail spaces which will be easy to tap into and run overhead into their stores. Vents: There are 2" vent lines accessible to vent all stores' waste lines. J-Boxes: Plans call for electrical J-boxes above each store front for sign connection for the tenant's signs. In P1, the restaurant space is appropriately laid out with a dedicated 2" water, dedicated 6" waste line and 4 — 1,250 gallon grease traps. Physical conditions observed which are atypical and will result in additional costs to either the landlord or the tenant include: Grease Traps: There are no grease traps connecting to any of the retail spaces facing N.W. 7th Street. These spaces are in high demand by several restaurant chains. In order to provide for a below ground grease trap, the inside slab of the parking garages will have to be cut and grease traps installed. Each 1,250 grease trap is estimated to cost $10,000 - $15,000. There is a possibility the restaurant can install an above ground grease trap in their space. It will depend on the volume of their grease use and space design. NAI Miami Commercial Real Estate Services, Worldwide. Submitted Into the public record ji_ onnecti fn jth .. Item_ _on Priscilla A. Thompson City Clerk Electric: There are no electric conduits leading from the main electric room to the retail spaces. These are usually run below the slab and into each unit. Because of the building's design, conduit will have to run along the walls and across the drives via conduits attached to the under deck of the second floor ramps/drives and over to each space. While not aesthetically pleasing, it will functionally provide the needed electrical service. HVAC: There are two, two inch conduits running from each parking garage to the designated location for HVAC equipment. Assuming multiple tenants in each parking garage, this conduit will quickly be filled and additional lines will have to run along the walls and across the drives via conduits attached to the under deck of the second floor ramps/drives and over to each space. While not aesthetically pleasing, it will functionally provide the needed HVAC service. ADA: If a handicapped patron wishes to visit a stadium retailer and is not attending the baseball games during game day, are they permitted to park in the garage? If not, will we be violating the ADA? Parking: If a patron wishes to visit a stadium retailer and is not attending the baseball games during game day, will they be permitted to park in the garage? If not, how will this be explained to the retailers/restaurants? Summary Based on current estimates, the funding for tenant improvements in order to attract the desired retailers and restaurants is short by $1,425,000. In addition, there are a number of physical design issues which will lead to higher costs for the tenant or the landlord which will ultimately be borne by the landlord through absorbing these costs or in reduced rental rates. It is also reasonable to assume additional design issues will occur as we continue to work with prospects and start working with tenants' design and construction professionals who have committed to the project. NAI Miami Commercial Real Estate Services, Worldwide, Submitted Into the public recoi i� connection with item m .1on G-I Z 31 I I Priscilla A. Thompson City Clerk Exhibit A Typical Vanilla Shell Standard Landlord's Vanilla Shell shall comprise the following: Floors: Concrete floor slabs, smooth troweled finish, broom clean. Walls: Walls shall be drywall and delivered smooth and ready for paint. Egress Door: Rear egress door will be a hollow metal door. Electrical Svc: 120/208 single phase 100 amp service at the Tenant's panel, which will be located at the Landlord's designated point on or at the rear wall of the Premises, or, as per Landlord's drawings or specifications. Washroom: Heating & A/C: Ceiling: Fire Sprinklers: Telephone: Water Service: One toilet room, containing one toilet and one wash basin completely installed with cold water service available and connected to the necessary plumbing and ventilation, together with the partitions and door enclosing same. Flooring shall be, at the option of the Landlord, either vinyl composite floor tiles or ceramic tiles. Landlord shall place the bathroom in a location as determined by Landlord. The H.V.A.C. system shall be installed pursuant to the Landlord's standard layout with one return air grill. The units shall be sized based on one (1) ton per every 286 square feet of rentable space. Standard 2' x 4' white metal grid. Light fixtures shall be provided based on Landlord's standard lighting plan. Lights shall be standard 2' x 4' fixtures with both three or four bulb fluorescent lights and a flat, translucent lens. Sufficient lay -in acoustical tiles to complete the ceiling shall be delivered in bulk to the premises for installation by the Tenant. If required by Miami -Dade County, a sprinkler system will be installed to meet minimum required code with sprinkler heads dropped to a height of 10'. Any modifications to the system shall be done solely at Tenant's expense. Empty conduit leading from the meter room where the main telephone switching unit is to the point in the Premises so designated by the Landlord shall be installed. Water service shall be brought to the point of water meter connection. Tenant shall be required to pay the appropriate deposit, together with fees for the water meter, meter connection(s) and sewer connection(s) for the water meter serving the Premises. An in -ground concrete box will be provided by Landlord. NAI Miami Submitted Into the public record .i connection with item meson ( l?_ 3- Priscilla A. Thompson Clerk Commercial Real Estate Services, Worldwide. BED -Miami Retail Prospect List Total Square Feet 53,281 100.00% Letters of Intent 31,102 58.37% Parties Expressing Interest 54,600 102.48% Total 85,702 160.85% Parties Letters of Expressing Total Intent Interest Square # of # of Square Parking Garage # Feet Square Feet Feet One [1] 23,914 Presidente - Market/Latin Cafe 8,438 Polio Tropical - New Concept Store 3,200 Menchie's Frozen Yogurt 2,000 TGI Friday's 5,500 Teriyaki Experience 3,200 Perdomo Cigars 1,200 Guayabera's Etc. 2,000 El Carajo - Tapas restaurant 4,000 City of Miami - Emergency Response 7,000 Total 23,914 13,638 22,900 Two [2] 21,676 Navarro Discount Pharmacy 11,964 Sonic Beach Restaurant 5,500 GNC 1,400 West Marine 10,000 T Mobile 2,000 Houlihans 6,500 The Pub 6,500 Muscle Maker Grill 1,700 Yogurtini 1,900 Quiznos - QSR [May be prohibited] 1,700 Total 0 17,464 31,700 Three (3] 7,691 Total 7,691 0 0 Submitted Into the public record VI connection with itemm co., On 121, I I Priscilla A. Thompson City Clerk Estimated Shortfall in Bond Funding for Tenant Improvements Based on the expected cost per square foot, the total cost to build -out BED -Miami to a Vanilla Shell is: $60.00 per square foot X 53,281 square feet $3,195,060 Of the $3,000,000 in the stadium bond for the retail space, marketing costs and commissions need to be deducted prior to determining the remaining balance for tenant improvements. This leaves an expected shortfall of: Less Bond Allocation Marketing Costs Commissions Funds for Vanilla Shell Expected Shortfall $3,000,000 $ 150,000 $ 275,000 $2,575,000 $ 620,060 Retail uses can be broken down into dry and wet uses. A dry use is one where the retailer does not consume a lot of water or generate waste water. Typical uses include clothing stores, jewelry stores, personal services i.e. insurance, cell phone stores, electronic stores, etc. Wet uses are users that consume larger amounts of water and generate larger amounts of waste water. Typical uses include restaurants, bars, hair salons, dry cleaners, etc. These uses require larger water supply lines, larger waste lines, grease traps and more HVAC tonnage. For restaurants and bars, typical build outs cost $25.00 - $175.00 per square foot above a Vanilla Shell. Assuming the landlord provides an "above standard" allowance of $50.00 per square foot for an estimated 20,000 square feet of restaurants, bars and other specialty uses, the total cost will be: 20,000 Square Feet X $50.00 Per Square Foot $1,000,000 Based on the above, the $3,000,000 bond allocation is short by: Vanilla Shell Shortfall $ 620,060 Above Standard Build out$1,000,000 Total Shortfall $1,620,060 In most entertainment styled venues, the landlord will generally pay for a Vanilla Shell and provide a "generous above" standard allowance for creditworthy restaurants and bars in order to attract them to their venue. These "above standard" allowances can NAI Miami Commercial Real Estate Services, Worldwide. Submitted into the pubic' recordin connection with item A4 on 123 II Priscilla A. Thompson City Clerk