South Miami Commission unanimously approves modified term sheet with 13th Floor Investments for City Hall redevelopment

The City of South Miami Commission on March 30 approved a revised term sheet with developer Thirteenth Floor Investments to pursue a 99‑year ground lease and phased redevelopment of the City Hall site, including a new City Hall, police station, library, Jean Willis Park improvements and mixed‑use residential buildings.

The vote was unanimous. The commission adopted the term sheet after negotiating modifications that the city said protect public interests: the conceptual site plan will explicitly assume inclusion of the library parcel, the developer must make commercially reasonable efforts to deliver an access road connecting to 62nd Avenue/73rd Street, the budget will be underwritten to include an optional fifth floor for City Hall, and the developer must propose preservation or relocation options for the historic Silva Martin Building. The clerk recorded a 5‑0 roll call in favor.

Why it matters: City staff and the developer said the revised financial structure addresses an early‑year cash shortfall that appeared in earlier projections. The deal is intended to deliver modern civic facilities without permanently selling the land; under the ground‑lease structure, the city retains ownership while the developer finances and builds the project and pays rent and upfront sums that the city can use for construction and debt service.

What the term sheet covers: City staff described a project site that includes the existing City Hall parcel, the library parcel, Jean Willis Park and a portion of adjacent roadway. Under the term sheet: • The civic program totals roughly 54,700 square feet (library, police headquarters and City Hall functions) and includes 100 parking spaces dedicated to the city in the Phase 1 parking garage. • Phase 1 residential/mixed‑use would include about 335 units and 5–10,000 square feet of retail; Phase 2 would add another ~335 units and additional retail and parking. • The civic improvements were budgeted in the term sheet at about $34.7 million (that figure includes the library in the developer model; the commission directed staff to treat the city’s obligated portion as the total cost less the county’s share for the library).

Financial terms and developer changes: The developer, Aaron Stollier of Thirteenth Floor Investments, presented a revised offer that raised the base economics from the original RFP. Key cash terms in the term sheet and the developer’s revision include: • Day‑0 payment at lease execution: $500,000. • Groundbreaking payment: $2,000,000 when construction begins on each phase; the developer offered an additional $1,300,000 per phase to smooth early‑year shortfalls, bringing total upfront payments to $7.1 million in the revised offer. • Minimum annual rent: $600,000 per phase (growing with CPI, capped at 5%). • Participation rent: 4.25% of gross revenues above the minimum rent. • The one‑time transfer fee originally in the term sheet was removed in the revised offer. • Liquidated‑damage provisions and escalating rents are written to protect the city in the event of late delivery; for example, the term sheet establishes additional annual penalties tied to missed completion dates (staff cited an example of $225,000/year for Phase 1 delays and $400,000/year for Phase 2 delays beyond specified outside dates).

Timeline and milestones: Under the term sheet, timeframes run from the effective date (when project documents are executed). Phase 1 must commence construction within 36 months of the effective date and be completed within about 5.5 years of that date. Phase 2 must begin no later than 6.5 years after the effective date and be completed by nine years; if Phase 1 is delivered early, Phase 2 must start within 12 months of that early finish.

Affordable housing and programmatic commitments: The developer agreed to reserve 10% of units at or below 120% of area median income (AMI), with one‑fifth of those units (i.e., 2% of total units) at 100% AMI. The term sheet also contemplates a “hometown heroes” leasing program to prioritize certain renter categories; the developer said they would produce program materials and partner with the city on outreach.

Contingencies and preservation: The term sheet includes a long‑term interlocal agreement requirement with the library. If the city and library cannot reach an agreement within the term sheet’s prescribed period, the developer is allowed to submit a revised site plan; the city retains approval authority and the right to terminate if a revised plan is not acceptable. Commissioners also required the developer present options to preserve elements of the Silva Martin Building on‑site or relocate architectural elements, with relocation costs anticipated to fall to the city if relocation is pursued.

Costs excluded from the developer model and next steps: City staff flagged several items not included in the developer’s base model that affect the city’s out‑of‑pocket financing: FF&E (roughly $2.16 million), the optional fifth floor (estimated ~$6.8–7.1 million including construction management), and the county’s share tied to the library (about $4.1 million, representing an 8.8% valuation share described by staff). When those items are accounted for, staff estimated a larger city financing need (staff cited a total out‑of‑pocket figure in the neighborhood of $40–41 million in the worst‑case scenario). Officials said the city can consider a mix of bonds and GOB financing and retain flexibility over the exact borrowing plan.

Public comment and operational concerns: A member of the public asked about sequencing, temporary relocation and whether the city retains ownership; staff said the city retains ownership under the lease model and that temporary relocation plans (including a 90‑day notice before the effective date and hybrid or trailer options) will be developed, especially to avoid any break in police operations.

Vote and timeline for final documents: After negotiating the listed modifications, the commission moved, seconded and approved the modified term sheet by roll call. Staff and legal counsel were directed to finalize the project documents and return them to the commission for separate votes; staff indicated that, if scheduleable, the full project documents could be brought back in several months (late June/early July was discussed as a possible target).

What the commission will review next: The full set of project documents (phase lease(s), construction management agreement, master development agreement, reciprocal easements, vertical subdivision and related exhibits), verification of the developer’s guarantor and liquidity requirements, and any site‑plan revisions tied to the library parcel or Silva Martin preservation will be brought back to the commission for formal approval.