South Miami commission approves term sheet to pursue 99‑year ground lease with 13th Floor Investments for city hall, library and park redevelopment

The South Miami City Commission voted 5-0 to approve a revised term sheet that would allow 13th Floor Investments to build a mixed civic and private development on the city hall/library/Gene Willis Park site under a proposed 99‑year ground lease.

Under the term sheet approved with modifications, the development would deliver roughly 54,700 square feet of civic space — including a library, police facilities and city hall functions — an enlarged Gene Willis Park, and a two‑phase residential and retail program. Phase one would include about 335 residential units, 5,000–10,000 square feet of retail and 360 parking spaces (100 of those dedicated to the city); a later phase would add about 335 units, 10,000–20,000 square feet of retail and approximately 550 additional parking spaces.

The developer, 13th Floor Investments, revised its offer during the meeting. The revisions keep a $500,000 payment at execution and $2 million per phase at groundbreaking, raise base annual rent to $600,000 per phase and increase participation rent to 4.25 percent of gross revenues above the minimum. To eliminate projected early-year shortfalls in the city’s cash flow, the developer proposed adding an extra $1.3 million per phase at groundbreak (an additional $2.6 million total) and removing the previously proposed transfer fee.

Why it matters: the transaction keeps long‑term property control with the city while creating a sharp increase in downtown housing supply and a concentrated civic campus. Commissioners debated whether to lease or sell portions of the site — several argued a sale would produce a one‑time capital infusion that could fund other local priorities, while a majority favored the lease to preserve long‑term control and potential upside.

Key terms and costs - Civic construction budget presented in the term sheet: approximately $34.7 million (the developer and staff clarified that about $6–7 million of that line item is the library portion and may be counted differently in the city’s ledger). - Affordable housing: 10 percent of units reserved at or below 120 percent area median income (AMI), with one‑fifth of those units at or below 100 percent AMI. - Payments: $500,000 at execution; $2 million at commencement of each phase; minimum annual rent of $600,000 per phase (CPI escalator, tied to a 5 percent cap), plus participation rent of 4.25 percent of gross revenue above the minimum; liquidated‑damage protections apply for delayed civic delivery (examples cited: $600,000 + $225,000/year for Phase 1 delays; $600,000 + $400,000/year for Phase 2 delays). - Schedule: Phase 1 must start construction within 36 months of the effective date and complete within about 5.5 years; Phase 2 must start within 6.5 years and finish within nine years of the effective date.

Questions and unresolved details Commissioners pressed staff and the developer on items that remain to be finalized: the exact accounting for library costs and the interlocal agreement with the library (the term sheet allows nine months plus a 12‑month extension to reach terms with the library, and the site plan would be revised or the city could exercise termination rights if no deal is reached), the cost of FF&E and relocation for city operations (staff estimated FF&E at roughly $2.16 million but said relocation costs were not yet fully defined), and whether an optional fifth floor for extra city space (about 12,400 square feet, estimated at roughly $6.8–7.1 million including fees) should be incorporated now. Staff estimated that including the optional floor, FF&E and other items could raise the city’s out‑of‑pocket exposure to roughly $40–41 million in a worst‑case financing scenario.

Preservation and access commitments The commission asked the developer to present options to preserve elements of the Silver Martin building (retain on site, salvage/rehabilitate elements, or consider controlled relocation). Commissioners also requested the term sheet be modified to require commercially reasonable efforts by the developer to pursue an additional access road from 62nd to the eastern portion of 73rd Street (improving circulation to the site).

Vote and next steps Commissioner Cay moved and Vice Mayor Corey seconded a motion to approve the term sheet as modified; the roll call vote was 5‑0 in favor. Mayor Fernandez and Commissioners Cay, Rodriguez, Bonich and Vice Mayor Corey voted yes.

City staff and the developer said they would proceed to draft the full project documents (phase leases, construction management agreement, master development agreement and supporting exhibits) and return them to the commission for action, with staff aiming to present those documents in the coming months (staff suggested late June or early July as a target). The commission’s approval tonight is of the term sheet and the set of modifications discussed; the final project agreements, financing plan and interlocal agreements must return for formal approval before execution.

What commissioners said Developer Ray Melendi said the process had been collaborative and described the revised financials as a response to city concerns about early‑year cash flow. Commissioner Rodriguez argued selling part of the property could unlock a large one‑time capital sum for other city priorities; several other commissioners said the lease preserves long‑term city control and, with the revised upfront payments, addresses early cash‑flow concerns.

The commission’s approval sends the term sheet and the agreed modifications into drafting and negotiation; no project documents were executed at tonight’s meeting.