What a Deal!
Developer’s Land Donation Nets City TDR’s Worth Millions
By Bari Auerbach

When it comes to ensuring Sunny Isles Beach reaps maximum benefits from transfers of development rights (TDR’s) while developers are also fairly compensated, the City Commission recently proved it’s possible to achieve a “win-win situation.”

Following a request made by Mayor Norman Edelcup, a developer (Porto Bellagio Partners LLC) seeking to donate property to the city in exchange for TDR’s wound up doing so under guidelines outlined in the city’s Town Center ordinance instead of the park bonus enhancement program. This served to substantially increase the intrinsic value of the property being conveyed. Now, the city will acquire the land plus TDR’s worth approximately $6 million that can eventually be sold to fund capital improvements.

“ On behalf of all residents of Sunny Isles Beach, we would like to thank the developer for this gracious gift [of land],” Edelcup said at the Jan. 13 City Commission meeting. “It certainly goes a long way to showing we can [attain] a win-win situation - not only for the developer but also for the benefit of our citizens…When the city has money available after selling [banked] TDR’s [attached to the donated property] we will certainly be able to improve quality of life with additional capital improvements that essentially [will have come] from this ‘gift.’”

The 2.5 acre parcel of donated land, legally described as “Tract D of RK Marina apartments” owned by Porto Bellagio Partners LLC is located on 172nd Street near the Casino property on the west side of Collins Avenue, where a 3.46 acre public park will soon be built. In accordance with another TDR related transaction that took place last year, the Commission voted to accept conveyance of the Casino property. This made it possible for The Related Group of Florida (building Ocean Four) to obtain TDR’s. The fact that the Casino property will soon be home to a public park is especially pleasing to many Winston Towers residents who were opposed to a residential development previously proposed for the site.

‘Sealing the Deal’
When the resolution regarding donation of the property by Porto Bellagio Partners was first brought up for discussion at the Jan. 13 City Commission meeting, Edelcup noted,
“ I personally feel under the park bonus enhancement program, I would not want to accept this piece of property because I don’t really believe it’s of a top priority [for the city to obtain it].

“There are instances where the park enhancement bonus is the ordinance of choice in order to acquire a piece of property - but at other times, I think when the property is not of prime value to the city [yet still] has some significant value, I would be inclined not to look at it under the park enhancement bonus - but to look at it under the regular ordinance that we have for the Town Center.”

Dave Metzner, managing partner for Porto Bellagio Partners, subsequently stated, “My company has agreed to ‘split’ the base TDR’s and have the [Commission] decide [how] to use it to benefit the city.”

Reiterating the significance of the developer’s compromise, Edelcup said, “[The developer is agreeing to] accept half the amount of TDR’s that could otherwise be obtained on this property and is donating the other half to the city to put in [our TDR inventory] under the Town Center ordinance provisions.”

To further highlight the benefit to the city, Edelcup referenced “TDR calculations” revealing that the developer would have originally been able to receive approximately 400,000 square feet of TDR’s under the park bonus enhancement program - but under the Town Center ordinance, that dropped to approximately 260,000 square feet. Furthermore, the developer agreed to “gift” half of the 260,000 square feet to the city - so ultimately, the city will get approximately 130,000 square feet (valued at roughly $6 million) to put in its TDR bank.

City Attorney Lynn Dannheisser read the verbiage of the resolution into the record noting a motion was made to “accept conveyance of approximately 2.417 acres owned by Porto Bellagio Partners as park land and [approve] the transfer of development rights from the property to the applicant’s account in the TDR bank in the amount of the underlying zoning of 2.5 FAR or 263,222 square feet and approximately 60 dwelling units per acre -or 145 pursuant with land development regulations relating to TDR’s – 50 percent of which will be transferred to the Sunny Isles Beach [TDR] account.”

‘Win Some – Lose Some’
While Porto Bellagio Partners agreed to proceed with the TDR transaction under the Town Center ordinance as opposed to the park bonus enhancement program, another developer the City Commission asked to consider the same sort of parameters did not choose to accept the proposal.

On November 18, 2004, speaking on behalf of developer Joseph Milton of J. Milton & Associates (Pinnacle, Intracoastal Yacht Club, King David, Sayan), attorney Cliff Schulman of Greenberg Traurig asked for deferral of an agenda item relating to the donation of a parcel of 0.83 acres of property located at 500 Sunny Isles Boulevard to the city in return for transfer of development rights (TDR’s) pursuant with the city’s park bonus enhancement program.

Subsequently, Mayor Edelcup made a motion to deny the deferral request stating, “The only way that I would entertain a motion for a deferral on this item is if you would be willing to bring it back under the normal TDR ordinance - the normal as of right zoning…The [developer] has a small piece of land that he wants to add to a big piece of land that we already have, make a park out of it – and make millions of dollars as a result of that transaction.

“ We will have the park no matter what happens - and [the issue is] whether or not we want to make the park include [the developer’s approximately] 12,000 square foot piece of property that is two-thirds under water - and grant the [developer] the opportunity to make millions of dollars.”

Ultimately, with only Commissioner Danny Iglesias dissenting, the Commission voted to deny the applicant’s deferral request and approved Edelcup’s motion requesting the developer withdraw his current request and re-submit it under the TDR ordinance that exists for the as of right development on that property and not for the park enhancement bonus. Schulman subsequently announced withdrawal of the application.

‘TDR’s 101’
Thanks to transfer of development rights (TDR’s), Sunny Isles Beach is making “landmark progress” towards the goal to acquire property for public amenities, parks and green open space.

Transfer of development rights (TDR’s) can be defined as "the process by which development rights are transferred from one lot, parcel, or area of land in a sending district (usually where land conservation is sought) to another lot, parcel, or area of land in one or more receiving districts (where property is desired and can be serviced properly)." Effective TDR programs can allow communities to develop in a more cost-effective manner and can increase the tax base while allowing owners of land to be compensated.

Further explanation of TDR’s by Commissioner Danny Iglesias has provided insight such as, “If a developer has a piece of land and doesn’t have any interest in building on that site – he has the option of picking up the TDR’s on that property and transferring them over to another site upon approval of the City Commission.”

In October of 2004, the Commission amended the city’s TDR ordinance to ensure fair and equitable administration for all parties concerned.

“We’re defining the ‘sender site’ – the site that gives up the land – as a site the city will be able to use as a park or open space,” Mayor Norman Edelcup explained. “The other item we’re [amending pertains to] the sender site…If there are TDR’s involved, they need to be identified at the time the site plan is being reviewed.”

Main TDR “receiver sites” in the city are the east side of Collins Avenue and the town center district on the west side of Collins Avenue from 172nd Street to Sunny Isles Boulevard. There are four city-owned sites creating a “bank” of transferable development rights: Golden Shores Park (205-191 Terrace), the active park (18115 N. Bay Road); Sen. Gwen Margolis Park (17815 N. Bay Road); and Samson Oceanfront Park (17425 Collins Avenue).

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