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New proposed zoning regulations for Miami Beach’s Sunset Harbour neighborhood would encourage office development, but shun future hotels, putting a new project by Ronny Finvarb in a perilous position.

The Miami Beach Planning Board on Tuesday recommended the city commission approve the new overlay district for Sunset Harbour, along with an amendment that would allow hotel and residential projects that submitted design review board applications before April 27 to move forward. However, city commissioners could decide to remove the amendment when the proposed regulations come up for first reading on May 12.

The overlay district would only allow primarily office buildings up to 65 feet tall in Sunset Harbour. The legislation provides for retail and restaurant uses in ground-floor spaces and some residential units, as long as a majority of a building is office use.

Directors of the Sunset Harbour Neighborhood Association, which helped craft the language for the new regulations with commissioner Ricky Arriola, spoke against Finvarb’s project, a 36-room boutique hotel that would be built at 1790 Alton Road. His affiliate Sobe 18 LLC recently paid $4 million for the 10,200-square-foot property and has an agreement with Kimpton to also manage the new hotel.

Geoffrey Aronson, an association director, said that even though Finvarb is only proposing 36 rooms, the units are large enough to accommodate up to eight guests, and that it would attract tourists looking to split the cost of hotel stays. He also noted that the association voted 9-1 to oppose the hotel project.

“That is about 230 or so potential guests at any one period of time,” Aronson said. “I would suggest to you that the location of the hotel is not necessarily attractive to Class A tourists. There are going to be five hotels surrounding our area.”

Mike Ruben, another association director, said the group would consider dropping its opposition if Finvarb agreed to reduce room occupancy from eight to six people, which the developer said he would.

“Our concern is that there has been a degradation of tourism in Miami Beach, and we feel higher occupancy rooms invite that type of tourist,” Ruben said. “We would have to meet as a board and then meet with Mr. Finvarb.”

Finvarb, who has developed four other hotels in South Beach, told the planning board that the new hotel he is proposing is not out of scale for Sunset Harbour and that he is not seeking any height increases or variances.

“I took a risk making an investment during the pandemic,” Finvarb said. “Now there is some discussion about taking away our property rights and penalizing us.”

Finvarb did not respond to a request for comment on Wednesday.

Mickey Marrero, the attorney for Sobe 18, said Finvarb, prior to closing on the development site, met with Miami Beach Planning Director Tom Mooney to confirm a hotel would be permitted on the property.

Marrero said Finvarb executed the purchase agreement with a nonrefundable deposit a week before the Feb. 10 city commission meeting, when commissioner Arriola initially floated his proposal to limit commercial development in Sunset Harbour.

A Miami-Dade County deed shows Finvarb closed on the site on April 6.

Marrero claimed Finvarb was blindsided by the proposed restrictions. “At no point in our discussions [with Mooney] did the possibility of prohibiting hotels come about,” Marrero said. “Our client did everything a property owner should do in good faith.”

When 1790 Alton Road was listed for sale, marketing materials said the property was approved for a five-story commercial/retail building with 30 parking spaces and a roughly 8,000-square-foot ground-floor commercial space.

Finvarb also owns the Kimpton Hotel Palomar South Beach at 1750 Alton Road. His portfolio also includes the Residence Inn by Marriott South Beach, Thompson South Beach, and Courtyard by Marriott South Beach.

Source:  The Real Deal