Land Use & Government Relations attorneys Javier Aviñó and Anthony De Yurre discuss adaptive reuse and historic preservation in one of Miami-Dade County’s most iconic historic neighborhoods, Coral Gables. They cover the City of Coral Gables’ use of adaptive reuse to preserve its signature Mediterranean architecture, the City’s incentives and bonuses for adaptive reuse, and what’s on the horizon for real estate development in Coral Gables. What follows is a transcript of the discussion.
AVIÑÓ: Hello everybody. I'd like to welcome you to Bilzin Sumberg’s interview series, Old Structures, New Purpose: Mastering The Practice of Adaptive Reuse. In this series, we'll explore the salient and timely topic of the business and legal aspects of adaptive reuse projects. Today, I have the pleasure of speaking with Anthony De Yurre, a Partner in Bilzin Sumberg’s Land Development & Government Relations Practice Group, on a very important neighborhood in our community, Coral Gables.
Thank you, Anthony, for joining us today. As I said, Coral Gables is an interesting community, and one of the oldest areas of our County. It's no stranger to adaptive reuse.
DE YURRE: Coral Gables is a city that I call home. I grew up there. I am an adjunct professor at the University of Miami. I'm a board member of the University of Miami Law School, Real Estate LLM. And so I have a lot of ties to the community, and I really enjoy practicing in that specific jurisdiction.
AVIÑÓ: So the dramatic growth of Miami-Dade County is something that we've seen in a variety of different communities, including Coral Gables. Can you tell us a little bit about how adaptive reuse projects play a role in Coral Gables?
DE YURRE: Absolutely. You know, Coral Gables is no stranger to development. Coral Gables actually has more office square footage than Brickell does, which is incredible when you think about that. So over many decades of development- the city was founded by a developer, George Merrick- there've been many instances of redevelopment and re-imagination of the city.
Certain components of the central business district still exist today as they did in the city's founding. But there are many instances of this going on currently in the city and the city is structured in many ways to allow redevelopment of existing structures within their approval process.
They have a board of architects; they have a historic preservation board and they have a particular bonus that you can earn in the city, which is the Mediterranean bonus. And so ultimately all these different components come together to create, I would say, a model scenario to allow for redevelopment of existing structures and use of the existing structures. Then new structures that are created or added to them still maintain the same historic feel through the Mediterranean bonus, which essentially lets you get certain height and density and intensity units or square footage bonuses, if you architecturally are inspired and have the different components of the original Mediterranean design of the city of Coral Gables.
AVIÑÓ: So you mentioned George Merrick and some historic aspects. Is that something that's unique to Coral Gables and how does historic preservation play into adaptive reuse, specifically?
DE YURRE: So the historic preservation is not unique specifically to Coral Gables. Almost every jurisdiction has some review from a historic component, but Coral Gables itself has many different instances of original Mediterranean design, a Mediterranean revival that tried to emulate it in the 1980s, and the city saw a need to create something that was more true to the original Mediterranean design of George Merrick.
And this process has gone on through different versions of the zoning code. And now most recently referencing specific examples like in the code, such as the Biltmore Hotel, the Colonnade Hotel, and City Hall itself. And so when new projects are brought to the city, we try to tie in a lot of the architectural themes.
The Colonnades, for example, are very unique to the Mediterranean design and the different facades that go back to the Mediterranean design. And we try to tie them all together in a newer project, but hearkening back to the Mediterranean design bonuses. Ultimately, what this allows you to do- whether you have an adaptive reuse of an existing older structure or a brand new structure- is create that same unifying theme of the Mediterranean architecture.
AVIÑÓ: So what are some of the ongoing adaptive reuse projects in the Gables that would provide some helpful lessons for developers as they process applications?
DE YURRE: Sure. One of the favorite ones that I have, that I got to work on for a client of mine, was 120 Giralda, which was the old Church of Scientology. It was the Church of Scientology for many decades. And prior to that, when we pulled the County records, it was actually an office for Dow Chemicals, way back in the 1950s.
I mean, you should see the photographs. It's like a time warp, with a Dow Chemical sign outside. You'd think it was a tourist picture from somewhere in Cuba with the 1950 vehicles. So that particular project was also unique because it also involved the city closing off Giralda and making it a strictly pedestrian thoroughfare. It was originally referred to as restaurant row, which has become a success in ultimately continuing to foster the restaurants in F&B space there. They closed the street and made it exclusively pedestrian.
So our clients bought the Church of Scientology, which is unique in Coral Gables because they had a significant amount of storefront which was probably at least a hundred feet long. And they also had a nice clear height inside. So what retailers or food and beverage occupant tenants are looking for is a certain spec of size in terms of storefront, height, and square footage.
And so when they came to me, we looked at that first and I said: Okay. You're still under just an LOI. You still don't have to buy this piece of property, but let's go look at it and look what the specs are, because it's going to be determinative of whether or not a tenant that could rent will actually be interested in the space.
And just as an aside, I love doing that part of the business. I love to get an understanding what the business goal of the client is. So we can marry it with what we're trying to accomplish on the legal end, as opposed to kind of being there with blinders on. And so we had the discussion, we went in there and they went in the next day and they blew out the drop ceiling and they had almost 20 foot clear height, which was phenomenal.
And so ultimately we went in there and told the city, we want to create separate bays with food and beverage concepts in here. And we also want to activate the rooftop because we were overlooking the pedestrian Giralda area. So you can imagine you're taking something that's been there for decades, but also the fact that there was once a Church of Scientology there, which is unique wrinkle. Is that a religious facility? Was it really an office building? We had to go and jump through a lot of those hoops. How does that really factor in for the client impact fees for redevelopment of existing spaces, like you take a warehouse and you make it a restaurant. Or you take an office space and you make it some other food and beverage concept. Now you have to go from, you probably paid $10 a square foot for road impact fees. And you're going up now to $60, $70 in some instances. And if you have a 10,000 square foot bay at six figures, it'll get into seven figures very quickly.
And so we had to figure out the previous use by going back into the history of it; that's how we had those Dow Chemical pictures of the site to figure out what the site was, how we could save money on these impact fees. And these are all little wrinkles of redevelopment and how you deal with existing properties. Secondly, ther was the structure of the site.
How do we accomplish what the client wants with the least impact in terms of the construction budget? We figured out a way to go and activate the rooftop, put a rooftop lounge on the building. And so you can imagine we took that project that was a decades-old office of a religious structure, figure out what it was in the 1950s and 40s to get credits for the impact fees, then deal with the structural components of it.
And now it is a phenomenal success. It has become the heart of Giralda, AKA restaurant row. They have a Coyo Taco in there, they have a simpler spring greens, a phenomenal concept. They are doing a launch of the rooftop lounge and event space in the coming weeks, along with new restaurants that are coming into the space.
So it really has become the poster child in Coral Gables for a successful adaptive reuse of a particular space.
AVIÑÓ: So you’ve talked about some truly transformative projects. Does the City of Coral Gables have a unique take or a unique spin on adaptive reuse as compared to other municipalities?
DE YURRE: Well, what's unique to Coral Gables is also timing, because they just passed a new zoning code. And this new zoning code in particular has a sub section that deals with Miracle Mile. Miracle Mile is a main thoroughfare of the city within the central business district. And what the new code allows on Miracle Mile is development of the particular sites without having to bring in a minimum parking requirement.
Why is this significant? Because as we discussed, when you take a use like office or warehouse or retail, and you make it a food and beverage concept- you're getting a theme here, right? Adaptive reuse, food and beverage. You have an increase in a parking requirement because you need less spaces for a retail space than you do for a restaurant or a lounge or a bar.
And so what the City recognized is we want to allow redevelopment of these sites. We want to allow different opportunities. We want to allow food and beverage; they saw the trend in food and beverage and they said, how do we do that? How do we accomplish that? And part of the restrictions were in parking.
So now you don't have to park in Miracle Mile if you redevelop these sites. They also allow that for historic properties, of a certain age you can go and change the use within the building. And as long as you don't expand the floor area, by a certain percentage, they will allow you to bring in a new use and not have a parking requirement increase.
That is something that would apply citywide and that something actually we did; we've done it a couple of different instances, where again, you're looking at your existing square footage. We want to just change the use on the inside. We're going to go from dry retail to restaurant, perhaps.
All right. As long as that building's been there from X date and you're not expanding the square footage, we're not going to require you to have a parking requirement increase. And then now in Miracle Mile across the board on Miracle Mile, they now allow you to redevelop the sites without having a minimum parking requirement.
So that's probably one of the other big considerations you have to take into account as you change the use and adaptive reuse of these sites: how does parking impact that? And that's the approach that Coral Gables has taken on that particular issue.
AVIÑÓ: So what do you think is on the horizon for Coral Gables development within this space?
DE YURRE: I would say that with the advent of the new zoning code, what you're going to see is an opportunity for more mixed-use development. The code was streamlined to reduce the number of steps that you need to have a mixed-use project approved. As I said, the city has more office square footage than Brickell does.
So in terms of traffic, and increase in the pedestrian activity within the central business district, what you need no, are residences, and then the ground floor retail to go along with those residences; you don't necessarily need as much office. And so the city recognized that in passing new zoning codes, so they can streamline the process to create more opportunities for mixed-use development.
Now we have these millions and millions of square feet of office. We don't have that much residential within the CBD. So with the increase of this residential, we're going to create this work, live, play atmosphere within a very walkable area within the CBD.
I also think the opportunities will be within the public private P3 space with the city, where the city has a number of properties that need updating. They need infrastructure, but given COVID in particular and constraints on budget, it's not like they're necessarily clamoring to go spend all this money.
The City of Coral Gables has a AAA bond rating, and they are very proud of that. And so I think we're looking for opportunities now where they can look at the private sector, and not sacrifice their bond rating. They understand that their revenues will come back eventually, but look to the private sector to help them redevelop some of the infrastructure they have, older parking garages perhaps, and older surface lots perhaps.
Those are opportunities where the private sector is interested in a pipeline to develop new projects or maybe redevelop infrastructure that was existing there and provide something new for the city. But without the taxpayers having to flip the entire bill.
AVIÑÓ: Anthony, thank you very much for joining us today.
We covered a lot of territory today on Coral Gables and adaptive reuse projects, and we look forward bringing you the next episode of Old Structures, New Purpose: Mastering the Practice of Adaptive Reuse.