Just before midnight, the Fort Lauderdale City Commission voted four to one in favor of amending a lease agreement to allow the Bahia Mar hotel to undergo a big redevelopment.
Under the 100-year master lease, Rahn Bahia Mar LLC has the right to knock down the 47-year-old structure at 801 Seabreeze Blvd. and replace it with a $1 billion mixed-use development on 39 acres of city-owned land. The current plan encompasses 256 new hotel rooms, 360 condo units, and 88,000 square feet of retail and office space.
In exchange, Rahn Bahia Mar will pay the city 6.25% of its annual rent at the marina, 4.25% of its hotel revenue, 5.5% of its commercial rents, and $1.25 per square foot of its residential sales. The LLC will also pay up to 5% of “branded” condo sales exceeding $1,200 a square foot, as well as transfer fees. Another 0.375% of branded condo sales will go to a community trust fund.
All told, the city would earn an average of $15.5 million annually under the terms of the new deal, Ken Krasnow, vice chairman of institutional investor services for Colliers International, said to Mayor Dean Trantalis and four city commissioners Tuesday night.
Fort Lauderdale previously earned $1.5 million a year from the property, which is valued at $256.4 million, according to an assessment from Colliers.
The master lease’s approval isn’t the final hurdle for the developers, however. Rahn Bahia Mar LLC, led by Kenny and James “Jimmy” Tate of North Miami-based Tate Capital and Sergio Rok of Rok Acquisitions in Aventura, still need the city’s final approval for a site plan.
Bahia Mar is the longtime anchor of the annual Fort Lauderdale International Boat Show, a major sales driver for South Florida’s $12.5 billion marine industry that’s said to rival the Super Bowl in economic impact.
The boat show’s organizers, which sublease the Bahia Mar Marina from the Tate brothers and Rok, recently sued the developers, but told elected officials they were not opposed to the passage of the master lease.
Stephanie Toothaker, an attorney for Yachting Promotions Inc. and Marine Industries Association of South Florida (MIASF), said Bahia Mar LLC agreed to add language to its master lease that would provide additional security for the boat show from potential litigation by future condo dwellers.
There remains negotiations to be had between Rahn Bahia Mar and the boat show on the ultimate site plan, signage, event infrastructure and the rent organizers will pay.
Phil Purcell, president of MIASF, said during the hours-long meeting on the master lease that the boat show needs a seat at the table to ensure its survival for the remainder of its 30-year lease at Bahia Mar Marina.
Alain Boileau, Fort Lauderdale’s city attorney, said the spat between Rahn Bahia Mar and the boat show is unlikely to influence the city’s decision.
“It really is not our fight,” he said.
According to MIASF and Yachting Promotions’ estimates, the annual boat show supports 149,000 marine industry jobs in South Florida and provides a $1.8 billion boost to Florida’s economy.
Developer James Tate has told the Business Journal that the Bahia Mar project has a potential impact of $1.43 billion and will support 2,317 jobs.
Dozens of citizens offered their views of the project to commissioners the project during the Tuesday meeting. Some spoke in favor of the project, but the vast majority of Fort Lauderdale residents in attendance were opposed to building condominiums on publicly owned land. Some critics of the deal, such as former Fort Lauderdale mayor Jim Naugle, demanded a referendum on any lease deal at the Bahia Mar site.
Boileau replied that the results of such a referendum wouldn’t be enforceable until at least 2062, which is when Rahn Bahia Mar’s previous 41-year lease runs out on the property.
Trantalis insisted that the new lease plan was preferable to a previous site plan that was approved by Fort Lauderdale officials in 2017. Under that plan, Rahn Bahia Mar could build 651 condos.
“I wish we could have a blank slate,” he said.
Commissioner Ben Sorensen, the lone dissenting vote, said “he is just not there” when it comes to supporting the construction of condos on public waterfront land.
“I am feeling much better about the business deal,” he said.
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