Restaurants Key To Retail Developers In South Florida

Miami residents' stomachs are becoming key to the future of the retail experience in South Florida.

“Food is the future,” Terranova Corp. development director Joshua Gelfman said. "Human beings are social animals, and we want to have experiences in public."

Gelfman said restaurants are key to creating experiences that shoppers crave at shopping centers and in neighborhoods like Lincoln Road.

Locally owned businesses — especially restaurants — have become key to retail real estate in Miami, said CBRE senior associate Danny Diaz, who was part of a Bisnow panel Tuesday that included Franklin Street senior vice president of investment sales Greg Matus, Comras Co. CEO Michael Comras, Kimco Realty president Paul Puma and Plaza Construction president Brad Meltzer.

Diaz said Miami's restaurant industry is “extremely healthy, and it's what's driving most of the projects down here."

But for restaurants and other small businesses, working with the city on permits can entail overcoming lots of obstacles. It can take months to secure a permit, The Barlington Group principal Bill Fuller said. Even then, the problems may not end.

Due to city code changes, businesses can find themselves out of compliance and facing costly fixes, Fuller said. Barlington has done a number of retail redevelopments in Miami as well as invest in some retail operations, including the retail redevelopment of 90 Southwest 8th St. in Brickell.

“Sometimes you can be held up three months for some grease trap fiasco,” he said. “There's no set standard or protocol that guarantees you're going to get anything done in any municipality. It's very frustrating. Especially for a small business owner when clearly they have programmed their budget to pay their rent on the day they expect to open. And then they're not opening [until] six months later. It's painful.”

Fuller cited a business his firm is in partnership with that had to shutter for two weeks due to a “misunderstanding in what the certificate of use allowed,” costing the business $100K in losses. The owners finally addressed the issue after meeting with city officials.

“You'll be on pins and needles because you'll have a successful operation and you'll have to go back in and address that,” Fuller said. "Sometimes it's extremely costly."

Miami chief innovation officer Mike Sarasti — on the same panel as Fuller during Bisnow's Future of Retail of Vice City Tuesday — said the city is looking into ways to ease the permitting process, including allowing businesses affected by permitting issues “to talk about their pain they're suffering right now” with someone at the city. Among the other potential fixes include electronic planning review and after-hours permit review in some cases.

“All these things are on the table,” Sarasti said.

Both Fuller and Sarasti said there is a level of revitalization in local business interest in the urban center, and it is a segment that will grow if the local government can foster it.

“I'm so re-energized by the sense of entrepreneurship that's out there,” Sarasti said. "I see that growing and expanding."

And local businesses can potentially “far out-succeed what any national company can do,” Fuller said. “How often in New York City do you see Papa John's or a Pizza Hut or Domino's? That's simply because they can't compete in that environment because there's just too many great local pizza operators.”