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New Development of Iconic South Beach Landmark Will Create Affordable Housing

A strategy to thwart a multi-year, nonstop campaign by the City of Miami Beach to close businesses like the Clevelander Hotel could make budget living in South Beach possible.

MIAMI BEACH, FLORIDA — Back in the glory days of Crockett and Tubbs, when Gloria Estefan and Miami Sound Machine’s “Conga” was the soundtrack to neon-hued nights, the iconic Clevelander Hotel on Ocean Drive was instrumental in revitalizing South Beach.

In 2009, the hotel underwent another round of significant renovations. But the owners of the Clevelander have faced political pressure for years as the city of Miami Beach aims to change the atmosphere around Ocean Drive – from a boisterous party scene to a more sophisticated, low-key ambiance.

Alexander Tachmes, an attorney for the Clevelander and partner at Shutts & Bowen, says Florida’s new Live Local Act provides the first opportunity he’s seen that could make financial sense.

“For close to a decade, many have claimed that change is required on Ocean Drive and that the way forward is to shut down iconic bars and entertainment establishments,” Tachmes told The Florida Standard. “This approach has led to a multi-year, nonstop campaign by the City to close businesses that are historic and legally operating, like the Clevelander.”

Tachmes said it has become an impossible task for the hotel to continuously oppose the hundreds of ordinances and statements from the City of Miami Beach. Rules that he says are focused on destroying and shutting down businesses.


Jesta Group, which owns the Clevelander, said the new Live Local Act recently passed by Florida lawmakers would allow them to build with a maximum height of 30 stories – bypassing local zoning laws – as long as 40 percent of its units are designated as affordable housing. The affordable units would be rentals, while the remaining units would be condos.

“Since purchasing the Clevelander Hotel and Bar a few years ago, we have been proud to operate this legendary and iconic establishment in South Beach,” Jesta Group’s Senior Managing Director Anthony O’Brien said in a statement. “Although we are happy to continue operating as we have, some have expressed a desire that we change our business model at the property. With the Live Local Act, we now have a unique opportunity to do that.”

The new development would have a ground-floor restaurant and maintain its historic Art Deco facade. Tachmes called the idea “a huge win on multiple levels.”

“The city wins by achieving its goal of turning a nightlife venue into a sophisticated restaurant and replacing hotel rooms with residential products on Ocean Drive,” he said. “The city and hospitality workers win by the introduction of a significant quantity of affordable housing, which will give the hospitality community greater options to live in the community in which they work.”

The Clevelander wins, Tachmes added, “by replacing a highly profitable business with enough potential development revenue to justify a change in business models.”

“We absolutely love this asset and we recognize the historic and iconic nature of its past,” O’Brien said. “We do not plan on ending the Clevelander’s brand as a bar and restaurant.”


But Miami Beach Mayor Dan Gelber, who said he wasn’t aware of the proposal until he saw the press release, called it the “worst idea ever.” Gelber even stated that Jesta Group, which bought the property in 2018, “should be ashamed.”

“Thirty-story buildings would simply destroy what is known throughout the world as the iconic postcard of our city,” Gelber argued. But City Commissioner Ricky Arriola expressed optimism, saying state lawmakers “had to force our hand” after the city approved zoning legislation limiting developers’ ability to build affordable housing.

“I think you’re going to see more projects like this in the future. I’m not sure that’s a bad thing,” Arriola said. “Potentially, we’re going to get more affordable housing, and, in the case of the Clevelander, we will potentially eliminate an outdoor nuisance, which will help clean up Ocean Drive.”

Mayor Gelber, who is term-limited in his role, will be replaced in November’s election. Voters will also choose three new commissioners. While the Clevelander says they want to work closely with the city on the plans, the new state law stipulates that local governments cannot restrict the density of an affordable development below the maximum density allowed anywhere in the city.

Florida lawmakers passed the Live Local Act in March, incentivizing new construction projects through tax breaks and interest-free loans to help Floridians afford down payments. A unit would classify as affordable for a one-person household earning up to 120 percent of the area median income – which would come to approximately $86,760 in Miami Beach.