5 Questions With David Martin of Terra Group

Seven years after Miami Beach voters approved a convention center hotel, developers Terra Group and Turnberry on Friday will break ground on an 800-room Grand Hyatt Miami Beach connected to the Miami Beach Convention Center.

The 17-story hotel is financed by a $392 million construction loan from Tyko Capital. When complete, the new hotel will make South Florida more competitive for major conventions.

“We have a list of all the conventions we lost for not having a room-block agreement with a convention center hotel,” said David Martin, CEO of Terra Group. 

This interview has been edited for length and clarity.

Commercial Observer: How will the convention center hotel affect conference bookings?

David Martin: The Miami Beach Convention Center hotel is going to be a huge asset for the convention industry and for the hospitality industry in Miami Beach. Maybe a decade ago or more, the convention space was asking to have price stability for their conventioneers. There are Tier 1, Tier 2 and Tier 3 conventions.  We want to get as many Tier 1 conventions as possible.

But in the requests for proposal, there’s a requirement for a headquarters hotel with a block of rooms. Instead of a meeting planner having to plan with 20 hotels, it lets the meeting planner work with four to six hotels.

And from a hospitality demand perspective, it’s going to be a very design-driven project. There hasn’t been a new hotel built of this size and scale in a long time. We have a very strong art in public places component.

What’s an example of a Tier 1 vs. a Tier 3 convention?

The Tier 1 events have less local impact and a higher GDP. So Art Basel might be a Tier 1 event. And an event like the car show, which brings a lot of local attendees, might be a Tier 3 event.

You recently paid $205 million for a condo site on Key Biscayne. What’s the plan there? 

We’ll start construction in a couple of years. We’re in the middle of engineering and designing and placemaking. We achieved all the entitlements we needed from the village. We’re planning 56 residential units. I’m not exactly sure where we’re going to land in terms of pricing. 

Our target is empty nesters moving into buildings for services, programming, convenience, quality of life. 3,000 to 6,000 square feet. Key Biscayne is such a special place. There are so many environmental amenities.

We need all kinds of housing. We need more workforce and attainable, but we also need high-end housing. That’s going to have the most impact in terms of increasing taxable value while having the least impact on infrastructure.

How does South Florida encourage more affordable housing?

We need to calibrate our zoning code to allow more density — three-story product along the higher-traffic corridors. My thesis is we give a density bonus for sites abutting commercial projects. We need a market-based solution. We’re not going to be able to deliver the supply of housing we need through subsidies and grants. Everyone knows we need to build more supply, we need to build it closer to transit, and we need to improve our transit system.

That sounds like the missing-middle concept of building more dense housing between downtowns and suburbs.

Absolutely. Did you know Little Havana has more density than Downtown Miami? You don’t want grandmothers and nieces and aunts needing to move out of a neighborhood to find affordable housing. 

Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.