RH announces proposal to restore One Ocean Drive

RH announced its intention to restore One Ocean Drive, Miami Beach, submitting an RFP and formally entering the bidding process for a long-term lease of this iconic public property. RH Chairman & CEO Gary Friedman outlined the Company’s vision for this historic property in a letter promoting “A dramatic reimagination and restoration of the site to its historic origins as a public park, with two beautifully landscaped beach promenades providing direct public beach access and opening up significant view corridors from Ocean Drive.” And added, “We expect to make a total capital investment in the range of $150M-$170M, inclusive of an estimated $50M in public benefits. The Company is seeking a 30-year lease term with a starting base rent of $7M, increasing a minimum of 3% annually, resulting in an average base rent of $11M, or $333M over the term of the lease. The estimated $50M in capital investments toward public benefits reflects RH’s commitment to both the local community and to Miami Beach visitors from around the world. Additional public benefits include our offer of a $5M upfront payment to the City to cover lost rent and taxes during the two-year construction period, plus a $1M cultural contribution to the community, to be directed by the City. Additionally, the City of Miami Beach can expect an incremental $3.3M per year on average, or a total of approximately $100M in ad valorem, hotel occupancy, plus food and beverage taxes over the term of the lease. Total public benefits from lease payments and taxes are estimated to be $465M over the life of the lease. Of which, $430M directly benefiting the City of Miami Beach and $35M going towards other governmental jurisdictions that impact the lives of City of Miami Beach residents including, Miami-Dade County and the Miami-Dade County Public School District.”