Clevelander Hotel Owner Plans Tower with Affordable Housing

The owner of the historic Clevelander Hotel in South Beach is proposing a redevelopment of the Art Deco property into a residential tower with an affordable housing component.

Jesta Group said its plans hinge on the Live Local Act, a new state law that aims to incentivize developers of affordable and workforce housing with tax breaks and zoning workarounds. Montreal-based Jesta acquired the Clevelander and adjacent Essex in 2018 for $28.5 million.

Jesta will submit plans for the project at 1020 Ocean Drive “in the coming days,” the company said in a press release. Jesta is proposing up to a 30-story structure that would preserve and retain the Clevelander and Essex’s Art Deco façades and convert the hotel into a residential development.

The Clevelander, which can serve alcohol until 5 a.m., has been at odds with city officials, including Miami Beach Mayor Dan Gelber, over its nightlife business in recent years. In March, a judge granted the Clevelander an injunction that blocked the city’s temporary cut-off of liquor sales at 2 a.m. during the peak weeks of Spring Break.

It’s unclear whether the developer plans to build on top of the existing buildings or demolish the property — or even whether it can, since the Clevelander and Essex are historic and in the Ocean Drive/Collins Avenue historic district.

Jesta said it is working with an architect to design a tower, and that it will work with the city and preservationists on the design. The five-story Clevelander was built in 1938 and designed by Albert Anis. It has 60 hotel rooms, a swimming pool and patio area, sundeck, rooftop terrace, sports bar and restaurant.

The Live Local Act, or Senate Bill 102, supersedes local governments’ zoning, density and height requirements for affordable housing in areas zoned for commercial or mixed-use development. It specifically allows for developments with minimum percentages of affordable housing to be built as tall and with the same density as buildings within one mile of the proposed projects. The law went into effect July 1.

Some municipalities across South Florida oppose the state’s ability to supersede local zoning. The law also bans local municipalities from enacting rent control.

In the case of the Clevelander, the maximum density would be 150 residential units per acre — or about 67 units. The non-affordable residential units, which would likely be condos, will have access to hotel services. The tower also calls for a high-end restaurant on the ground floor.

Anthony O’Brien, senior managing director of Jesta Group, said in a statement that the Live Local Act allows the company to develop enough density and square footage to justify changing its business model.

Forty percent of the proposed residential units in the Clevelander redevelopment would be set aside for affordable rental housing. They would remain affordable for at least 30 years.

Shutts & Bowen attorney Alexander Tachmes, who represents the developer, said in a statement that the lack of affordable housing in Miami Beach has contributed to a “severe labor crisis.”

“It is extremely difficult to attract and retain talent in an industry with a dwindling labor pool and nowhere for existing employees to live,” he said.