City moves quickly in bid to save CVS lease deal

Raanan Katz is a man of action.

When the former Israeli basketball star turned developer speaks, mountains move and deals get made.

In Sunny Isles Beach on June 5, it was yellow plastic bollards that stood in his way and within four hours they were gone in a demonstration of teamwork and the power of  a letter of indemnification against lawsuits.

Katz, the man behind RK Associates and the city’s largest commercial property owner, had a problem. So he put out a call for an urgent meeting with city officials. Commissioners obliged by scheduling him for an unannounced ‘discussion’ session after an advertised special commission meeting.

The problem, Katz told commissioners, was that CVS, the national pharmacy chain, had put a gun to my head” over the new store at 183rd Street and Collins Avenue. The company was ready to cancel its lease – without ever taking occupancy – in a dispute over access from northbound Collins Avenue via 183rd Street. The yellow bollards – the plastic posts in the middle of 183rd Street that prohibited a left turn into the CVS site – had to go. And they had to go immediately.

If the sticks stay, CVS won't open and "I've built a white elephant," Katz said.

At stake, he said, were his $2.5 million investment, a lease worth roughly $5 million, the survival of RK Village Plaza, the commercial property tax revenue that flows to the city and nothing short of the future of retail in Sunny Isles Beach.

Against that backdrop, Katz was careful to frame his case not as a legal argument but rather as a call for fairness and “mercy” for a member of the Sunny Isles Beach family. He recalled his early days as a developer when Collins Avenue was flanked by low-rise motels and T-shirt shops were the predominant form of retail business. He recalled his backing for the city, his donations, his friendship and support past, present and future.  He poked at what he said was unequal treatment at the 178th Street corner and at more dangerous spots within the city. He ticked off the economic challenges he faces in Sunny Isles Beach, from vacant storefronts to delinquent tenants. And he floated the notion of a messy and expensive lawsuit that seemed certain to include the city.

A mistake had been made, a miscommunication, he acknowledged. Perhaps it was on his end. But it wasn’t fruitful to point fingers at this point.  “You don’t owe me anything but today I have a problem,” he said, and “I can’t afford to wait.”

"I'm very close to begging," he told commissioners.

Acting City Manager Rick Conner and commissioners recalled the discussion about the site plan and about the safety of pedestrians including pupils at the nearby Sunny Isles Beach Community School. They restated their interest in a long-term solution that involved locating a traffic light and new shopping center entrance at 182nd Street, between the Colonial Bank building and the new CVS. Progress was being made, Conner reported, but a lot of agencies needed to sign off on the plan which was now in the hands of the county.

Katz said he was open to that long-term solution as well as a number of other possibilities including donating more land so that 183rd Street could be widened. But what he really needed was an immediate fix so that he could convince CVS to take occupancy of the store and save the lease deal.

He showed city officials documents that he said named the city as a co-insured on $100 million of liability insurance in case something happened at the intersection. He offered to pay for a police officer to monitor traffic flow and step in if problems arose.

But by the end of the day, he needed to go back to CVS with an indication that the problem was on the way toward resolution and that CVS could go ahead and open for business, even if it meant he had to cut them a rent reduction.

Over an hour of debate came down to Commissioner George “Bud” Scholl’s suggestion that, with the school closed for the summer, the city could temporarily remove the bollards with the understanding that they would go back up a week before school resumed in August unless a more permanent fix could be implemented by then.

City Attorney Hans Ottinot ticked off the conditions, including Katz assuming the city’s liability should CVS sue, and a deal was cut. Four hours later, the yellow plastic bollards were gone.

It was a show of good faith that seemed to give Katz enough to reengage CVS executives yet still give Vice Mayor Lewis Thaler and others confidence that pupil safety wouldn’t be compromised.

If Katz can negotiate with CVS officials as effectively as he negotiated with Sunny Isles Beach commissioners, the drug store will open this summer.


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