JUNE 23, 2014







-----Original Message-----

From: al crespo []

Sent: Wednesday, June 18, 2014 6:01 PM

To: Jeff Berkowitz


Good Afternoon Mr. Berkowitz,

I was looking at the Consolidated Cash Flow projections you provided to the city, and since my math is pretty much limited to add and subtract, I might be having a problem trying to figure it out.

As best as I can figure, it appears to me that your calculations -

and I understand that they are in part aspirational - are based on  collecting $23.44 from each visitor, and that your first year calculations are based on the 3.2 million visitors that you have cited in the past.

Is that correct?

If it isn't, then would you provide me the correct numbers?  As I told you previously, I don't like to be wrong, and the best way not to be, is to work from accurate information and numbers, and I really would like to comprehend your projections.


al crespo


In response to your question:

Our projections are based on a very detailed study done by an independent leading company in the attraction and entertainment space. The projections are consistent with an earlier study conducted by another group of independent consultants. It is almost impossible to generalize and boil down to a few simple numbers. Hopefully the following helps:

Attendance and Revenues per Visitor

The consultants project in the first full year (12 months) of operations, 3.269 million visitors to the Tower. 85% or 2.779 million will pay to access the observation decks and the rides. 15% or just under 500.000 will not pay an admissions price because they are accessing other amenities that charge differently, such as the restaurant, night club, private club and the conference center and 500 seat ballroom. So it is impossible to really come up with an overall per visitor revenue that would have any meaningful value. However, we do estimate that the average admission price for a paid visitor at $26.30.

By way of example, the projected pricing as of today for the 2018 (opening) for the General indoor and outdoor Observation Decks are:

Adult- $28.95

Child- $24.95

Senior- $24.95

Groups- $23.95

There is also combo pricing where one can visit the Observation decks and the flying Theatre, SkyPlunge or SkyDrop for an additional charge. There will be dynamic pricing based upon fluctuating demand, express pass pricing and an upcharge to visit the premier observation deck. Because of all of these variations, it is difficult to calculate a one price per visitor. What is important is that our basic pricing (admission to the general observation decks) is extremely competitive with other similar attractions (towers) around the world and with other Miami-Dade attractions. We feel that our pricing will be very attractive to both tourist and residents, who deserve a modern state-of-the-art tourist attraction in an otherwise world-class community. Attendance will also fluctuate by month (there is a seasonality to our South Florida tourist and as such, we are impacted), by day (weekends and holidays will be busier) and by hour. Therefore, there is no average daily attendance. We have designed the project to accommodate visitor traffic significantly in excess of that which has been projected.

I have visited many of the top towers throughout the world and I can state, without reservation, that not a single one of them will come close to matching the nature, quantity or quality of the amenities which we are planning for SkyRise Miami. There are a considerable number of other revenue generating opportunities other than paid admissions including, but not limited to, valet parking revenue, naming and sponsorship rights, fine dining restaurant revenue and numerous other food and beverage opportunities, nightclub revenue, and event revenues from the 500 seat ballroom and several other event venues within the tower, retail gift sales and a host of other miscellaneous revenue generating sources.

I am assuming that the purpose of your inquiry is to address your perception of the financial viability of the project. I have sufficient confidence in our feasibility studies to proceed to invest $30 million of my funds, prior to deploying any investor or lender dollars. Given the projects location in Bayside, which currently hosts millions of visitors and is likely to see significantly increased traffic once the minimum $27 million is expended to upgrade its facilities, we believe that the penetration rates utilized in forecasting the projected attendance are reasonable. In any event, there is no risk to the City as it is not expending any funds whatsoever in connection with the development of tower.

Let me put this in the proper context. SkyRise is subleasing from Bayside approximately 1.85 acres, on which is currently an asphalt surface parking lot. This is not pristine park land. The pier contains 89 parking spaces, which generate revenues, a small fraction of which flows to the City. In the event that the proposed Bayside/SkyRise project is not approved by the City Commission and/or by the voters, it is extremely likely that the surface parking lot will remain as such for the 46 years remaining on the existing Bayside lease and the City will continue to enjoy minimal income. Our projections based on the deal which has been proposed for the amendment of the existing Bayside lease will yield the City more than $1.5 billion in additional revenues over the new lease term, not to mention many thousands of jobs in the more than $1 billion in annual economic impact to the community forecast by our economic study, which was reviewed and approved by the Beacon Council.

The negotiations with the City were brutal and this transaction may be the best deal the City has ever done. I believe your characterization of this transaction as "another bad deal for the City "is without foundation in fact and is indefensible. Given the fact that the City is not expending one nickel and stands to reap more than $1 billion in payments over the term, I can only conclude that your only concern relates to the financial viability of the project and your perceived but unfounded risk to the City. The tower itself will be constructed by private investment and will not proceed to vertical construction prior to all required funding sources being in place and the completion bonded by a major national general contractor. Once the tower has been completed and is operational, in the extremely unlikely event that our attendance and financial projections prove to be wildly overly optimistic and our revenues insufficient to defray our operating expenses and debt service and lease obligations to Bayside, General Growth Properties, the multi-billion-dollar REIT, which owns Bayside, would succeed to our interest, would have to take over operation of the tower and would continue to be responsible for the rental obligations due to the City. There is absolutely no risk to the City!

I would be most appreciative if you would publish this entire email in the interest of journalistic integrity and refrain from merely referring to it and mischaracterizing its content. The truth shall set you free.

Jeff Berkowitz


Berkowitz Development Group, Inc.

2665 S. Bayshore Drive, Suite 1200

Coconut Grove, FL 33133

Telephone: (305) 854-2800

Facsimile: (305) 859-8300


SkyRise Miami website:

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Several days ago while researching my latest story I sent Jeffrey Berkowitz an email asking him to respond to a question regarding the numbers that I was planning to use related to his Consolidated Cash Flow projections.  

It would be unfair to consider this email as a response to my latest story, because it is not.  However, he does present his side of some of the issues I did raise.