As reported in The Real Deal.

A deal by the Adler Group to redevelop the city of Miami-owned Miami Riverside Center won narrow approval by commissioners, despite criticism tied to the developer building a new city administrative building.

The Miami City Commission voted 3-2 on Thursday to approve the 99-year lease agreement with Lancelot Miami River LLC to replace the 27-year-old building at 444 Southwest Second Avenue. The new project will have four towers with a mix of residential, office and hotel uses, as well as roughly 37,000 square feet of retail and a parking garage with a minimum of 1,000 spaces. The project’s footprint would also include land owned by another Adler affiliate at 230 Southwest Third Street, where the developer is proposing to build the city’s new headquarters.

As part of the approval, the city plans to issue $150 million in bonds to finance the construction of its new office building, which includes a 4 percent developer’s fee.

Lancelot, whose president is Michael Adler, agreed to pay the city $3.6 million in annual rent or 3 percent of its annual gross revenues, whichever is greater. The rent would increase annually by 1.5 percent in the sixth year, and Lancelot has an option to buy the property for about $70 million. The city would also get a 2 percent fee from any condos Lancelot develops and sells.

Following the commission’s vote, Greenberg Traurig attorneys for Lancelot said in a statement that the developer expects to begin construction of the project’s first phase in the fourth quarter of 2020 and that the entire development will take five to seven years to complete. The first phase will include the city’s new office building to minimize any disruption to municipal services, said Ryan D. Bailine, one of two Greenberg Traurig shareholders representing Lancelot.