01/08/09

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Month in review

Miami Beach officials busted for bribery
A developer and contractor who paid Miami Beach city building inspectors to expedite his projects through the permit process turned informant and helped the city charge three men with bribery and racketeering.

Law officials charged Andres Villareal, Mohammed Partovi and Henry Johnson on March 19 with the offenses.

According to the charges, city officials received $110,000 in kickbacks, including a Rolex watch and Ford Crown Victoria, from Michael Stern, co-owner of the historic Coral Rock House. Stern received lower impact fees and advice on how to demolish the historic coral rock structure located at 900 Collins Avenue.

Stern's house has been the focus of a four-year preservation battle. He now plans to preserve the 1915 house.

Stern received immunity from prosecution for his role in helping make the corruption case.

Mixed-use transit project gets green light
Atlanta-based developer York Residential will start construction on an its ambitious mixed-use transit project in Deerfield Beach by the first quarter of 2009.

Deerfield Station is a $180 million transit-oriented development that will abut the Deerfield Beach Tri-Rail commuter rail station along Hillsboro Boulevard.

The project's three residential buildings will come online in 2010 and include 467 market-rate apartments, 82 workforce housing units, 36,000 square feet of office space, 14,500 square feet of ground-level retail and a 140-room hotel, with two large garages that hold 1,146 parking spaces.

Property tax amendment heads to ballot
Just weeks after Florida voters pushed through a property tax cut by passing Amendment One, the state Taxation and Budget Reform Commission approved a plan to place another property tax amendment on the November ballot.

The new measure would reduce the amount of property tax used for school budgets, which could cut the tax by around 33 percent in Miami-Dade and 36 percent in Broward. The state legislature will have to decide where the money will come from to replace lost revenue, but it is likely to include sales tax hikes and budget cuts elsewhere.

Mall planned for Hallandale Beach
An $85 million mall project has been proposed for Hallandale Beach. Hallandale Square would be located at the southeast corner of Hallandale Beach Boulevard and Federal Highway, just north of the $1 billion mixed-use project, Village at Gulfstream Park, which is slated for completion in October.

Hallandale Square would include 320,000 square feet of retail, 38,000 square feet of restaurants, a movie theater and a five-story parking garage. Miami Beach-based Taubco, a developer on the project, has agreed to pay Hallandale Beach $321,400 for sewer improvements in the area.

Trump plans Palm Beach hotel
Unsuccessful in his efforts to sell his Palm Beach home, Donald Trump has announced plans to turn the six-acre estate at 515 North Country Road into a high-end hotel.

While the developer has not yet applied for the necessary permits, he says that multiple hoteliers have expressed interest. Mayor Jack McDonald and other local officials have expressed opposition to the idea.

New $1.1 billion joint venture forms
Miami-based the Related Group and Lubert-Adler have formed a $1.1 billion joint venture with plans to buy and manage mortgages and properties from developers, landlords, investors and lenders. Assets range from finished condos to raw land in Florida.

The Related Group has built and managed more than 70,000 residential units throughout Florida and the U.S., valued in excess of $10 billion. Philadelphia-based Lubert-Adler is a real estate private equity firm, specializing in redevelopments through joint ventures with local operating partners.

"Our unwavering commitment to the Florida market has driven the creation of an investment vehicle to leverage the sluggish market," says Jorge Perez, CEO of the Related Group, in a company statement.

"The vehicle strengthens Related's position by increasing our access to capital and expanding our company's ability to make larger deals with other developers, lenders and property owners."

Developer alleges betrayal of trust
A bank is being sued by Florida developers for revealing details of a secret land deal in Boca Raton.

The lawsuit was initiated by Greg Talbott and it seeks $180 million in damages from Fifth Third Bank and Mission Capital Advisors. According to Talbott, the financiers wrongly exposed a $50 million deal to sell four plots of land in downtown Boca Raton, owned by Talbott, to developer Tom Crocker. Crocker is said to be accumulating properties for an eventual pedestrian retail corridor. Talbott's lawsuit alleges breaches of confidentiality and fiduciary duty, as well as invasion of privacy.

Two South Florida developers bankrupt
Two South Florida developers, Strada 315 LLC and Beach House Properties LLC, filed for bankruptcy in March.

Strada 315 LLC, the developer of Fort Lauderdale's Strada 315, filed for Chapter 11 bankruptcy after selling 48 of its 117 units. According to court documents, the company lists between $10 million and $50 million in assets, with liabilities in the same range.

Regions Bank did not extend a $34.8 million construction loan the company needed to finish the project, which is located at 315 NE Fourth Street. The company said it does not have the money to pay subcontractors and creditors.

Surfside-based Beach House Properties also filed for Chapter 11 bankruptcy protection. The company was scheduled to break ground on a 101-unit condo project on the property of the Beach House Hotel last year. It owes 20 of its largest unsecured creditors $4.6 million, according to court records.

St. Regis breaks ground on luxury hotel
Miami-based the Related Group broke ground in early March on the St. Regis Resort Residences in Bal Harbour, located on nine acres at 9701 Collins Avenue.

As one of the largest developments of its kind in Florida, the three all-glass towers stand 27 stories tall and include 268 residences, 37 condo-hotel suites, 183 hotel rooms and 24 St. Regis Residence Club residences.

Each tower will have its own private lobby entrances, security, valet and covered parking. The project has an estimated sellout of more than $1 billion.

For-sale units will have 10-foot ceilings, pre-wiring for smart technology and 11-foot-wide all-glass balconies. The project, slated for completion by 2011, will also include a 15,000-square-foot spa and fitness center.

Lord Black reports to prison
Publishing magnate Lord Conrad Black, whose legal battles were highlighted in the February edition of The Real Deal, has begun his six-and-a-half-year prison sentence in Orlando's Coleman Federal Prison.

Black said farewell to friends and family with a round of dinner parties at his Palm Beach mansion. Black has been convicted of stealing $6 million from his company, Hollinger International.

Tower trades hands for $41 million
Keystone Property Group paid Boston-based Cabot Investment Properties $41 million for Dadeland Towers North in Miami.

The 244,176-square-foot, three-building development is located at 9300 South Dadeland Boulevard, just west of US 1 in Downtown Kendall/Dadeland.

The acquisition continues the Philadelphia-based company's plan to expand outside the mid-Atlantic and Northeast areas.

The company's most recent Florida deals include the acquisition of a 150,000-square-foot property in Miami Lakes and the 154,984-square-foot Pinebrook Business Center in Largo for $11 million.

Despite slowdown, G.L. Homes closes on 1,000 acres
G.L. Homes has closed on a purchase of 1,068 acres of land for $117 million. The land west of Delray Beach was under contract during the real estate boom, but finally closed in early March.

According to plans submitted in 2005 to county officials, G.L. Homes plans on allowing half the land to remain farmland in accordance with county rules. Industry leaders say the company may be stocking up on land for use after the recession when land becomes scarce again.

Plantation condo plan nixed
Plantation planning and zoning officials voted 7-0 in March to reject a land-use amendment that would have allowed 230 condo units to be developed at the heart of a 36-hole, semi-private golf course.

Property owner Scratch Golf Company wants to construct 10 six-story and 10 four-story buildings at the Jacaranda Country Golf Club golf course, which surrounds an upscale neighborhood of single-family homes.

More than 2,000 neighbors formed a nonprofit coalition to protest the condo development. The board's vote is only a recommendation for city council leaders, which will make the final decision at a future meeting.

Plaza condo completed
Miami developer the Related Group completed construction on two 56- and 43-story towers called Plaza on Brickell. The buildings form Brickell's largest residential structure.

The new $200 million mixed-use development is located at the north end of Miami's financial district at 901 Brickell Avenue. It consists of two towers plus 30,000 square feet of commercial space on the ground level with retail and restaurants.

The 56-story tower has 440 one- and two-bedroom units and the 43-story tower has 500 one- and two-bedroom units. The condo units have views of Biscayne Bay and Brickell Key.

The Related Group's Florida portfolio consists of 45,000 units built or managed since 1979.

Multi-family demand on the rise
The demand for multi-family housing in South Florida will grow this year, according to Atlanta-based Apartment Realty Advisors.

A lack of affordable for-sale housing, the subprime mortgage fallout, and the addition of 66,708 jobs in Florida during 2007 are driving the demand for multi-family units in the Miami region, according to the report.

The consultancy also determined in February that the demand for multi-family housing is likely to jump in coastal areas with high barriers to entry.

The report also found the state is expected to add another 1.4 million jobs by 2015.

"While there are still not as many active buyers in the market, continued strong in-migration, a historically low level of construction starts, and improvement in economic fundamentals will result in the likely divestiture of a number of distressed properties this year," the report concludes.

University grabs 60,305-square-foot center
Nova Southeastern University has signed a deal to occupy 60,305 square feet in Fort Myers. The new four-story building, located at 3650 Colonial Court near Interstate 75, will house the school's Student Educational Center.

The school plans to move into the building sometime this year. It will be the only tenant.

The academic facility will feature programs such as education, mental health, counseling and nursing.

The university has its main campus in Fort Lauderdale and educational centers in Tampa, Miami, West Palm Beach, Orlando, Jacksonville and the Bahamas.

Four-story high school breaks ground
The Miami-Dade Public School District broke ground on a new four-story senior high school in February. The 4.5-acre campus is located at 2555 NW 151st Street, near Florida International University's Biscayne Bay Campus.

The school district selected Fort Lauderdale-based Pavarini Construction Company to build the new 165,000-square-foot facility, dubbed "QQQ-1 High School" for now.

When it opens in the fall of 2009, the school will accommodate 1,600 students.

Founded in 1896, Pavarini first entered the southeast U.S. market in 1967 with the construction of One Biscayne Tower in Miami. The company has constructed more than five million square feet of space for academic institutions, including K-12 and college preparatory facilities around the world.
Developer plans 70-unit condo project
Developer Martin Margulies has started work on Bellini Williams Island, a 24-story, 70-unit condo project in Aventura.

The development, located at 4100 Williams Island Boulevard and slated for completion by 2010, will consist entirely of three-bedroom corner units ranging in size from 2,235 to 2,608 square feet. Pre-construction prices for the units run between $1.3 and $3.2 million.

The development will also include four 4,636-square-foot penthouses and offer water views. Amenities will include hurricane-resistant glass, a fitness center, media room, game room and pool.

Coastal Construction building apartments
Coastal Construction Company has signed a deal with developer Wood Partners to build Red Road Commons, a 405-unit apartment complex comprised of six buildings in South Miami.

The four- and five-story buildings include one-, two- and three-bedroom apartments and will serve the University of Miami. The project also includes 10,700 square feet of retail space and 1,900 square feet of office space.

The project will be completed in the summer of 2009. Miami-based Coastal, led by CEO Tom Murphy Jr., has more than $1 billion worth of construction projects in the pipeline.

Florida foreclosures on the rise
The foreclosure rate in Florida climbed 158 percent over last year, which exceeded the national average. The Cape Coral-Fort Myers region had the highest rate of homes in default in the nation, according to RealtyTrac Inc.

Last year, 48,425 homes nationwide received at least one notice from lenders about overdue payments. This February alone, more than 223,000 homeowners received notices.

Nationally, one out of every 534 homes is in default, compared to one out of every 86 in Cape Coral-Fort Myers, according to RealtyTrac.

Housing Authority's voucher system a mess
The Boca Raton Housing Authority caused a riot in March when the local agency distributed 500 Section 8 voucher applications. The housing authority initially said it would dole out 600 voucher applications March 12 at 9 a.m. The vouchers subsidize housing for low-income families.

Instead, officials gave out only 500 at 2 a.m. in order to avoid potential crowds later that morning, and reserved the remaining 100 for the disabled. Police wearing helmets and carrying riot shields warned hundreds of people to go home when they showed up at the advertised time.

The housing authority will proceed with a lottery of returned applications and choose 200 people. Once an applicant is selected, they will undergo a background check before their name is added to the waiting list. Officials also said they would open the waiting list again in a few months. The last time the housing agency opened its waiting list was in 2005.

Goya Foods grabs more space
Goya Foods has signed a $26 million deal to build a new 120,000-square-foot manufacturing and distribution facility at the Pan American West Business Park.

The new facility, located in the Airport West submarket of Miami-Dade, will add 30 new jobs. The company also considered relocating its headquarters to Orlando, West Palm Beach, or Broward County before it decided to stay in Miami-Dade.

Goya Foods entered Miami-Dade County in 1976 and established its current operations at 1900 NW 92nd Avenue in Doral. The company also has manufacturing and distribution facilities in other parts of the U.S., Puerto Rico, Dominican Republic and Spain.

New crane rules for Miami-Dade
Within days of a fatal crane accident, a new ordinance regulating crane inspection and operator certification went into effect in Miami-Dade County.

Under the new rules, crane operators will have to pass both a written and practical test prior to using the equipment.

On March 25, a crane working on a project in midtown Miami crashed into the side of an adjacent building, leaving two people dead and five injured. Officials are investigating whether windy weather conditions or operator error are to blame.

The new ordinance was originally introduced following a 2006 fatal crane accident.

State allows eminent domain of property for private use
A state appeals court has decided Hollywood was within its rights when it decided to take a family's downtown property by eminent domain for use by a private developer.

The Fourth District Court of Appeal overturned a 2006 ruling saying the city could not take the property, which belongs to the Mach family and houses the family hair salon in addition to several other businesses.

Developer Charles Abele has been working with the city since 2005 to obtain the property for the garage entrance of his $100 million, 19-story condo and retail tower, Young Circle Commons.