Daily Archives: December 6, 2006

BOB Will Return on Sunday

I will be out of town from this evening till Sunday. Still, I will do everything possible to keep things updated. For those of you heading to Art Basel this weekend, have fun!

– Bob: Miami

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MDC Proposing Joint Development Venture for Wolfson Campus

Miami-Dade College downtown tract draws interest

By Dan Dolan
   Miami Dade College already has a few nibbles on its request for a public-private joint venture to develop 2.6 acres of prime land at its Wolfson Campus in downtown Miami, a school official said this week.
   Just days after the development process began, several local and national investors contacted the nation’s largest college for details on the plan to build a commercial project and a 250,000-square-foot education facility at 520 Biscayne Blvd., the school spokesman said.
   In exchange for land lease and air rights, Miami Dade College wants a developer to foot the bill for building the school’s arts center and an income-producing property, which could include retail space, condos, offices, a hotel or a parking garage, according to the school’s request for proposals.
   “We’re open to different ideas,” said spokesman Juan C. Mendieta. “We’re asking prospective bidders to present their vision for the project.”
   So far, Miami Dade College’s vision includes at least two towers more than five stories tall. One would house a 500-seat theater, a 12,500-square-foot art gallery, a 9,000-square-foot dance studio, the Miami International Film Festival, the Florida Center for Literary Arts as well as classrooms and administrative offices for its College of Cultural Affairs.
   The second tower, and any other building, could contain a mix of retail, residential and commercial space, the school’s plan says. Miami Dade College would retain ownership of the land, which it bought two years ago for $24.9 million. The developer would recoup its investment through rents, though the company would have to pay real estate taxes on its portion of the project, Mr. Mendieta said.
   Prospective investors have until March 16 to submit proposals. School officials will review plans, then enter into formal negotiations with a developer by the end of April. A contract will be awarded in October, according to a timeline in the school’s request for proposals.
   “As a public college, we have some financial limitations,” said Rolando Montoya, president of the 27,000-student Wolfson Campus. “We are lucky we already own the land. Our funds for construction are limited. That’s why we’re looking for a partner for the arts center.”
   The Biscayne Boulevard site, which is bounded by Northeast Second Avenue and Northeast Fifth and Sixth streets, is prime real estate, school officials said. The lot, which is currently used for surface parking, features water views and easy access to mass transit.
   The school’s purchasing department is accepting proposals, but hasn’t put a price tag on the project, the spokesman said.
Details: http://www.mdc.edu/purchasing/bids or (305) 237-7575.

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The Related Group’s Mercy Hospital Project Update

Condos may rise behind Mercy Hospital


For more than 50 years, Mercy Hospital has occupied the same spot on the Coconut Grove waterfront — healing the sick, growing in size, and once in a while ticking off the neighbors.

Back in the 1990s, it was a proposed 120-bed nursing home and a 650-car parking garage that outraged residents. They worried about traffic tie-ups. Miami city commissioners sided with the hospital. The battle lines were drawn.

Nowadays, it is Mercy’s first-ever foray into high-rise condo territory that is prompting protests at City Hall. City commissioners in the coming months will decide whether to approve three high-rise towers slated for the Mercy property, a vote that will serve as a key test for just-elected Commissioner Marc Sarnoff, whose district includes the Grove.

Mercy wouldn’t build the condos, which would range from 26 to 36 stories. That task would fall to a development team that includes developer Jorge Perez’s Related Group.

Two years ago, Mercy agreed to sell 6.7 prime acres of its tax-exempt medical campus to Boca Raton-based Ocean Land Investments, which is partnering with Related. The price: $98 million. The developers would not inherit the tax-exempt status.

Mercy says the land deal is key to its capital-improvements plan. Eighty-two percent of Mercy’s square footage is more than 30 years old. Mercy envisions an ambitious $300 million overhaul that will improve the Catholic hospital’s appearance while luring additional clinical programs.

The 42-acre, 483-bed hospital, sponsored by the Sisters of St. Joseph, employs more than 2,300. The Sisters are responsible for oversight of the hospital and its assets. Mercy is not affiliated with, or supported by, the Archdiocese of Miami. Hospital representatives — including a nun, Sister Elizabeth Worley, who formerly chaired its board — have appeared at city meetings to lobby for the condo project’s approval.

City commissioners must grant a land-zoning change for the condos to happen. Residents opposed to the project complain that the towers are dramatically out of scale with the surrounding neighborhood and will further clog roads.

”High rises belong downtown,” resident Patrick Goggins said. “We don’t want Bayshore Drive to become another Brickell Avenue.”


The condo plans have gained the support of homeowners’ groups in the nearby Natoma Manors and Bay Heights subdivisions. That support, however, has prompted its own series of questions.

The associations struck a confidential deal with the developers — prompting objections from some who deem it an inappropriate way of silencing critics. Attorney Tucker Gibbs, who represents the homeowners groups, declined to comment. Gibbs has neither confirmed nor denied the deal included payment of an undisclosed sum.

In 1993, when Mercy wanted its nursing home and parking garage, it agreed to pay the same two neighborhoods $125,000 each for security, traffic control and study costs.

Regarding the current agreement, Related Group executive Bill Thompson said negotiations with the associations were beneficial to the neighborhood as a whole — prompting a reduction in the density of the condos, for example.

Related once planned 1,000 condo units on the Mercy site, but is now proposing 300 ultra-luxury units at prices ranging from $3 million to $15 million. Thompson said the new tenants will be part-time residents purchasing second or third homes — the type of folks who don’t always need to get to the office by 9, and therefore won’t add to traffic woes as much as some think.

”These agreements take all types of forms and shapes,” Thompson said. “People should look at the merits of the deal.”

Thompson said the towers won’t even be visible from Bayshore Drive, as they would be built behind the hospital on a jut of land resembling a peninsula. Traffic concerns are legitimate, he said, but he added that if additional medical space were built instead of condos, the traffic impact would be worse.

The hospital, as part of its sales pitch to residents, has promised to limit future expansion and focus on improving the space it now has.

Thompson noted the Cocoanut Grove Village Council earlier this year — while voicing misgivings about the secret agreement — endorsed the condo project.


Miami’s Planning Advisory Board, which advises city commissioners, is recommending against the proposed condos, as is the city’s zoning board, which serves a similar function. Traffic ranked among the boards’ concerns. City commissioners will have the final say, and it is new Commissioner Sarnoff who will play a key role because it’s in his district.

On the campaign trail, Sarnoff expressed reservations about the project, calling it oversized.

Mercy President John Matuska lives near the hospital and says he’s sensitive to residents’ objections. But he sees the condos as the least disruptive way for Mercy to finance a more modern facility. While some worry a city-granted rezoning would give Mercy the legal right to sell off more land for high rises in the future, Matuska says there are no plans to do so, and the hospital won’t do anything without involving the public.

”We’re not trying to pull a fast one,” Matuska said. “Mercy’s been here for 56 years now. I really don’t have any place to move Mercy to, and so it’s in our best interest to try to be good neighbors.”

Source: http://www.miami.com/mld/miamiherald/16172340.htm 

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Las Vegas Condo Market Slips as Miami and NYC Remain Strong

Vegas Condos Go Cold
Developers are suddenly scaling back their bets on the town’s once sizzling luxury real estate market

Posted Wednesday, Jan. 25, 2006
Now that several high rollers in the Las Vegas condo-hotel game, with properties linked to the likes of Michael Jordan and Ivana Trump, are either folding or selling their holdings, a growing number of players are losing their taste for big bets on high-rise residential real estate development.
Over the past two years, as high-rise fever spread across town, prices for the luxury apartments ballooned, fetching as much as $500 to $1,000 a square foot—or up to $1.5 million for a one-bedroom— at the peak. Buyers, mostly interested in flipping them for quick profits, eagerly anted up five-figure down payments, while developers planned more than 70 luxury towers holding a total of about 43,000 units on or near the Strip and downtown. But the intense competition for the city’s limited supply of contractors sent construction costs skyrocketing 30% last year, just as lending policies tightened, interest rates climbed and sales started to slow.
Currently, just 18 projects are under way, and nervous developers have called off three high-profile projects over the past seven months. A number of others, including one backed by a group including George Clooney, are being either revised or postponed. Experts now forecast that only a quarter to half of the six dozen originally proposed projects will ever be built. Brian Gordon, a principal at Applied Analysis, a real estate research firm, says the developers with experience building luxury high-rises, whose properties are located on or near the Strip and carry a strong and recognizable brand name— such as Donald Trump, Hard Rock and MGM Grand— are the ones playing winning hands in Vegas now.
Back east, the luxury condo markets that have had similarly explosive growth in Miami and New York, where high-end apartments can command from $2,000 to $4,000 a square foot, haven’t slumped yet. Still, experts say the abrupt reversal of fortune in the desert, where the mainstream residential real estate and hotel markets are still quite healthy, shows just how quickly the odds can change in even the most affluent markets if runaway speculation and overzealous development take hold. “It’s another case of irrational exuberance,” says John Restrepo, head of a Las Vegas real estate and economic consulting firm. “There is a market for high-rise condo hotels here; but it’s not as deep as people thought it was. The days of the two guys from the East Coast or Canada coming into town and promoting a condo development with a website and a dream are over.”

Source:  http://www.narreia.com/newsadvice/news_detail.php?blog_id=543 

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