BTI’s $500M South Fla. Mixed-Use Project Gets Approvals

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A mixed-use development featuring two 35-story towers and 856 units developed by BTI Partners, with guidance from Government Law Group PLLC, has won key approvals from Hollywood, Florida, officials this week, clearing a path for the over $500 million project to move forward.

The Hollywood City Commission voted unanimously on Wednesday to approve the rezoning, design and site plan for Block 57, a project planned for downtown Hollywood that involves extending a major boulevard to go between the site’s two proposed towers.

“It alone will tremendously enhance property values, clean up homelessness, bring eyes to the streets, walkability to the area and really make downtown Hollywood … what it was always intended to be,” Keith Poliakoff of Government Law Group told Law360 in an interview.

Poliakoff said the approvals for Block 57, a project that will cost a little over $500 million to build, came after working with various government entities on the plan for two years.

The proposed development has faced “virtually no resident concerns at all, which is almost unheard of,” he added.

The project, developed by Fort Lauderdale, Florida-based BTI, features 856 apartment units, over 38,000 square feet of office space, 142,000 square feet of commercial retail space and 1,500 parking spots, according to site plan documents.

It is expected to encompass over three acres about a mile and a half from the South Florida city’s boardwalk, according to BTI’s website. Hollywood is a beachside town situated between Fort Lauderdale and Miami in Broward County.

The approvals for Block 57 came with some conditions to make sure that the design the Hollywood city commissioners OK’d is maintained as the project moves further along the construction process, Poliakaff said.

At Wednesday’s meeting, the commissioners also asked BTI to continue working with city staff and the Florida Department of Transportation on the project’s street design and traffic flow.

The development firm previously paid $15.75 million to buy part of the project site, a retail complex called Young Circle Shopping Center, according to an announcement in 2020.

BTI and Bridge Investment Group recently secured an $83 million construction loan to build another mixed-use project in Hollywood that will feature 362 units and 16,000 square feet of retail space, the companies said in August.

BTI is represented by Keith Poliakoff of Government Law Group PLLC.

–Editing by Steven Edesltone.

Article Link: BTI’s $500M South Fla. Mixed-Use Project Gets Approvals
Auther: Charlie Innis

Bonds on the Ballot in Delray, and a New Doc’s All American

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Two major bond referendums will be on the Delray Beach ballot in March.

One will ask voters to approve $100 million for public safety improvements, including a new police station. The other will be a $20 million plan to upgrade recreation, focusing on Atlantic Dunes and Catherine Strong parks.

The city commission approved the proposals Monday. That alone would have been noteworthy. Just as remarkable, though, was the unanimous approval. For all of the city’s factional politics, the commission was united on what would be the most significant public investment since voters approved the Decade of Excellence bonds in 1990.

That $21 million program—later expanded through refinancing—was key to Delray Beach’s revival. This commission sees these proposals as essential to sustaining the redevelopment of the last three decades.

City officials said the police station, which dates back to 1992, had become outdated after just four years. The money would finance a rebuild of the fire station that handles calls on the east side of the city and in Gulf Stream. Delray Beach needs to adjust its system with the end of the contract to provide service to Highland Beach and the loss of that station. The town is creating its own department.

The timing is right for the new proposals. Delray Beach’s existing general obligation bond programs—financed with property taxes—expire in 2023 and 2024. The city also is issuing a bond to pay for the new water plant and system. Customers’ bills will finance that work.

Commissioners now must decide whether Delray Beach should issue the bonds over 20 years or 30 years. Owners of homes assessed at $250,000 would pay $132 a year for 20 years or $107 for 30 years under the police/fire proposal. They would pay $27 and $22 under the parks proposal. Those numbers would double for homesteads assessed at $500,000

Ryan Boylston had pushed for the referendums more than any other commissioner. He agreed that he and his colleagues “were on the same page.” Boylston noted that he and Mayor Shelly Petrolia, who often are at odds, “put aside” an issue regarding Atlantic Dunes Park that could have jeopardized chances of the parks bond passing.

Oddly, given the amount of money, the public safety bond would not provide Delray Beach with a new emergency operations center. During Hurricane Irma in 2017, the current center leaked and there were computer problems. Boylston said the city has not decided on a location.

But will the proposals pass, given higher inflation and talk of a recession? Said Boylston, “We’ve never voted one down.” The 1990 plan passed as South Florida went into a recession.

No plans for a new Delray city hall

One project not on the list is a new city hall. Delray Beach’s main government building was built in 1961.

Despite a 1997 renovation and storm hardening, the building looks beyond dated. Some commissioners had talked about making a new city hall part of a bond proposal. Not now.

But the idea isn’t dead. Boylston notes that if the bond referendums pass, that will take care of Delray Beach’s public safety and parks needs for the next two or three decades. The community redevelopment agency is paying for the new Pompey Park, meaning that the money isn’t coming out of the city’s operating budget. A public-private partnership could finance a makeover of the municipal golf course, which is another big-ticket item.

Boylston said the commission wants to “get through the election” and the bond votes, then reassess city hall. “We may be able to take care of that from city funds.” Though Delray Beach will examine whether a public-private partnership could work with that facility, “We may not need it.”

A new Doc’s All American

Renderings for the new Doc’s All American

Barring something unexpected, a new Doc’s All American will be coming to Delray Beach.

This week, the city commission approved a project that will combine the iconic downtown fast-food restaurant that faces Swinton Avenue with a 17,000-square-foot office and retail building on the adjoining property that faces West Atlantic Avenue. The vote was unanimous.

Doc’s closed last year when the owner of the two properties was unable to secure approval of a larger project. The new version reduces the height from four stories to three, is less dense and offers porches facing Atlantic, to make what Neil Schiller, the developer’s attorney, called “a very pedestrian-friendly environment.” Opponents had argued that the earlier version would have overwhelmed the site.

Because of the changes, Schiller said, the developer needed to ask for much less from the city. The commission did need to allow outdoor dining as part of the approval. Schiller said the two potential operators “want Doc’s as Doc’s,” not as a typical indoor restaurant.

The site plan must go before the historic preservation board, and Doc’s must get its historic designation. No one I spoke with, though, expects a late snag.

“We overcame a lot of challenges,” Schiller said. He pointed out that the project will be across the street from the new Sundy Village. “Between the two, I think we’ll have created something special for the gateway to Delray Beach.”

Delray to consider DDA reopening Old School Square

Cornell Art Museum in Old School Square; photo courtesy of the Delray Beach DDA

On Friday, city commissioners will hold a special meeting to discuss placing the Downtown Development Authority in charge of reopening Delray Beach’s Old School Square.

I reported last week that the DDA board had expressed interest in reopening the Cornell Museum, which is part of Old School Square. The meeting presentation goes further. It includes a staff recommendation that the DDA develop a plan for reopening the entire arts complex.

The plan is sweeping, to the point of possibly renaming Old School Square as part of a “rebranding.” The first phase would be to form a task force of “industry experts and DDA stakeholders.” I’ll have more after the meeting.

Speaker at Delray commission meeting charged with perjury

It’s one of the oddest stories in Delray Beach’s history.

On Aug. 9, the city commission was discussing Delray Central, the mixed-use project proposed for South Congress Avenue. A speaker identified himself as the president of a nearby homeowners association—at the Andover single-family home community— and testified that “we” support Delray Central. Nothing new there. HOAs speak for or against development projects all the time.

Neil Carson; image from Palm Beach County Sheriff’s Office

Except that Neil Carson is not president of the Andover HOA. He’s not on the board. He just lives in the community.

Which wouldn’t be much of a problem except that the hearing on Delray Central was quasi-judicial. Which means that all speakers must swear to tell the truth.

Carson now finds himself charged with felony perjury. He told investigators that he was “nervous” to address the commission for the first time.

“Nervous?” Carson is managing director of multi-family development for Kaufman Lynn Construction, which is based in Delray Beach. The housing proposed for Delray Central is multi-family.

The law firm that represents Andover’s HOA noted Carson’s lie. According to the probable cause affidavit, Carson plans to write letters of apology to the city and the HOA. The city would have to decide whether to prosecute.

El Rio Canal bridge traffic woes will continue

There will be no immediate relief from one of Boca Raton’s major traffic annoyances.

That would be replacement of the El Rio Canal bridge on Palmetto Park Road several blocks west of downtown. The work has restricted traffic on that main thoroughfare to one lane.

When the county began the project in August 2021, officials said construction would take about a year. Unfortunately, the new date for completion is late July of next year, according to a county construction supervisor.

He cited “numerous delays in procuring construction materials, as well utility delays.” The bridge on the north side of Palmetto Park Road is complete and work on the new road has started. “Once the roadway portion is completed, eastbound and westbound traffic will shift to the north bridge.” Demolition on the south bridge will follow. And the hassles will continue.

Article Link: Bonds on the Ballot in Delray, and a New Doc’s All American
Auther: Randy Schultz

CRE Landlords, Tenants Fight For Upper Hand In S. Florida

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Law360 (September 2, 2022, 4:01 PM EDT) — With economic forces and local market trends driving up prices for South Florida commercial real estate, the mutual needs that marked tenant-landlord relationships during the depths of the pandemic have given way to property owners motivated to seek out technicalities and other creative means to oust tenants in favor of higher-paying replacements, attorneys say.

Continued high demand and limited supply has mostly insulated the South Florida market from the slowdowns seen across the country as a result of recent boosts in inflation and interest rates. But tenants and landlords still find themselves entwined in a sort of dance as each tries to find security and advantages in the uncertain environment.

With prices increasing for South Florida commercial real estate, property owners are motivated to find creative ways to oust tenants in favor of higher-paying replacements, attorneys say. (AP Photo/Wilfredo Lee)

“I’m sure there’s some landlords and tenants who are still working together nicely and all that. But for the most part, with inflation going up and the prices going up, I think there’s a lot of self-preservation involved now, and it doesn’t always work as well as it did in the pandemic when everyone was similarly situated,” Jordan Isrow, a commercial litigator with Fort Lauderdale-based Government Law Group PLLC, told Law360. “I don’t think people are similarly situated now.”

The economy has also put some tenants in positions where they are the ones looking for the exit in the face of changing business fortunes, and the strong market pressures have pushed some property owners to decide their best option is to cash out as well.

In some cases, these diverging factors can lead to litigation, but the accompanying time and cost is often a significant deterrent at a moment when both are precious, opening the door for lawyers and other real estate professionals to pursue some creative solutions of their own, they said.

“There’s a whole lot of possible options and scenarios, and what we’ve become really good at is looking at all those options and helping get the best outcome for our clients,” said Nico Romano, who leads the real estate team at Coral Gables boutique Spiritus Law.

The South Florida region covering Miami-Dade, Broward and Palm Beach counties emerged as one of the hottest real estate markets as the nation climbed back from the COVID-19 pandemic. The area’s mix of warm weather allowing for year-round outdoor activities, favorable tax laws and what were at the time more affordable prices, spurred an influx of people, businesses and capital across just about every real estate segment.

Development has been brisk, but geography has helped keep supply tight, especially in the busiest, most-developed areas in Miami-Dade County, which is sandwiched in an 18-mile-wide strip between the Atlantic Ocean and the protected Everglades.

Nonetheless, the market has stayed strong enough to forge ahead despite the economic headwinds.

“Inflation is never really great … but this upward pressure from inflation, which would normally cool things off, hasn’t really affected South Florida because of all the demand for space,” said Romano, who in addition to his law practice owns some commercial real estate himself.

This high demand, aided by inflation, has sent rents upward. According to second-quarter reports from real estate company Colliers, Miami-Dade County saw retail asking rates reach a record high of $42.10 per square foot, representing a 15% increase since the middle of last year, while office rents jumped 8.7% and industrial rates increased 5.6% amid record low vacancy for that segment.

Palm Beach and Broward counties also set records in retail, after 16.1% and 13.5% year-over-year increases, respectively. Palm Beach County, which is seeing major development in downtown West Palm Beach to accommodate incoming financial firms and other businesses, saw office asking rates vault by 9.1%, while intense demand for industrial space in Broward led to a 22.4% increase for a record $12.18 average rate for triple-net leases.

Erin Byers, a senior managing director at Colliers who specializes in industrial properties, noted that there has been not only an increase in online shopping over the past couple of years, but also a broader shift in consumers wanting just about everything delivered to their homes or available for in-store pickup — and quickly.

“It’s all the companies kind of looking to compete with the 800-pound gorilla Amazon. So it’s those tenants and those tenants offering services to them to create that last-mile or early delivery that continues to fuel the market,” she said, noting that includes food service tenants needing to expand.

But while Byers said she has not seen inflation manage to slow down business in South Florida, she noted that rents have accelerated at a “very high level” over the past few months, resulting in rates soaring by as much as 40% to 60% for some tenants. This trend has affected negotiations over lease renewals, which is typically the only time a landlord has a chance to reset rental rates.

Given the market’s direction, tenants probably want to renew early because finding a new space requires additional time and money, Byers said. But while landlords are generally looking to keep their tenants, in an effort to achieve the highest rent possible, many have been waiting until closer to the expiration date to start talks, rather than the customary six to nine months out.

“Just because the market’s moving so fast, they are looking to see if the market continues to go up and not leave any rental rate on the table,” Byers said. “They also create a leveraging point. If they wait until three months before the lease is expiring, the tenant won’t have time to relocate.”

Having tenants on long-term agreements typically provides a landlord with greater security and enhances property values. However, with today’s dramatic upswing in rates, landlords with long-term tenants now find themselves unable to capitalize on the market.

“When the market is very stable, people look at a property and say, ‘There’s a lease that has 10 years left. That’s very attractive because we have nice predictable income for this property, and the tenant’s going to be there for long term,'” said Louis Archambault, a real estate partner in Miami with Saul Ewing Arnstein & Lehr LLP. “When the market increases very quickly, now they’re saying, ‘Well, I want a building where the leases are all expiring within a year so I can increase them.'”

A tenant in the midst of a long-term lease today likely has a rate that was fair at the time of signing, but is now below market, Isrow of Government Law Group said.

“So a lot of these landlords are getting offers or are getting inquiries from other potential tenants and, of course, they’re all willing to pay a higher dollar amount because that’s what the market provides for now,” Isrow said.

For many of the out-of-state operators entering the region, even the increased rates still seem affordable compared to what they were used to paying in places like the Northeast or California, Romano of Spiritus Law noted.

With replacement tenants on deck and willing to pay more, many landlords are champing at the bit to terminate leases.

Sometimes the solution is as simple as the landlord asking tenants for their price to be bought out of their lease, Romano said, but the challenges of finding a new space or the desirability of the current location may lead a tenant to reject a buyout.

When that happens, landlords often turn to technicalities and other strategies, Isrow said, identifying several potential strategies.

“The first thing I always recommend is that it starts with the lease,” he said. “The lease agreement sets out the road map of what are the possibilities and what are also the risks of trying to go down this road.”

Reviewing monetary grounds is usually the initial step, checking whether the tenant has missed payments on rent, its share of the common building element expenses or taxes, Isrow said.

Then there are nonmonetary obligations, such as failure to obtain or renew tenant’s liability insurance, which is a common requirement. Unauthorized assignment or subletting of the premises is another item to check, with some leases containing restrictive covenants that prohibit particular business uses or storage of certain materials, for example.

Over time, landlords tend to be become more relaxed and long-term tenants may be able to operate more independently, as long as they keep up to date on their rent checks, Isrow said. That was especially true during the pandemic, which required businesses to adapt to unprecedented situations. But in the current environment, landlords are using another common lease provision — the right to entry as landlord — to seek out infractions.

“They want to take a look at the premises and see if it’s in good condition. But by doing that, what they’re really doing now is going in to look to see if there’s anything that the tenant is doing that’s improper or otherwise probably prohibited under the lease to see if they can find the grounds to terminate the lease,” Isrow said.

Another area where Isrow said he has had success helping landlords free up spaces is through technicalities in the lease renewal process itself. Most lease agreements include requirements about how and when to give notice and for the tenant to be in good standing at the time of renewal. In at least one instance, one of Isrow’s clients successfully called out a tenant for not being in good standing at the time it submitted a renewal request.

“Others had been just really nitpicky and technical on the notice provisions,” he added. “You’d be amazed that most people nowadays assume that an email is proper notice, but if an agreement doesn’t expressly provide for that, and it says for some other process, then that’s also been a successful way of doing that.”

Landlords can get even more creative by taking strategic actions to put a tenant in a position where it has trouble satisfying the lease requirements. Many leases include a requirement for tenants to pay for a percentage of common elements, so if a landlord decides to renovate the property’s parking lot, for example, a tenant who is already struggling to cope with increased business costs and facing higher interest rates may not be able to come up with the needed money. Additionally, the work may temporarily remove access to facilities the business relies upon, making it harder for the company to continue operating in that space.

“Some of those things can be used tactically because it’s allowed for in the lease,” Isrow said. “It puts the tenant in a tough spot. They’ve agreed that the landlord can do the work. Of course, the landlord has to be careful not to do anything intentional to make it more problematic, but sometimes just by virtue of the work itself, it can interfere with an operation. And a landlord who has the right reason to do the work can usually use that to their advantage.”

From the tenant’s perspective, businesses that are looking to get out of leases, for example for retail spaces or offices that are now bigger than they need, are likely to be able to successfully negotiate a buyout with their landlords, Romano said. Some may also look into the possibility of subletting space, if allowed under the lease.

There are circumstances, however, that can lead to litigation, the most likely being where a landlord is blatantly trying to manufacture a technicality to terminate the lease and where it would be particularly burdensome or detrimental to the tenant to have to move to another location, Romano said.

“You have to find out what ultimately is the desire of your client,” he said. “If this is the only possible place, OK, you dig in your heels.”

Many leases contain attorney fees provisions, which require the losing side to cover the prevailing party’s legal costs. That gives a tenant that feels it has a very strong case greater opportunity to take a landlord to court, but also poses an additional financial risk, the attorneys said.

“There’s a lot more risk in terms of not just having to pay your own attorney, but having to double that to pay the other side,” Isrow said. “So I think the primary rule is avoid litigation, if at all possible, and it’s kind of the last resort.”

Creative steps can also help resolve a sticky situation for the various sides.

“Everyone wants something. It’s just a matter of discovering what that is and making sure it works for everybody,” Romano said. “Whether it be one way or another, it’s — I don’t want to say fun — but we have a knack for coming up with things that may be out of the box.”

Drawing from his own experience as a landlord, Romano recounted a situation in which a tenant with a substantial lease was seeking either to receive a buyout or pay some minimal amount to exit a lease. He was able to find a developer that was interested in the property and ended up selling it for a price he wanted, while the tenant did not have to pay a substantial amount for the remainder of the lease as part of the agreement.

“So I was able to save everybody money, aggravation and time by figuring out how to make it work for everybody,” he said.

Romano’s experience is one example of the current market conditions contributing to a property owner deciding to sell. The economy has also resulted in some landlords finding themselves in situations where they almost have no choice but to sell, the attorneys said.

“Owners that have properties where their debt service is very high, or they are in a situation with a property that may require a lot of improvements, and they don’t have the equity or the cash flow to be able to make those improvements, they’re most likely going to have to sell just because of the market conditions,” Saul Ewing’s Archambault said. “Unless they’re able to fix those deficiencies, they may not have a choice.”

Looking ahead, the experts said while there is the possibility that conditions will worsen into a recession, they are cautiously optimistic that inflation will level out, and the market will adjust and move forward at the new rates and price points.

“There’s a lot of worry related to uncertainty, but it’s vastly different than what we had at the end of the 2000s, where financial institutions were in a recession and there was instability in the financial institutions,” Archambault said. “It’s just interest rates that are rising. … The banks are fine financially. They’re just charging more in interest for the loans.”

Colliers’ Byers said she thinks the South Florida market has some significant factors that will keep driving it forward, but there are limits. As rates keep rising, businesses looking to expand may have to rethink those plans, and some tenants may eventually get squeezed out to second-tier markets, especially in the industrial segment where space is at such a premium.

“Rates and valuations of buildings can go up for only so long before they have to level, just from an ability to withstand those increases,” she said. “I feel comfortable and confident in our market. However, I do realize that not everyone can afford to double their line item of their expenses just with rent alone.”

–Editing by Jill Coffey.

Article Link: CRE Landlords, Tenants Fight For Upper Hand In S. Florida
Auther: Nathan Hale

Large self-storage facility may be coming to Atlantic Avenue and Turnpike intersection

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Rendering of large self-storage facility at the intersection of Atlantic Avenue and the Turnpike west of Delray Beach – Neil Schiller, Attorney For The Applicant

The country’s largest self-storage company, Public Storage, is looking to build a three-story facility on the southwest corner of Florida’s Turnpike and Atlantic Avenue.

The County Zoning Commission on Aug. 25 granted a necessary variance, the first approval in what will be a lengthy process to build a three-story, 71,259 square-foot facility on a vacant parcel west of Delray Beach in an unincorporated area of the county.

According to documents submitted to the county, the 1.8-acre parcel is often used by vagrants. It is full of beer bottles and litter. Cars are parked on it illegally.

“This (a self-storage building) would be a major upgrade,” said Neil Schiller, the attorney for the applicant.

The variance was needed because the parcel is currently part of the Waterways planned unit development that was built nearly 30 years ago. All such developments need to have frontage on a major highway. In this case, it was on Atlantic Avenue.

Schiller explained that the requirement now needs to be waived to allow the facility to be built as the parcel serves as the development’s Atlantic Avenue frontage.

Schiller noted that the approval will not affect the ability of residents to enter and exit the 189-unit gated community. “Everything will stay the same,” he said, adding that both the residents and the users of the storage facility will use Tranquility Way, the access road into the Waterways off Atlantic Avenue.

Vacant lot in red is where a large self-storage facility would be built west of Delray Beach at the Atlantic Avenue and Turnpike intersection – Neil Schiller, Attorney For The Applicant

Staff recommended that the variance be denied, arguing that the granting would “confer a special privilege” to the applicant since all other planned unit developments have had to comply with the frontage requirement.

Staff noted that when the Waterways’ development was approved, it met the frontage requirement. Removing it now creates an “inconsistency with the requirements of the county’s zoning code,” staff reported.

But the zoning commission accepted Schiller’s argument that without the variance, the property owner would be stuck with a property that could not be built upon, creating “an undue hardship.” And Schiller noted that both the Waterways HOA and the Alliance of Delray Residential Associations support the project. Other projects under consideration included a gas station and a fast-food restaurant. Such projects, he said, would create far more congestion than a self-storage building.

With the variance approval, Schiller will return to county officials asking that the land area be deleted from the Waterways’ development and that a land-use change be approved as well. Without the variance, the project could not have moved forward.

The zoning commission had the ability to grant the variance change on its own. The subsequent applications will need the approval of county commissioners. According to Schiller, there have been six other parcels at Turnpike intersections with commercial elements.

Public hearings are expected to be conducted early next year. If approvals are granted, construction could begin sometime in 2024.

To gain the support of the Waterways HOA, Public Storage addressed all the association’s concerns, Schiller said. It went so far as to redesign the site plan to make it more palatable to the HOA and it even took the color orange out of much of the project. Orange is the company’s corporate color and almost all of its buildings have a large dose of orange, he noted.

“They didn’t like it so we removed almost all of it,” Schiller said. “We did everything they wanted.”

Mike Diamond is a journalist at the Palm Beach Post, part of the USA TODAY Florida Network. He covers county government and transportation. You can reach him atmdiamond@pbpost.com. Help support local journalism. Subscribe today.

Legal battle ramps up at waterfront Bal Harbour condo building

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Former unit owner and her buyers allege board president Joseph Swedroe is engaging in “self-dealing”

Joseph Swedroe and 286 Bal Bay Drive (Getty Images, Google Maps, Eleventh Circuit Court)

Current and former unit owners at a boutique waterfront building in Bal Harbour allege that the condo board president has illegally obtained control, with the goal of ultimately terminating the association and redeveloping the property.

Litigation between Water’s Edge House condo board president Joseph Swedroe and former unit owner Marlene Feuerring dates back nearly two decades. Swedroe, who is a partner at his father’s architecture firm and a real estate agent with Beachfront Realty, owns seven of the 11 units at Water’s Edge House, built in 1954, at 286 Bal Bay Drive.

At the root of the dispute is that Feuerring and the now-owners of her former units allege Swedroe has illegally claimed the right of first refusal to purchase units when they become available without going through the correct process. Swedroe and the association allege that Feuerring violated the condo declaration by bypassing the association.

If Swedroe were to acquire enough units to eventually terminate the association, he could sell the property to a developer for a significant markup or redevelop it himself. Developers are increasingly targeting older properties through condo buyouts because little undeveloped waterfront land is left. And in the year since the deadly condo collapse in Surfside, more owners are willing to sell.

Swedroe, his attorney, Aaron Behar, and the condo association’s lawyer, Evan Berger, did not immediately respond to requests for comment.

According to Miami-Dade court filings, Feuerring had entered into a deal in November of last year to sell her units to a non-Swedroe buyer, but Swedroe wanted to purchase the units. The board was unable to vote to exercise the right of first refusal on Feuerring’s units because two of the three board members had a financial interest in the outcome of the sale, a.k.a. a conflict of interest.

But at an emergency special meeting in December of last year, seven of the 10 unit owners present voted in favor of the association purchasing the units with Swedroe as the true buyer, according to court filings. Swedroe is listed as a manager of the LLCs that own six units and he owns one unit in his name, giving him the seven votes.

After the vote, Swedroe notified Feuerring and her buyer that he was “ready, willing, and able to close” on the units, according to the lawsuit he filed against her last year in Miami-Dade Circuit Court. Feuerring “refused to cooperate” and said she will not sell the condos to him without a court order, according to his complaint.

A judge dismissed Swedroe’s lawsuit with prejudice, court records show, and Feuerring’s buyer backed out. She ended up selling the units to her real estate agents, Lisa Miller and Hayley Sloman of The Girlz LLC in March for $1.7 million, property records show.

Swedroe and Feuerring’s disputes date back to 2004, when Swedroe sued Water’s Edge House and unit owners, including Feuerring and her late husband, Ralph. That complaint is not available online. In 2020, Feuerring sued the condo association and Swedroe, alleging that Swedroe breached his fiduciary duties “by engaging in self-dealing” as association president, for allegedly failing to maintain and repair the common spaces, resulting in water intrusion to Feuerring’s property, which ultimately devalued her units.

Fast forward to this year, in May, when Water’s Edge House sued Feuerring, Miller, Sloman and The Girlz LLC for breach of contract and equitable, declaratory, and injunctive relief after Feuerring sold her unit to The Girlz LLC. A hearing on whether the case will be transferred to complex business court is set for Sept. 9.

The defendants – Feuerring, Miller, Sloman and The Girlz LLC – seek the court’s appointment of a receiver to take over the association. They allege that Swedroe has perpetrated the association’s alleged “flagrant breach of fiduciary duties and gross mismanagement” through “years of unchecked self-dealing and breaches” of the condo declaration. They claim Swedroe has led the charge on special assessments to all owners at the building to fund his lawsuit against Feuerring.

Attorney Jordan Isrow of Government Law Group, representing Feuerring, and her buyers in the lawsuit, said that once a majority owner has control of the association, it leaves the remaining owners with little leverage.

“It’s time for people to start realizing,” Isrow said. “It may not be relevant today, but these are the decisions that snowball unless you’re actively participating” in the decisions that boards make.

Isrow said the association doesn’t have the meeting minutes that statute requires, documenting previous votes on exercising its right of first refusal for previous purchases.

“A lot of these people are older or part-timers and they aren’t paying attention as much,” Isrow said, referring to aging condo communities in South Florida. “This is the tip of the iceberg. My hope is we can get a good result.”

Article Link: Legal battle ramps up at waterfront Bal Harbour condo building
Auther: Katherine Kallergis

As Fight Over South Florida Condo Termination Intensifies, Expect More Litigation as Developers Pursue New Buildings

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“A lot of condo associations seem to go unchecked. It’s not to say that they do anything wrong, but the truth is, a lot of people aren’t paying attention to what their condo board does. Especially in something like this particular building, where a lot of its members are part-time residents,” said Jordan Isrow of Government Law Group. “You may not see something is happening to your building or not happening to your building until it’s too late.”

As condo associations and developers look to take advantage of older buildings to capitalize on South Florida’s increased property values, condo termination litigation is bound to increase. But that can also create problems for condo owners as some may try to illegally profit off of the trend.

That’s an allegation at the heart of a lawsuit against Miami architect heir and Water’s Edge Condominium Association president and board chair. Joseph Swedroe of Bal Harbour, who owns seven of the 11 units at Water’s Edge condominium, is accused of unlawfully self-dealing to gain control of the majority of the units.

The property is located at 286 Bal Bay Drive in Bal Harbour.

It’s a case that demonstrates why associations might need a receiver to keep things fair for everyone, as attorney Jordan Isrow of Government Law Group in Fort Lauderdale sees it.

Isrow represents the defendants who are condo unit owners where Swedroe is on the board.

Jordan Isrow of Government Law Group in Fort Lauderdale.

“A lot of condo associations seem to go unchecked. It’s not to say that they do anything wrong, but the truth is, a lot of people aren’t paying attention to what their condo board does. Especially in something like this particular building, where a lot of its members are part-time residents,” said Isrow. “You may not see something is happening to your building, or not happening to your building, until it’s too late.”

Attorney Evan Berger of Becker & Poliakoff in Fort Lauderdale represents the condo association, and attorney Daniel Gielchinsky of DGIM Law in Bay Harbour Islands represented Swedroe in his lawsuit. Neither responded to a request for comment by deadline.

Isrow’s clients allege that Swedroe wanted to buy two units from owner Marlene Feurring so that he could own nine of the 11 units in the condominium. The lawsuit claims Swedroe used his control of the board to charge special assessments to all unit owners to fund the lawsuit against them for the benefit of Swedroe personally with any legitimate benefit to the members of the association at large.

“Our belief is that he’s wanting to gain 80% plus ownership requirement statutorily allow him to terminate the condominium which would then give him the right to control the destiny of a very valuable piece of real estate in Bal Harbor on the water right by the inland,” said Isrow.

The case first came to Isrow when Water’s Edge Declaration of Condominium sued Feuerring, claiming that the association has the right of first refusal to buy any unit that was offered for sale. The association claimed the seller violated the “clear and enforceable requirement of the declaration” when Feuerring sold her units to Lisa Miller and Haley Sloman without first providing the association with the opportunity to purchase them.

“She gave notice to the association, but at the time there were only two board members, one of which was Joseph Swedroe,” said Isrow. “The association’s own general counsel advised him that he could not vote on the right of first refusal because he had a conflict of interest, so she was ready to move forward with the sale but before she could do so there was a lawsuit filed by Swedroe individually.”

Isrow said Swedroe filed a lis pendens to stop the sale, seeking to force Feuerring to sell the units under the right of first refusal.

“We went for an emergency hearing that he did not have legal standing because he is not the association and the association is the only one that had that vote initially, and without a proper vote, there is no exercising right of first refusal,” said Isrow. “It was very unusual because it rarely happens.”

That case was dismissed with prejudice, and Swedroe was ordered to pay the defendant’s attorney’s fees. Now, there are two additional board members, who Isrow claims are Swedroe’s sister and the CEO of his father’s architect firm.

“They do not live in the building. They do not own any of the units in the building. They were just designated by Joe Swedroe or just requested that they step in to be candidates and they were elected,” said Isrow.

Isrow said after the election, the association started to investigate the sale of Feuerring’s former units. Feuerring, Miller and Sloman have countersued, asking the court to appoint a receiver to oversee the association and the board.

“Even assuming that they were going to void the transaction, which we don’t think will happen, that only gets you back to the status quo. That means Marlene goes back to being the owner of the unit and the buyer is no longer the new owner,” said Isrow. “Marlene has made clear she will never sell to Joe Swedroe. She will hold onto it and gift it to her son or grandson.”

Isrow said the lawsuit epitomizes why the association needs a receiver.

“Without any of the other unit owners having a say in the voting, keep in mind he owns seven of the 11 units, anytime there’s even an at-large vote he trumps all the other unit owner’s votes. There’s no alternative remedy to seek help,” said Isrow. “The only viable alternative here is a receiver and that’s the direction we’re going in.”

With an increase in property values there’s a lot of money to be made, and older condos that are redeveloped could be worth something in the multimillion-dollar range. Isrow said he expects to see similar cases in the future.

For attorneys who represent condo owners who may find themselves in a similar situation, Isrow advises being extremely detail-oriented.

“Make as many records requests as possible because, statutorily, the association is required by law to maintain certain records,” Isrow said. “If those records aren’t being kept or they never existed in the first place, whichever may be the case, that’s a very important barometer of whether that is something of concern.”

Article Link: As Fight Over South Florida Condo Termination Intensifies, Expect More Litigation as Developers Pursue New Buildings
Auther: Melea VanOstrand

StrongBlock Lured, Bilked Crypto Investors Via Reward, Suit Says

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Crypto-asset seller StrongBlock promised “lifetime” rewards with the purchase of certain blockchain products but then capped those rewards in a bait and switch, 15 investors say in a suit in federal court in New York.

The company also violated the law by failing to register as a seller of securities, Erik Crowl and the other investors say in their complaint, filed Aug. 26 in the US District Court for the Southern District of New York. The tokens and nodes qualify as securities, they say.

StrongBlock’s blockchain crypto-assets, unlike decentralized commodities based on blockchain, “are similar to traditional securities in that they represent one’s investment in a project that is to be undertaken with the funds raised,” the investors say.

Their compensation should amount to more than $4 million, they say.

The investors allege StrongBlock sold them nodes in exchange for StrongBlock STRNG and SRINGR tokens that they owned “and promised those nodes would in turn earn Plaintiffs token rewards.” The rewards were allegedly promised to come daily, “in perpetuity with no cap or limitation.”

But the company “pulled the rug out from under every node holder by arbitrarily and unilaterally capping in April 2022 the cumulative rewards that could be generated by an individual node,” the investors say. That action allegedly contradicted company statements “that node rewards would never go to zero.”

The investors also name four individuals in the complaint, including CEO and founder David Moss.

Causes of Action: Unregistered offer and sale of securities; control person liability; breach of contract; conversion; fraudulent and negligent misrepresentation; fraudulent inducement; negligence; and unjust enrichment.

Relief: Compensatory damages of “no less than $4,171,584.36″ plus interest; and punitive damages.

Response: StrongBlock didn’t immediately respond to a request for comment sent through a support form on its website.

Attorneys: Zeisler PLLC and Government Law Group PLLC represent the investors.

The case is Crowl v. StrongBlock, S.D.N.Y., No. 1:22-cv-07313, complaint 8/26/22.

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Maya Earls at mearls@bloomberglaw.com

Article Link: StrongBlock Lured, Bilked Crypto Investors Via Reward, Suit Says

Hollywood trailer park goes under contract to developer

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Phase 2 of the Pinnacle 441 apartments is planned at 6028 Johnson St., Hollywood.

The developer has proposed a 7-story project here.

Pinnacle aims to redevelop a trailer park in Hollywood to build the second phase of its affordable housing project.

The city’s Technical Advisory Committee on Sept. 6 will consider plans for Pinnacle 441 Phase 2. Miami-based Pinnacle has the 1.67-acre trailer park, containing 50 homes, at 6028 Johnson St. under contract from Ponte Vedra-based TP Hollywood LLC.

Directly to the east of the trailer park, Pinnacle broke ground on Pinnacle 441 in early August. The $45 million project will have 110 affordable apartments, three market-rate apartments and 6,760 square feet of retail.

“We’re really excited to expand our footprint in affordable housing development with the possibility of adding 100 additional residences with the second phase of Pinnacle 441,” Pinnacle regional VP Timothy Wheat stated.

Totaling 123,593 square feet in seven stories, the project would have 100 apartments and 110 parking spaces. The units would range from 783 to 1,330 square feet.

There would be 30 one-bedroom units, 47 two-bedroom units, 22 three-bedroom units, and one ground-floor live-work unit with two bedrooms and space for a small business.

There wouldn’t be many amenities in the building, as the tenants would have access to the amenities in the first phase of the project.

Hollywood-based Kaller Architecture designed the project. Fort Lauderdale-based attorney Keith Poliakoff represents the developer in the application.

With rents spiking by double digits in Broward County over the past year, there is huge demand for affordable housing. The U.S. 441 corridor in Hollywood didn’t have much development for decades, but the city has allowed more density there and developers have taken a stronger interest in the area.

Many trailer parks in South Florida have been redeveloped into more profitable uses in recent years. This is one of the few instances in which the trailer park would be replaced by affordable housing, instead of market-rate apartments or industrial.

Article Link: Hollywood trailer park goes under contract to developer
Auther: Brian Bandell

30 years after Hurricane Andrew: How resilient is South Florida? – orlandosentinel.com

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The 30th anniversary of Hurricane Andrew’s assault on South Florida is days away, and for the uninitiated and those who may have forgotten, here is what the Category 5 storm did to southern Miami-Dade County and elsewhere.

After striking on Aug. 24, 1992, Andrew killed 65 people, destroyed 63,000 homes, left 175,000 homeless, and in the immediate aftermath, left a million people without power. Three cities and towns in particular — Homestead, Florida City and Naranja Lakes — were completely or nearly reduced to ruins.

When 100 Air Force reservists returned home from temporary duty in Italy, their C-141 Starlifter landed at the U.S. Coast Guard station at Opa Locka Airport in northern Miami-Dade, not at their headquarters at Homestead Air Force Base, which bore the earmarks of a military attack.

“Welcome back,” Col. Russell Clem told the returnees. “Unfortunately, I have to say, welcome back to the greatest natural disaster to hit the United States.”

By many accounts, the recovery effort that followed was chaotic and nearly devoid of leadership. But once the extent of the disaster became apparent, a region that was already battered by a recession, a savings-and-loan crisis, elevated joblessness, and the bankruptcies of leading employers gradually found its way back.

If Andrew did the region any favors, it exposed flaws in local building codes, shoddy construction on a large scale, the pitfalls of relying on an economy focused on tourism and real estate, and deficits in storm preparation and recovery.

How resilient is South Florida now?

Interviews this week with businessmen, economists, forecasters and other experts show substantial improvements over the last three decades. Many agree that another storm of Andrew’s magnitude is likely to be mitigated by preventive measures taken over the years, though South Florida’s growing status as a preferred place for out-of-staters to relocate has raised uncertainties about the extent of damages another massive storm could cause.

Hurricane Andrew, one of the most powerful storms of the 20th Century, as it hit the southeast coast of Florida on Aug. 24, 1992.

New building codes

The communities of South Miami-Dade never had a chance in the face of a storm packing wind speeds of 175 mph and higher in certain areas.

Mobile home parks were reduced to shards of wood and metal. Planes, hangars and housing at the air base suffered heavy damage. Some housing developments stood fast better than others, their fates tied to building code adherence, construction quality and their proximity to the severest winds.

Broward and Palm Beach counties got their share of high winds, downed trees and structural damage, but the impact was greatest the farther south one drove.

The storm destroyed or damaged more than half of Miami-Dade’s housing units, according to a 1996 University of Florida research report. More than 353,000 people evacuated their homes, according to the university’s Bureau of Economic and Business Research.

Two Miami-Dade grand juries investigated deficiencies in both the codes and their enforcement, and strongly urged improvements. Today those improvements are a factor that many in the construction and weather forecasting businesses view as the region’s main line of defense against future big storms.

Bryan Norcross, FOX weather contributor and hurricane specialist, was working for WTVJ-Ch. 6 in Miami when Andrew struck. He was on the air for 23 consecutive hours, sitting down in his anchor chair at 9 a.m. Sunday; he didn’t leave until 8 a.m. Monday.

Norcross is credited with comforting thousands of South Floridians during the worst of the storm because they heard his voice on the radio. They heard him on the radio only because he made preparations to have a radio feed in case the TV transmission didn’t work.

“A sequence of things that happened allowed my voice to be the voice they heard in the dark of night when all hell was breaking loose,” he said.

His main Andrew takeaway: better building codes.

“The building codes used in Dade and Broward county are the best hurricane building codes in the world. It’s a direct result of Hurricane Andrew,” he said.

Miami construction law attorney George Breur of the Mark Migdal and Hayden firm says the post-Andrew codes are responsible for reduced damages across Florida during subsequent storms in the 2000s.

“Andrew was basically what gave birth to the Florida building code,” he said. “There was obviously inconsistent enforcement of the codes. Every three years it’s been updated and improved.”

In Miami. he said, 25 new condo towers are under construction and all of them will contain high-impact glass materials.

“In Miami-Dade County a residential high-rise has to have a wind grade of over 185 mph,” Breur said. “That’s not to say we’re not going to have some damage. But the key takeaway is that losses will be reduced. You’re not going to have a building blown completely away and there should be less insurance claims.”

Aerial of a Florida City mobile home park in 1992 after Hurricane Andrew devastated south Miami-Dade (then just Dade) County. The old Florida City water tower took a beating and was replaced by a new tower. The city’s water plant was also refurbished. (Carl Seibert/South Florida Sun Sentinel file)

But construction these days is more costly.

Ron Magill, Zoo Miami’s goodwill ambassador and communications director, recalled the zoo’s aviary was destroyed, causing the loss of countless birds.

“What has changed is that the building codes became so much more stringent following the hurricane,” Magill said. “An aviary that originally cost us $3 million to build, to rebuild [it] to meet the codes properly took us 10 years at a cost of $13 million.”

Management hopes the strengthened codes will help prevent animal escapes and reduce the chances for injuries.

Peter Dyga, president and CEO at Associated Builders & Contractors, Florida East Coast chapter, warns the code improvements are no guarantee against widespread damages even though he lauds the upgrades.

“For sure I think the changes that were put in place contributed to progress through the years to the point where we have one of, if not the strongest building codes in the world.”

As a result, the level of destruction “should not should be as great” if the region was hit by another storm of Andrew’s strength.

But he warned the better code doesn’t make the region risk-free.

“We will probably be hit by the same things again,” he said. “We are taking a calculated risk by having people living in a zone that’s exposed like the southeastern portion of Florida.”

A diversified economy: a stronger defense?

South Florida’s economy is in better shape now than 30 years ago to withstand the financial impact of severe storms, economists say.

J. Antonio Villamil is the founder and principal adviser at Washington Economics Group, a consultancy in Coral Gables, and a former undersecretary of commerce In the 1990s during the administration of President George H.W. Bush.

“We’re a different economy altogether,” he said. “We have much more international business and high technology startups. We don’t rely as much as we did before on cyclical construction and tourism as in the past. Given the size of the population and entrepreneurial nature of the startups, it’s quite different than during Andrew.”

amra Giffen looks through what is left of her mobile home in Kendall on Aug. 25, 1992, after Hurricane Andrew hit South Florida. (Jim Virga/South Florida Sun Sentinel file)

Immediately after the storm, a recovery movement spearheaded by private businesses called “We Will Rebuild” helped jump-start the process and set a tone for more cooperation between the public and private sectors..

“It helps to create a better business environment when you have the public sector and business community working toward a common goal,” Villamil said. “That happened. There was a lot of leadership in the area.”

“We Will Rebuild was a major factor in driving investment in the area,” he added. “The business environment improved dramatically.”

Many businesses selling must-have items did well after the storm.

Keith Koenig, CEO of the City Furniture chain, which is based in Tamarac, said the storm wiped out his company’s location in Cutler Bay. At the time, the business was known as Waterbed City.

“We were pretty devastated by that,” he said. “The insurance company covered that. Our business really boomed because people needed to replace furniture where their homes and apartments were wiped out.”

“It was a disaster, and also an opportunity,” said Koenig, who also serves as a board member of the Atlanta Federal Reserve’s branch in Miami. “We dealt with the hurricane and our business actually boomed for about nine months. It was an artificial temporary boom and then got back to a more normal level of business.”

He, too, counts the strengthened building codes as being “at the top of the list in my mind” as being a major change for the good driven by Andrew.

The Aug. 25, 1992, front page of the Sun Sentinel, a day after Hurricane Andrew blasted across South Florida. (South Florida Sun Sentinel)

“Builders were really concerned this would drive up costs,” he said. “But it didn’t slow down demand. Now, any home not built to that level of that resilience is not as valuable.”

Northward ho — instant growth for Broward

The storm dramatically forced shifts in the population. driving nearly 40,000 people out of Miami-Dade permanently, according to the UF report, with many moving to the Broward County cities of Miramar and Pembroke Pines. Both are now among the region’s fastest-growing cities.

“People got their insurance money and the entire population shifted from Dade County to West Broward County almost overnight,” said attorney Keith Poliakoff, managing partner of the Government Law Group in Fort Lauderdale. “I always thought that was amazing.”

Previously, the West Broward area was “nothing but land and cattle,” he added.

Bob Swindell, president and CEO of the Greater Fort Lauderdale Alliance, recalled that a significant amount of residential development already had been underway when the storm hit, effectively providing housing opportunities for Hispanic and Caribbean-area residents who resided in south Miami-Dade and needed to find new places to live.

“Fortunately, there was enough product coming online in Broward,” he said. “We had the first Caribbean-American majority city commission in Broward County and in the country. It changed our politics and the culture and the makeup of our county.”

Villamil said the population movement created “a truly integrated economy,” especially between Miami-Dade and Broward.

“We truly have a megalopolis between Dade and Broward, including Palm Beach County,” he said. “This is likely to accelerate with Brightline and Tri-Rail and the ability to commute between counties.”

Better preparations emerge

For FPL, there were numerous lessons learned about how to respond to such a disaster. It had no idea in 1992 how to beef up the workforce before the storm, how to house those workers, how to feed them, where to stage the work trucks, where to stage the food.

The utility has more than 100 staging sites now, said Manny Miranda, executive vice president for power delivery.

He recalled that after Andrew struck, he received an initial damage report from a co-worker.

“He said, ‘Manny, every single pole is down,’” Miranda recalled. “I said, ‘Maybe it’s where you’re standing.’ He said, ‘No, everything is devastated.’”

Miranda would soon learn that description was accurate. The utility replaced 20,000 poles for 1.4 million customers.

The utility’s storm recovery process is very different now, he said.

Boats damaged by Hurricane Andrew at Black Point Marina in Homestead on Sept. 4, 1992. (Judy Sloan Reich/South Florida Sun Sentinel file)

“We already have pre-determined where material goes, where the tents go, where trucks park, how to fuel trucks. We can house people, we have mobile trailers for sleeping, mobile trailers for cooking,” he said.

The company also learned to have its workers toil alongside city cleanup crews. One thing that happened during Andrew was that municipal crews bulldozed entire areas to get them cleared, destroying electrical equipment in the process.

Miranda said about 45% of FPL’s electrical lines are underground.

“One of the things we know is our main transmission lines, our main circuit lines, what we call main feeder lines, they hold up pretty well during a hurricane,” Miranda said. “The issue for us during Hurricane Irma was overhead lines in people’s backyards.”

Miranda said access and restoration is complicated by trees, swimming pools and sheds. The utility is looking to put all neighborhood lines underground and harden them all to withstand 145 mph winds.

Zoo Miami in South Miami-Dade learned it needs a post-storm plan, including having generators for air conditioning animal housing.

“I think the zoo is much-better prepared in dealing with the aftermath than we were initially,” Magill said. “The sense of having a pre-determined evacuation for animals post-storm, having generators now built and located throughout the park, having our stations properly managed and maintained so we can deal with excess water. I think that experience is going to be invaluable should another storm of that magnitude come through.”

Swindell believes the state now has a better storm preparedness culture.

“People were moving to Florida and a lot of new folks had never been in a hurricane before,” he said. “You’d have a hurricane party at a local bar and go out and buy stuff you would never buy.”

“That mindset really got shaken up. I think people take it much more seriously. We’re building much better.”

Three generations of one family lost their mobile homes at the Dadeland Mobile Home Park in Kendall when Hurricane Andrew hit South Florida. Tamra Giffen comforts daughter Catlin, 3, while grandmother Dorothy Giffen rests on what was left of a neighbor’s home on Aug. 25, 1992. (Jim Virga/South Florida Sun Sentinel file)

The next ‘Big One’

Economists still warn that another storm of Andrew’s magnitude could well create much more damage than in 1992 mainly because of the sheer rise in the region’s population, which is now 6.1 million, up from the 4.1 million people who lived here three decades ago.

The increased density caused by a development boom has created higher real estate values that could easily be deflated by another natural disaster, they warn.

“Where we might be underestimating is the actual cost,” said Sofia Johan, an economist at Florida Atlantic University. “The population has doubled in the last 20 years and the population’s wealth has possibly doubled, if not quadrupled.”

“Whatever damage happens is going to be even more expensive,” Johan added, noting that insurance companies are dropping customers and raising rates.

Florida’s insurance market has spent most of the last two years on life support, battered by financial woes, the South Florida Sun Sentinel recently reported. Heavy losses caused widespread fears — just before the official start of hurricane season on June 1 — that a large number of companies would not be able to meet the state’s minimum financial-strength requirements to protect all of the state’s property owners.

“I get dropped by my insurance companies on a regular basis for whatever reason,” Johan said. “I am thinking about all of those people who cannot afford the 60% to 70% increases in insurance. What would happen to them?”

Hollywood Mayor Josh Levy reminds people that sea level rise is a major concern.

“If a storm hits at King Tide we could be worse off as a region,” he said. “We’re certainly taking steps to raise the seawalls and public shorelines to reduce the likelihood of flooding in a perfect-storm situation. Conditions led by sea level rise make the challenge all the more harder. The bar is set higher by nature itself.”

Staff writer David Lyons can be reached at dvlyons@SunSentinel.com. Staff writer Chris Perkins can be reached at chperkins@sunsentinel.com.

Article Posted on: 30 years after Hurricane Andrew: How resilient is South Florida?

Author: David Lyons and Chris Perkins

30 years after Hurricane Andrew: How resilient is South Florida? – sun-sentinel.com

/in /by

The 30th anniversary of Hurricane Andrew’s assault on South Florida is days away, and for the uninitiated and those who may have forgotten, here is what the Category 5 storm did to southern Miami-Dade County and elsewhere.

After striking on Aug. 24, 1992, Andrew killed 65 people, destroyed 63,000 homes, left 175,000 homeless, and in the immediate aftermath, left a million people without power. Three cities and towns in particular — Homestead, Florida City and Naranja Lakes — were completely or nearly reduced to ruins.

When 100 Air Force reservists returned home from temporary duty in Italy, their C-141 Starlifter landed at the U.S. Coast Guard station at Opa Locka Airport in northern Miami-Dade, not at their headquarters at Homestead Air Force Base, which bore the earmarks of a military attack.

“Welcome back,” Col. Russell Clem told the returnees. “Unfortunately, I have to say, welcome back to the greatest natural disaster to hit the United States.”

By many accounts, the recovery effort that followed was chaotic and nearly devoid of leadership. But once the extent of the disaster became apparent, a region that was already battered by a recession, a savings-and-loan crisis, elevated joblessness, and the bankruptcies of leading employers gradually found its way back.

If Andrew did the region any favors, it exposed flaws in local building codes, shoddy construction on a large scale, the pitfalls of relying on an economy focused on tourism and real estate, and deficits in storm preparation and recovery.

How resilient is South Florida now?

Interviews this week with businessmen, economists, forecasters and other experts show substantial improvements over the last three decades. Many agree that another storm of Andrew’s magnitude is likely to be mitigated by preventive measures taken over the years, though South Florida’s growing status as a preferred place for out-of-staters to relocate has raised uncertainties about the extent of damages another massive storm could cause.

Hurricane Andrew, one of the most powerful storms of the 20th Century, as it hit the southeast coast of Florida on Aug. 24, 1992.

New building codes

The communities of South Miami-Dade never had a chance in the face of a storm packing wind speeds of 175 mph and higher in certain areas.

Mobile home parks were reduced to shards of wood and metal. Planes, hangars and housing at the air base suffered heavy damage. Some housing developments stood fast better than others, their fates tied to building code adherence, construction quality and their proximity to the severest winds.

Broward and Palm Beach counties got their share of high winds, downed trees and structural damage, but the impact was greatest the farther south one drove.

The storm destroyed or damaged more than half of Miami-Dade’s housing units, according to a 1996 University of Florida research report. More than 353,000 people evacuated their homes, according to the university’s Bureau of Economic and Business Research.

Two Miami-Dade grand juries investigated deficiencies in both the codes and their enforcement, and strongly urged improvements. Today those improvements are a factor that many in the construction and weather forecasting businesses view as the region’s main line of defense against future big storms.

Bryan Norcross, FOX weather contributor and hurricane specialist, was working for WTVJ-Ch. 6 in Miami when Andrew struck. He was on the air for 23 consecutive hours, sitting down in his anchor chair at 9 a.m. Sunday; he didn’t leave until 8 a.m. Monday.

Norcross is credited with comforting thousands of South Floridians during the worst of the storm because they heard his voice on the radio. They heard him on the radio only because he made preparations to have a radio feed in case the TV transmission didn’t work.

“A sequence of things that happened allowed my voice to be the voice they heard in the dark of night when all hell was breaking loose,” he said.

His main Andrew takeaway: better building codes.

“The building codes used in Dade and Broward county are the best hurricane building codes in the world. It’s a direct result of Hurricane Andrew,” he said.

Miami construction law attorney George Breur of the Mark Migdal and Hayden firm says the post-Andrew codes are responsible for reduced damages across Florida during subsequent storms in the 2000s.

“Andrew was basically what gave birth to the Florida building code,” he said. “There was obviously inconsistent enforcement of the codes. Every three years it’s been updated and improved.”

In Miami. he said, 25 new condo towers are under construction and all of them will contain high-impact glass materials.

“In Miami-Dade County a residential high-rise has to have a wind grade of over 185 mph,” Breur said. “That’s not to say we’re not going to have some damage. But the key takeaway is that losses will be reduced. You’re not going to have a building blown completely away and there should be less insurance claims.”

Aerial of a Florida City mobile home park in 1992 after Hurricane Andrew devastated south Miami-Dade (then just Dade) County. The old Florida City water tower took a beating and was replaced by a new tower. The city’s water plant was also refurbished. (Carl Seibert/South Florida Sun Sentinel file)

But construction these days is more costly.

Ron Magill, Zoo Miami’s goodwill ambassador and communications director, recalled the zoo’s aviary was destroyed, causing the loss of countless birds.

“What has changed is that the building codes became so much more stringent following the hurricane,” Magill said. “An aviary that originally cost us $3 million to build, to rebuild [it] to meet the codes properly took us 10 years at a cost of $13 million.”

Management hopes the strengthened codes will help prevent animal escapes and reduce the chances for injuries.

Peter Dyga, president and CEO at Associated Builders & Contractors, Florida East Coast chapter, warns the code improvements are no guarantee against widespread damages even though he lauds the upgrades.

“For sure I think the changes that were put in place contributed to progress through the years to the point where we have one of, if not the strongest building codes in the world.”

As a result, the level of destruction “should not should be as great” if the region was hit by another storm of Andrew’s strength.

But he warned the better code doesn’t make the region risk-free.

“We will probably be hit by the same things again,” he said. “We are taking a calculated risk by having people living in a zone that’s exposed like the southeastern portion of Florida.”

A diversified economy: a stronger defense?

South Florida’s economy is in better shape now than 30 years ago to withstand the financial impact of severe storms, economists say.

J. Antonio Villamil is the founder and principal adviser at Washington Economics Group, a consultancy in Coral Gables, and a former undersecretary of commerce In the 1990s during the administration of President George H.W. Bush.

“We’re a different economy altogether,” he said. “We have much more international business and high technology startups. We don’t rely as much as we did before on cyclical construction and tourism as in the past. Given the size of the population and entrepreneurial nature of the startups, it’s quite different than during Andrew.”

amra Giffen looks through what is left of her mobile home in Kendall on Aug. 25, 1992, after Hurricane Andrew hit South Florida. (Jim Virga/South Florida Sun Sentinel file)

Immediately after the storm, a recovery movement spearheaded by private businesses called “We Will Rebuild” helped jump-start the process and set a tone for more cooperation between the public and private sectors..

“It helps to create a better business environment when you have the public sector and business community working toward a common goal,” Villamil said. “That happened. There was a lot of leadership in the area.”

“We Will Rebuild was a major factor in driving investment in the area,” he added. “The business environment improved dramatically.”

Many businesses selling must-have items did well after the storm.

Keith Koenig, CEO of the City Furniture chain, which is based in Tamarac, said the storm wiped out his company’s location in Cutler Bay. At the time, the business was known as Waterbed City.

“We were pretty devastated by that,” he said. “The insurance company covered that. Our business really boomed because people needed to replace furniture where their homes and apartments were wiped out.”

“It was a disaster, and also an opportunity,” said Koenig, who also serves as a board member of the Atlanta Federal Reserve’s branch in Miami. “We dealt with the hurricane and our business actually boomed for about nine months. It was an artificial temporary boom and then got back to a more normal level of business.”

He, too, counts the strengthened building codes as being “at the top of the list in my mind” as being a major change for the good driven by Andrew.

The Aug. 25, 1992, front page of the Sun Sentinel, a day after Hurricane Andrew blasted across South Florida. (South Florida Sun Sentinel)

“Builders were really concerned this would drive up costs,” he said. “But it didn’t slow down demand. Now, any home not built to that level of that resilience is not as valuable.”

Northward ho — instant growth for Broward

The storm dramatically forced shifts in the population. driving nearly 40,000 people out of Miami-Dade permanently, according to the UF report, with many moving to the Broward County cities of Miramar and Pembroke Pines. Both are now among the region’s fastest-growing cities.

“People got their insurance money and the entire population shifted from Dade County to West Broward County almost overnight,” said attorney Keith Poliakoff, managing partner of the Government Law Group in Fort Lauderdale. “I always thought that was amazing.”

Previously, the West Broward area was “nothing but land and cattle,” he added.

Bob Swindell, president and CEO of the Greater Fort Lauderdale Alliance, recalled that a significant amount of residential development already had been underway when the storm hit, effectively providing housing opportunities for Hispanic and Caribbean-area residents who resided in south Miami-Dade and needed to find new places to live.

“Fortunately, there was enough product coming online in Broward,” he said. “We had the first Caribbean-American majority city commission in Broward County and in the country. It changed our politics and the culture and the makeup of our county.”

Villamil said the population movement created “a truly integrated economy,” especially between Miami-Dade and Broward.

“We truly have a megalopolis between Dade and Broward, including Palm Beach County,” he said. “This is likely to accelerate with Brightline and Tri-Rail and the ability to commute between counties.”

Better preparations emerge

For FPL, there were numerous lessons learned about how to respond to such a disaster. It had no idea in 1992 how to beef up the workforce before the storm, how to house those workers, how to feed them, where to stage the work trucks, where to stage the food.

The utility has more than 100 staging sites now, said Manny Miranda, executive vice president for power delivery.

He recalled that after Andrew struck, he received an initial damage report from a co-worker.

“He said, ‘Manny, every single pole is down,’” Miranda recalled. “I said, ‘Maybe it’s where you’re standing.’ He said, ‘No, everything is devastated.’”

Miranda would soon learn that description was accurate. The utility replaced 20,000 poles for 1.4 million customers.

The utility’s storm recovery process is very different now, he said.

Boats damaged by Hurricane Andrew at Black Point Marina in Homestead on Sept. 4, 1992. (Judy Sloan Reich/South Florida Sun Sentinel file)

“We already have pre-determined where material goes, where the tents go, where trucks park, how to fuel trucks. We can house people, we have mobile trailers for sleeping, mobile trailers for cooking,” he said.

The company also learned to have its workers toil alongside city cleanup crews. One thing that happened during Andrew was that municipal crews bulldozed entire areas to get them cleared, destroying electrical equipment in the process.

Miranda said about 45% of FPL’s electrical lines are underground.

“One of the things we know is our main transmission lines, our main circuit lines, what we call main feeder lines, they hold up pretty well during a hurricane,” Miranda said. “The issue for us during Hurricane Irma was overhead lines in people’s backyards.”

Miranda said access and restoration is complicated by trees, swimming pools and sheds. The utility is looking to put all neighborhood lines underground and harden them all to withstand 145 mph winds.

Zoo Miami in South Miami-Dade learned it needs a post-storm plan, including having generators for air conditioning animal housing.

“I think the zoo is much-better prepared in dealing with the aftermath than we were initially,” Magill said. “The sense of having a pre-determined evacuation for animals post-storm, having generators now built and located throughout the park, having our stations properly managed and maintained so we can deal with excess water. I think that experience is going to be invaluable should another storm of that magnitude come through.”

Swindell believes the state now has a better storm preparedness culture.

“People were moving to Florida and a lot of new folks had never been in a hurricane before,” he said. “You’d have a hurricane party at a local bar and go out and buy stuff you would never buy.”

“That mindset really got shaken up. I think people take it much more seriously. We’re building much better.”

Three generations of one family lost their mobile homes at the Dadeland Mobile Home Park in Kendall when Hurricane Andrew hit South Florida. Tamra Giffen comforts daughter Catlin, 3, while grandmother Dorothy Giffen rests on what was left of a neighbor’s home on Aug. 25, 1992. (Jim Virga/South Florida Sun Sentinel file)

The next ‘Big One’

Economists still warn that another storm of Andrew’s magnitude could well create much more damage than in 1992 mainly because of the sheer rise in the region’s population, which is now 6.1 million, up from the 4.1 million people who lived here three decades ago.

The increased density caused by a development boom has created higher real estate values that could easily be deflated by another natural disaster, they warn.

“Where we might be underestimating is the actual cost,” said Sofia Johan, an economist at Florida Atlantic University. “The population has doubled in the last 20 years and the population’s wealth has possibly doubled, if not quadrupled.”

“Whatever damage happens is going to be even more expensive,” Johan added, noting that insurance companies are dropping customers and raising rates.

Florida’s insurance market has spent most of the last two years on life support, battered by financial woes, the South Florida Sun Sentinel recently reported. Heavy losses caused widespread fears — just before the official start of hurricane season on June 1 — that a large number of companies would not be able to meet the state’s minimum financial-strength requirements to protect all of the state’s property owners.

“I get dropped by my insurance companies on a regular basis for whatever reason,” Johan said. “I am thinking about all of those people who cannot afford the 60% to 70% increases in insurance. What would happen to them?”

Hollywood Mayor Josh Levy reminds people that sea level rise is a major concern.

“If a storm hits at King Tide we could be worse off as a region,” he said. “We’re certainly taking steps to raise the seawalls and public shorelines to reduce the likelihood of flooding in a perfect-storm situation. Conditions led by sea level rise make the challenge all the more harder. The bar is set higher by nature itself.”

Staff writer David Lyons can be reached at dvlyons@SunSentinel.com. Staff writer Chris Perkins can be reached at chperkins@sunsentinel.com.

Article Posted on: 30 years after Hurricane Andrew: How resilient is South Florida?

Author: David Lyons and Chris Perkins