Archive for category: News

When Condra Property Group bought the single-story motel at 2007 North Ocean Drive in Hollywood, Florida, last year, it was planning to redevelop the site into a 10-story luxury hotel. But the project required a height variance, got tied up in the approval process and never broke ground, the developer’s land use attorney said.

Then in March, Florida Gov. Ron DeSantis signed Senate Bill 102, known as the Live Local Act, a dramatic overhaul of the approval process for housing development across the state. As a result, Condra is planning to submit an application to build an 18-story apartment building on the site instead, according to emails seen by Bisnow.

Under the provisions of the Live Local Act, the local government is prohibited from denying the application, Government Law Group attorney Keith Poliakoff said.

The passage of Live Local has already begun to transform development processes across the state of Florida ahead of the law’s July 1 effective date. The law’s far-reaching provisions — which curtail local governments’ authority to approve and deny projects, redefine what affordable housing means and inject hundreds of millions in funding toward new developments — have set off a wave of pre-development activity, industry players said.

“What we’re seeing is a mad rush by smart developers to find industrial, commercial and mixed-use properties,” said Poliakoff, who is based in Fort Lauderdale and represents developers and local governments. “For the first time in so many years, they’re able to build residential on land where it was previously prohibited. And they’re finally given the density and height necessary to make the development of those blocks profitable.”

Several sources told Bisnow they were already preparing proposals for developments that fit the new legislation, with some planning to submit their plans on July 1. They said the law has led a new group of developers who weren’t previously in the affordable housing space to consider projects.

But there is some concern that the $711M in first-year funding the law provides could quickly be depleted — and there is an expectation that the rules around approval could change or be challenged in court.

“You have to be ready to go now,” said J.C. de Ona, the Southeast Florida president at Centennial Bank.

De Ona said Centennial, which has invested over $150M in Southeast Florida’s affordable housing sector, is already hearing from clients that are trying to get “that first wave of funds” that are unlocked this summer.

“The money that’s going to be available I think is going to go pretty quick,” he said. “You’re looking at the entire state of Florida.”

SB 102, which was introduced to the Florida Senate in January and signed into law March 29, was designed to encourage affordable housing development through a mix of loans and tax incentives while also changing zoning rules and prohibiting local municipalities from blocking developments that fit the law’s requirements.

The law provides $711M in funding for existing affordable housing loan programs in the upcoming fiscal year and more than $1.5B in the next 10 years to fund development across the state.

As developers prepare projects that fit the new law’s guidelines, the local governments that will be responsible for implementing the law are still trying to understand how it will impact their approval processes.

“We’ve talked to some local governments, and everybody’s in the same position right now,” said David Deutch, co-founder of Pinnacle Communities, which has built around 10,000 housing units through its affordable housing division while also developing market rate products. “There’s lots of questions. There’s lots to digest in the bill, and everybody’s trying to figure out ‘What does this mean for us?’ and how best to implement this.

“Everybody’s excited about the opportunity, but the devil’s in the details,” he said.

‘The Legislature Usurped Local Power’

Under the Live Local Act, municipalities and counties are prohibited from restricting the density of projects “below the highest allowed density on any unincorporated land in the county where residential development is allowed,” so long as the project meets the law’s other provisions.

The law also changes how height restrictions can be assessed, prohibiting localities from blocking projects because of height so long as the project is “below the highest currently allowed height for a commercial or residential development located in its jurisdiction within 1 mile of the proposed development.”

The provisions put new limits on how local governments can approve properties, saying municipalities “must authorize” projects under certain circumstances and that local governments “may not restrict” density or heights outside of the limits set out in the legislation. By putting these limits in place, the law has taken away some aspects of city planning that have historically been done on the local level.

“For one of the first times that I can remember in state history, the legislature usurped local power,” Poliakoff said. “It has now taken over land use and zoning decisions and has taken over a municipality or county’s right to govern the development of lands within its jurisdiction if that land can be utilized for attainable housing.”

Poliakoff said he expects local governments to still try and reject projects on the basis of density and height after July 1, but he said those decisions would likely lead to lawsuits from developers.

“Municipalities are going to push back and are going to try to do everything in their power not to implement the law because they are upset that it usurps their power,” Poliakoff said. “I’m already hearing through the grapevine that a lot of the eastern cities that contain land on the barrier islands are going to push back. But the law is very plain, very easy to understand. And it will be hard for municipalities to get around the clear and strict and unambiguous language that’s contained in the statute.”

Other attorneys and developers told Bisnow they have had conversations with local officials who support the intent of the Live Local Act and are leaning into it.

“The jurisdictions I’m working with so far are embracing it,” said Iris Escarra, an attorney and co-chair of the land use practice at Greenberg Traurig. “They’re trying to implement it and they’re trying to see how they can incorporate it into their traditional application processes.”

Escarra said she has spoken to politicians and their constituents who are concerned about a lack of affordable housing in the state and think this legislation has the potential to streamline the approval process.

“The leadership of the state is telling the local governments that they need to cut through the red tape,” Escarra said. “The state wants affordable housing. The state wants to give flexibility. The state wants you to do it expeditiously.”

But with less than eight weeks until the law goes into effect, local governments are still working to develop rules and the process for getting approvals.

“The only thing that I think is going to cause a little bit of havoc, at least initially, is how many of these are going to be filed, how quickly they’re going to be filed,” Escarra said. “The local governments pretty much run a regular ship.”

Landowners Think ‘They’ve Hit The Lottery’

The Live Local Act also includes a number of provisions meant to encourage affordable housing development beyond state loans and the flattening of the approval process.

It expands the definition of affordable, allowing developers to claim some tax credits for units leased to tenants making up to 120% of an area’s median income.

In Miami-Dade County, that means developers would need to make units affordable to a single person making $81,960, according to Department of Housing and Urban Development data. In Broward County, a single person would qualify if they made less than $76,200. In both cases, developers who build to the Live Local Act could charge rents above $2K per month for 40% of the designated affordable units while listing the other 60% of units at market rate.

“I will say there is an intense amount of interest” from developers, said Becky Wilson, an Orlando-based land use attorney at Lowndes.

“There are a lot of groups that believe that with the combination of the tax incentives, along with skipping the political approvals, they can make this work.”

The law will also open up commercial and industrial zoning to residential development, provided the property has at least 40% of its units restricted at the new affordability level. Developers are looking at converting properties like big-box stores, old office buildings and shuttered fast-food restaurants into residential properties, sources said.

“There’s people out there that are looking into it a bit more now to see if they can get incentives at the property they’ve been looking at and see if they get the zoning they want with the bill,” Centennial Bank’s de Ona said. “A deal that was not financeable before, we can make them financeable because there’s more equity available.”

The law could also alter the industrial development landscape, as property owners may begin to weigh the return on investment from building warehouses against the potential of a mixed-income residential development.

“Everyone who owns a piece of industrial property today believes that they’ve hit the lottery,” Wilson said. “Finding a place to build a warehouse is going to be expensive because the owners think, ‘Wait a minute, this is a new 10-story apartment complex.’”

As the development community, along with local and state governments, prepare for Live Local to go into effect, there is a broad expectation that the law will need to be updated and clarified. Some expect new legislation will be introduced to clarify some of the rules and restrictions put in place by Live Local.

“July 1 is the starting point for implementing this bill. It’ll take time,” Pinnacle’s Deutch said. “It will take a concerted effort on behalf of local governments and the development community to sort through the issues and come up with strategies that make sense, as opposed to just being adversarial.”

In the meantime, developers are working with lawyers on new proposals even as they acknowledge that uncertainties in the economy continue to make financing projects a challenge.

“I mean, what do you have to lose getting it approved administratively?” Wilson said. “I would anticipate a lot of business getting these projects approved, and then I don’t know if they actually get built.”

Article Link: Developers In A ‘Mad Rush’ To Take Advantage Of Florida’s Live Local Act
Author: Matt Wasielewski, South Florida

Affordable housing, insurance lawsuit reform already signed into law

Against the backdrop of controversial measures regarding permitless carry, a six-week abortion ban and Gov. Ron DeSantis’ feud with Disney, Florida state lawmakers have advanced a number of bills this session that could alter the landscape for developers, brokers and property owners in the Sunshine State.

Among the most consequential real estate bills to pass this session is Senate Bill 102, which sets aside more than $700 million for affordable and workforce housing and incentivizes developers with major tax breaks, at a time when South Florida has emerged as one of the nation’s least affordable housing markets.

The Legislature could also vote on bills tied to demolitions of properties in historic districts, challenges to development approvals and more before the session ends on May 5.

Affordable housing

The law, called the Live Local Act, supersedes local governments’ zoning, density and height requirements for affordable housing in areas zoned for commercial or mixed-use development, and strips local municipalities’ ability to enact rent control, which was previously only possible during a housing emergency. It will also replenish a state housing fund that has been gutted by Florida lawmakers for years.

The law was signed by DeSantis in late March and takes effect July 1.

It provides funds and incentives to affordable housing developers and is intended to encourage market-rate developers to incorporate mixed-income housing into their buildings. The $711 million it sets aside could also help fill funding gaps that exist in part because of recent cost increases in construction, land, insurance and financing.

“This landmark legislation is the first of major consequence to help ensure affordable housing will be built,” said attorney Keith Poliakoff of Fort Lauderdale-based Government Law Group. “It takes a lot of the handcuffs off the developers who develop this type of housing.”

Condo safety and insurance

After a condo safety law that passed last year sent condo associations scrambling to meet looming deadlines for structural repairs and financial requirements, lawmakers are advancing a new bill that seeks to clarify certain aspects.

Senate Bill 154, now in the Florida House, provides some flexibility to the condo safety measure, which was signed into law a year after the deadly collapse of Champlain Towers South in Surfside in 2021. The latest bill gives local municipalities some authority in enforcement and limits the “milestone” inspection requirements for residential condo or co-op buildings.

The law passed last year requires buildings to have an architect or engineer complete structural integrity reserve studies, which then determine how much a building has to have in its reserves.

More important, it eliminated HOA associations’ ability to waive the funding of their financial reserves, giving them until the end of 2024 to raise monthly dues or enact special assessments to fully fund reserves, if needed, by the start of 2025.

It also requires buildings of three or more stories to go through inspections once they are 30 years old, or 25 years old if within three miles of the coastline, and every 10 years after that.

It takes a lot of the handcuffs off the developers who develop [affordable] housing.
KEITH POLIAKOFF, ATTORNEY

Rather than a blanket requirement, the new legislation would give local agencies the power to determine if condo and co-op buildings within three miles of the coastline need to be inspected at 25 years.

The latest bill would also give associations a bit of breathing room until the deadlines go into effect. Condo boards could waive full or partial funding of financial reserve requirements — if they secure a majority vote of the entire building’s voting interests — but only until the end of 2024.

That could provide temporary financial relief for many communities that are strapped for cash, said Miami attorney Marci Cohen. A number of properties statewide are playing catchup, trying to make repairs, fund their reserves and keep pace with other growing costs.

The Legislature also tackled insurance reform with House Bill 837, which DeSantis signed into law in March. The measure, which proponents say is intended to weed out frivolous lawsuits and could encourage insurers to stay or return to Florida, makes it harder and more expensive to sue insurance companies — including property insurers. It also reduces the statute of limitations, limits damages and eliminates certain attorneys’ fees.

Restrictions on foreign investment

A bill restricting foreign investment in Florida real estate that previously had bipartisan support is now the subject of intense criticism. House Bill 1355 would ban Chinese nationals from purchasing real estate anywhere in the state, unless they are U.S. citizens or residents who currently own property in the state. It also restricts foreign investment from six other countries.

Experts caution that the bill would send a negative message to investors from other countries, though it likely wouldn’t have a huge immediate effect on foreign investment in South Florida, where Chinese investment has dwindled since before the pandemic.

Lender Daniel Ettedgui, who flew to Tallahassee to speak out against the proposed legislation, called the bill racist. “If you do that today with the Chinese, what’s next?” he said. “History is repeating itself.”

As things stood late last month, the bill would force Chinese investors to register their existing ownership of such properties with the state, which some critics compared to Nazi Germany requiring Jews to register their property with the government.

It would also ban foreign nationals from Russia, Iran, North Korea, Cuba, Venezuela and Syria from purchasing agricultural land in the state, and from buying land within 20 miles of a U.S. military installation or critical infrastructure facility.

Legislators across the country have spoken out over the potential national security threats that come with foreign investors and their governments owning agricultural land, but many brokers said the proposed bill goes too far. It could restrict Chinese buyers from purchasing condos or houses for their children attending college, as well as Chinese investors who buy into retail and office properties.

“As it stands, the Florida bills could make it difficult for families to purchase homes for students studying in Florida,” said Ana Bozovic, founder of real estate data firm and brokerage Analytics Miami. “Is that something we really want to restrict?”

Article Link: Florida lawmakers tackle affordable housing, condo safety, foreign investment
Author: Katherine Kallergis

Florida Governor Ron DeSantis

A new bill signed by Florida Gov. Ron DeSantis that aims to spur development of affordable housing across Florida could lead to a wave of redevelopment of low-density areas.

The Live Local Act (SB 102) increases funding for affordable housing projects, makes it easier for developers to win approval for affordable housing in commercial districts, and prohibits government rent control.

Central Florida has become one of the least affordable housing markets in the nation over the last few years. A surge in migration from other states created frantic competition for homes and apartments, which drove up housing prices and rents.

“To have housing for teachers, police officers, firefighters, all these important things, you can’t do it if they have to drive an hour to work every day,” DeSantis said at the signing ceremony in Naples.

The Live Local Act was approved 103-6 in the House and unanimously in the Senate.

It contains $771 million in funding for affordable housing programs through the Florida Housing Finance Corp. (FHFC). That breaks down to $259 million for the SAIL programs with low-interest loans for developers; $252 million for the SHIP program with loans to developers in partnership with local government funding; $100 million to alleviate inflation-related costs for affordable housing projects; $100 million for Hometown Heroes to provide down payment and closing cost assistance to first-time homebuyers who work in law enforcement, firefighting, education, health care, child care or military/veterans.

It also created a sales tax refund of up to $5,000 on building materials for affordable housing projects funded by FHFC.

“This is transformative,” said David O. Deutch, a partner at Miami-based Pinnacle, one of the largest affordable housing developers in Florida. “There is now a certainty of funding and an iron-clad commitment to affordable and workforce housing in the state.”

The Florida Housing Finance Corp. always has more projects seeking funding than it has money to award, so this act means more projects will obtain funding and move forward. Additionally, Pinnacle can seek out more projects because it has a higher chance of winning funding, he said.

Right now, a lot of worthy affordable housing projects in Florida were stuck because Florida Housing Finance Corp. funds weren’t available and the cost of construction has increased, he said. Those projects are now more likely to move forward.

The extra funding will help developers build affordable housing amid a challenging environment with increased construction costs and higher interest rates that make loans more expensive, said Brian Sidman, founder of Miami-based BAS Holdings, which builds workforce and affordable housing through its subsidiary Redwood Development Co. He’s going to ramp up his development team to take advantage of the new law and meet the overwhelming demand for affordable units.

“We have a significant housing crisis and we need a lower cost of capital and changing zoning in certain areas to allow for workforce development to come in.”

The Live Local Act preempts certain local zoning rules to make it easier for affordable housing developers to secure approval.

“The attainable housing law will immediately change the landscape of development in Florida,” said Keith Poliakoff, an attorney with Fort Lauderdale-based Government Law Group, which represents many developers. “For the first time I can recall in state history, the state government has overridden home rule and taken away the zoning and land use powers from local government.”

Under the act, a municipality must authorize a multifamily or mixed-use project in an area that’s already zoned for commercial, industrial or mixed-use if the developer agrees to make at least 40% of the residential units affordable housing or workforce housing for 30 years. That means the rentals would be for people earning up to 120% of area median income. This project would be approved by city administration without a zoning, land use change, special exception or comprehensive plan amendment, so the City Commission wouldn’t need to vote. If this is a mixed-use project, at least 65% of the building must be for residential.

The density allowed at such a project could be equal to the highest density allowed anywhere in the municipality where residential is permitted. As for height, the project could be as tall as any building within a one-mile radius in the same city, or three stories, whichever is taller. The developer could also reduce the number of parking spaces if the site is near a public transit stop.

Poliakoff said development dynamics will change across Florida and lead to developers seeking property in prime coastal locales to redevelop. For instance, the city of Hollywood has zoning and height restrictions that prevent the redevelopment of low-rise hotels on the beach into high-rise residential towers.

With this new law, he said developers could replace those hotels with a residential high rise containing the maximum density in Hollywood – 95 units per acre for a condo built on the ocean in the 1970s – and the same height. As long as 40% of the units are workforce housing, the city can’t deny the project, he said. Poliakoff noted the law has no limits on unit sizes, so the workforce housing units could be small studios and the rest of the project could be luxury apartments.

In Sunny Isles Beach, this law would allow redevelopment of the commercial centers on the west side of A1A with the same density as the condos on the beach, as long as workforce housing is included, Poliakoff said. The same goes for commercial areas in cities that have recently been resistant to more density.

He noted that some municipalities may struggle to afford infrastructure improvements to handle more dense development than they planned for.

“My clients are all looking to buy commercial, industrial and mixed-use properties that have significantly gone up in value because of this bill,” Poliakoff said. “Developers will make billions of dollars off this law and it will increase the amount of affordable and attainable housing in Florida.”

The Live Local Act will result in a wave of redevelopment, said Walter Duke, head of Fort Lauderdale-based appraisal and real estate consulting firm Walter Duke & Partners and chair of the Broward Workshop’s affordable housing committee.

There are many underutilized shopping centers and office buildings in locations that are functionally obsolete and could become affordable housing, he said. Older warehouses also could become affordable housing, he added.

“The days of building single-family subdivisions are over,” Duke said. “We need to go vertical. People will have to embrace density.”

Article Link: New Florida affordable housing funding bill to spur massive redevelopment
Author: Brian Bandell

Jupiter Medical Center has proposed an $110 million expansion.

The nonprofit hospital currently has 248 beds at 1210 Old Dixie Highway. It wants to build a 92-bed addition on the east side of its campus. The new five-story building would total 135,000 square feet.

In addition, a five-story parking garage would be built with 845 spaces, including 80 electric vehicle charging spaces.

Apartments planned in Goulds

Lanai Landings II LLC, an affiliate of L. Milton Construction, wants to build the second phase of its apartment complex in the Goulds neighborhood of Miami-Dade County.

Located on the 1.8-acre site at 14550 Mable St., the nine-story project would total 428,788 square feet, with 274 apartments, 2,741 square feet of retail and 371 parking spaces. Amenities would include a gym, a dog walk and a park.

The first phase of Lanai Landings, with 54 units, was completed in 2020.

Related Group seeks development deal

The Related Group’s affordable housing arm is seeking a deal with Miami-Dade County to redevelop a public housing site in West Little River.

The developer is seeking a 75-year ground lease for the 3.6-acre site at 860 N.W. 95th St. West Palm Courts and Palm Towers currently has 191 public housing units.

Related would build at least 272 apartments, with 191 affordable units and the rest either workforce or market-rate housing.

Pinnacle proposes apartments

Pinnacle has proposed an eight-story apartment complex in North Miami.

The developer, through affiliate Arch Creek Station LLC, has the 1.6-acre site at 12616 Arch Creek Road and 1486 N.E. 127th St. under contract. Totaling 435,831 square feet, the project would have 239 apartments, a 393-space parking garage and four parking spaces on the street. Amenities would include a pool, a fitness center, a dog park, a lounge, a clubroom and a coworking room.

D.R. Horton has Florida City site under contract

D.R. Horton (NYSE: DHI) has proposed a townhouse community in Florida City.

The national homebuilder has the 4-acre site on the east side of Southwest 10th Avenue/Redland Road, just south of Southwest 352nd St., under contract from Baltazar Royal LLC. It wants to rezone the land to build 58 townhouses.

Banyan Cay hotel, golf owner in Chapter 11

The 200-acre Banyan Cay hotel, residential and golf project in West Palm Beach could be sold through bankruptcy after the developer filed for Chapter 11 reorganization protection.

Banyan Cay Resort & Golf LLC filed the Chapter 11 petition in U.S. Bankruptcy Court in West Palm Beach. Gerard A. McHale, the proposed chief restructuring officer, signed the petition for the West Palm Beach-based company. It was previously managed by developer Domenic J. Gatto Jr.

Miami-based attorney Joseph A. Pack, who represents the debtor, wasn’t available for comment.

The debtor owns the 150-room Hyatt-branded hotel under construction at 2020 Banyan Resort Way, a 130-acre golf course designed by the legendary Jack Nicklaus, and development sites approved for 179 condo units, 28 single-family homes and 22 villas.

The Chapter 11 filing stays a $95.1 million foreclosure judgment won in February by U.S. Real Estate Credit Holdings, in care of Calmwater Capital.

In addition to the mortgage, the company owes $5 million in mezzanine debt to foreign investors through the EB-5 visa program. The mezzanine lender started the process of seizing its equity in the company.

“The debtors are optimistic that with debtor-in-possession funding and the breathing room afforded to debtors under Chapter 11, the debtors will be in a prime position to engage in a robust sales process for the almost-completed hotel, golf course, development site for 179 condominium units, villas, and all other real and personal property related thereto that will maximize recoveries for all parties,” McHale stated in his declaration in the case.

HE SAID IT

“The attainable housing law will immediately change the landscape of development in Florida. For the first time I can recall in state history, the state government has overridden home rule and taken away the zoning and land use powers from local government.”

Attorney Keith Poliakoff, founder of Government Law Group, on the Live Local Act, the affordable housing bill signed by Gov. Ron DeSantis

Article Link: South Florida real estate projects in the pipeline for the week of April 7
Author: Brian Bandell

The multi-building development highlights what other builders often confront when working the now-hot Miami River waterfront

In the middle of Miami’s glitzy Brickell neighborhood, archeologists have uncovered thousands of artifacts and human remains at a riverside site. Those findings, some experts say, are the clearest indication yet of life in what’s now Miami dating back 7,000 years — older than the first cities in Mesopotamia or the construction of the Giza Pyramids in ancient Egypt.

“It’s a phenomenal site. It would completely change everything we know about archaeology in Miami and South Florida,” said Sara Ayers-Rigsby, a professor at Florida Atlantic University and the director of the Florida Public Archaeology Network.

But not everyone is so thrilled. Miami advertises itself as a developer’s paradise, championing the next big project. The property’s owner, Related Group, Miami’s largest condo developer, is planning to build a three-tower development on the site at 77 SE Fifth Street and 444 Brickell Avenue, considered one of the city’s most sought-after locations.

As preservationists and some residents press opposition, the crown jewels of Related’s development, a Baccarat-branded condo tower and a luxury hotel, hang in the balance. City officials, after months of silence, have taken the first step in possibly designating parts of the parcel as a protected archaeological landmark. The proceedings have already delayed construction and could potentially torpedo the development.

Related bought the 4-acre site, which faces the Miami River, for $104 million in 2013 just as Brickell was being recast from a sleepy residential neighborhood into a financial center, home to glistening skyscrapers. The developer left the two existing 1970s-era buildings untouched, until Miami’s real estate market took off during the pandemic.

An influx of wealthy Northerners seeking low taxes, year-round sunshine and refuge from stringent COVID restrictions, sent prices of Miami condos skyrocketing. In early 2021, Related unveiled plans to build three buildings on the prime site: a 44-story rental, an 82-story hotel and condo, and a 75-story condo. The third tower would be branded by Baccarat, the 259-year-old French luxury crystal maker. Jorge Pérez, Related’s chairman and CEO, hyped the Baccarat building as his firm’s “most luxurious product” in its 45-year history.

Centuries ago, the section of the Miami River, which opens to Biscayne Bay, was home to the Tequesta indigenous tribe and village, considered South Florida’s largest settlement prior to the arrival of Europeans. In 1513, Spanish explorer Juan Ponce de Leon encountered the Tequesta by the mouth of the Miami River. Previous excavations have uncovered artifacts dating back 2,000 years.

“Anybody who buys anything along the river, especially at the mouth of the river, knows what they’re getting into,” said Traci Ardren, an anthropologist and archaeologist at the University of Miami who specializes in New World prehistoric cultures. “It’s one of those buyer beware situations.”

Since the 1980s, city regulations have required developers to check parcels along parts of the river and bay for archeological remains and artifacts before breaking ground. Related hired veteran archeologist Richard Carr to conduct a search. In April 2021, Carr sent the city a “notice of discovery.” As required by law, a full excavation ensued, which Related says has cost over $20 million.

The archeologists uncovered at least two gravesites with skeletal fragments, possibly part of a ceremonial burial, as well as postholes, which could be the marks of a prehistoric structure. Overall, the diggers found 16,610 pottery shards and 340 bones. Perhaps most notable were the dozens of projectile points that appear to date back to the Archaic period, which in the Americas stretched approximately between 8,000 to 500 BCE.

While Carr believes the Tequestas found the artifacts centuries after their creation in northern Florida, other experts disagree. Those discoveries have the potential to push back the timeline of when Native Americans inhabited what today is considered Miami by thousands of years, according to William Pestle, the chairman of the University of Miami’s anthropology department.

“The mouth of the Miami River, which is obviously today prime real estate, was also prime real estate a 1,000 years ago, 2,000 years ago,” Pestle said. “And now maybe more: 5,000, 6,000, 7,000 years ago.”

Carr himself believes the parcel is worthy of preservation. The site “is eligible for listing in the National Register of Historic Places … because the site provides important data documenting prehistoric culture, subsistence, and settlement patterns in South Florida, and specifically the Tequesta culture on the Miami River,” Carr wrote in the public reports, adding his recommendation that “intact portions of the site be avoided if feasible”.

Yet, as 2023 dawned, it looked like Related was getting ready to start construction — with the apparent blessing of the city. The developer took out a $164 million construction loan to begin work on the rental tower, property records from December show. The company was also close to securing a second mortgage for the Baccarat development, a Related spokesperson told Commercial Observer in January, even though the excavation had yet to end. That excavation remains active today on part of the site, while construction has started on another part.

The loans were evidence that Related had secured permits from the city for one tower and was close to securing permits for another. City officials had yet to publicly comment on how it would handle the archaeological artifacts, a sign that it was prioritizing the development. (City officials did not respond to Commercial Observer’s multiple requests for comment.)

Frustrated by the city’s silence, independent local archeologists began showing up to the public meetings of Miami’s Historic & Environmental Preservation Board, the regulatory committee charged with overseeing the dig. They demanded that the board preserve the site. Just a day after the Miami Herald published a scathing article, the board unanimously voted in February to begin studying whether the site, where the Baccarat development was set to rise, merited legal protection — reversing its previous pro-development stance. The move seems to have stalled Related’s construction. The much-expected second construction loan has yet to appear in property records.

Archaeology has already blocked other Miami developments.

In 1998, developer Michael Baumann bought a parcel across the street from Related’s contested site to build a luxury condo. Before construction began, archeologists discovered a circle measuring 38 feet and containing 24 holes — indicative of a religious structure — as well as shell, stone, bone and pottery artifacts from the Glades culture and the Tequesta civilization. Public outcry followed. Florida’s state government bought back the parcel for $26 million and preserved it. In 2009, the site, which is now called the Miami Circle, was designated a National Historic Landmark and today houses a dog park.

Most times, though, ambitious Miami projects move forward. Across the river in Downtown Miami, MDM Development Group planned a multi-tower, $1 billion luxury development meant to revitalize Miami’s urban core. On one site, archeologists unearthed a portion of the Tequesta tribal village, including a cemetery, dating back 2,000 years, as well as the foundation of the Royal Palm Hotel, which oil magnate Henry Flagler built in the 19th century. The excavation took about a decade, but MDM eventually completed a 34-story, mixed-use building called Met Square in 2018.

Related is ready to fight. It has told the condo buyers of the Baccarat development, which is nearly sold out, that the project is moving forward. We “have property rights. We own this parcel and have worked with the city and the state governments to establish those development rights,” Jorge Pérez wrote in a Miami Herald op-ed last month. Although he vowed to preserve the artifacts for research and display them in a “major” exhibition, the developer accused preservationists of exaggerating the importance of the findings. The artifacts, while “important,” are “not as old as the pyramids,” Pérez wrote. (A spokesperson for Related declined a request for an interview.)

The law is on Related’s side, according to Keith Poliakoff, a founding partner of Government Law Group law firm, which has represented property owners and local governments in disputes involving archaeological discoveries. The Preservation Board is unlikely to prevent Related from building. If the project is blocked, a governmental entity would need to buy the land from the developer. The price tag would likely be too high. Perhaps even more costly would be the long-term negative impact on Miam’s pro-business and pro-development bent, Poliakoff said.

At the Preservation Board’s latest public meeting April 4, board members tried to broker a compromise. At Related’s request, they withdrew plans to move forward with designating a portion of the site a historical landmark. In return, the developer must work with archeologists and Native American tribes to come up with a “preservation action plan” six months after the ongoing excavation is completed. The board would still need to approve the proposal, which is likely to include exhibition space at the development and the addition of a plaque explaining the site’s historical significance. As stipulated by Florida law, human remains will be removed and reburied under the guidance of Florida tribes, including the Seminoles, who declined Commercial Observer’s request for comment.

The arrangement allows Related to move forward with the Baccarat development — for now. A lawyer representing the developer said delays caused by the designation process would have cost Related “hundreds of millions of dollars in damages” with financial partners, investors, lenders and condo buyers. The compromise also avoids, as one board member cautioned, “protracted litigation.” After the April 4 meeting, Related issued a statement saying it was “pleased with the board’s decision.”

The ordeal appears to have spooked other developers. Fortune International Group’s Edgardo Defortuna, 13th Floor Investments’ Arnaud Karsenti, and Integra Investments’ Nelson Stabile, who all have luxury condo developments in the works in and around Brickell’s waterfront, spoke in opposition of historical designation. Defortuna and Stabile sat through the entire six-hour meeting.

As pressure mounts, further delays, and even cancellation, are not out of the question. The meeting drew such a large crowd that a tent was installed outside of Miami City Hall to accommodate those without seats. During the meeting, both opponents and proponents spoke for over an hour and a half.

Another battle looms for the other half of Related’s site — which archeologists have yet to excavate. It houses a 13-story office building. Related wants to eventually demolish it to make space for the luxury hotel. Because it’s located between the excavated site and the Miami Circle, the land is likely to hold a trove of historically significant objects. Ideally, archaeologists want the site to be left untouched, viewing it as the last opportunity to preserve a probable archeological treasure trove since much of Brickell and Downtown Miami has already been developed. They’d even prefer no excavation take place as excavation methods improve over time, reducing the risk of ruining uncovered artifacts.

The Preservation Board unanimously voted to initiate the landmark designation process for that portion of the parcel. By starting the procedure early, board members want to reach an agreement with Related before it puts in place financial commitments in hopes of preventing another frantic fight. They’re expected to make a final decision in July after city staffers present their recommendations. “We will work with the city hand in hand on the designation of the site. Our efforts will continue to be transparent and inclusive,” Related said in a statement.

But some fear the board is setting a bad example. “When we think of Miami, we don’t think of people and preserving their history. We think about the new and about moving forward,” said Helena, a Miami resident who spoke at the April 4 hearing and did not give her last name. If this site doesn’t meet the standard for preservation, “then what does? Do we need to find Noah’s Ark?”

Julia Echikson can be reached at jechikson@commercialobserver.com.

Article Link: Related Group Digs In on Brickell Project That Unearthed Ancient Artifacts
Author: JULIA ECHIKSON