Archive for category: News

MIRAMAR — Miramar City Commissioner Winston F. Barnes, 73, will keep his seat on the dais.

City leaders planned to vote at Monday night’s meeting on whether to oust Barnes for attending commission meetings remotely throughout the pandemic. But before any commissioners could discuss or vote, Commissioner Maxwell Chambers, who brought up the motion, withdrew it.

Barnes had filed a motion to fire City Attorney Burnadette Norris-Weeks and the firm she represents, Austin Pamies Norris Weeks Powell, PLLC. She, too, will get to keep her job, commissioners decided.

After the hours-long heated discussion and public comment surrounding Barnes’ and the city attorney’s potential terminations, commissioners largely agreed that they wouldn’t support losing either person.

Mayor Wayne Messam said Monday’s meeting was “one of the darkest” he had seen in his 10 years on the job. Messam said he was surprised to see the topic on Monday’s agenda because no commissioner supported taking action on Barnes’ potential firing at the last meeting.

He couldn’t support removing Barnes, Messam said, pointing out that the agenda item made it seem as if he “has been absent, void, silent, AWOL for one year” when Barnes was still attending the meetings and voting on items. He told commissioners he was not in favor of removing the city attorney, either.

“There obviously is not support for the removal of our attorney, but I must say that I don’t know how this wound can be mended, but there has to be some way that it’s addressed,” Messam said. “It has to be.”

After Barnes had attended meetings virtually from May 20, 2020, through September of this year, commissioners asked Norris-Weeks for her legal input on whether a commissioner was obligated to attend meetings in person and if he or she could be in attendance without physically being there.
Norris-Weeks issued a memo that says if the mayor or commissioner does not attend meetings for three consecutive months, he or she can be “relieved” of office by the commission’s majority vote.

Barnes, 73, who was elected in 2003, “emotionally shared his medical conditions” at an October meeting and told his colleagues that a family member of his had been hospitalized and remains in a coma, a letter from Barnes’ attorney, Keith Poliakoff, to City Attorney Burnadette Norris-Weeks says. Barnes recently returned to attending the meetings in person.
Poliakoff’s letter to Norris-Weeks notes that Barnes was marked “present” in the minutes for each meeting he logged into from May 20, 2020, through Sept. 1 of this year and that Barnes was never told he may be violating the city charter for attending and participating virtually.

Barnes said Monday that the city attorney “literally set me up” by not telling him about his needing to physically be in the chambers. “The taxpayers and the city of Miramar deserves better than it is getting with our city attorneys,” he said.

He defended himself from some who have brought up that he has been going to work in person at the radio station where he works. “I sit in a booth by myself, and on top of that we are such a small operation if at any time there are five people in the building, we are overcrowded,” he said. “When I left work today, there were two other people in the building.”

Before removing his motion to fire Barnes, Chambers said he felt staff made their best efforts to provide a safe environment at the chambers for leaders to return during the pandemic with plexiglass shields and mask requirements. He proposed that commissioners in a future situation may create a rotating schedule for commissioners to decide who can work virtually and when to avoid the same issue.

“When you’re here to do the people’s business, you have to be responsible, that’s why we are here … We all came back, staff came back, and there’s no excuse,” Chambers said.

Commissioner Alexandra Davis said accusations that the discussion to fire Barnes was political retribution was “quite maddening.”

“It’s very clear what the charter states — that we needed to have shown up for work,” Davis said. “All of that being said, we agree to move on from this as a lesson learned and that hopefully in the future [if] any one of us have an issue coming to work, we’ll let our colleagues know …””

Barnes’ motion to fire the city attorney argued that the commission had “lost faith in the Norris-Weeks ability” to provide legal counsel in the best interest of Miramar citizens. No one supported Barnes’ motion.

Vice Mayor Yvette Colbourne said she could not support removing the city attorney “based on what one commissioner feels has been one wrong incident.”

“That’s now how you judge someone’s performance. I think when we have an issue it needs to be worked on, it needs to be resolved,” Colbourne said. “We need to be reasonable, and we need to approach these things both as adults and as professionals.”

Michelle Austin Pamies, a partner at Austin Pamies Norris Weeks Powell, PLLC, said the opinion provided to city leaders about Barnes’ attendance and participation was the best, most accurate opinion the city attorney could provide.

“When a commissioner comes to you and asks for a legal opinion on any matter, you provide the opinion you think is accurate. We are not advising the city commission to take action. We’re asked to provide an opinion,” Austin Pamies said.

Link: South Florida elected leader worked remotely during COVID. His peers determined whether he could keep his commission seat
Auther: ANGIE DIMICHELE

The $1.2 trillion infrastructure bill Congress passed is expected to jump-start major construction projects in South Florida, bringing a significant number of jobs and opportunities for local contractors.

The Infrastructure Investment and Jobs Act, which President Joe Biden is expected to sign in the coming days, includes multiple areas of infrastructure that will be bolstered nationwide.

Miami-Dade County Mayor Daniella Levine Cava said her administration has been preparing to partner with the federal government to invest whatever money comes its way into “hundreds of shovel-ready resilience projects that also create good-paying local jobs.”

“We’re ready to put these funds to work to create new opportunities for thousands of Miami-Dade residents and businesses as we build back our economy stronger than ever,” she said in a statement.

Levine Cava’s office highlighted numerous projects it expects will be near the front of the line for federal stimulus, such as converting septic systems to sewers; allowing ships at PortMiami to hook up to shore power instead of burning fuel; building more electric vehicle chargers; and climate resilience projects such as roadway improvements, floodwater mitigation and the protection of wastewater treatment plants to guard against climate change. The county’s SMART Plan for mass transit will also be a priority. Its mass transit corridors include bus rapid transit routes from Dadeland to Florida City and the Miami Intermodal Center near Miami International Airport to Tamiami, and a commuter train on the FEC Railway from Miami through Aventura.

Lisa Colon, a construction attorney at Saul Ewing Arnstein & Lehr in Miami, said the bill will create many jobs in highways and bridge construction, as well as public transportation and climate infrastructure. Miami-Dade was under pressure from regulators to reduce pollution from its wastewater system, so this bill should provide funding to help it modernize its system, she said. The county has been considering working with private companies to fund the repairs to the Rickenbacker Causeway, which leads to Key Biscayne, but the bill may provide enough funding to start the project, Colon said.

The infrastructure bill also has a 10% target for small businesses participating in these construction projects, and includes outreach and training funds for small businesses and disadvantaged businesses, which generally includes minority- and women-owned contractors, she said.

Colon said to make sure to register with the SBA as a small disadvantaged business “because they will favor these programs toward them.”

Dan Lindblade, CEO of the Greater Fort Lauderdale Chamber of Commerce, said the influx of federal money could bring 700 to 2,000 new jobs to Broward County.

“The reason it’s important for us is bridges, roads, subterranean infrastructure,” he said. “This is a real godsend for South Florida – and for the United States, for that matter.”

Broward Mayor Steve Geller said his county has substantial needs when it comes to making itself more resilient to sea level rise and climate change.

“We are currently 2 inches from overtopping the … flood control structures,” he said. “I am truly worried that we are going to be flooded in South Florida.”

The federal money will also be a huge help for Broward’s efforts to improve its transportation system, including roads, buses, highways, rail, Port Everglades and Fort Lauderdale-Hollywood International Airport.

Gretchen Cassini, Broward’s Mobility Advancement Program administrator, said the county will be able leverage its recently passed sales tax for matching grant funds from the federal government. In March 2018, Broward voters approved an additional 1% sales tax for transportation and mobility improvements. It is expected to bring the county $16 billion over 30 years.

“The importance of the surtax is that we have become more competitive for all of these various grant programs because we have a local dedicated source of revenue,” she said.

Federal funding may also be tapped for one particularly important and huge project: creating a new way for passenger trains to travel over the New River in Fort Lauderdale. Grupo México-owned Florida East Coast Railway freight trains and Brightline passenger trains, owned by Tokyo-based SoftBank Group Corp., use the Florida East Coast Railway Bridge, a drawbridge that is only 4 feet above the water. Whenever the bridge goes down, boat traffic is interrupted, sometimes for as long as 45 minutes. That happened 34 times a day prior to the pandemic, much to the frustration of the local marine industry.

Additionally, Tri-Rail Coastal Link, a proposed commuter train service operated by the South Florida Regional Transportation Authority, won’t be able to operate north of the the New River since Grupo México, which also owns the train tracks, capped the number of trains traveling over the bridge at 36 trips a day. The commuter service, which is still not fully funded and depends on cooperation from Brightline and the FEC, is envisioned to have 81 stops between downtown Miami and Jupiter.

Proposals for a new passenger rail connector include building a bridge at least 25 feet above the water and a tunnel under the river. Those proposals, which cost from $216 million to $2.5 billion, will be discussed at a Nov. 18 meeting in Fort Lauderdale.

Neil Schiller, an attorney and lobbyist affiliated with Boca Raton-based Government Law Group, said Palm Beach County officials are likely “salivating” over the prospect of receiving hundreds of millions of dollars for infrastructure improvements. He noted that the county has already aggressively invested taxpayer money toward improving and upgrading roadways and bridge. Now, with federal money earmarked for such purposes, Schiller said local tax money might be diverted for other purposes, “things like homeless workforce housing and affordable housing.”

Donald Burgess, CEO of the Chamber of Commerce of the Palm Beaches, said he’d like to see the money used to improve drainage in coastal cities and road connections between the eastern and western parts of the county.

“We are fine with the north-south flow of traffic,” he said, “but when it comes to the east-west, that has always been a challenge.”

As for the economic impact, Burgess said it’s too early to tell.

“It is a big deal, but right now, in terms of the business community, it is very hard to say what the impact is going to be,” he said. “Yes, it has been approved, but we are not sure as yet of the details of what the state will get, what counties will get, what the cities will get.”

Link: South Florida expects windfall from $1.2T infrastructure bill
Auther: Brian Bandell and Erik Bojnansky

Article Link: South Florida Business Journal Runs Jordan and Payton’s Announcements

Billionaire Hussain Sajwani’s firm hopes for spectacular US debut

Hussain Sajwani has made a career out of going against the tide.

While his compatriots scaled back after the 2008 market downturn, Sajwani, the founder of Dubai-based Damac Properties, announced his biggest project yet, the 42 million-square-foot Damac Hills. And years later, as many high-profile businesses severed ties with the Trump Organization over Donald Trump’s anti-Muslim rhetoric on the campaign trail, Sajwani did not budge. He opened the Middle East’s first Trump-branded golf course at Damac Hills in 2017, with Eric Trump and Donald Trump Jr. as guests of honor.

His moves have baffled other developers. “Mad,” is what they thought of him, he recalled in a 2016 interview with Forbes, because in the early 2000s he sold prime parcels in the heart of the city in order to buy land in the then-barren Marina neighborhood. Two of his 80-plus story towers are among the canyon of skyscrapers that today define the Marina skyline.

The flamboyant billionaire now has his sights set on the U.S., and not just any site: Damac has emerged as the stalking horse bidder on one of the country’s most emotionally charged parcels, one that many local developers have refused to touch: the Surfside site in South Florida, where nearly 100 people died in June when the condo tower on the property collapsed.

In September, Damac offered to pay $120 million for the nearly 2 acres of oceanfront land where Champlain Towers South previously stood. The choice is controversial – some victims find the idea of developing anew where their loved ones died unthinkable – but allows a newcomer a chance to enter a hot luxury market.

“If they were just building in New York City, it would just be another building. If they come to Surfside and say, ‘We want to redevelop the Champlain site,’ we have someone who has truly entered the marketplace in a big way,” said Keith Poliakoff, a South Florida-based real estate attorney. “The Surfside location provides a unique opportunity for a worldwide developer to make a name for themselves in the U.S.”

Damac has developed 35,000 residential units, mostly in Dubai but also in Jordan, Lebanon, Qatar, Saudi Arabia and London. The company, which has a market cap of over $2 billion, is publicly traded on the Dubai Financial Market, after having been the first Middle Eastern developer to list on the London Stock Exchange in 2013.

Miami is a “natural fit, given its reputation for being a popular, luxurious destination,” said Niall McLoughlin, a spokesperson for Damac, confirming that the developer intends to build a high-end residential project at the Surfside site. “We fully understand the emotions surrounding the site and wish to approach the development with full consideration of the community’s benefit.”

Hussein and the city of gold

Damac is a mystery to most Americans. But in the Middle East, it has a long, checkered history.

Sajwani’s moniker, the “Donald Trump of Dubai,” is not just a reference to his prized ties to the Trump Organization, dealings that include BelAir at The Trump Estates villas in Dubai. It’s also a nod to the Emirati’s penchant for flashy, headline-stealing projects – and his skills as a hype man.

Buy a Damac home, and Sajwani may throw in a Lamborghini. Buy a villa, and you might get a studio apartment as a bonus. On more than one occasion, buyers were entered into a raffle to win a six-seater private jet.

Sajwani, now in his late 60s, grew up in Dubai as the eldest of five children in a middle-class family. His father sold goods at a souk and his mother door-to-door to local women.

“I used to listen to all the stories, the successes and the failures, the issues that an entrepreneur faces in life,” he told the Financial Times of his childhood.

He was part of the first wave of Emirati students that the U.A.E. sent on government scholarships to the U.S. While studying industrial engineering at the University of Washington in Seattle, he had a side gig selling timeshares in the U.A.E. Upon returning home, he worked for state-owned Abu Dhabi Gas Industries (now ADNOC) and then struck out on his own, using funds from his timeshare business to start a catering company with clients including the U.S. military in Iraq, Afghanistan and Bosnia.

In the 1990s, Sajwani invested in dotcom firms such as Juno and mail.com, and built small hotels in Dubai. He founded Damac in 2002, around the time the U.A.E.’s rulers opened its property market to international investors – formerly, only U.A.E. citizens and those of the neighboring Gulf countries could buy property there.

Oil prices had fallen and the government pursued rapid economic diversification, according to Faisal Durrani, head of Middle East research at Knight Frank. This quickened Dubai’s evolution into a lux real estate hub, Durrani added.

Damac’s marquee Dubai projects include Aykon City, which the developer describes as a city-within-a-city with four residential towers and an entertainment and retail plaza; Damac Towers by Paramount Hotels & Resorts, which has 1,200 residential units and a hotel; and the the 63-story Paramount Tower Hotel & Residences Dubai. In 2019, Sajwani’s private investment firm bought the luxury fashion brand Cavalli, and Damac is now at work on a 70-story Cavalli Tower, which Sajwani described as an “an effortless extension of (Cavalli’s) vision beyond patterns, garments and sensational catwalks.”

But all that glitz hasn’t come without serious setbacks. After the 2008 downturn, Damac laid off hundreds of employees, renegotiated with contractors and paused construction on several projects. It moved buyers from canceled towers to buildings that were well on their way, prompting a barrage of lawsuits, according to a 2013 article in the Financial Times.

“There was a fire and everyone wanted to leave the room,” Sajwani told the publication.

Sajwani took his biggest hit not in his hometown, but in Egypt, where he was sentenced to five years in prison in absentia over a land deal with the Hosni Mubarak regime that allegedly bilked the Egyptian people of $41 million. He did not serve time thanks to a Damac follow up suit against Egypt in an international court. (A 2016 BuzzFeed investigation of the court, created under a series of trade treaties, chronicled how it acts as a tool for companies and executives to escape punishment, while countries fear its rulings to an extent that they willingly upend their own laws.)

Attorneys for Damac said the conviction was politically motivated. King & Spalding’s Ken Fleuriet called it “guilt by association,” adding that doing business with the Mubarak government does not equate to wrongdoing, according to BuzzFeed.

Sajwani’s sentence was canceled and Damac dropped its suit in a 2013 settlement.

Damac has also faced civil suits from buyers. In one case, it was ordered to pay $710,000 to a Canadian buyer over allegations of construction delays, according to a 2016 Forbes report. Another dispute with a German buyer was settled confidentially.

McLoughlin waved off the suits, saying “occasional litigation is common in the real estate industry.”

The Egypt case is “very old news,” he added.

Fast friends

In a world where money trumps politics, the Sajwani and Trump families are close beyond their business deals.

“My wife and Ivanka are very good friends,” Sajwani said in a 2017 NBC interview. “They send emails. She’s been here, to my house. We’ve been in New York having lunch and dinners with them regularly. You enjoy working with somebody — it’s not only [a] cold business relation.”

In 2015, shortly after the then presidential candidate’s anti-Muslim comments sparked outrage, Damac removed a Trump sign and a billboard of Donald and Ivanka Trump from the Damac Hills site.

The sign was taken down for “periodic maintenance” and put back up two days later, McLoughlin said. Still, Forbes reported that the billboard was replaced with one of Marlon Brando as Vito Corleone in “The Godfather.”

During a Sajwani family visit to Mar-a-Lago in Palm Beach, Trump called them “beautiful people.” During his presidency, he said he turned down Sajwani’s $2 billion real estate business proposal, but didn’t specify what the proposal was.

The Trump brand “carries significant weight in the global golfing community,” and Damac holds the “collaboration with them in high esteem,” McLoughlin said in his email.

Damac has no Trump partnerships in the pipeline, although Sajwani has said in interviews he is keeping an open mind.

Big Damac in little Surfside

Dubai’s property market is among the world’s most volatile. The city has seen housing prices plummet more than 25 percent since a 2015 peak in part due to oversupply, according to a JLL report cited by the Wall Street Journal. This year, the high-end housing market has rebounded, but Sajwani has cautioned that a slight improvement isn’t a reason to go all-out building.

“The situation does not look rosy,” he said last year, vowing that Damac would reduce construction and encouraging his competitors to do the same.

It’s possible that Damac sees South Florida as a potential bonanza. The region’s luxury market has been going gangbusters, with developers reporting a rush of sales. In August, Miami-Dade condo sales – excluding new development – rose by about 70 percent compared to August 2020 and about 65 percent compared to August 2019, according to the Miami Association of Realtors. Wealthy enclaves like Palm Beach and Miami Beach have been consistently breaking price records.

“It does not surprise me at all that Damac may want to tap into another market that may be similar to what Dubai was 10 years ago,” Poliakoff said.

As the stalking horse bidder, Damac set the minimum price for the Surfside collapse site. It will soon kick off its 90-day due diligence. Competing offers must begin at $120.3 million, and a court auction in late February or early March will determine the winner.

Surfside commissioners were looking to downzone the site as part of a townwide code revision, but ultimately allowed rebuilding up to Champlain’s size. That tower was 12 stories tall and contained 136 units, but the specifics of the redevelopment have yet to be hammered out.

“In Surfside, they’re going to have to deal with the zoning criteria being very strict,” said Reinaldo Borges, a Miami-based architect who worked for Damac and had an office in the Middle East for a decade leading up to the crash.

If Damac ends up purchasing the property, former residents of Champlain likely won’t be able to afford units in the new tower. At newer oceanfront developments in Surfside, units can run north of 8,000 square feet.

“I could only expect them to do something extraordinary in terms of quality and execution,” Borges said.

Recent sales at luxury projects in Surfside could provide a hint as to what pricing Damac may target. At the Four Seasons-branded Surf Club development, for example, sale prices have approached $4,000 per square foot. And even though the Champlain Towers site may have a stigma associated with the tragedy in the short-term, observers expect that to fade away over time.

“If the market was incredibly weak, the stigma would last longer because there would be many other alternatives,” said Jonathan Miller, head of appraisal firm Miller Samuel and author of Douglas Elliman’s residential market reports. “The fact [is] that the market continues to be very tight.”

Surfside could also be a key maneuver in Sajwani’s larger ambitions for Damac.

The billionaire is looking to privatize the company, offering $595 million for outstanding shares to be purchased through his holding company Maple Invest. The Sajwani family are majority shareholders and are deeply involved in the business: Sajwani’s son, Ali, is general manager of operations, and his daughter, Amira, is general manager of sales and development.

Sajwani might be looking to take the company private while the stock is cheap, and go public again down the line for a higher price, according to David Trainer, a corporate finance consultant. And Surfside may have a role to play.

“If they can get this asset at what they believe to be a cheap price and make a profit out of it, that would be one of the potential drivers to reverse losses into profits,” Trainer said.

Could a public offering in the U.S. be part of the plan? To pull that off, “they might have to have some presence, have some business in the United States,” Trainer said. “But it’s pure speculation.”

Damac’s foray into the U.S. may pave the way for other deep-pocketed developers from the Middle East who specialize in luxury projects, especially in lifestyle markets like Miami.

“It was only a matter of time before these developers started stepping into new markets and taking their learnings, their experience, their reputation with them,” said Durrani of Knight Frank. “This might be the start of a trend where we see more Middle East developers becoming active elsewhere in the world.”

Link: From Dubai to Surfside: Inside Damac’s plans to redevelop the tragic site
Auther: Lidia Dinkova and Katherine Kallergis

Buyers seeking warm weather and the amenities of oceanfront living have often sought out more affordable units in older buildings along South Florida’s waterfront. But now the supply of those condos may be dwindling.

Developers, facing little to no inventory of undeveloped waterfront land, are increasingly targeting bulk buyouts of these buildings. And unit owners are more likely to embrace those offers, especially in the wake of the Surfside collapse of Champlain Towers South that killed nearly 100 people.

Although an official cause of the collapse has not been identified, unit owners and the condo association were aware of critical structural problems, including leaks in the pool deck and cracks in the concrete. The building had just begun $15 million in major repairs required to receive its 40-year recertification.

The collapse triggered Miami-Dade County, various cities and individual buildings to order inspections of older buildings, prompting condo associations to deal with issues they may have previously ignored or delayed indefinitely. If they don’t, their building may be declared unsafe and ordered evacuated, with residents unable to return until properties are brought up to code.

But not all unit owners can afford the often costly repairs. Enter developers who can offer bulk buyouts above market value. Since the collapse, investors have been identifying buildings to bid on, and industry experts predict deals will surge once more structural and engineering reports come in.

The price a developer is willing to pay is determined by the project that can be built on the site. Still, the more divided unit owners are, the less likely they are to come to an agreement. And while developers will likely offer more to a unit owner than an individual buyer might, it may not be enough for the seller to afford a similarly located and sized condo, especially in today’s market.

However, the unit owners also are unlikely to be able to afford repairs if they want to stay.

“We’re not talking about putting film on windows. We’re talking about foundations and rebar. It’s going to be very expensive,” said Bilzin Sumberg attorney Martin Schwartz. “You can tell people they have to be in a safe building, but where are they going to get the money from?”

Florida law requires more than 95 percent of unit owners to agree to terminate a condo association, which can be a challenge for bulk investors looking to redevelop a property.

“You’re not dealing with one seller. You’re dealing with multiple sellers,” said Taylor Collins, a principal at Two Roads Development, which just completed its first bulk buyout. “It’s a very emotional process. A lot of times, people realize the building is at the end of its life.”

Recent deals

Two Roads brought in the Related Group as a joint-venture partner to acquire Carlton Terrace, an oceanfront condo building in Bal Harbour. They paid about $130 million for the 88-unit building this summer. But the partners were not the first developers to attempt the deal. Carlton Terrace had been on the receiving end of roughly 10 offers over the years, sources say.

To find these deals, developers are tracking the market. Two Roads has a map of buildings that are 30, 35 and 40 years or older on the water in Miami-Dade and Broward counties, with a zoning map overlaid to determine what can be built on the property, as well as the price it is willing to pay unit owners to acquire the building.

“Sometimes, if we really like a building and think it’s going to come to market in three to five years, we’ll start buying units today,” Collins said.

Mast Capital, a Miami firm led by Camilo Miguel Jr., paid more than $100 million to acquire La Costa, a 124-unit oceanfront building in Miami Beach starting in May, with plans for a luxury condo tower on the site. After the June collapse in Surfside, the La Costa building was declared unsafe by Miami Beach and was ordered evacuated. 

Following the collapse, developers may have an easier time convincing unit owners to sell, experts say.

“The sales pitch is enhanced, unfortunately, by the safety factor,” said attorney Bill Kramer of Morgan Real Estate. “If you’re living in a $200,000 condo and it’s going to cost $100,000 in repairs, could you possibly afford it? It kind of doesn’t make sense.”

Insufficient reserves

Multimillion-dollar estimates for major repairs don’t come out of thin air. Condo associations, under pressure to keep monthly fees low, will often defer maintenance and postpone projects. Florida law allows associations to waive funding reserves for projects greater than $10,0000 by a simple majority.

“That’s why you hear of huge special assessments to fix the things they knew they would have to do,” Kramer said.

He and others expect the law regarding reserves will eventually change. Since the Surfside collapse, a number of buildings have hired firms to complete reserve studies.

“The reality is there has never been a total regulation of these buildings to actually make the repairs. It’s very likely that as associations are being forced to make repairs, they are not going to be able to,” said attorney Keith Poliakoff of the Fort Lauderdale-based Government Law Group.

Oceanfront properties, especially, are on the receiving end of “tremendous wear and tear,” Schwartz said. And many of the owners in older buildings have fixed incomes.

Divided house

David Cohen, an executive at the property management firm AKAM, said that the challenging part of a buyout is still getting enough unit owners on board, calling it a “public relations battle.”

Longtime Related executive Carlos Rosso, who left the firm last year, is familiar with the process. Rosso owns units at Bay Park, a waterfront building in Edgewater that is dealing with two offers from competing groups, each for $150 million.

“For elderly people who have lived in these buildings for such a long time, it can be a very traumatic experience, particularly accelerated with what happened with Champlain Towers [South],” Rosso said, citing both the financial and emotional aspects.

Sellers will have to change their lifestyles in many cases, giving up their waterfront views and communities they’ve built with their neighbors.

“It takes time, a lot of patience, but at the end of the day, it’s the reality,” Rosso added. “And I think people need to take advantage of this hot market and move on. As they say, you never go broke on profit.”

At Bay Park, a 254-unit building that was constructed in 1961, unit owners are facing roughly $10 million in concrete restoration work and other repairs required to bring the 13-story building up to code.

Both Bomel Companies, a Los Angeles developer, and Miami-based Aman Group, a firm led by investor Vivian Dimond, are trying to convince unit owners to sell. Bomel has secured contracts with about half of the owners, but that deal wouldn’t close unless it gets more than 95 percent of unit owners.

The building is emblematic of the dilemma individual owners of older properties are facing. Some don’t want to sell and would pay to make the necessary repairs. Others can’t afford the repairs. And some are investors looking to make a profit. But unless they come together, a bulk deal won’t happen. And if they don’t complete the restoration work, the city could eventually shut Bay Park down.

“People are going to be more reluctant to stay in these much older buildings that have deferred maintenance issues, particularly when they are the target of a condo termination,” said Berkadia broker Scott Wadler. “They may be more incentivized to walk away, to sell their unit.”

Condo associations are increasingly hiring brokers and property management firms to streamline the process and avoid bidding wars that divide sellers.

Mika Mattingly, a Colliers broker, is working with broker and investor Arden Karson on condo termination deals, encouraging owners to be a “united force, because that’s where you have the most bargaining power,” Mattingly said. “Developers will really appreciate that because they don’t have to scramble later.”

In some cases, sellers can double the market value of their units by banding together, Karson added.

“They’re not building any more beachfront. If you want to be in prime locations, you’ve got to look at these older buildings that have run their useful life,” said Collins of Two Roads. “You’ll never get a higher price. If you come together and sell it to a group as a developer, you’re going to hit a home run.”

Link: Selling out post-Surfside collapse
Auther: Katherine Kallergis