Stalled projects leave Miami with high-rise skeletons

 

Stalled construction projects have languished for years on Miami’s skyline as relics of the last housing boom.

BY TOLUSE OLORUNNIPA

TOLORUNNIPA@MIAMIHERALD.COM

A few of the ghosts of Miami’s real estate boom still linger above the city as grayed, abandoned towers, frozen in mid-development poses.

These concrete skeletons are mired in lengthy legal battles, abandoned by vanished developers or simply waiting out the market so that they can be relaunched or repurposed in better times.

The buildings have languished for years as relics of a real estate downturn that caught builders unaware and are seen as eyesores that drag down already declining property values in the surrounding neighborhoods.

As a new crop of downtown developers seeks to begin the next wave of condo building, the ashen buildings stand as reminders of the dangers of unchecked ambition and unregulated development, said Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach.

“In most of these cases, the developers had very little of their own money in the construction financing,” said McCabe, who forecast the housing bust and coined terms like “ghost towers in the sky” five years ago. “The developers did not have much skin in the game. It’s very similar to why people are walking away and allowing their homes to go in foreclosure.”

Five years ago, these towers were advertised to residents and city commissioners as pillars of development that would revitalize neglected communities. Now they’re home to squatters and rodents and, with little pressure from city officials, most show no signs of progressing anytime soon.

Here are a few of the stalled projects:

BRICKELL SUNVIEW/ALOFT HOTEL

Miami developer Pedro Villar started building an 88-unit residential complex at 1001 SW Second Avenue, a couple of blocks from Mary Brickell Village, back in 2007. Halfway through construction, the market began to slide, and it became clear that the Brickell Sunview project would not be able to succeed as a residential project. Villar’s Sunview Companies halted construction and began to seek an exit strategy.

Despite being sold for $11.5 million in 2010 and repurposed by a top-tier hotelier earlier this year, the project has been stuck in shell-mode for more than two years.

The piles of trash and graffiti scrawled on the walls have become a drag on a neighborhood hoping to benefit from Brickell’s revival, said Robert Lechter, who represents the owner of Brickell Station Lofts, an apartment complex across the street from the construction site.

“There should be some kind of a law against that,” he said. “We purchased Brickell Station Lofts two years ago and that building was exactly the same way it is now.”

In January, Starwood Hotels announced that it would be building a 160-unit Aloft hotel on the site, complete with an indoor pool, a swanky bar and meeting spaces. It was supposed to open in December, but the company has pushed the launch date back at least twice. Its website has updated the opening date to July 2012, but that date seems unlikely. The project is expected to need about eight months to complete construction, and there are no active cranes or machinery on the site.

Starwood hotels did not return calls seeking comment.

“I can’t believe that someone would invest that kind of money and just leave it like that,” said Lechter. “It does have an impact on the area because a third of Brickell Station Lofts looks out on that building. That’s not fun.”

LOGIK I

Only about four of Logik I’s 30 stories were built before the construction crane lowered its neck and drove away nearly four years ago.

Supported by Miami’s city commission, the Logik project at 530 NW First Court was supposed to be a glass-encased economic beacon on the eastern edge of Overtown, bringing jobs and new businesses to the area.

The proposed office condo was planned for about 350,000 square feet of offices for small companies and retail space that could host a restaurant or boutique.

In the months before the real estate bubble burst, developer Jorge Arevalo of Miami-based Urbana Development rushed to gain city approvals and kickstart construction, announcing that sales were so strong that he was planning to build a second 30-story tower for the site.

Not long after, the real estate downturn hit, and the project tanked.

“We got it approved and what happened is the real estate opportunities went away and the market went away,” said Lucia Dougherty, an attorney who represented Urbana Development. Dougherty said she lost touch with the developer after the project stalled. Arevalo could not be reached for comment.

The project was sidelined by legal and financial troubles, with the developer filing a $90 million lawsuit against Bank of America in 2008, alleging the bank refused to provide $39.5 million in promised financing. As financing dried up, several subcontractors placed millions of dollars worth of liens on the property for unpaid wages.

Hallandale-based Mustang Electronics bought the shell building last year out of foreclosure and has not done much to the squalid site since then. It is hoping to sell the land under the building for a profit. There are a few “For Sale” signs hanging on a forlorn fence, and debris litters the site.

Mustang Electronics declined to comment about the site.

FILLING STATION LOFTS

The legal battle over Filling Station Lofts, 1650 NE Miami Ct., has dragged on for three years while the half-built condo project and the neighborhood surrounding it have deteriorated.

The original developer, Daniel Holtz, had planned a 17-story, 100-unit luxury condo building back in 2006. Part of Miami’s building frenzy, it was pitched as a building that would revitalize the sleepy area between downtown and Wynwood. The project’s renderings show a shiny tower rising above a well-lit, walkable neighborhood with coffee shops and boutiques. Its motto: “Never forget the street. Give it life.”

Now, three years after construction financing dried up, the graffiti-stained structure and the weeds sprouting around it are having the opposite effect. The building is flanked by shuttered storefronts and barren land, as few businesses have been willing to open next to the dilapidated 17-story shell. Its owner owes more than $30,000 in overdue property taxes, according to county records.

“A lot of these projects become shelter for the homeless or squatters because they have sat without any maintenance now for three to five years,” said McCabe. “In some cases, they have been open to the elements, and there has been deterioration of the properties.”

The project could face years of litigation as several subcontractors allege the developer conspired with an investor group to stiff them of more than $3.5 million in wages. There are several lawsuits pending.

“They hurried us along, made us finish, then told us there was no money left,” Ronald Laing, president of Biscayne Roofing and Waterproofing Systems, said in an interview with The Miami Herald earlier this year. He said his company put the roof on the condo building, completing $225,000 worth of work in 2008 without being paid.

An attorney for Holtz did not return calls seeking comment.

Read more: http://www.miamiherald.com/2011/10/31/v-fullstory/2481124/stalled-projects-leave-miami-with.html#ixzz1cVJ8gizi