November 6, 2013
The reopening of the fully restored 1953 MiMo landmark, set for Dec. 5, could mark a significant milestone in the slowly gathering revival of the boulevard along the city’s Upper East Side.
The Vagabond’s newest owner, developer Avra Jain, is buying four more of the dozen or so historic but rundown MiMo motels that define the district. She has ambitious plans to turn them into a collection of boutique hostelries and dining and lounging spots for locals and visitors looking for distinctive, affordable alternatives to South Beach.
“The boulevard is at the tipping point,’’ Jain said as she led a tour of the bustling, still-unfinished Vagabond restoration. “The demand is there. This isn’t contrived. If you change the motels on the boulevard, you change everything.’’
The Vagabond’s multi-million-dollar makeover, overseen by architect Dean Lewis, will restore the kitsch-edged 1950s verve that made the motel the gem of the boulevard in its heyday, before family tourism gave way to hookers and drug pushers.
But Jain says none of this would be happening without a little-known, and previously untried, city program designed to foster renovation of properties designated as historic.
The program allows owners to sell “air rights’’ — meaning development rights they can’t use because of historic designation — to developers looking to build bigger in high-rise districts such as downtown. The revenue, which can amount to millions of dollars, must then be plowed back in full into renovation of the historic property.
Jain and her attorneys at Greenberg Traurig were the first to figure out how to tap into the transfer of development rights (TDR) program, established when the city’s new Miami 21 zoning code went into effect in 2010.
The ability to raise money through TDRs, she said, is key to the restoration of the deteriorated boulevard motels, whose small size and big renovation needs would otherwise make the job financially unfeasible.
“There’s a reason this building sat vacant for so long,’’ Jain said, alluding to failed efforts in recent years by previous owners to resuscitate the Vagabond, which she bought for $1.9 million last year. “Economically no one could make it work. We will spend $5 million on renovation. Part of this for me was really passion for the building. But it’s otherwise hard to justify spending this kind of money on a 45-room motel.’’
Jain raised $3 million for the Vagabond restoration by selling 440,000 square feet worth of air rights to developers Related Group and Terra Group for use in three high-rise condo projects in Edgewater, Brickell and Coconut Grove. The appeal for the condo developers: the TDRs have sold for $7 to $8 per square foot, considerably cheaper than the cost of buying additional development capacity through the city’s Miami 21 “bonus’’ program, which also permits builders to purchase the right to add volume to their projects, said Lucia Dougherty, Jain’s attorney at Greenberg.
Jain next plans to use TDRs again to restore two other MiMo motels she has purchased — the Royal, a block north of the Vagabond, which she will turn into an annex to the iconic motel; and the Stephens, at 6320 Biscayne, where she will bring in a national retailer. Jain also has contracts to buy two more boulevard motels, she said.
The city’s use of TDRs in the MiMo historic district, which runs along both sides of the boulevard from 50th Street to 77th Street, has not been entirely uncontroversial.
At the insistence of some neighbors and City Commissioner Marc Sarnoff, who represents the area, the city imposed a 35-foot height limit on both sides of the boulevard. That raised strenuous objections from preservationists and property owners, who say the restriction has stalled redevelopment of the district by making it nearly impossible to expand smaller, outmoded buildings to make them viable again.
Jain hopes the Vagabond will become a gathering place for the neighborhood. For her plans to fully bear fruit, however, will require other developers to follow suit by purchasing and renovating historic motels.
That may yet happen. Greenberg’s Dougherty and Iris Escarra say other developers interested in using TDRs have approached them. and other deals are hatching.
TDRs, Sarnoff said, are “selling like hotcakes.’’
Source: Miami Herald