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Developers Beginning To Target Omni Area

July 31, 2014

A blighted area north of downtown Miami that has been ignored through five decades of boom-and-bust cycles is being targeted by developers.

Hoping to persuade city leaders to accommodate them on zoning issues, at least three companies are focusing on the area from I-395 to Northeast 20th Street and between the Florida East Coast Railway tracks and Northeast Second Avenue.

If they can navigate the joys and sorrows of real estate development before the clock runs out on the boom, the developers say their efforts are likely to transform that area into a residential community of several thousand people. “I don’t think that the middle of a city should have 20, 30 blocks of vacant land, which is exactly what we have here,” Nir Shoshani, a partner at NR Investments Inc., told the Daily Business Review.

His company is marketing two projects in the Omni West area dominated by squat warehouses, vacant lots and fewer than 900 residents. One of the properties, the Filling Station Lofts on 1657 N. Miami Ave. is set to receive its occupancy permit, Shoshani said. Canvas, a 403-foot-tall condo less than 500 feet away on 1630 NE First Ave., was just unveiled to brokers. NR Investments also scooped up most of the block north west of Northeast Miami Court and 14th Street.

During his company’s development efforts in Orlando and Tampa, Shoshani said: “We tried to look at it from a macro level and not just as individual project. We try to think of it from a wider perspective, which is the idea here.” Pushes to develop the area where their projects are sprouting have been sporadic in the past, Shoshani said. “You have the opera house, you have the media entertainment center that’s being put in, but there’s no community around it.” Until now.

A few hundred feet east of NR’s projects, Miami-based Melo Group is planning two apartment towers. A 36-story, 497-unit Melody tower at 245 NE 14th St. has city approval and broke ground in early June. Another tower with the working title 14 Plaza on Northeast 14th Street between Miami Court and Miami Place was denied upzoning in May.

“Someone has to throw the first stone,” said Carlos Melo, a principal in the family-run company, suggesting the projects will lead to a flurry of me-too development from others. “That’s what happened to us in Edgewater. When we did the first rental building in 2011, everyone told us we were insane. Folks asked why we would create something in an area where people were laying around on the pavement all drugged up, sleeping, half dead or all of the above.” “But the location was prime,” he said. “This is the same story. It’s the only part of the city where high density makes sense that’s served by light rail public transport.”

‘People Need Hondas’

Melo’s vision might sound familiar to those who have been following the family’s ventures. The Melos focus on workforce housing: small, affordably priced units with basic amenities to serve the middle-class office workers of downtown Miami and the Brickell financial district. They are priced out of the luxury waterfront offerings going up nearby. Melo said development in the Omni West area will be a corollary of residential demand pushing its way west from Edgewater.

“In Miami, there’s this belief that everyone’s a millionaire, and there’s this push to only make Ferraris. But people need Hondas and Chevrolets, too,” Melo said. In spite of what his competitor NR is doing, Melo said, “The area is not ready for condos yet as I doubt the foreign buyers needed to buy the properties will want to own there.” Instead, the Melos are taking an if-you-build-it-they-will-come approach, planning rental buildings with subsidized retail tenants and perhaps a budget hotel.

Shoshani, the NR partner, is more bullish about the neighborhood and sees it not as linked to Edgewater but more closely following a north-south axis of development that includes Brickell, downtown Miami, Park West, Wynwood and Midtown. He said the Melos are likely to find some of their no-frills offerings surrounded by luxury product, as occurred in Edgewater. “The Melos are the Melos are the Melos. They have their thing, and it’s working very well for them. I don’t think it will be what the area develops into as a whole, but it works for them businesswise.”

The strategy for Canvas will be to target sales at $450 per square foot, about the same as prices being negotiated right now on new bay-view properties a few blocks east and north, Shoshani said. But because the apartments will be smaller than those in Edgewater, buyers unable to drop over $500,000 on an apartment will find a niche.

‘Area That’s For Living’

Walter Defortuna, chairman at Fortune International Realty who is leading marketing for the project, said: “The storyline I think is really simple if you think of this as an area that includes Wynwood and goes all the way to the Design District. One sells the other. The Design District helps Midtown, and Midtown helps Wynwood, and that helps this.”

Shoshani draws a vision of small, high-rise apartments where residents shuttle between local shops, beer gardens, restaurants and art galleries. “That will give you the vibe that you need in order to make the area what it needs to be. You begin having an area that’s for living, not just sleeping,” he said.

A third company working in the area, the local operation of Swiss investment bank Credit des Alpes SA, has been looking since at least February at redeveloping a two-block area southwest of Northeast 14th Street and Miami Court, public records show. Credit des Alpes doesn’t own the assemblage, which suggests the company has a contract on the properties. Plans for the property have not been disclosed. In Miami, the bank advised on the sale of Miami Beach’s Saxony Hotel in 2007, and is now held by the Faena Group. Calls to Credit des Alpes’ local partners and its registered lobbyists were not returned by deadline.

Also likely to end up as a mixed-use development is 7.4 acres northwest of Northeast 17th Street and Second Avenue, the site of the proposed Bayview Market retail center before the recession. CBRE has been marketing that property since March.

Daring To Develop

For all the differences between the projects planned by the Melos, NR Investments, Credit des Alpes and any future players, there are key similarities that will help determine if their plans succeed or fail—guidance and assistance from city officials for one.

After the city’s planning board denied an upzoning in May, the Melos have been lobbying to build higher than 24 stories without buying development bonuses. “Miami 21 reduced the height and took out some of the square feet per acre allowed in this area,” Melo said. He maintains an upzoning makes economic sense for developers and would help create a critical mass of population.

Shoshani also has been communicating with city officials including City Commissioner Marc Sarnoff and Community Redevelopment Agency executive director Pieter Bockweg. Sarnoff “saw the idea of doing this as an arts and entertainment district, and we’re trying to build upon that,” Shoshani said. “Meanwhile, Pieter and his staff have been working very hard at helping developers establish what they need to come into an area.”

A revived plan for a streetcar going through the heart of Omni West and a dedicated police unit for the area are among the initiatives Shoshani mentioned as positives. “At the end of the day real estate is about vision, luck and, you’re probably not going to print this, balls,” he said. “I think the opportunity here was something everyone saw, but no one really dared. Not just in the last boom, but the last three booms, no one dared.”


Source: DBR


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