American Da Tang Files New Lawsuit Over Vacant CCCC Towers Site In Brickell

American Da Tang and Shanjie Li have filed a new lawsuit over breach of contract at the site of the formerly-proposed CCCC Towers in Brickell. The joint venture was under contract to manage the development in exchange for a 5% equity stake in the project. The site is also tied up in a lawsuit in Hong Kong over control of the site after Asia Allied Infrastructure Holdings Limited (formerly Chun Wo), who owns a 45% stake in the project, filed suit against China City Construction Group due to lack of progress at the site. Miami’s Unsafe Structure Panel issued an emergency order in March 2019 requiring the developers to fill in the 2-story excavation of the site which has sat vacant for over 10 years. The Arquitectonica twin tower design that was proposed would rise 1,069’ and would feature condos, hotel, office and retail space with a total development value of $875 million.

Voters Approve Privately Funded Miami Beach Convention Center Hotel

In the highly anticipated election on Tuesday night, Miami Beach residents approved the construction of an 800-room convention center hotel. The referendum needed a 60 percent vote in order to lease public land from the city and passed at 64 percent in its third attempt to bring a headquarter hotel to Miami. The hotel will be built on a city-owned parking lot adjacent to the newly renovated convention center.

The previous attempt in 2016 failed due to concerns over the size, originally twice as large as the current proposal, and traffic congestion. The tourism bureau estimates Miami Beach lost at least $250 million in economic revenue over the last several years because it was unable to accommodate larger scale conventions.

South Beach resident Andres Montejo, 43, said that the convention center hotel was one of the issues that drove him to the polls. Montejo, a businessman who travels frequently for work, said that the other cities he visits already have hotels connected to their convention centers.

“A convention center is great, but without a hotel it’s just another convention center,” he said after casting his ballot at Miami Beach Senior High School. “Anybody that travels ... you know that’s how the game works. It’s like that all over the world.”

Other residents, annoyed with the constant flow of construction and resulting noise and traffic in the area, decided to vote against the hotel.

The hotel will connect to the convention center via a pedestrian bridge and include a 53-foot podium containing parking, meeting spaces and ballrooms as well as two 185-foot-tall wings of hotel rooms. Voters authorized the lease and the construction of an 800-room hotel with a maximum height of 185 feet, but specifics of the hotel design will be evaluated by the city’s Design Review Board at a later date.

The group behind the proposal — Turnberry’s Jackie Soffer, Terra Group’s David Martin, Miami Design District developer Craig Robins and architecture firm Arquitectonica — emphasized that the hotel would be roughly 100 feet shorter than the previous proposal and include six times more space for cars to queue on the property so that they don’t spill onto the street.

“This is the right project for our city at the right time, and Jackie, Craig and I look forward to working with the community to deliver a hotel that will make Miami Beach proud,” said developer David Martin.

On a related ballot item, residents voted to earmark the guaranteed hotel rent payments for traffic reduction measures, stormwater projects and education initiatives, rather than sending the money to the city’s general fund where it could be used for a broader range of expenses.

According to the terms of the lease agreement, the hotel will have to pay Miami Beach either fixed rent totaling $16.6 million over the first 10 years or a percentage of hotel revenue, whichever is greater. Miami Beach estimates that the city will also collect $96 million in taxes from the hotel over the next 30 years.

Article by: Katya Demina

Petition to Annex Two of Six Islands Along Venetian Causeway

Residents of San Marco and Biscayne Islands are circulating a petition to move the islands outside of the jurisdiction of the city of Miami and into Miami Beach. The two artificial islands are located on the westernmost side along the Venetian Causeway, between South Beach and Downtown.

The Miami-Dade County planning board and county commissioners would consider the petition if 20 percent of residents signed it, but county code would also require a residents vote on annexation.

According to Diana Fontani, a resident of Biscayne Island, 13 percent of the 370 households have signed the petition. One benefit of annexation would be lower property taxes, which residents of Belle Isle, Di Lido, Rivo Alto and San Marino islands enjoy. Parking fees are also lower on the Miami Beach side of the Venetian.

Another incentive is the desire for better policing, code enforcement and city services. Residents have complained that the city of Miami’s government has been unresponsive to complaints of neglected lots on the island. Lastly, families on the islands want access to after-school programs in Miami Beach that are much further away in Miami.

Despite local support, modifying city boundaries is a long and complicated process. The city of Miami is unlikely to want to part with these high-value homes, just as Miami Beach would welcome the higher tax base. City commissioners have referred the idea to the finance committee for a preliminary study of the financial impacts.

Article by: Katya Demina

Investment Spotlight: Reinvigorating Miami’s Real Estate with Opportunity Zones

The opportunity zone program is a little-known provision of the Tax Cuts and Jobs Act that could be a powerful economic development tool for designated low-income communities. The program provides tax incentives to developers who invest in these areas, including 427 tracts of land in Florida, 68 of which are in Miami-Dade County. From a policy perspective, it was designed to connect new sources of capital to neighborhoods that haven’t realized economic growth in years.

The provision allows unrealized capital gains from prior investments - including other asset classes like stocks and securities - to be rolled into an opportunity fund to defer taxation. An opportunity fund is created in the private sector and is the first community investment tax incentive vehicle introduced since the Clinton Administration. The notion behind opportunity zones is that the longer the investment is held, the lower the tax burden is. So long as 90% of the investment remains in the community, the capital gains tax is reduced by:

• 10% if the investment is held for five years, or

• 15% if the investment is held for seven years

• Fully exempt if the investment is held for at least ten years

This is an innovative advance for investors to redirect their capital to support low-income communities like Little Haiti with underappreciated value. It’s a generous incentive compared to previous economic development programs because there is no government intermediary to approve projects. Now the question of intent remains: will investment spillover enough into these neighborhoods or will this just be a chance for developers and investors to cash in?

Germaine Smith-Baugh, CEO and President of Broward County’s Urban League, worries that despite the potential for growth, with investment comes a pattern of gentrification. As property values, rents, and taxes rise, longtime residents can get priced out. “I’m right here on Sistrunk Boulevard,” an economically distressed neighborhood in Fort Lauderdale, said Smith-Baugh. “Folks are buying left and right. The foreign dollars coming in to purchase here — it’s unreal.”

Smith-Baugh hopes the program doesn’t displace local business and residents, and says the solution is to attract the right kind of impact investors, or people who will work with the neighborhoods to create workforce housing and transit. “We would like to see organizations that can aggregate potential projects and make the residents and businesses feel as though they are part of the process,” she said.

In order to qualify, the real estate asset would need to be built or be converted with improvements totaling at least the purchase price of the property. It must also be an active conduct business, meaning the asset can’t simply be a home that appreciates in value over time.

The opportunity zone program is an attractive vehicle for moving capital of scale into low-income neighborhoods with enough parameters to ensure it is being deployed toward economically productive investments that ultimately create jobs and businesses.

Article by: Katya Demina

Extortion & MLS Manipulation: Inside Kevin Tomlinson Vs. The Jills Legal Battle

The drama has now wrapped up in a high-profile legal drama between real estate broker big-wigs Kevin Tomlinson of ONE Sotheby's International Realty vs. The Jills of Coldwell Banker, led by Jill Eber and Jill Hertzberg. While the legal proceedings have wrapped up, this is a case where there are no winners. Tomlinson was sentenced in August 2018 to an extended period of probation and has been banned from the real estate industry after being convicted on 2 counts of extortion. Tomlinson had threatened to expose The Jills for manipulation of Multiple Listing Service (MLS) property sales data unless they paid him $800,000 to keep quiet. Tomlinson will now endure 2 years of probation with an ankle monitor followed by an additional 15 years of probation. Tomlinson had faced 30 years in jail for his actions.

In the Tomlinson vs. The Jills case, The Jills took full responsibility for the manipulation, pinning the actions on a rogue employee, Juan Carlos Otoya, and claiming that they were unaware and don't use the MLS. The Jills had manipulated listings on the MLS 552 times between 2011 and 2015, erasing 23,740 days on market from the firm's listings sales velocity on over $372 million worth of property. Tomlinson had filed a complaint with the Miami Association of Realtors in regards to The Jill's inflated sales data. Despite the admission, neither Otoya nor The Jills have been punished or further investigated and it is believed that the drama behind the Tomlinson extortion case has overshadowed the MLS manipulation complaint. 

Unexplored in the court proceedings, should The Jills have known of the manipulation, using the manipulated data to secure listings could constitute as fraud, defined "as the the wrongful or criminal deception intended to result in financial or personal gain." While the manipulation of MLS data can make a realtor look good to prospective clients, both buyers and sellers alike, the manipulation of MLS data can also effect everything down the line in the real estate industry such as home appraisal value, mortgages, and the accuracy of comparable sales data, which can be used from everything previously mentioned to an buyer's fair ability to make the proper choice of property and offer price based on data backed to be accurate. Additionally, their statements under oath that they were unaware of the manipulation could constitute perjury should they have made any references to the manipulated data previously during either showing, listing appointment or negotiation. There is currently no investigation made public into the matter.  

Some Outraged Downtown Residents Have Made A Move Against The City of Miami For Ultra & Formula 1 Proposal

Not everyone can always be happy, no sooner then Miami had made strides on the world stage to host the Formula 1 Miami Grand Prix in the streets of Downtown Miami, had a group of 11 residents moved against the city. Some Downtown Miami residents have teamed up and sought legal council combatting the city hosting Ultra Music Festival in Downtown's Bayfront Park and the city's bid to bring a Formula 1 race to the streets of Downtown and PortMiami as early as October 2019. The residents, who live in 50 Biscayne and Epic, have sent a Cease and Desist letter to the city. The proposed 2.57-mile course would run through Downtown Miami's Biscayne Boulevard, American Airlines Arena and PortMiami. The letter alleges that both the Formula 1 Miami Grand Prix and "mega events" such as Ultra Music Festival and Rolling Loud Festival, all violate the City of Miami's noise ordinance, which in turn negatively affects the health of nearby residents and their property values. 

Ultra Music Festival has garnered much attention for the city of Miami, helping aid to boost property values and tourism. If looking at cities such as Monaco, property values on the race course have been boosted by popularity and a condo-hotel such as Epic benefits greatly from major events in near proximity. The noise ordinance clause has been used against other Downtown venues including the nightclubs behind Marquis Residences, Ten Museum, One Thousand Musuem, 900 Biscayne and Marina Blue. The difference between the two cases is one targets events which bring millions of dollars of benefit to the city and its taxpayers, typically operating during the day, while the clubs in question operate at late night hours with resident complaints coming between the hours of 2 am and 6 am with private prosperity. 

Ultra Music Festival was sold out in 2018 with a record-breaking attendance of 165,000 and over 30 million online streams. Ultra Music Festival is renegotiating their lease for hosting the festival in Bayfront Park, with Miami commissioners asking for rent to rise to $2 million. Ultra Music Festival currently pays around $1 million annually to host the festival at the site. Formula 1 does not yet have a deal in place, although city commissioners approved the race in a unanimous 5-0 vote in May 2018. Formula One has 500 million global fans and currently hosts 21 races across five continents which are broadcast to over 1.8 billion viewers. Hosting a Formula 1 Grand Prix's economic impact on Montreal is around $65 million and Formula 1 claims the Formula 1 Miami Grand Prix could produce over $700 million annually for the city. Set-up time could take up to 3 months while clean up would take 2-3 weeks. The city expects to be sued over the matter. 

Judge Rules Florida Department of Transportation Can Proceed With "The Fountain" Signature Bridge

A judge has ruled to allow the Florida Department of Transportation (FDOT) to proceed with the winning design for Downtown Miami's proposed $802 million Signature Bridge. The winning design is known as "The Fountain" designed by Archer Western and The de Moya Group. In an April hearing, the State of Florida Division of Administration Hearing ruled in favor of FDOT after bridge advocate and former Miami City Commissioner Marc Sarnoff filed a lawsuit alleging that FDOT violated their 2013 settlement agreement via their handling of bids to design and build the bridge by manipulating scoring to allow the Archer Western and The de Moya Group's proposal to win. Another design by contractors Fluor, Astaldi and MCM, which finished in second, was allegedly the favorite design by community representatives. The court ruled that Fluor-Astaldi-MCM failed to prove that "The Fountain" was chosen due to corruption. The legal action delayed the groundbreaking which was supposed to commence in 2017 and be completed in 2022. The Signature Bridge is expected to cost $802 million with $626 million in funds provided via the State of Florida including state motor fuels tax, vehicle license fee, and documentary stamp collections; and $186 million being funded via MDX toll revenue bond proceeds. 

Inside Florida's Newly-Signed State Law Regarding Public Access to Private Beaches

The bill, signed by Gov. Rick Scott last month, has spurred questions from beach residents and businesses alike; some fear access to Florida’s coastline will be cut off immediately. State ownership of Florida beaches extends from the mean high tide mark (wet sand) seaward to navigable waters, and private ownership extends from the mean high tide mark upland (dry sand).

Starting July 1, H.B. 631 will make it harder for local governments to mandate access to the privately owned beaches. It prevents municipalities from adopting ordinances to allow public entry when private property owners want to block off their beaches. Instead, the city or county would need to get a judge’s approval — by suing the private landowners. Litigation is likely inevitable as the public expects open access to beaches and would add a burden on the courts without providing any additional funding. 

In the past, municipalities were able to issue a Customary Use Ordinance to allow public access. The term “customary use” refers to the general right of the public to enjoy public beach access based on the legal doctrine of custom. The Florida Supreme Court recognizes such ordinances when the public’s use has been “ancient, reasonable, without interruption, and free from dispute.” 

According to the state Department of Environmental Protection, Florida has 825 miles of sandy beaches. Opponents of the new law worry that it will encourage private owners to restrict access by posting signs or roping off sand to prevent trespassing. Public officials worry how the limits will affect tourism, as beach recreation is a primary draw for visitors. 

Unfortunately, the effects of the law will be revealed on a case-by-case basis. Florida Senator Kathleen Passidomo, R-Naples, sponsored the bill in response to a complaint by Walton County residents, who were tired of beachgoers setting up chairs and leaving trash behind on their properties. They sued the county for not allowing them to restrict public access, and lost. Most resorts along the Eastern coastline, however, say they have no intention of restricting their beaches. Miami Beach says the law will have no impact there because the beachfront is public and state owned. 

Article by Katya Demina