Downtown project to renovate building, add new tower for condos

By Paola Iuspa
   A two-phase project that calls for renovating the 78-year-old former home of now-defunct CenTrust and demolishing adjacent downtown Miami buildings to make way for a second tower is planned to add more than 300 market-rate condos to the business district.
   Construction of the first phase could begin by year's end and be ready in 18 months if financing goes as planned, said Rafael Kapustin, one of the developers. That part of the project is planned to convert the now-empty 14 upper floors of the old CenTrust site at East Flagler Street and Northeast First Avenue into 90 condos and retain the retail stores on the ground floor.
   In phase two, which won't begin until the first is finished, a $35 million, 210-unit condo is to rise adjacent to the Broks Center Building at 120 NE First St. and be connected by a plaza to the renovated structure. The new construction also is to include a garage and ground-floor retail space.
   Flagler First Condominiums, 101 E Flagler St., is being developed by the partnership of Kapustin Corp., headed by Mr. Kapustin, and Rok Enterprises, headed by Natan and Sergio Rok. Both buildings are being designed by Martinez, Pose Architects.
   Historian Arva Parks will lead efforts to restore the old CenTrust building to its original appearance, Mr. Kapustin said, including its façade, which has been hidden behind a huge grid bearing the shape of a flame.
    "We know there is a market for market-rate apartments," he said. "And we are willing to prove it. This project will be catalyst for progress."
   Miami Commissioner Wifredo Gort, chairman of the Downtown Development Authority, said the area has a proven need for residential properties. He said an authority priority for years has been to bring home ownership to Miami's business district to make it a 24-hour vibrant downtown.
   News of a a planned residential complex in East Flagler Street's future stirred hope among merchants occupying the ground floors of longtime vacant office buildings.
   For store owners, who may see the offices of a 78-year-old building that was once home to CenTrust become condos as a new residential building rises beside it, having people live downtown is like a dream come true.
   Fernando Obispo, owner of Vanneli Perfumes, at 133 E Flagler St., a block east of the site, said the development will mean more business.
   Mr. Obispo, who opens his store at 9 a.m. but never closes at the same time because he is always awaiting a last customer, said having people "living permanently" in the area would make a difference.
   "I assure you being able to stay open until midnight is what many of us want," he said when informed of the condo plans by a reporter. "I did not know about the condominium but if it is true, it's a great thing."
   Beatriz Allocco de Barreiro, who owns BAUSA Corp., 135 E Flagler St., a convenience store and coffee shop a block east, said she can already picture condo residents stopping by for a coffee before or after work.
   "Right now our clients are tourists and office employees so after 6 p.m. we have nothing else to do," she said. "We would like to stay open for longer."
   She said having residents in the business district would mean regular customers - and steady business.
   About 300 residents live in the business core now, compared to almost 4,500 in nearby East Brickell, 5,200 in West Brickell and 2,500 in Overtown, a development authority report says.
   Flagler First Condominiums is to offer 300 units at a market rate. Since the trend of recycling commercial buildings started six years ago, about five buildings have been converted or are in the process of becoming affordable rental housing, observers said.
   "This is the first conversion where units will be sold at market rate," Mr. Kapustin said.
   The complex will offer 635-square-foot one-bedroom units and 850-square-foot two-bedroom units with prices starting at $101,000, Mr. Kapustin said.
   "They will sell for at least 43% less than the market calls for," he said. "We sell them at a low cost to make them more attractive. We want to make an offer they can not refuse."
   The developers will be able to make up the difference by partially funding the project with state and federal grants, Mr. Kapustin said. Because of the grant sources the project won't have to be an affordable housing project, he said.
   Each unit will have a washer and dryer, and a recreation lounge and a gym will complement common areas.
   Residents in phase one will have valet parking and a parking space available at a city-owned garage a block away, Mr. Kapustin said. Once phase two is built, residents will have their own parking garage.
   He said about a third of the units in phase one already have purchase applications pending.
   "We came up with a system where people give a $100 deposit, to be held in a trust account, and they can see the unit plans and decide if they want to buy an apartment," he said.
   Unable to secure money from private lenders, Sergio Rok said the project will be developed thanks to grants the government has committed.
   Beatriz Barberio, the executive director of the Downtown Miami Community Development Corp., a Downtown Development Authority subsidiary in charge of housing, said private financing is hard to get because downtown lacks comparable projects that developers and lenders could use as yardsticks of cost efficiency.
   Mario Martinez-Malo, a member of the Housing Finance Authority of Miami-Dade County, a state-created authority able to issue bonds to fund housing and promote home ownership, said his authority is developing a new financing program for this "innovative project."
   "They have created a new financing tool that was first implemented in Atlanta during the Olympics," Mr. Kapustin said. "Mr. Martinez-Malo and members of the authority are working with Atlanta officials to create a similar tool to apply in our project. If it works, other developers eventually will be able to use it."
   He said members of the Housing Finance Authority and the Downtown Development Authority have been working closely to find ways to finance the condominium.
   Mr. Martinez-Malo said downtown is "a virgin area," waiting to be transformed. He said for many persons, living downtown will be an alternative to buying apartments in overpriced Miami Beach.
   Mr. Gort said the need for residential properties in the commercial business district is proven.
   "Since Casa Grande Towers Condominium was built," he said, "there has been a waiting list." That condo at 104 SW Ninth St. is near the business district.
   A recent Downtown Development Authority study recommends adding 3,000 residential units throughout the business district, with a variety of rental and home ownerships for different income levels.
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