Miami and developer have different views on fate of Island Gardens; County committee declares land 'blighted'
By Risa Polansky
A luxury development long planned for Miami's Watson Island is just about dead in the water, a top city official says.
The developer, however, insists it's simply on hold.
The fate of the Island Gardens luxury hotels and mega-yacht marina project has been uncertain for months as developer Mehmet Bayraktar struggles to make rent payments on the city-owned land.
He's insisted — and continues to insist — the project is moving ahead, just more slowly because of the global financial meltdown.
But now, Miami Chief Financial Officer Larry Spring is saying Island Gardens is probably sunk.
"The developer has come to the city and stated because of the inability to secure the financing he is not able to move forward… Right now it is unlikely that we have a project," he told Miami-Dade commissioners at a committee meeting last week.
In considering declaring part of Watson Island and nearby Bicentennial Park blighted in order to expand a city community redevelopment agency to encompass the properties, county Commissioner Katy Sorenson questioned the move, noting the land wouldn't fit the criteria of "slummed or blighted" with luxury hotels sitting on it.
With such grand plans for the waterfront property, "why are we making this part of a CRA?" she questioned.
That's when Mr. Spring sprang the news, telling commissioners "unfortunately it just won't be there."
The city this month sent the developer a notice of default, he noted.
It's dated Oct. 1 and allows 30 days to pay a missing $83,000 in August rent.
Mr. Bayraktar's Flagstone Property Group has yet to pay that month and beyond.
He also missed June and July payments but came through with those in August.
In an interview last month, Mr. Bayraktar said rent is not the issue — the global financial meltdown is.
He couldn't promise making monthly payments to the city but said he planned to focus on financing the project itself.
That's still where he stands, he said via e-mail last week.
Mr. Spring's comments were missing a key phrase, Mr. Bayraktar said: "at this time."
"At this time we are on hold due to [the] global financial meltdown… It doesn't mean that we are not going forward with the development," he wrote.
He said he didn't tell the city the project was off but "told them at this time we are not in a position to pay imposed "consideration for use payment[s]' which we are not even using the land."
The city calls the required monthly payments "consideration for use," not rent.
Commissioners last year demanded Flagstone pay monthly to use the site in exchange for more time to get the project started.
Though his company agreed to the arrangement, Mr. Bayraktar lately has complained of the "imposed" payments for the land he's not yet using.
Still, he insists he has not called off the project.
In fact, he said, "we are actually making progress with different equity and financing sources."
He did not elaborate.
Mr. Spring did not return several phone calls or an e-mail requesting he clarify his statements at the county committee meeting, where he said more than once the project is "unlikely to be moving forward."
Still, county Commissioner Sorenson said at the time, even if that particular luxury development never gets built, another probably will — it's prime waterfront land.
Mr. Spring said the plan was always for Watson Island to be "a donor area to the CRA," generating property tax revenue that would contribute to projects in actual blighted areas, such as building Museum Park in the now empty Bicentennial Park, also part of the proposed expanded redevelopment area.
Redevelopment agencies generate revenue by capping the value of real property in the area and collecting the tax increment above the cap as property values rise.
The measure declaring the land "blighted" passed in committee, but Ms. Sorenson said she has some thinking to do before the full commission considers the item Nov. 3.