Developer withdraws height increase request for luxury Sunset Harbour project

A luxury, mixed-use project in Miami Beach’s Sunset Harbour neighborhood that has mesmerized observers and roiled city politics for nearly six months will not be built.

Earlier this week, Deco Capital Group asked city commissioner Joy Malakoff to withdraw her request for a height increase for a mixed use project tentatively called Sunset Harbor Residences at 1733-1769 Purdy Avenue. Malakoff told The Real Deal the project “would have been a wonderful fit for Sunset Harbour, it was worth trading a lower density for a height increase.”

Deco Capital had planned to build 15 luxury condos on top of premium retail on a total of eight lots it acquired in 2014 for $14 million. New York-based RWN Real Estate Partner, backed by billionaire Marc Rowan, is a majority partner in the venture. The planned building would have overlooked Maurice Gibb Park, and would have required a height increase from the city to build from the allowable 50 to 90 feet.

The architecturally striking project has been embroiled in controversy ever since it was proposed. Miami Beach Mayor Philip Levine abstained from voting on the project after commissioner Kristen Rosen Gonzalez questioned him about whether he had a conflict of interest because of property he owns adjacent to that could have substantially increased in value.

The Florida Commission on Ethics found no conflict of interest, but Levine continued to recuse himself from all votes on the issue.

While many in the Sunset Harbour neighborhood supported the project, it was opposed by some of those living at the adjacent Lofts Condominium and by Beach Towing, which operates an adjacent business. Lofts’ residents who said their views would be blocked by the new building joined Beach Towing in mediation with Deco Capital. Tensions escalated as fliers opposing the project were distributed across Miami Beach warning of overdevelopment and calling on commissioners not to raise height limits.

The Miami New Times first reported that Deco Capital withdrew its variance request.

Bradley Colmer, founder of Deco Capital, told TRD he can’t discuss the specifics of the mediation, but that “we met basically every non-monetary demand made by Beach Towing and residents of the Lofts Condominium.” Beach Towing “was the “driving force” behind opposition to his project and that “their demands were inherently unreasonable.” Colmer said.

At the heart of the mediation was the compensation Beach Towing was demanding, reportedly in the millions of dollars, to rescind a deed restriction that prevented parking on property previously owned by the towing company that had been sold years earlier. That property was part of the package of eight lots assembled by Deco Capital. The developer said the restriction wasn’t relevant because the property was going to be used for residential and retail uses – not as a parking lot – and only required enough parking to service those functions.

The fracas escalated after lawyers for Deco Capital went to court claiming that Beach Towing was operating illegally, a claim based on Beach Towing not receiving the proper permits to operate a tow lot prior to a 1989 zoning change that prohibited tow lots from operating at its location on Dade Boulevard.

Ralph Andrade, a lawyer for Beach Towing, dismissed the claim to TRD, saying that Deco Capital engaged in “bullying tactics” with its neighbors. “They threatened the neighborhood that if they didn’t go along with the height increase they were going to bring in a big box retail, like a target or a home depot,” Andrade said. “So that approach we believe generated a lot of bad blood and animosity from the outset.”

Colmer said Andrade is guilty of “mischaracterizing things,” and that compared to other options it had, Deco Capital was pursuing “the most neighborhood- and community-oriented development we could do.” For now, he and his partners are looking at options that would not require a height increase for the property.

“There is multi-level retail, there is office over retail, and even a hotel, all of those are kind of on the table with that 50-foot option,” Colmer told TRD. “We haven’t made up our minds yet, we proceeded with what we thought was the best option,” he said.