The Real Deal Miami

Are downtown revitalization efforts failing in post-boom times?

By Jennifer LeClaire | July 28, 2008 03:37PM

Macy’s Florida Chairman Julie Greiner is sitting on the fence about a long-term commitment to downtown Miami while Wal-Mart is in talks to open a store there.

Miami Mayor Manny Diaz is pushing green building in the Magic City while the University of Miami architecture students may soon begin working to address Miami’s deteriorating downtown.

As news headlines indicate, Downtown Miami’s revitalization efforts are meeting with mixed reviews. What’s more, many analysts are reporting a downtown downturn across South Florida in the wake of the residential real estate boom.

Are downtowns in danger of going downhill again, with dark condos and community improvements coming to a screeching halt in the face of recession fears?

Bernard Zyscovich, principal of Miami-based Zyscovich Architects, offers a resounding “no.” Rather, he believes downtowns across the region will remain attractive choices – if they receive the appropriate level of public support.

Recent real estate sales confirm the views of Zyscovich, whose firm designed a Downtown Miami master growth plan that merged urbanism and architecture with economic and social schemes.

In Downtown Miami, the number of real estate sales has actually increased, from 191 in the first quarter of 2008 to 304 in the second quarter of 2008. By way of comparison, sales were 131 in the second quarter of 2007 and 101 five years ago, in the second quarter of 2003, according to Trulia.com, a real estate data site. The average sales price is up 5 percent from the first to second quarter at $473,721.

“It is important to understand that as a result of the increase in residents, the commercial offerings and urban amenities need to be stepped up to provide the opportunities for the growth of downtown,” Zyscovich said.

It is also critically important to maintain the feeling of security in these times of growing crime statistics, he added. Continued improvements to the infrastructure and pedestrian experience are essential to enhance the growth and viability of Downtown Miami.

“These are very tough times for cities because the private sector economy is in trouble at the same time as budget cuts at the state are forcing cuts in public services,” Zyscovich said. “It is the perfect moment for people to begin to explore the vision plan for the future development of our cities and its character-defining neighborhoods. There will surely be a next cycle.”

Like Zyscovich, Mark Grant, an attorney with Ruden McClosky in Ft. Lauderdale, doesn’t see downtowns going downhill again. Although the region is admittedly experiencing some tough economic times – especially in the housing industry – he cited several factors in play that will help downtowns. The first is mass transit and the rising price of gasoline.

“Mass transit has improved in the downtown areas, and local governments have been working – albeit very slowly – to continue to improve mass transit. The high price of gasoline, and especially diesel fuel, is causing many people to think about living closer to where they work,” Grant said.

In Downtown Ft. Lauderdale, many condos will sit dark over the next year, but a good number of them will be rented to people who want to live downtown and can’t get mortgages, Grant said. There are also several new rental projects coming online around downtown Ft. Lauderdale that will attract people who can’t buy but want to live closer to where they work, he continued.

Melissa Wohlust, executive director of the West Palm Beach Downtown Development Authority, says Downtown West Palm Beach is attracting new business, retaining existing ones and wooing consumers to the core.

Despite the economy and gas prices, she expects the city’s investment in key community projects like the waterfront and City Center to keep investors interested in Downtown West Palm Beach. Only five projects planned for the downtown area are on hold.

In Downtown West Palm Beach, however, the number of real estate sales have come to a grinding halt. Trulia reports a total of only 10 sales in the first and second quarters, or an average of five per quarter. (By way of comparison, there were still only eight sales in the second quarter of 2007.) What’s more, the average sales price is down 1.7 percent from the first to second quarter of 2008 at $331,220.

“Downtown property managers report occupancy rates averaging almost 80 percent, so even though units may not be turning over for sales, they have tenants,” Wohlust said. “From a Downtown revitalization perspective, rentals are sometimes more desirable – particularly in Florida – because renters typically live in their units 12 months out of the year as opposed to seasonal residents.”

As Zyscovich sees it, there are many challenges to sustaining quality of life in the downtowns but there are also opportunities to continue real growth with incremental and ongoing civic improvements to public spaces and streets.

“I remember the impact that widening the sidewalk on Ocean Drive had for the cafe scene, which unleashed the phenomenon the world now knows as South Beach,” he said. “Little things can make a huge impact.”