The Real Deal Miami

West Avenue plan raises hotelier hopes

By Erik Bojnansky | June 08, 2009 12:36PM

For bureaucratic purposes, it’s simply labeled a boutique hotel, but Michael and Phillip Muskat’s proposal to build a six-story hotel on West Avenue could pave the way for similar ventures on this mostly residential South Beach street. 

That also means property values are likely to increase along West Avenue, said Jeff Morr, CEO of Majestic Properties. “This is a big plus for West Avenue, not a minus,” he said.

The Muskats are now seeking approval from city government to change the area’s zoning, a process that took an important step last week when the Miami Beach Design Review Board unanimously backed the 38-room hotel’s plan. The design, from the Buenos Aires firm Itecdesign, includes 525 square feet of retail, a 56-seat ground-floor restaurant, a 20-seat outdoor café on a third-floor terrace and a rooftop pool.

The property’s zoning change at 1247-1255 West Avenue from residential to hotel received the blessing of the Zoning Board of Adjustments in April.

The city Planning Board meets June 23 to finalize the process, and until that happens, no one will discuss the next step. It remains unclear if the Muskat brothers plan to develop the hotel themselves or sell the land to a developer after their plans are fully approved.

“We can have a discussion after the Planning Board,” said the developers’ attorney, Monika Entin of Rosen Switkes and Entin.

The developer must tear down a 51-year-old, two-story apartment building and two single-family homes constructed in the 1930s to realize their boutique vision. The Muskats bought the buildings and the 17,202-square-foot lot they stand on for $4 million in 2005, according to the Miami-Dade Property Appraiser’s Office. Two years later the city approved a six-story, 30-unit condominium.

Morr says it was a good move on the Muskats’ part to seek a change of zoning from residential to hotel this spring. “Hotel land is worth more,” he said. “There is no market for condo land at this point. Multifamily buildings you can buy cheaply.”

The Muskats are also taking advantage of a trend that was started by developer Crescent Heights when it opened the Mondrian at 1100 West Avenue in 2008. Managed by the Morgans Hotel Group, the 19-story Mondrian is a condo-hotel that markets itself as the Delano of the 21st Century.

Morr says the Mondrian and the recent zoning change will make it easier for property owners to seek a hotel use. “This definitely gives the neighbors rights they didn’t have before,” he said.

“I think it will absolutely be a positive thing,” agreed Leslie Cooper, who is listing a 1940s-era apartment building at 1235 West Avenue. Having a future condo-hotel on her client’s block will definitely add to the property’s value, she says. 

Another plus, for developers anyway, is that unlike Collins Avenue and Ocean Drive, most of West Avenue is not in a historic district, Cooper points out. That means a property owner does not need permission from the Miami Beach Historic Preservation Board to obtain a demolition. 

This has allowed Cooper’s client, a contractor and developer whom she declined to name, to obtain a demolition permit for the Art Deco building.

Andrew Frey, a zoning attorney affiliated with the firm Akerman Senterfitt, is skeptical that West Avenue will be a hotel street any time soon. “Ten years from now, if things are better, you might see [property owners] asking for a hotel use,” he said. In this economy, demand for new hotel properties has also taken a hit and interest in building new hotels across the country is low, even in South Beach. “Hotels are down, retail is down, everything is down,” he said.