Biscayne Landing developers want to buy portion of project site for condos

North Miami would have to approve sale of 50 acres to Swerdlow/LeFrak partnership

Jul.July 08, 2014 09:45 AM

Two years after signing a long-term lease with the City of North Miami to build a shopping mall, residences, offices and a hotel, the developer of Biscayne Landing wants to buy a portion of the long-troubled project site, The Real Deal has learned.

A June 13 letter sent to city officials by Oleta River Partners principal Michael Tillman, a director of the LeFrak Organization, outlines a proposal that would see Oleta exercise an option to purchase 50 of the 190 undeveloped acres to build a condo tower. The price would be determined by the average of two appraisals obtained by North Miami.

The city approved Biscayne Landing’s first incarnation in 2002. Back then, Boca Developers and the Swerdlow Group planned 4,500 high-end condominiums, a hotel, town center, schools and parks on the former Superfund site. Boca bought out Swerdlow in 2006 and revamped the plans to feature a more traditional neighborhood instead of high-rise condos.

Debt-saddled Boca was unable to finish the project after the market crashed and was out of business by 2010. The city attempted to rebid the project several times, even entertaining a developer that proposed an indoor snow skiing resort.

Swerdlow teamed up with the LeFrak Organization in 2012 and formed Oleta. They signed a 200-year lease and agreed to give the city an upfront sum of $17 million, plus $1.5 million in rent, back rent and a small percentage of gross revenue from residential sales, the hotel and other commercial uses.

City Council members are expected to discuss Tillman’s request Tuesday. In exchange for allowing Oleta to exercise the purchase option, the developer is offering to cover the cost to remove 194,000 cubic yards of contaminated fill from the property and create a stormwater plan for new construction. Oleta must also get approval from the master condo association of One Fifty One at Biscayne, the only finished residential tower at the site.

In his letter, Tillman suggested buying the 50 acres would allow Oleta to expedite permit approvals for the residential tower. Tillman’s letter does not address when the developer plans to build the mall or the hotel. Tillman and Oleta’s other partner, Michael Swerdlow, were traveling last week and unavailable for comment.

“Oleta Partners looks forward to exploring ways to move the Biscayne Landing project forward with the City Council of North Miami through a renewed spirit of cooperation by the parties and the shared goal of continued progress and job creation for the City of North Miami,” an Oleta spokesperson said in a written statement.

North Miami City Council members Carol Keys and Scott Galvin told TRD they are intrigued by the proposal.

“There is a discussion of letting them exercise a purchase option,” Keys said. “I would entertain that if the conditions are met.”

The value of the 50 acres should significantly increase if Oleta owns it outright instead of being subject to a 200-year lease with the city, according to Keys.

Galvin said he would like to hear the developer’s pitch at a public hearing “so everybody can wrap their heads around it.” But his support is also contingent on the city designating the money from the proposed sale to other city projects, like the expansion of the Museum of Contemporary Art. North Miami officials recently unveiled an $18 million plan to double the size of the museum’s 23,300-square-foot space to feature more works of art in its collection.

“We don’t have the best history of spending our money in the best way,” Galvin said. “If we identify legitimate places where the money can be used, I can see us doing this.”

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