Stalking horse bidder emerges for Surfside condo site offering $110M

Meanwhile, Surfside is working on revising zoning code to reduce density in the town

The lot where Champlain Towers South used to be (Getty)
The lot where Champlain Towers South used to be (Getty)

A potential bidder has emerged with a $110 million offer for the site of the Surfside condo collapse that killed almost 100 people, leaving survivors and their heirs to try and recover what value they can from the tragedy.

The offer from the undisclosed stalking horse, which would set the minimum purchase price, could rise to $120 million. It comes as the site is about to be put on the market, allowing others to outbid the floor amount.

The stalking horse proposal is the latest development in the planned sale of the site of the deadly collapse, although a key unfinished item remains before a deal could go forward: the property’s zoning.

The town of Surfside has yet to confirm the zoning, a requirement before an offering memorandum listing the site marketwide could be issued, according to listing broker Michael Fay, who disclosed the bid at a Wednesday court conference on the collapse litigation.

The town is also in the process of revising its zoning code, which could impact the future of the Champlain Towers South site.

“We are going to need confirmation of zoning for any buyer, stalking horse or any” other, said Michael Fay, who is leading the Avison Young team listing the 1.9-acre site. “Zoning is a key component of this sale to anyone.”

Michael Goldberg, the court-appointed receiver to oversee the condo association’s financial matters in the litigation, had sent the town a letter on July 30 requesting zoning information. The town’s attorney said in court the request is not simple, as it goes into issues like town agreements and vested rights. The attorney agreed to have the town planner confirm just the site’s zoning as soon as possible.

Miami-Dade Circuit Judge Michael Hanzman, who is presiding over the suits, has pushed for the litigation and subsequent disbursements to victims to move forward fast in light of the tragedy. On Wednesday, the judge authorized Fay to negotiate an agreement with the stalking horse bidder.

More than a dozen complaints have been filed in the aftermath of the Champlain Towers South collapse mainly against the association. The northeast portion of the 12-story condo tower collapsed on June 24, and the remaining structure was brought down in a controlled demolition in early July. Ninety eight people died.

The bid announced on Wednesday is the first to be submitted in writing, as others also have expressed interest, Fay said. He declined to name the bidder or say if it is a local or out-of-state group. Still, discussions are ongoing with one or two other groups interested to be a stalking horse, Fay added.

The offer is in the ballpark of initial appraisals of the property that valued the site at 8777 Collins Avenue between $110 million and $130 million.

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Meanwhile, the town of Surfside is working on a complete revision of its zoning code, Mayor Charles Burkett confirmed. That has been in the works for about a year and a half. A draft version of the proposed legislation will go before the commission in a few weeks, according to Burkett.

“We want to be more like Aspen, Colorado and less like Sunny Isles and Miami Beach,” he told The Real Deal. “We believe there is a limit to the number of people we can jam into a fixed area, and that once you reach that limit, you destroy the quality of life.”

Oren Cytrynbaum, a unit owner, said during Wednesday’s hearing that the proposed changes would reduce the site’s density from 109 units per acre down to about 45 units per acre.

Hanzman said “it would shock the court” if that was true.

“Let me make something clear. I would hope that after this tragedy the town of Surfside is not seriously considering taking any action that would make this property less valuable and therefore lessen the amount that might be available to compensate the victims of this tragedy,” Hanzman said.

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Some survivors and the families of the victims want the site to be turned into a memorial, or have expressed interest in rebuilding. But both continue to be unlikely outcomes. Burkett said his goal is to work with the families of the victims.

Manny Kadre, who, along with Rodney Barreto is tasked with handling the government relations aspect of the site’s future, said that it was “very unlikely” that the government would monetize the site despite the “incredible political will” that exists to help the victims.

Kadre outlined a list of possible outcomes, including a mortgage forgiveness fund that would require Congress’ approval, a victims’ compensation fund, and a memorial.

“I think the more money we can get in different buckets,” Kadre said, “the better.”