Developer Harvey Hernandez paid $50.5 million for a riverfront site near Brickell City Centre, where he’s planning a three-tower residential and marina project.
An affiliate of his Newgard Development Group closed on the 1.6-acre property at 99 Southwest Seventh Street in Miami. It secured a $55 million loan from 3650 REIT, a Miami-based lender that is affiliated with the development firm Grass River Property.
Benzol Properties, led by Bernard and Jerome Herskowitz, had owned the site since 1987. It is currently home to a 25,000-square-foot building with tenants KLA Schools and a dry cleaner, which would be demolished. The site is just northwest of Brickell City Centre, a $1.5 billion mixed-use development that Swire Properties completed in 2016 and is planning to expand.
Preliminary plans for the property call for three towers: one would have branded luxury apartments, a second would have branded condos, and a third would be a hotel or a branded hospitality project, all with a marina component, restaurants and a tie-in to the Underline linear park. One tower will be branded under Newgard’s new “Lofty” home-sharing line. Units will be priced from about $500,000 to more than $1.5 million.
In all, the development could be close to 2 million square feet, Hernandez said.
Hernandez, who has been embroiled in litigation on other Miami projects, filed a previously sealed motion against seller of the Brickell property. Court records show his 99SW7 Holdings LLC filed the complaint earlier this month against Benzol Properties Corp. to force the disclosure of contamination studies that the buyer said posed a health and safety risk. Hernandez declined to comment on the litigation.
Companies led by Hernandez previously have fought legal battles with a former employee, as well as with Airbnb, and also with his previous projects Centro and Brickell House.
On Brickell, Hernandez’s company locked out KLA Schools shortly after the sale closed, the Miami Herald reported. KLA Schools is in the process of building its new campus, and is nearing a deal to temporarily relocate.
Fortune International Realty brokered the sale of the Brickell property to Hernandez’s entity, according to a copy of the sales agreement included in the lawsuit.
Lotus Capital Partners, led by Faisal Ashraf, arranged the financing, which was used for both the acquisition and to fund predevelopment construction costs. The two-year loan has two six-month extension periods.
New York-based Lotus will also market the project to potential equity partners beginning next year.
Hernandez said Newgard would like to break ground next year, and completion would be about two to three years after the groundbreaking.
The property, with 400 feet of frontage along the Miami River, is one of the largest redevelopment riverfront sites in Brickell. The Related Group is planning a three-tower Baccarat-branded project east of the site, also along the river.
Swire is also expected to launch the second phase of Brickell City Centre soon.