“Terrible precedent:” Commissioner leads fight over Steve Ross’ plan to buy and redevelop the historic Deauville

Deauville’s owners may be asking $500M for oceanfront site

Stephen Ross, Miami Beach Commissioner Kristen Rosen Gonzalez, Miami Beach Mayor Dan Gelber and Frank Gehry with the Deauville Beach Resort (Wikipedia, Getty, Visit Florida, Related, Rosen Gonzalez)
Stephen Ross, Miami Beach Commissioner Kristen Rosen Gonzalez, Miami Beach Mayor Dan Gelber and Frank Gehry with the Deauville Beach Resort (Wikipedia, Getty, Visit Florida, Related, Rosen Gonzalez)

Two days after Miami Beach Mayor Dan Gelber announced that Stephen Ross is proposing to redevelop the historic Deauville resort — which would require a voter referendum — commissioners moved to advance the plan.

After a heated debate mostly between Gelber and Miami Beach Commissioner Kristen Rosen Gonzalez, commissioners voted to pass on to the Miami Beach Planning Board a proposed amendment that would create an oceanside FAR (floor area ratio) overlay district between 66th and 68th streets in Miami Beach.

The vote sets the stage to potentially increase the allowable size of the redevelopment of the Deauville property, a historic oceanfront resort that is being demolished after years of neglect. The proposal will go to the planning board June 21, then to the land use board in July. Then it will go back to the commission later in July, before residents can vote on it in November. If approved by voters, five of seven commissioners would have to support the final ordinance.

The Deauville’s owners, the Meruelo family, who have racked up nearly $4 million in fines from the city, recently reached a deal to sell the North Beach property to Ross, the billionaire founder of the New York-based Related Companies and owner of the Miami Dolphins. Ross recruited architect Frank Gehry to design the project. Neisen Kasdin, a former Miami Beach mayor and attorney with Akerman, represents Ross.

At the awards and presentations commission meeting on Wednesday, Rosen Gonzalez accused the mayor of rushing the item onto a meeting agenda without giving sufficient notice. She said it would set a “terrible precedent” to move the proposal forward at this stage.

The Meruelos are believed to be asking $500 million for the Deauville, Rosen Gonzalez said. Related Companies announced it as a “purchase” on Monday, alongside the mayor’s e-blast, but he did not elaborate on whether Ross signed a letter of intent or is in contract to buy the hotel from the Meruelos. The sale would likely be contingent on a zoning approval, though that has not been confirmed by Related.

Rosen Gonzalez said she was “extremely disappointed” with the “lack of transparency.”

“We shouldn’t be referring [to the planning board] anything until the current owners are gone. To give it away now is to undermine the entire purpose of our demolition by neglect ordinance,” she said. “They should be punished by what they did… and instead we are going to reward them.”

Gelber countered, adding that it was “really unfair” to imply that he was sneaking the deal into Wednesday’s agenda. Gelber said he wanted to give Ross and Gehry a chance to make their case so that a new project can replace the Deauville, which has been decaying for years.

“I’m sure the price is high, and I’m sure the people who own it are getting a great deal.
I’m more interested in giving the public a great deal,” he said. Gelber has thrown his full support behind Ross, adding during Wednesday’s meeting that he “would never support this unless Stephen Ross was the developer.”

Commissioner David Richardson said he shared the view that “we cannot punish the community simply because we want to deny an owner a return on their investment.”

Ross has said little about his plans, except that he would develop an ultra luxury hotel and condo project on the 3.8-acre site. In his letter announcing the proposal, the mayor wrote that it would be “entirely unrealistic and impractical to expect” that the city require the Deauville to be recreated as it was.

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Under the city’s zoning code, the Deauville redevelopment would be limited to a structure with the same FAR, height and massing, and the Miami Beach Historic Preservation Board can require the Deauville structure be replicated.

The Meruelo family has been in fierce litigation with the city for years, and was accused of intentionally letting the Deauville property deteriorate to the point that it can’t be saved. The city ordered a demolition by neglect order earlier this year after it was determined to be an unsafe structure, in the wake of the deadly Surfside condo collapse.

“Will we do the same with the Raleigh? Will we do the same with the Versailles and the Delano?” Rosen Gonzalez asked.

Developer Michael Shvo plans to redevelop the Raleigh, another oceanfront Miami Beach hotel that was shuttered and exposed to the elements for years, while developer Vlad Doronin plans to do the same with the Versailles in Miami Beach. Both projects call for ultra luxury hotel and condo components and the restoration of the existing historic structures.

The Deauville’s demolition made national headlines, as the hotel was known for hosting The Beatles 1964 performance on “The Ed Sullivan Show,” as well as other celebrities including the late Frank Sinatra and the late President John F. Kennedy.

The MiMo-style resort was designed by architect Melvin Grossman and completed in 1957. The 540-key hotel features a large swimming pool, theater, salon, ice skating rink, ballroom, radio station and iconic (and now demolished) porte cochere.

Deauville Associates LLC, a company owned and controlled by Belinda and Richard Meruelo, acquired the hotel in 2004 for just $4 million. It closed permanently in 2017 following an electrical fire.

During Wednesday’s meeting, commissioners questioned whether the Meruelos or a new buyer would receive a zoning change if it is approved.

Commissioner Alex Fernandez, who was unable to vote because he was attending over Zoom, interrupted Rosen Gonzalez, demanding to know whether Ross owned the property already.

Later in the meeting, Commissioner Steven Meiner had the same question. “I haven’t seen documents. Why not reveal what they say? Does he own the property or is it contingent on a voter referendum?” Meiner asked. “It seems like right now there is an answer to that question.”

He suggested Ross could be seeking a larger project size with a FAR of 4.0 or 5.0. The Deauville has one of the highest FARs in the city at 3.15.

Rosen Gonzalez called it “an insult to North Beach” to vote in favor of the item.

“The building is still standing and the body is not even cold yet, and we’re already wiping the slate clean,” Rosen Gonzalez said. “We’re wiping our history clean and the world is watching.”

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