Potential casinos put downtown condo market at crossroads

The future of condo development, investment and land speculation in Greater Downtown Miami could be materially affected by the decisions – or lack thereof – made regarding Las Vegas-style casino gambling by representatives in Tallahassee during the next 60 days of the 2014 Florida legislative session that begins today.

Coming off the devastating real estate crash of 2007, Greater Downtown Miami is in the midst of another foreign-investor fueled building boom, as nearly 50 new condo towers have been proposed for a 60-block stretch from the Rickenbacker Causeway north to the Julia Tuttle Causeway, according to the preconstruction condo projects website CraneSpotters.com. (Full disclosure: my firm operates this website, which uses public records to track newly proposed condo projects in South Florida.)

As talk surfaces about another condo bubble possibly forming in Greater Downtown Miami, investors are increasingly focused on the potentially positive impact that Las Vegas-style casinos could have on real estate prices.

It is against this backdrop that local attention is expected to focus on Tallahassee for the next two months as members of the state’s House of Representatives and Senate could finally take up the controversial issue of allowing Las Vegas-style gambling at sites that are not existing pari-mutuel venues in Miami-Dade, Broward and possibly other Florida counties.

At least two proposals have already been made for this legislative session to permit a pair of Las Vegas-style casinos to be created in South Florida, according to the Miami Herald. Under one of the plans, two potential casino operator licenses would be granted to developers that agreed “to pay $125 million for the licenses and invest $2 billion each in the projects,” according to the Sun-Sentinel.

If such gambling legislation were to somehow be adopted, Greater Downtown Miami would likely be a favorite to get one of the Las Vegas-style casinos given the effort made – and the money spent – thus far by Malaysia’s Genting Group to develop its proposed Resorts World Miami casino destination on the former Miami Herald site at Northeast 14th Street and Biscayne Bay.

In fact, the latest push for Las Vegas-style gambling destinations in Florida effectively began in September 2011, when Genting announced plans for a $3 billion mixed-use casino project that was to have two condo towers, four hotels, retail space and a convention center. Genting’s original plan for the casino resort destination was revised after legislators in Tallahassee participating in the 2012 session decided more studies were necessary before making a decision on such a controversial issue, according to Bloomberg.

A year later, the Florida Legislature decided to spend about $400,000 on a two-part study to determine the potential impacts of a gaming law change, according to the Jacksonville Business Journal.

As this new Florida legislative session begins, the elected officials come to Tallahassee armed with enough economic studies, input from lobbyists and feedback from constituents to potentially make a long-awaited decision about the viability of Las Vegas-style casino destinations in the state.

The question going forward is what impact a vote, regardless of the decision, on Las Vegas-style casino gambling will have on the long-term outlook for condo developers, land sellers and investors in Greater Downtown Miami.

Peter Zalewski is real estate columnist for The Real Deal who founded Condo Vultures LLC, a consultancy and publishing company, as well as Condo Vultures Realty LLC and CVR Realty brokerages and the Condo Ratings Agency, an analytics firm. The Condo Ratings Agency operates CraneSpotters.com, a preconstruction condo projects website, in conjunction with the Miami Association of Realtors.