When it comes to some of Miami-Dade’s biggest proposed development deals, one surprising major player has emerged.
It’s not condo magnate Jorge Pérez, golf course mogul Donald Trump, the Soffer family of Fontainebleau fame or any of the other familiar names.
It’s the Miami-Dade County School Board and Superintendent Alberto Carvalho.
Riding widespread community support and popularity, the board and Carvalho have increasingly sought to capitalize on South Florida’s lucrative real estate market, efforts they insist will benefit 350,000 mostly poor school kids.
The district has taken a starring role in negotiations with David Beckham to build a Major League Soccer stadium, and to bring the world’s largest shopping mall to land on the edge of the Everglades. But the country’s fourth-largest school district isn’t finished.
Sitting on land in some of Miami’s hottest neighborhoods, Miami-Dade is now considering offering up its downtown headquarters for what could be a 10-acre redevelopment — and to profit off a school site in the exclusive Design District.
“There is a clear opportunity,” Carvalho recently told School Board members.
The only thing standing in the way is South Florida’s infamously cyclical real estate market, which appears to be headed for a cool down. Squeezed by a strong dollar and plenty of inventory, developers have already shelved plans for new towers downtown.
There’s also the question: should a school district insert itself in complicated real estate deals?
“Generally speaking, the school district is all about educating. It’s not about real estate development. And when somebody gets away from their expertise, nothing good ever comes of it,” said Peter Zalewski, founder of the South Florida condo-tracking website CraneSpotters.
On the corner of 14th Street and Northeast Second Avenue, developer Melo Group is building 500 rental units promising the holy grail of real estate: location, location, location.
“Living in this luxury highrise with waterfront views will ensure you are in the middle of it all and minutes from all of the attractions Miami has to offer,” the website for the development boasts.
The Miami-Dade School Board headquarters stands right across the street, a collection of under-used buildings overlooking busy parking lots. All together, the district owns 10 acres in downtown, a stone’s throw from the Adrienne Arsht Center for the Performing Arts, the Pérez Art Museum Miami and some of it overlooking Biscayne Boulevard.
For now, the district is hinging its redevelopment hopes on one small parcel that officials say could unlock even bigger projects down the line. That parcel is a surface parking lot used by school district officials during the day, and by the Arsht center at night. The district has solicited bids for the parcel twice before, but didn’t get much interest.
This time could be different. In recent weeks, three major public partners and a private land owner have all said they’re interested in a striking a deal. The team: Miami-Dade schools, the Arsht center and its owner, Miami-Dade County; and Miami Beach developer Russell Galbut. Galbut currently owns vacant land abutting the school district’s parking lot.
“Just getting to the point where everyone says, ‘Let’s see if we can work something out,’ that’s an important first step,” said Michael Spring, an adviser to the county mayor and director of Cultural Affairs. “It doesn’t sound like much, but we’re four relatively complicated organizations.”
Talks are very early and details are sparse. But the idea is to combine the school district’s lot with Galbut’s to build a mixed-use apartment building with retail space and plenty of parking. The deal promises something for everyone: Arsht would get much-needed parking, Galbut would get more room to build and the school district could move into the new building, replacing its outdated headquarters.
In an ideal plan, Carvalho said the new space — the district needs about 120,000 square feet — would be built at no cost to the school system. Galbut didn’t immediately shoot down the idea.
“I think with reasonable, smart people like we have at this table, we’ll be able to negotiate everything,” Galbut said. “There are many different needs that need to be satisfied, and it can be done in many different ways.”
If the plan materializes, the district’s headquarters would stand empty. That could make the lot and surrounding properties more desirable to major redevelopment down the road. But Carvalho urged a cautious approach.
“Trying to move on all parcels at the same time probably would be counterproductive, particularly taking into account the surprising yet realistic scenario that the window for opportunity for massive development may have been closed somewhat,” he recently told board members.
There are also some potential sticking points on the School Board side. Board member Marta Perez Wurtz said she’d rather see the school district move to a more central location. Vice chairwoman Dorothy Bendross-Mindingall also asked the school district to be sensitive to the neighborhood, which borders the culturally rich but poverty-stricken Overtown.
“I want to make sure that we do what we need to do for all people, not those who have huge bank accounts,” she said.
But Zalewski, the founder of the real estate tracking website CraneSpotters, is skeptical anything will come of the big plans. He pointed to major mixed use projects and residential development already in the works in the area. There are about 12,000 condo and rental units expected to be completed by 2017 in downtown. More than a million square feet of retail space is planned between two projects alone: Miami World Center and Brickell City Centre.
“When you look at what would someone develop on the site of the Miami-Dade School Board, you have scratch your head and say, ‘We don’t know,’” Zalewski said.
The 20,000-square-foot Atlas Plaza in the Design District is home to luxury brands like Rolex and Longchamp. In July, it sold for $65 million — or $3,300 a square foot.
A short walk down the street, past two separate Christian Louboutin stores and a Prada USA, is the Design Architecture Senior High, a nationally ranked Miami-Dade magnet school.
“It’s a great property,” said Tony Cho, the developer who founded Metro 1. “It’s right smack in the middle of luxury Miami.”
Just like the neighborhood, DASH is highly sought-after, with hundreds of students auditioning every year for a coveted few openings. Miami-Dade thinks it can expand the school to enroll more students — and do it on someone else’s dime — by profiting from DASH’s prime location.
The school district has been exploring how to reconfigure the school on its current site to free up land to sell or rent.
The district has been short on details — what a new school might look like, how much land would be offered up and how the district would solicit interested developers. A proposal is expected to come to School Board members in December.
The details, Zalewski said, will be important.
“Someone’s going to make a lot of money,” he said. “Is it going to be the School Board, or is it going to be a developer?”
Source: Miami Herald