Miami Wants To Take Back Watson Island Land From Flagstone

After 15 years, Miami is finally trying to take back the Island Gardens property on Watson Island from a lessee who never built what was promised.

At a special meeting last week, commissioners unanimously voted to direct the city manager to issue a notice of default to Turkish developer Flagstone.

Flagstone representatives said they could cure any default or sue the city. A lender would also have priority over the city, they said.

The city has lost millions in undervalued rent for the property since agreeing to lease the land 15 years ago, according to commissioner Ken Russell, who pushed for the vote. Flagstone was supposed to have built a mixed-use property including hotel and retail.

If a new RFP was issued for the property today, Russell said it should include a a multi-modal transit hub that connects and finances the Baylink and water taxis.

 

A letter from Russell prior to the vote:

I placed this discussion item on the agenda today because I’m frustrated.

It has been more than 15 years since the City of Miami and our voters gave the right to develop our public land on Watson Island to Flagstone.

Ever since, we’ve entertained a litany of excuses as to why very little of the project voters approved has been built.

At this moment we have before us what I think is a pretty clear issue ‐‐ Flagstone had a deadline to have all its material permits approved and actually begin construction by May 1 of this year. I understand they moved some dirt around a few days before to try to convince us that construction had begun. Not the first time they’ve done that, by the way.

But their phased permit, which allows them to begin building before the master permit is finally approved, actually expired back in March and was not reinstated until May 4.

Three days late? No ‐ it’s 15 years and three days late.

Fifteen years we’ve been waiting for Flagstone to deliver what it promised.

Here’s what the Miami Herald wrote in December of 2002: “The project, approved in concept by city voters last year, would convert 10 acres of land into a bustling neighborhood ‐ with two five‐star hotels, a fish market and a yacht marina. It’s expected to be complete in about three years.”

Back then, the City was looking to attract signature projects that would pump up our local economy. Midtown didn’t yet exist. Wynwood as we know it today didn’t exist. Downtown and Brickell were a shadow of their current form. We didn’t have the arsht, the Frost, the Perez Museums. Most of all, we didn’t have the congestion and infrastructure needs that we do now. And yet here we are, 15 plus years later, still talking about Flagstone. At this point, I have to ask, is Flagstone even relevant anymore to the vision of what our public land on Watson Island could and should be? Is this project ‐ should it ever be built and I’m pretty skeptical about that ‐‐ what Miami needs and deserves?

The Voters spoke back then, but if they spoke today, what would they say? If we were to plan that space right now, I would advocate for an RFP that has the developer implementing a multimodal transit hub that connects and finances the Baylink and water taxis. It could be the point of public transit to all of the best amenities on the island. It could be a beautiful green space that would give the most amazing views of our downtown skyline. But the voters don’t have a say. Unless this developer is in default, and I believe that they are.

In Paragraph VI.a ofr the Amended and restated Agreement to enter into the Ground lease from 2010, it states, “If…the Parking/Retail Components do not Start Construction by 9/01/2016 (extended by Governor’s executive order to May 1 of this year), then Flagstone’s rights to build any Components expires and ceases, the Agreement to Enter is terminated. City retains all Prepaid Construction/Base Rent”.

The Phrase “Begins Construction” is defined in Exhibit A of Composite Attachment 3 of the same agreement. The phrase “Start Construction shall mean that all material plans and permits are approved and issued and the actual act of physical construction has begun.

Furthermore, in paragraph VII. A of the same agreement, it states that “If the Retail Parking Components do not Commence Consruction by the 72nd month from 9/01/2010 (being 8/31/2016 and now May 1, 2017) then there will be no crediting of Prepaid Construction/base Rent, The City shall keep all Prepaid Construction Base Rent Received, the City can terminate the Agreement to Enter, all Ground Leases, and the City can take back the Marina Component…and the balance of the project and the property.

The phased permit expired and was not renewed before the date. The master building permit has not yet been obtained.

The City has lost millions in undervalued rent. The only silver lining is that we can now look at the land in the context of our needs today. I hope for your support in giving the voters this long overdue chance.

I move that we direct the administration to issue a notice of default, and that our city attorney and auditor general conduct an analysis of the various agreements to see if there are other breaches as well.

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Anonymous
3 years ago

Give it to a multi billionaire Arab developer, screw the FAA and just build a 3000 foot towering monster.

Anonymous
3 years ago

Prediction: This will cost taxpayers tens of millions of dollars to settle with Flagstone. And we’ll get nothing in return.

Anonymous
3 years ago

Like most important projects in Miami, we’ll never see this one come to fruition. I wonder what will happen to Skyrise, Baylink….

Anonymous
3 years ago

Yea but this time it’s not Miami’s fault. You give the developer a steal of a deal of land any other developer would die to have. You give them countless opportunities to build an they build nothing but a dock in 15 years! As much as I want to see this project happen I really feel they don’t deserve this land. My best guess is Flagstone does not have the money to build this thing and after 15 years they can’t get the funding. Instead of giving up on the project they rather hang on to it thinking they with find the money but they haven’t so now they have lost the land.

marc
3 years ago

Your guess is Flagstone doesn’t have the money? Good guess.

Anonymous
3 years ago

Well hopefully Skyrise doesn’t get built

aceraroja
3 years ago

“Well hopefully Skyrise doesn’t get built”

seconded

Anonymous
3 years ago

this is actually good news. the site is so perfect for something great that making it a marina for rich douchebags is just a waste.

Anonymous
3 years ago

It seems that Flagstone’s strategy is to bring a lawsuit against the City and drag out for years to which the City will eventually settle because the land will be tied up and not available for a new RFP. It’s a terrible deal that Photo-Op Manny Diaz cut in the early 2000s with Flagstone that has dragged out for countless years…too senseless. Poor leadership then by Diaz that ends up crippling Miami of one of the best real estate properties on the eastern seaboard.

Scam at Watson Island
3 years ago

Commissioners vote 5-0 to terminate Flagstone’s deal. About time.

aceraroja
3 years ago

Cut streets into it and plat the lots and sell to individuals to build a new neighborhood. Then connect it with metrorail to the beach and downtown.

And then I woke up. They’ll just give it to some other dickbag to build a wad of stucco with a dumb mall and add a trillion cars to the city.

Anonymous
3 years ago

Sell the land to the Genting Group and let them build a Bigass Resort Casino on it.

Anonymous
3 years ago

Troll?…well, a Resort Casino beats a stupid 1000ft hairpin or money clip looking structure that some people think will draw thousands of tourist a day.

Anonymous
3 years ago

Let Moshe Mana will build something. He clearly has a proven track record in the city.

Anonymous
3 years ago

Better yet, give it to Related and we can have Architectonica build another tower with a sloping roof and juxtaposed balconies

Anonymous
3 years ago

lol….