Two developers with ties to the controversial Biscayne Landing project were the only ones to respond to North Miami’s request for a show of interest to transform the former Superfund landfill into a mixed-use project.
The competing development groups were formed by Michael Swerdlow, managing partner of Miami-based Swerdlow Group, and Ian Bruce Eichner, founder of the New York-based Continuum Co.
The city will take a month to determine if they are qualified, and developers that clear the hurdle will have until Sept. 20 to submit a proposal to develop the 184 acres off Biscayne Boulevard. The winner would be allowed to negotiate a long-term lease and development rights with the city, which owns the land.
Swerdlow has a long history with the property. In 2002, his company was part of a partnership chosen to clean up and develop the contaminated site. Swerdlow, with partner Boca Developers of Deerfield Beach, had city approval to build thousands of condos and hundreds of thousands of square feet of retail, hotel and office space. But when it was time to start construction, Swerdlow sold his share to Boca Developers for about $100 million in 2005 shortly before the real estate market peaked.
Boca Developers eventually lost the lease and development rights to the lender, which in turn lost its rights for failing to pay rent to the city.
For the last several months, Swerdlow has pushed to get back into Biscayne Landing by stepping into the shoes of the foreclosed Boca Developers. But city officials started a new bidding process and took the first step Wednesday.
Eichner, best known in South Florida for his high-end condominium projects in South Beach named Continuum I and II, plans to partner with local developer William Wallace IV, said Continuum general counsel Michael Merola. Wallace was a Biscayne Landing executive with Boca Developers.
North Miami activist Holly Cohen isn’t happy that two companies with inside information are the only ones in the race. She said the city failed to attract more bidders by giving just a month for interested parties to conduct due diligence and come up with a development concept.
“No one who was not knowledgeable of that property could have even attempted to qualify within that timeframe,” said Cohen, a North Miami attorney. “There is so much that you would have to know beforehand to be able to come up with a plan.”
Swerdlow Group president Brett Dill said his company will partner with a New York developer, LeFrak Organization, and the private investment group Baupost Group in Boston on Oleta Partners for Biscayne Landing.
LeFrak affiliates developed the LeFrak City, a community of 5,000 apartments on 42 acres in Queens and were involved in the initial development of the 92-acre Battery Park City in Manhattan in the 1980s. The Baupost Group has done some investments with Swerdlow affiliates in South Florida in recent years, Dill said.
“It is one of the best, well-capitalized partnerships you can have to ensure the long-term viability of Biscayne Landing,” he said. “We are going to form a jointly owned company, with each company contributing the proper resources.”
Some residents have expressed concern with Swerdlow’s re-entry. They fear the developer may walk away from the project once again.
Dill said his company is willing to prove its commitment to Biscayne Landing.
“Should the city want to restrict our ability to transfer ownership in this project for some period of time, we would certainly be willing to entertain any thoughts that make sense,” he said.
Dill said Swerdlow’s previous exit shouldn’t be used against his company.
“Our ability to recognize changing economic climates should also be viewed as a benefit to this project,” he said. “We are shrewd businessmen and make the right decisions along the way.”
If selected for the project, Swerdlow would build 700,000 to 1 million square feet of retail space, an assisted living facility, a hotel and 2,000 to 3,000 residential units, Dill said.
Two of Swerdlow’s best known developments in South Florida are the 1.4 million-square-foot Dolphin Mall in Doral and Las Olas Riverfront, a now struggling 260,000-square-foot retail and entertainment center in Fort Lauderdale.
Eichner’s towers at the tip of South Beach were completed during the real estate collapse, and he was able to hold onto the project despite bleak condo sales. Several other South Florida developers lost their unsold condos to their lenders as they defaulted on construction loans.
The location, the views, the quality of the project and its amenities make the Continuum one of the best condo projects in the region, said Adam Lubkin, president and chief executive of Ibis Development Group in Miami.
“The location is priceless,” he said. “The towers are unbelievable.”
When it comes to Biscayne Landing, Continuum has formed the Continuum Group and plans to transform the site into a “premiere multi-use destination for residents, business interests and year-round visitors,” Merola said in an e-mail.
The first phase would consist of retail space and could be completed within five years, he said.
Eichner may have a hard time persuading North Miami residents that his company won’t follow the steps of Boca Developers by defaulting on its debt.
Eichner and affiliates lost two buildings to lenders in the 1990s and lost the construction of the Cosmopolitan Resort & Casino in Las Vegas after defaulting on a $760 million loan from Deutsche Bank in 2008 during the recession.
Merola said Eichner was one of the many developers who suffered during the real estate crisis of the early 1990s and late 2000s.
“Real estate development is sometimes subject to the whims of booms and busts,” Merola said. “For those developers who do not flip their projects but rather are committed to the development, from to time these developers will be subject to the vagaries of the marketplace.”
Paola Iuspa-Abbott can be reached at (305) 347-6657.