Hot Properties

The condo kings at Crescent Heights say they're changing the face of Miami Beach. They certainly are.

Crescent Heights's high-gloss advertising program tends to obscure the bare realities of the product being offered. Aside from the top-end units, this is essentially fast-food real estate: quick, inexpensive fare, and marginally nutritious. When its units were on the market, the Alexander offered commodious two-bedroom, 1200-square-foot condos for about $250,000 apiece. Slightly larger two-bedroom "townhomes" at the Castle Beach Club at 5445 Collins Ave. are priced up to $275,000 and offer tennis and volleyball courts, a pool, and a jacuzzi. But many of the company's properties comprise tiny units that would barely be habitable on a full-time basis. Studios at the Continental, for instance, begin at $33,900 and range upward to $53,900. These units range in size between 220 and 275 square feet, legally not large enough for a kitchen A not physically big enough, in fact, for much more than a folding futon, a chair, and a table. Studios at the Mantell cost between $36,000 and $51,000 and comprise less than 400 square feet. Though the building has a pool, it offers no parking.

"Did you ever read Thomas Hobbes's Leviathan, when he says people are 'nasty, brutish, and short'?" asks Bruce Menin, offering an interesting interpretation of the English philosopher's description of life (not people) in the absence of a social contract. "It's been a learning experience for me that when you're a large target, people like to throw large stones." Menin is responding to the allegation, frequently leveled by critics and competitors, that Crescent Heights receives favorable treatment from the City of Miami Beach, a charge Galbut and Menin deny.

"I find the city almost impossible to deal with at times," Galbut says, and he goes further, accusing the current commission of offering poor public leadership in the realm of business. "It concerns me when we don't have professional businesspeople elected to the commission. When you bring new commissioners on-board who lack any business experience, any prior public service experience because they don't have a basic understanding of how government works, it slows the whole process down." When pressed for specifics, Galbut declines. "There's no sense," he responds. "I believe in always using energy for the positive purposes rather than for the negative."

A deal Crescent Heights and the City of Miami Beach struck last year raised some eyebrows. The arrangement called for the Decoplage and the Di Lido Hotel, which sit on opposite sides of Lincoln Road where it dead-ends at the Atlantic, to surrender to the city privately held land that blocked public access to the beach. In return, the city would spend up to $450,000 redesigning and rebuilding the block. With a more attractive streetscape and newfound pedestrian traffic, Crescent Heights would be in a position to develop potentially profitable commercial properties along the right-of-way. Some observers say the transformation of a dead end into a commercial thoroughfare with shops and sidewalk cafes is bound to result in a windfall for the company. In addition, the deal calls for the street to be elevated slightly, giving the Decoplage and the Di Lido room to expand their underground garages.

Menin says he still questions whether the deal was good for Crescent Heights at all. "We're losing our private cul-de-sac," he says, adding that the city had plans to open the street in any case, even if it meant purchasing the right of way. (City officials say such a purchase probably would have cost more than $450,000 in attorneys' fees alone, and that as it stands, the arrangement sped up the process.)

While the city's building department records for several Crescent Heights projects don't reveal a company that flagrantly skirts the law, the developers do have a history of thumbing their corporate nose at certain city codes, especially those that deal with signage. Last year Crescent Heights created a brief public uproar when it made an advance payment of $10,000 to a city account to cover anticipated fines against its buildings, specifically the Decoplage, where the developers routinely hung illegal banners and streamers promoting sales. The city had cited several other Crescent Heights buildings for similar violations. Cities typically collect fines by filing liens that must be settled before a property is sold, or when the city forecloses on the liens. The Crescent Heights account was intended to allow Miami Beach to pay itself as fines accumulated. "It's one of the soundest things I've done as a business attorney, which turned out to be perceived as a horrible thing," says Laurence Feingold, Miami Beach's city attorney. "It was perceived as condoning, so we abandoned it."

Galbut complains that his company is scrutinized more closely than smaller businesses that get away without paying all the requisite city fees. "There is nobody, nobody, no other developer in the history of Miami Beach who has paid the kind of fees we've paid," he exclaims. "But you go out there today, no one else has permits for their banners. I'm not telling you a single name, but there's virtually no other developer who is in compliance with the ordinance. Do I think there's a double standard? Yes. Am I complaining about it? No. I'm a big boy."

While he concedes that dozens of other businesses commit violations, Paul Gioia, Miami Beach's building department director, denies that he treats Crescent Heights harshly; it simply boils down to volume. "If you have zero properties, I won't go after you," Gioia says. "But if you have 3700 properties, I'll go after you probably 3700 times more than the other guy."

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