Builder Beware

Welcome to the new Miami Beach, where the citizens are angry, commissioners are cowed, and developers are Public Enemy #1

John Shubin runs his law practice out of a squat four-story building near the downtown Miami Burdines, and he lives in Coral Gables, but right now he is the hottest attorney in Miami Beach. Along with his partner Jeffrey Bass, Shubin has, during the past year, become the legal catalyst for the anti-development movement currently dominating Beach politics.

Not only have he and Bass racked up impressive victories representing neighbors opposed to development, but Shubin himself was among the architects of the city charter amendment -- the so-called Save Miami Beach referendum, passed this past June -- that requires certain waterfront developments be put to a public vote. In the wake of the amendment, city commissioners passed additional ordinances that have made "controlled development" the law of the land in Miami Beach.

Still, Shubin says, playing the role of anti-development zealot in Miami Beach can be a tough gig: "I often feel like I am the streaker at Queen Victoria's funeral. I make these arguments that seem to be very well-founded in the law, and it can be very frustrating when people whose opinions you respect look at you like you're insane." The 36-year-old attorney, who somehow manages to appear intense even with his feet on his desk and his thick hands clasped behind his head, attributes the communication gap to the fact that politicians and developers aren't used to hearing coherent legal arguments coming from those who oppose development.

"Neighbors are always coming before commissioners with this emotional, sentimental stuff," Shubin says -- stuff that commissioners have a tendency to tune out. "Developers, on the other hand, are always litigious, or threatening to be litigious. The trick, as a lawyer, is to provide commissioners with a legal hanger on which to hang their decision."

While Shubin and Bass have been passing out hangers, lawyers for developers have been trying to twist them into nooses. Indeed, the recent wave of anti-development rules has hardly caught developers flat-footed. In the months before commissioners voted for these restrictions, high-rise builders raced to submit building applications that would be considered under the nice, permissive, old rules. A lot of them made it, too; some 37 projects will be considered without regard to a few or all of the new ordinances.

For Shubin and the neighborhood groups that have hired him, these proposals are an effort to manipulate the approval process and subvert the will of the electorate. For developers, these pending projects represent the last of the great cash cows on the Beach. And they have indicated that they will stop at nothing, including suing the city, to get them built.

If it once seemed that developers could do whatever they wanted in Miami Beach, it's because they could. Back in the Seventies and Eighties, the city's southern end was a crumbling slum populated with retirees and Cuban refugees from the 1980 Mariel boatlift. City officials were desperate for any infusion of economic life. To lure developers, the commission revised the entire zoning code in 1971 to allow extremely high-density development. Commissioners also dangled the prospect of "design bonuses," which allowed developers even greater density if their plans met certain criteria for good design. If we let them build big, the reasoning went, they will come.

Come they did, and they found a city administration and commission eager to accommodate their grand designs. With the exception of the successful effort to preserve the Art Deco District, the credo of the era was, Growth is good.

By the early Nineties, the refurbished Deco District was clearly one of the keys to the city's rebirth as an international tourist mecca. But plenty of prime, nonhistoric real estate remained, especially in the area below Fifth Street known as South Pointe. And if a developer wanted to build something -- no matter how big -- he usually found allies at city hall.

The mechanics of the approval process back then ran pretty much as they do today: A developer meets with staff from the city's Department of Planning, Design and Historic Preservation to discuss what he wants to build. The developer then submits an application, which consists of a survey, site plan, floor plans, sketch, zoning data, photos of existing buildings on the site, traffic-impact study, demolition plans, et cetera, and the necessary processing fees. The application must further prove that the proposed project meets "concurrency" requirements -- that it will not overly burden existing roads, sewers, and other city services.

Once the application is complete, it goes before the city's Design Review Board (DRB) within 35 days. A seven-person panel of volunteer professionals with expertise in planning, architecture, and/or land-use law, the commission-appointed board was established in 1984 to review all proposed developments on the basis of their aesthetics, functionality, and relationship with the surrounding community. Miami Beach is the only governmental entity in Dade County that has such a board.

When an applicant comes before the DRB, board members decide to approve or reject the project based on what the developer, his attorneys, and architects have to say that day, along with the city planning staff's recommendation. (The board can also vote to postpone a project to a later DRB meeting, giving the developer more time to work out any kinks.) A DRB-approved project might also need to get state or county permits, or it might need to go before the city's Zoning Board of Adjustment if it requires a zoning variance. DRB decisions can be appealed to the commission and eventually challenged in circuit court.

But for the most part, the only thing that can stop a project that has passed DRB muster is market forces -- for example, if a proposed condominium tower doesn't sell enough units in advance. Nearby residents who object to a project may also speak before the board, though until very recently their protests generally fell on deaf ears, as did their appeals to the city commission.

In the past decade developers have pushed through behemoths such as the Portofino Tower, the Blue and Green Diamonds, La Gorce Palace, the Floridian, Il Villaggio, 1500 Ocean Drive, and Sunset Harbour, which now thrust skyward, mocking the rage of the surrounding populace.

In late 1996 citizen frustration at these out-of-scale skyscrapers boiled over. A grassroots group called Save Miami Beach gathered enough signatures to force a referendum requiring public approval of any waterfront building whose construction would increase the property's zoned density. The effect for developers: If you want to build a tall building on waterfront property that's already zoned for tall buildings, you can go right ahead. If you want to build a tall building on property zoned for short ones, you need to ask the people's permission. Good luck.

The amendment passed resoundingly this past summer. One immediate effect was the demise of the Portofino Agreement, a development deal between the city and bad-boy German developer Thomas Kramer. Part of the complicated agreement included an increase in zoning for a small slice of South Pointe called the Alaska Parcel; when it became clear that up-zoning the waterfront parcel would require a citywide vote, Portofino backed out of the deal.

Commissioners -- especially those up for re-election this past November -- tried to catch as much of this anti-development swell as possible. The old commission passed a new height-limit ordinance this past October, resulting in different heights for different parts of the city, some as low as 11 stories; the tallest any new building can be is roughly 44 stories. In January the new commission (including three rookie commissioners) voted to eliminate design bonuses.

But the new commission finds itself in a curious spot. Most members hope to score political points by appearing tough on developers. At the same time, too zealous an effort to block these projects could leave the city liable to developer lawsuits. Mayor Neisen Kasdin summed up this duality in his State of the City address on February 11. He vowed there would be "no more Blue or Green Diamonds," but was careful to add that pending projects would be considered "on a case-by-case basis."

Two of the most heated cases -- the 20 Venetian Way project, and the Ocean Parcel on South Pointe -- pit crack development lawyers Lucia Dougherty and Clifford Schulman (of the Miami firm Greenberg Traurig) against the tag team of Shubin and Bass. Developers and their foes are carefully tracking the fate of these projects, which have become de facto test cases of the new Beach rules.

In the most intriguing twist of lawyering to emerge from these battles, Shubin has argued for a broader application of the charter amendment he helped craft. The gist of his position: The design bonuses that were granted to developers should be viewed as increases in zoning. Thus any proposed waterfront project that includes design bonuses should be put to a referendum. According to the planning department, eleven pending projects eligible for design bonuses are on waterfront properties. Will that mean thirteen referenda for Miami Beach voters?

Hell no, says Dougherty. Like other development attorneys, she has been looking for an opportunity to challenge the Beach charter amendment in court, and will certainly do so if Shubin's argument gains acceptance at city hall. Whether or not this happens, Dougherty has already threatened to sue the city for cleaving too closely to Shubin's legal arguments.

The Ocean Parcel -- a 12.5-acre tract on the southern tip of South Beach -- is next door to two of the biggest, most despised high-rises in the city: South Pointe Tower, built in 1986, and Portofino Tower, built in 1995. In city-planning terms, the Ocean Parcel is really the undeveloped part of an eighteen-acre lot that includes the existing condo towers. Last year developers submitted plans to build three more titans on the vacant eastern portion of the lot.

The best-known of these designs was the brainchild of Helmut Jahn, the renowned Chicago-based architect whose high-rises adorn downtown skylines from Manhattan to Singapore. Jahn's plan included two 54-story residential towers and a 40-story combination hotel and condominium.

The man behind the plan was Bruce Eichner, a prominent New York developer who agreed in June 1997 to buy the Ocean Parcel from Thomas Kramer for a reported $54 million. The purchase has not yet been finalized. Hedging their bets against the sale falling through, both Eichner's Continuum L.L.C. and Kramer's Portofino Group submitted separate applications to develop the property. And both developers applied for Design Review Board approval -- before the city commission enacted its height-limit ordinance.

The Continuum proposal came before the DRB on January 6. By then the proposed development was front-page news. A November 3 story in the Miami Herald, complete with artist's renderings of the glass-and-steel buildings, ballyhooed Jahn's international reputation. (The story also noted that some of South Pointe's more strident anti-development activists were determined to stop the project.)

After reviewing the Jahn designs, planning director Dean Grandin and his staff found some deficiencies in the application, but none serious enough to kill the project outright. They recommended that the DRB delay a final decision on the project until a later meeting. Board members, however, proved far more decisive at the January 6 meeting, held in city hall's commission chambers.

At this meeting, the DRB listened to commentary from area residents, Continuum attorney Clifford Schulman, and Jeffrey Bass. (Shubin and Bass were present representing a resident of the Portofino Tower.) Bass put forward some fascinating legal arguments against Jahn's design. He insisted, for instance, that if Continuum wanted to build Jahn's glittering glass-and-steel towers on the parcel, the developer would need permission from the property owners already on the larger lot, in this case the condominium associations of Portofino and South Pointe towers, which stand on the west part of the same lot. "Common sense would dictate that all owners of a property would need to join in an application to build something on that lot," Bass would say later.

At the meeting he contended that the only way for Continuum to avoid this issue of owner permission would be to "split" the vacant part of the lot from the original, creating two discrete parcels. This move, though, would greatly reduce the size and density allowable on the new lot.

Shubin and Bass had sent Grandin a letter in November outlining these objections. The implications for both Continuum's Jahn-designed project and Portofino's proposed project galvanized Grandin. He fired off two letters to Clifford Schulman in November, asking the attorney to address both the lot-splitting and owner-permission issues. Schulman, on behalf of both Continuum and Portofino, replied with a twenty-page memorandum asserting that neither company's application would necessitate a splitting of the lot.

As to the necessity of obtaining the permission of the condo associations, Schulman wrote that Florida courts haven't made a determination one way or the other, but other jurisdictions have held that such permission is not necessary when multiple buildings with different owners occupy the same lot.

While Grandin's staff report regarding the Continuum project did not mention either of these sticky legal questions, board members found plenty of other problems. "It is difficult for any architect to react to Helmut Jahn," said Peter Blitstein, an architect who sits on the board. "He has designed some of the most important buildings in the world; I've always loved his work. But from the first time I've seen these buildings, I've always felt they don't belong on Miami Beach."

Board members were careful not to say things like "too big" or "too tall"; the DRB is not supposed to accept or reject projects on the basis of their size. But several did echo Blitstein's assessment that, aesthetically, Jahn's buildings just don't fit in with their South Pointe neighbors.

Schulman chided the board for this view. "When you fail to look forward, you have committed yourself to death or atrophy," he warned. "Whether Miami Beach likes it or not, we are going to enter the 21st Century." Schulman then asked that the board accept the planning staff's recommendation of a postponement until March 10. The board refused, and unanimously rejected Continuum's application outright.

How much did the arguments of Jeff Bass (the dapper, affable "good cop" to Shubin's acerbic "bad cop") have to do with the rejection? Technically, nothing. But the attorneys' novel arguments have taken on lives of their own. As of last week neither the planning staff nor the city attorney's office nor the city commission had determined whether Shubin and Bass's points are valid. At least one of them, however, makes sense to the mayor. "It seems to me that the permission of the unit owners would be required for an application to be valid," Kasdin says, adding that's he is still waiting for City Attorney Murray Dubbin to clarify the issue.

These arguments will have another chance to be tested at the March 25 meeting of the DRB (a special second meeting this month, given the number of pending projects), when it will be Portofino's turn to present its designs for the Ocean Parcel, prepared by the legendary architectural firm Skidmore Owings Merrill, the visionaries behind San Francisco's Bank of America pyramid and Chicago's Sears Tower.

On February 25 the planning department finished a written order confirming the DRB's rejection of Continuum's project. Schulman has twenty days from that date to ask for a rehearing before the DRB or to appeal the board's decision to the city commission. When contacted for this story, Schulman declined to comment in detail on either the Portofino or Continuum plans for the Ocean Parcel, stating only that Continuum was "considering all options" -- including suing the city. Developer Bruce Eichner, reached at his Manhattan office, was more blunt. He noted that he will watch carefully what happens with Portofino's application, and that he is "amending" his own plan. He also warned that if neither his nor Kramer's plans are approved, either or both of the developers will sue the city.

The handiwork of one of Greenberg Traurig's biggest clients is visible right outside Lucia Dougherty's office window. Past Biscayne Bay, past the serried ranks of cargo containers at the Port of Miami, looms the terra cotta monolith that is Portofino Tower. "The climate in Miami Beach is terrible for development," Dougherty says, pushing her wire-rims up into her straight blond hair as a makeshift headband. "And the more Miami Beach and Dade County squeeze, the more that is going to be to the benefit of the City of Miami. Here, take a look."

She strides over to her window on the 23rd floor of the 1221 Brickell building and points to a tall, work-in-progress office building in the foreground of the panorama. "Right here we have the 33-story rental building Jorge Perez is putting up on South Bayshore Lane," she notes. "A mirror image is planned for the site right next to it. And over there, two 57-story towers are planned by the Brazilian company that did Il Villaggio in Miami Beach." Dougherty ticks off a total of seven projects under way between the Brickell Avenue bridge and SE Fifteenth Street.

She folds her arms and gazes at the far side of the Intracoastal, slowly chewing a piece of Mint-a-Burst gum. "I've basically told all my clients that they will have a long, arduous task doing anything on Miami Beach right now," says Dougherty, who served as city attorney for the Beach from 1983 to 1984.

Developer Victor Labruzzo knows all about arduous. He is trying to build a 26-story condominium at 20 Venetian Way on Belle Isle, the easternmost islet on the Venetian Causeway, and his plans for that oval-shape swath have sparked one of the roughest battles over any Beach development project.

Labruzzo submitted his original application before the institution of citywide height limits in October 1997. (This also put him well ahead of January's elimination of design bonuses.) A neighborhood group of Belle Isle residents, through Shubin and Bass, has opposed the project from the outset. When the DRB approved the building in mid-November, the neighbors appealed the decision to the city commission, which heard the appeal on February 4.

As with the theories he and Bass had applied to the Ocean Parcel, Shubin's arguments questioned some of the previously sacrosanct assumptions about the entire approval process. Shubin posited that Labruzzo's application was deficient because it did not address issues of concurrency -- meaning the impact the project would have on city services and infrastructure, such as traffic flow.

In making this argument, Shubin noted that many projects had, in the past, received DRB approval without having completed the necessary traffic studies. Generally such studies had been put off until a project was ready to pull a building permit to begin construction.

Aimee Hamilton, president of the Belle Isle citizens' group that retained Shubin and Bass, finds that practice fundamentally unfair, as the DRB is, barring appeal, the public's last chance to speak about a project. "That just completely deprives the public of any opportunity to comment on issues of concurrency," she says.

Lucia Dougherty, on Labruzzo's behalf, argues that traffic studies, though technically required as part of an application to the DRB, have always been deferred until after DRB approval because it was unrealistic to do such detailed studies so early in the process. A traffic study would have to take into account any projects that were scheduled to begin construction at or around the same time as the applicant's project. It's only reasonable, Dougherty told the commission, to wait until you're about to begin building, then look around and see what other buildings are under way or ready to start.

Responds Hamilton: "She said that you're penalizing these people unfairly by making them take [all pending] projects into account. I say that if you don't take those projects into account, you're unfairly penalizing the citizens."

The concurrency question was not the only legal grenade Shubin lobbed at that commission meeting. He also argued that the developer's use of design bonuses to increase a project's size (known as floor-area ratio) should be seen as a zoning increase. And because the property is on the water, the charter amendment requiring a referendum should be invoked.

"Preposterous," snaps Dougherty in a later interview. "I never thought anyone would buy such an argument. That charter amendment was aimed at one piece of property, and that's the Alaska site."

The commission didn't explicitly use the charter amendment as the reason for granting the residents' appeal. Commissioners ruled that the DRB should not have approved the project because the developer had not yet provided proof that the project wouldn't degrade city services below acceptable levels. The commission unanimously voted to send the project back to the DRB to be reconsidered.

That commissioners believed Shubin's concurrency argument was bad enough for Dougherty; that they were willing to even consider his idea about using the referendum vexes her further. "For the first time," she says incredulously, "the city sort of indicated that they would view the bonuses -- the bonuses that were always part of the zoning ordinance, and which thousands of projects have always had -- as something that has to do with the referendum."

Shubin thinks the theory makes perfect sense, and addresses the persistent inequities that caused the commission to strike down the bonuses in January. "The idea of bonuses -- which the last time I looked in the dictionary implied something that was in addition to what you are permitted to have -- has all of a sudden become vested rights," he sneers.

This argument also raises the question of who determines whether the amendment applies. "You can't have a referendum if nobody has the balls to invoke the charter amendment," Shubin points out. "We may have to start suing to start putting these projects on the ballot."

The commission's decision on 20 Venetian Way was "one of the worst days of my professional career," Dougherty concedes. She sees the action as a symptom of anti-development sentiment gone wild. "Just apply the rules consistently," she says, sounding tired. "Tell me what the rules are and let me play the game."

While activist Hamilton believes the question of applicability of the charter amendment to other pending projects is an important one, she sees a more general significance in the commission's decision: "This whole issue has put a spotlight on the process that's been followed for design approval on the Beach." She points specifically to the deferring of traffic studies and other concurrency issues until after DRB approval. "It's probably been going on for years, and it's not right."

The developer of 20 Venetian Way clearly feels he's the one who has been wronged. In a February 18 letter to Mayor Kasdin, Dougherty called the commission's decision "unsupportable and erroneous," and wrote that Labruzzo "will pursue all legal remedies to overturn the commission's decision and to secure all compensation to which the applicant is entitled under the law."

The legal remedies include suing on the basis of federal and state laws that protect the rights of property owners, including civil rights laws.

Like every Design Review Board meeting, the February 25 gathering in the Miami Beach City Commission chambers is a minor traffic jam of architects with drawings and balsa-wood models, power-suited attorneys, and knots of fist-shaking, not-in-my-backyard neighborhood activists.

Today's agenda includes several projects for which Shubin and Bass have been retained; both partners are in attendance, Shubin's suit a pinstriped navy, Bass's a greenish-khaki. They're seated with Charles Schaab, the president of the Save Miami Beach group for which Shubin served as pro bono counsel last year. Lucia Dougherty is also there (pantsuit, navy blue) representing the developers of the Westin Resort at 4833 Collins Ave. and the Carillon Hotel at 6801 Collins Ave.

Planning and zoning director Dean Grandin steps up to the podium before the seven men of the DRB and gives a presentation about a five-page memo he sent to the DRB the previous day. The crux of the memo: that the city commission was wrong in reversing the decision of the DRB regarding 20 Venetian Way. The final decision on whether a project is concurrent should rest with Grandin and his staff.

Although the staff will include issues such as traffic flow in its reports to the DRB "for informational purposes," the memo reads, "the board is not authorized to address any measures" having to do with the impact a project will have on the level of city services. "Staff will make those determinations," Grandin emphasizes from the lectern. "They fall outside of your jurisdiction. Your role is essentially aesthetic."

As Grandin speaks, Shubin fumes in his seat. The muscles of his square jaw flex, and his ears begin to redden. "This is the most outrageous thing I've ever seen," he rasps, then stands up and waits, arms folded, for Grandin to finish.

Shubin's response is terse and charged. What Grandin has just declared, he says, is a direct contradiction of the city commission's determination on 20 Venetian Way. In fact, Shubin notes, Grandin made these same arguments in the commission hearing of the 20 Venetian Way appeal, and the commission rejected them.

By trying to reserve total authority for judging a project's compliance with concurrency standards, Shubin says, Grandin is attempting "a wholesale amendment of the zoning code. This is patently illegal. This exceeds the director's authority."

After this tense exchange, another project that Lucia Dougherty champions and Shubin and Bass oppose, the Carillon Hotel, comes before the board. Shubin, speaking for his neighborhood clients, raises the same point he did in his opposition to 20 Venetian: The Carillon has not yet met concurrency. The staff report given to the board members, consistent with Grandin's memo, recommends the project be approved even though the developer has not yet proven it to be concurrent. Other issues remain, and the board decides to defer voting on the project.

After the meeting, Shubin dashed off a letter to Grandin (copied to the mayor, commissioners, city attorney, and Dougherty) reiterating his point that Grandin's memorandum "could be construed as tantamount to a confession of error" concerning the 20 Venetian Way decision. Put in more prosaic terms, which Shubin is always happy to do: "What did Dean do? He put an opinion in writing that what commission did with 20 Venetian was wrong. Greenberg Traurig is going to take that statement and jam it up the city's ass."

Says Dougherty: "I agree with John Shubin. [Grandin's memorandum] is a confession of error."

Shubin says he sees a continuing pattern in the city's planning department of decisions favoring developers -- many of whom just happen to be represented by attorneys from Greenberg Traurig. "Maybe I'm just too conspiracy-minded," Shubin shrugs, "but there are people who want me to take this to the State Attorney's Office." (Grandin did not return several phone calls requesting comment for this story.)

More than any individual entity or person, Shubin says, the real enemy is the behind-the-scenes process. "Before an application even gets filed," he complains, "a developer and his capable counsel will sit down with staff and find out what staff wants, what it doesn't want, 'Can I use bonuses?' These discussions take place privately. The public has no knowledge that any of this is going on. It's not illegal, but it shows the disparity in the points of entry for neighbors versus developers."

Some on the city commission appear just as wrathful about this process as Shubin. So much so that Commissioner Martin Shapiro, from the dais at a February 18 commission meeting, suggested that the city actually hire Shubin as a consultant to find ways to stop pending projects that don't conform to the new zoning ordinances. Commissioner Nancy Liebman seemed amenable, as did Commissioner David Dermer -- the former chairman of the Save Miami Beach group. City Attorney Murray Dubbin, though, sounded a note of caution.

"I'm concerned that a lot of the words spoken may come back to haunt us," Dubbin intoned. "We may be writing a handbook for some developer who thinks he can make more money suing the city than by building a building."

Mayor Kasdin, heeding Dubbin's warnings, did his best to quell the suggestion. With developer litigation already looming, he noted, the last thing the commission needed to do was further provoke the Lucia Doughertys of the world.

In a subsequent interview, Kasdin emphasized that it is time for commissioners to stop trying to score political points by bashing developers. "What Marty was trying to do might actually be destructive of stopping overdevelopment," Kasdin said. "While its sounds good to say over the microphone, it could get the city killed in court.

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