Guess Who's Coming... to Dinner Key?
In 1989 a hearty, hand-shaking Californian named Sherman Whitmore motored into Miami on a 68-foot Bertram. He stepped off the yacht into a cream-colored Rolls-Royce, drove to the Grand Bay Hotel for brunch, and began dropping hints about his $13 million West Coast real estate holdings.
It wasn't palm trees or marlin fishing or a mysterious dark-haired mistress that drew Whitmore to Miami. The object of his desire was Dinner Key boat yard in Coconut Grove, six acres of city-owned waterfront land occupied by two rusting seaplane hangars and the remnants of a once-thriving marine-repair business.
For the past decade the parcel at 2640 S. Bayshore Dr. has been a money-losing liability, all the more galling for its location 300 yards north of Miami City Hall. At the time Whitmore arrived, city officials were seeking a certain someone who could turn this albatross into a cash cow.
Whitmore sponsored a slow-pitch softball team, served boat drinks to political heavy hitters, and hired several well-connected consultants, including fundraiser and zoning lawyer Robert Traurig, former Miami mayor David Kennedy, and architect Willy Bermello. He rekindled an old friendship with David Brown, chairman of General Development Corporation and soon to be indicted in Florida's largest-ever land-fraud case. Sources say Brown, who had been in business with Whitmore in California in the early Eighties, introduced Whitmore to Coconut Grove real estate developer Manny Medina, who in turn helped him meet other local power brokers, such as city commissioner Rosario Kennedy and city manager Cesar Odio.
The long-term lease on Dinner Key boat yard became one of the most coveted contracts in Miami history. Amid heavy lobbying, commissioners considered development proposals from three finalists and decided Sherman Whitmore was their man -- against the recommendation of the city's own review committee. Whitmore promised to tear down the rusting seaplane hangars and replace them with a boat-storage warehouse, 102 new marina slips, a seafood snack bar, and a maritime general store.
The makeover never took place. Whitmore moved into the property on April Fool's Day 1990, announced that his financing had collapsed, and finally declared bankruptcy to stall an eviction suit by the city. Creditors tried to seize his yacht, but the yacht disappeared. So did the cream-colored Rolls. Whitmore's $13 million California empire turned out to be a house of cards buttressed with bank paper. When he vanished from Miami in early 1991, Whitmore owed taxpayers more than $350,000 in fees and unpaid rent.
"He came into town. He had a lot of parties. He did the schmoozing," says one former city official, who declined to be identified. "Basically, everybody bought his act."
Six years later the ghost of Sherman Whitmore haunts historic Dinner Key boat yard as Miami prepares to choose between three new development schemes and three groups of competing bidders who want to control the prime bayside property for the next 40 years.
The bidders include Hugh Westbrook, the powerful Democratic Party fundraiser and CEO of Vitas Healthcare Corp., who dreams of building an upscale farmers' market similar to Boston's Faneuil Hall or the French Market in New Orleans.
Also in the running is a high-profile partnership distilled from homegrown chutzpah and transplanted glitz and consisting of ex-commissioner Rosario Kennedy, developer Manny Medina, Hollywood film producer Steve Perry, and movie star Sylvester Stallone. Their plan: Build a movie and television production studio on the old boat-yard site.
A third group favors more traditional marine uses for the boat yard, and lists among its members North Carolina entrepreneur and sports-team owner Felix Sabates; State Rep. Carlos Lacasa; Miami Beach Marina developer Robert Christoph; publicist Julio Gonzalez-Rebull, Sr., and his son, prominent lobbyist Julio Rebull, Jr.; accountant and onetime CIA operative Felix Lima; and Antonio Zamora, former general manager of the city's Virginia Key Marina.
Each group of developers claims to know the magic formula that will transform one of Coconut Grove's last best pieces of public waterfront land into a popular showpiece. Each promises to rescue the site from neglect and return it to profitability -- an urgent concern in light of this month's revelation that Miami faces an unexpected $68 million budget shortfall.
The three new visions for Dinner Key arrived at city hall last month in response to a May 31 request for proposals (RFP). The RFP is the culmination of a community charrette, a series of city-sponsored brainstorming sessions begun in 1992 and intended to draw the public into a discourse on what the refangled boat yard should look like.
The city's RFP calls for preserving and renovating Dinner Key's cavernous seaplane hangars, built by Pan American Airways in the early Thirties. (Pan Am sold the hangars to the City of Miami after World War II. For the next 40 years the city leased the hangars and surrounding land to the Merrill-Stevens Dry Dock Co.) The RFP stipulates construction of an "urban market," a new marina, a working boat yard, and a pedestrian walkway along the edge of Biscayne Bay. Beyond these essential ingredients, the document gives plenty of leeway for developers to freshly reinterpret the boat yard.
On October 10, city commissioners appointed a nine-member review committee that, beginning this week, will hear presentations from the competing developers, listen to the results of an independent financial analysis by a local accounting firm, and use a detailed scoring system to rank the proposals. After reviewing the committee's conclusions, the city manager will recommend one of the proposals to the commission for approval, perhaps as early as November.
Meanwhile the boat yard is already changing. This past June 20th Century Fox needed more space in Miami for work on Speed II, a $60 million sequel to the 1994 action movie starring Keanu Reeves. The film's producer, Steve Perry, hired former Miami commissioner Rosario Kennedy to intervene on behalf of the studio and persuade a ragtag band of maritime craftsmen to vacate the city-owned premises for several months.
After some negotiation, the craftsmen accepted a monetary inducement to leave, and today the larger of the two Dinner Key hangars is abuzz with as many as 100 local and out-of-town prop builders. The sets they construct are shipped by barge to the island of St. Martin. Filming began recently in Los Angeles, Miami, and the Keys.
In her role as political mechanic, Kennedy also helped Perry secure production sites near Bayfront Park and the Port of Miami. Later, Kennedy acknowledges, she arranged a luncheon at the Grand Bay Hotel for herself, Miami Mayor Joe Carollo, and Perry, during which the three discussed the possibility of Perry and Sylvester Stallone bidding on the boat-yard lease with a view toward building a movie studio. "The fact that the [Dinner Key boat-yard] site is already being used to produce a movie, even in its dilapidated state, shows that a studio on that location can be a very good idea," Kennedy says.
Perry was already familiar with Dinner Key. More than a decade ago he used one of the seaplane hangars to shoot The Mean Season, a 1984 movie starring Andy Garcia, Mariel Hemingway, and Kurt Russell. "Thirteen years ago it was in the same dilapidated condition it is today, which is a shame," Perry notes. "It seems like the last thing down there that really needs fixing up."
Kennedy says she was touring the property with Perry and Stallone one day after work on Speed II had begun. She mentioned that the boat-yard lease was up for grabs. Perry and Stallone got interested. "I brought Manny [Medina] in at the end because of his expertise," Kennedy adds.
The four partners -- Medina, Kennedy, Stallone, and Perry -- recruited well-connected local consultants, including Robert Traurig (legal counsel), Wolfberg Alvarez & Partners (architecture), and Arthur Andersen (financial planning). They also hired M.N.R.E. Management & Consulting Corp. to operate the planned marina. State records list Manuel Diaz, a former top executive at Medina's development company, as president, director, and registered agent of the corporation.
Although his name doesn't appear on public records, Coconut Grove businessman Stephen Kneapler is also a principal in M.N.R.E., according to Kennedy. Kneapler, a long-time associate of Medina and Diaz, heads the management team that operates Monty Trainer's restaurant immediately north of the boat yard. Medina, Diaz, and Kneapler are no strangers to city leases on waterfront property. In 1986, three years before going to prison for tax evasion, restaurateur and Miami politico Monty Trainer sold his restaurant lease to Medina for $6.1 million. Medina expanded the business and later sublet portions of the property to Kneapler. In 1980, Kneapler pleaded guilty to federal conspiracy charges following an SEC investigation of his Miami-based Richmond Industries.
In addition to his role as limited partner in the boat-yard redevelopment group, Medina is the head of two companies that hope to handle construction, management, and retail operations for the reconfigured Dinner Key site. Another of his companies, Terremark Centre Ltd., is additionally the single largest limited partner in the redevelopment group, controlling twice as many shares of stock as any of the other participants. Medina's most recent real estate project is Grove Hill Tower, a luxury condo with balconies overlooking the bedraggled boat yard.
Medina declined to comment on his role in the proposed development deal. Kennedy says the fact that she and Medina were perceived as tangential players in Sherman Whitmore's disastrous boat-yard scheme seven years ago is entirely irrelevant today.
To the Atlantic Clipper Foundation, Ltd., the partnership put together by Rosario Kennedy, the idea of a movie studio at the old boat yard is forward-thinking and practical. The partners say they expect to derive up to 67 percent of revenues by renting out two state-of-the-art sound stages to be built inside the larger hangar. "What makes this financially sound is precisely the movie studio," Kennedy says. "This is a chance for Miami to capitalize on its reputation as a premier spot for film production. Whoever wants to champion this project will bring a great industry to this city at a time when it is strapped for cash. It could be a godsend."
In addition to building a production studio, the partners say they will create a "film institute" in conjunction with Miami-Dade Community College that would offer industry internships to students and educational programs to the public. They bristle at critics who claim the film institute is mere window dressing to make a private, commercial sound stage more palatable to the public.
"Not correct!" says Perry. "The educational facility we intend to create as part of the studio will not be closed to the public, and in fact the studio will be open to the public in ways that the other proposed projects could never be."
Kennedy adds: "This is not pie in the sky. This is a very doable thing. We are going to create another Sundance Film Institute, a production workshop, and we have the capital and the expertise to do it. The partners are ready to put their money where their mouth is."
In a cheery letter from Stallone to city officials, the muscled one notes that "Coconut Grove, as part of the City of Miami, with an established international reputation in commerce, trade, and tourism, is one of the few places on this earth where a venture such as this could work -- and work well!"
Stallone tries to explain exactly how the film institute fits into the studio scheme: "While the primary purpose of the [studio] is not exhibit-oriented, there is no doubt that the concept being introduced can easily incorporate and even enhance the opportunities for interpretive and interactive exhibits for historic and cultural exposure of the community."
Besides the studio and film institute, the Atlantic Clipper group proposes a new marina and fuel dock, a dockmaster's administrative office, a small repair yard for boats, an outdoor food and fish market, a bayside promenade linking city hall with Monty Trainer's restaurant, and a 1200-square-foot convenience store with sundries, fishing tackle, and marine electronics.
In all, the group plans to spend $6 million on capital improvements. An additional $2.4 million in federal hurricane funds will be spent by the city to rebuild a damaged sea wall and construct a portion of the marina.
In return for a 40-year lease on the site, the Atlantic Clipper promises to pay the city a minimum of $350,000 per year for the first decade, more after that. It reserves the right to pay only $100,000 per year in the event the city delays reconstruction of the marina.
The group expects the 53,000-square-foot studio to be by far the most profitable element of the new boat yard, returning $744,000 the first year and as much as $1.89 million by year ten. In contrast, the boat-repair facility is expected to lose money the first year and then become a modest moneymaker; the marina should generate about $180,000 starting off, then increase to nearly $500,000 in annual net income, they say.
The group's proposal contains an escape clause that would allow the partners to vacate the development after twenty years if business turns sour. Like the other bidders, Atlantic Clipper wants the option to expand into the adjacent Virrick Gym property. It also reserves the right to sublet any part of the boat yard it wishes.
Hugh Westbrook, an opposing bidder, is skeptical about the idea of a movie studio at Dinner Key. He says he and his partner, Miami admiralty lawyer Michael Moore, hired consultants to look into the same idea. "Their conclusion was that it was not a viable thing to do because of the costs associated with soundproofing the building, and also the point of view that it would close off the buildings from public access," Westbrook says. "What good is it to restore this hangar, and then not open it up and let the public come and look at it? I certainly believe that Miami needs production facilities. We think there would be other, better places for a film facility that would not tie up public waterfront land."
Bob Christoph, a partner in the third competing development group, confirmed he has met with Kennedy and Perry in a thus-far unsuccessful attempt to get them to locate the studio elsewhere in Miami and leave the boat yard to more traditional uses. Christoph continues his hunt for alternative studio sites, which he says could include the Miami Arena or, as a temporary solution, the Coconut Grove Convention Center. "The public needs to come to the surface on this," says Christoph. "They need to say, 'Sylvester, we welcome you with open arms, but this isn't the right place for a movie studio. Not here on waterfront land.'"
Christoph's group has a markedly more conservative vision for the old boat yard, one that emphasizes traditional maritime uses. The group wants to spend $1 million of its own money in addition to the city's $2.4 million in federal disaster-relief funds to create a snazzy new 144-slip marina. The larger seaplane hangar would be used as a dry stack -- a vertical parking lot -- for 140 more boats.
The group's proposal also describes a 40,000-square-foot Caribbean market that would sell food and other products from countries serviced by Pan Am's flying clippers in the early days of aviation. The market is designed to occupy the smaller hangar and spill out onto a bayside courtyard.
Christoph and his partners say their less glamorous land uses are also less risky since there's a demonstrable need for boat slips and marine services on Biscayne Bay. They say they can promise the city at least $300,000 per year and are willing to spend a total of $5 million on improvements.
In counterpoint to these two proposals, Hugh Westbrook and Michael Moore envision using the larger of Dinner Key's seaplane hangars as a walk-through public market. "We plan to leave the doors open during the day," Westbrook notes. "You'll be able to see all the way through the hall out to the water. It's going to be very much a pedestrian place, with multiple points of access."
Rather than build the maximum number of boat slips, the Westbrook group proposes a smaller marina designed around a broad public pier extending into the bay and leading to a small open-air restaurant. Westbrook says he's confident his group can overcome any environmental regulatory problems that building the pier might entail. The boat repair yard would be significantly larger than that proposed by Atlantic Clipper, with tenant craftsmen occupying the smaller seaplane hangar.
Perhaps most important, Westbrook's group proposes a more modest initial return to the city -- $100,000 per year for the first four years, rising after that -- but also promises to sink significantly more money into capital improvements, nearly $9.5 million. "We have looked at this very, very carefully, and we believe the true cost of restoring the property is greater than some people may have guessed," Westbrook says. "I don't want to comment on the accuracy of the numbers from the other folks, but we think this is what's required to make the project commercially viable."
After a decade of debate and false starts, and following recent weeks that have seen the resignation of Miami's city manager, finance director, and a city commissioner amid charges of corruption and financial impropriety, some observers see the boat -yard redevelopment process as a grand opportunity for politicians and city officials to prove they can do the right thing by the public. Some go so far as to call the Dinner Key deal a crucible in which the political future of Miami will be cast, for better or worse.
"If the boat-yard thing gets screwed up, and if we can't get the budget in line, I think all hell is going to break loose," says Lawrence Terry, a member of the Cocoanut Grove Village Council. "I don't think the people in this community will put up with any more nonsense. There's been too much rhetoric and too much back-room dealing in the past. If we allow this process to slide into the same old thing, we're going to be in serious trouble."
Dubious spectators complain that Atlantic Clipper is poised to take over the process by virtue of Hollywood charisma and old-fashioned political connections rather than the merits of its proposal. "I believe that the mayor may already be biased," says Felix Lima, one of the bidders who oppose a movie studio on the site and favor boat-intensive uses. "I hope that the other commissioners are not swayed by the glamour of Mr. Stallone. His being involved in this discourages other people who might have made proposals. To be perfectly frank, we probably would have reconsidered spending a lot of money on this proposal knowing that the odds are in their favor."
City officials are not oblivious to the sorry history of past development attempts or the current state of public demoralization. Two weeks ago Jack Luft, Miami's director of community planning and revitalization, successfully persuaded the Coconut Grove Chamber of Commerce to postpone public presentations by the three boat-yard bidders. He had previously sent letters to each group requesting that they defer public dialogue on the boat-yard proposals until after the review committee completes its labors. "We're trying to separate the committee's work from any round of community comment or debate or publicity," Luft explains. "This is a little like picking a jury. Just as you wouldn't want a jury member talking to the defendant before the trial, we don't want proposers lobbying the committee members, or prospective committee members talking to each other. I cannot have external, uncontrollable forces prematurely shaping the opinions of the committee members."
As the fray heats up, Hugh Westbrook says he wonders about the personalities and political currents that may affect the selection of a boat-yard developer, but has chosen to keep his distance from committee members and politicians. "We have good financing and accomplishability," Westbrook says. "I fully expect that the process is going to move forward on its merits. Maybe it's naive of me to say so, but I think the city is at a turning point, and that Mayor Carollo is in a position to point things in a new direction."
Naive is right, says Christoph. The brewing fight for control of Coconut Grove's waterfront will inevitably be influenced by power politics, to one degree or another. "If Mayor Carollo can tell the voters that he brought Hollywood to Miami, then that's one more arrow in his quiver," Christoph offers by way of example. "I hope that he won't be swayed by political ambition as he looks toward the upcoming election next November."
Asked if he could recall the name of California developer Sherman Whitmore's yacht, Grove activist Lawrence Terry said he couldn't. But he thinks virtue, not venality, will triumph at Dinner Key this time. "All the people involved in this new deal are real, and the money seems to be real. This time we have no one driving into town in a Rolls-Royce pretending they're a person of means. I'm generally hopeful."
Whitmore's yacht was named The Virtuous.
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