The Ultimate Nasty Neighbor
Miami's skyline is spiked with construction cranes. Drive down Biscayne Boulevard south from the Julia Tuttle Causeway and that's what you see -- that and small armies of orange-vested construction workers cutting across the roadway or stopping traffic so cement trucks can back into the busy boulevard. For the average citizen it all adds up to a temporary nuisance, especially during rush hour. For those living near one of the many construction sites, however, it can be more than a fleeting annoyance; it can mean lives utterly and permanently transformed -- and not always for the better.
For others, like millionaire developers Willy Bermello and Gustavo Miculitzki, the forest of cranes means money, big money. Where many see ground-level inconveniences, Miculitzki and Bermello look skyward and see the ghostly silhouettes of giant buildings, phantoms of future residential towers. To them every slice of affordable property, no matter how small, holds the promise of luxury housing and lavish profits.
While some real-estate analysts warn that Miami's construction boom cannot be sustained, that a collapse is inevitable, and that some neighborhoods will be despoiled by abandoned projects or vacant skyscrapers, guys like Bermello and Miculitzki are laughing their merry way to the bank. Miculitzki scoffs at the idea of a slowdown in the market. "I have a worldwide perspective, and Miami is just getting started," says the Argentine developer. "More and more people will come every year, from the north United States as well as Europe and Latin America."
The people Miculitzki has in mind are wealthy, and they're not interested in just South Beach penthouses anymore. They're buying in downtown Miami, along the gritty Miami River, in Wynwood, and in even more unlikely areas. So the buildings keep going up. In the Edgewater neighborhood alone, a staggering 28 condominium buildings are now planned or under construction. (Edgewater is that narrow strip of land between Biscayne Boulevard and the bay, from NE Fourteenth Street to the Tuttle.)
As absurd as it may seem to the people who live and work in scruffy, blue-collar Edgewater, many a developer is betting on a kind of social revolution, a spectacular change that will be sparked by the opulent condos themselves. By this reckoning, today's Subway sandwich shop will be tomorrow's upscale restaurant; ramshackle dollar stores will miraculously morph into chic boutiques. To confidently take that kind of gamble, Miculitzki says, a developer must possess intuition. "There has to be an ability to know instinctively which pieces of property are right for certain projects," he says.
It must have been instinct that led Bermello and Miculitzki to NE 28th Street, because logic certainly would not. At the eastern terminus of 28th, a quiet, narrow dead-end street just one block long, the developers envisioned a 50-story monolith soaring above tiny one- and two-story homes. Onyx 2, as they've christened their condo behemoth, will be a massive cylinder rising nearly 600 feet into the air. (In renderings the neighboring houses look like ants trudging to a can of Red Bull.) It will be ribbed with balconies on the south side, but the northern face will be covered by a sheer, featureless concrete wall. The 117 condos will range from 1200 to 2300 square feet, topped off by 4500-square-foot penthouses. Other features will include a wine cellar, rooftop garden, pool, and spa. The residences are expected to command prices ranging from $400,000 to $6 million.
It's highly unlikely anyone from the neighborhood could afford even the smallest unit at Onyx 2, and that has thrown into sharp relief the differences between developers like Miculitzki and Bermello and local residents like Dana Murphy. "The decisions that were made to allow this building to come into this neighborhood were decisions for the future residents of Miami, without any regard at all for the people who live here right now," fumes Murphy.
A homeowner on NE 28th Street, Murphy will soon reside in the literal shadows of Onyx 2. The 39-year-old entrepreneur's harangues are punctuated by a strong New England accent and a glare that threatens to cross the line from anger to rage. He's mightily pissed off, and he's smart, and as a former aide to a Massachusetts state senator, he understands that governmental bureaucracies are great tools for gumming up the works of projects like Onyx 2. Last year, when he found out the property three houses east of his would be turned into a colossal condo, Murphy set about doing just that.
Extending one block from Biscayne Boulevard east to the bay, Murphy's section of NE 28th Street consists of nine single-family homes and a modest, two-story apartment building. Despite occasional intrusions by hookers, drug dealers, and homeless men looking for a place to crash, Murphy's block remains a relatively sleepy refuge from the grimy storefronts and relentless traffic rushing by just around the corner on Biscayne.
After decades of convulsive change, Edgewater recently seemed to have finally settled into an identity. Originally developed in the Twenties, the area was first called Miramar, its large homes and mansions modeled after those in Havana's Miramar district. The neighborhood was one of Miami's toniest, benefiting first from an influx of rich northern industrialists and then from the post-World War II economic boom. Miami's urban core, however, festered in the Sixties and Seventies, and that downward tick in the quality of life was enough for some residents to begin selling their homes to wealthy South Americans looking for safe investments. But many of those foreign investors allowed their properties to slide into disrepair as they waited for the market to get hot again. Then, in the mid-Seventies, the collapse of many Latin economies halted investment altogether.
By the early Eighties riots in Liberty City, the Mariel boatlift, and the increasingly dangerous downtown environment sent many Edgewater homeowners fleeing for Broward or Kendall. Residences in the once-affluent bayside neighborhood sat empty or became homeless hangouts. Then the Miami City Commission, in a misguided effort to promote redevelopment, changed the area's single-family-home zoning to allow for high-density, multifamily uses. But instead of encouraging investors to build new condominiums or apartments, the new zoning led many property owners to subdivide their spacious houses and carve out as many small, low-rent apartments as possible. Edgewater became a cheap place to get started in Miami -- a boon to many poor immigrants but also, owing to the transient and unregulated nature of the place, a haven for drug dealing, prostitution, and vagrancy.
Now, after decades of battles between concerned residents and the seedier elements, and aided by a gradual influx of middle-class renters and homebuyers, Edgewater has become a quiet bayside retreat from the noisy Biscayne Boulevard corridor, an unglamorous but affordable and relatively safe beneficiary of the burgeoning Design District, the ascendant Wynwood art district, and their attendant marketability. Thanks to these factors, plus the city commission's ill-timed rezoning and the myriad forces that affect real-estate values, it has also become one of the hottest condo markets on the planet.
Against this backdrop, Bermello and Miculitzki in April of last year bought five parcels of bayside property on 28th Street. "We just found this amazing location," Miculitzki recounts. "Willy and I worked together on Onyx [their condo project just three blocks south] and sold 80 percent in the first few weeks, presale. We found a great site and decided to build another one." The duo quickly began the complicated process of obtaining required city permits. They weren't required by any law to inform the neighborhood of their intentions, and they didn't.
Not until July did Dana Murphy learn something was up; he saw work crews begin tearing down the dilapidated bayfront house at the end of the street. "I'm not against urban renewal, but this stuff is just rolling over this neighborhood and nobody's looking out for the people who live here now," repeats Murphy, who doggedly policed the initial demolition work and kept an eagle eye on workers as they ripped out trees and shrubs on the vacant piece of land between the house and the water. He called code-enforcement officers when laborers dug up and killed trees on city-owned property adjacent to the building site, and again when, in preparation for a groundbreaking celebration, the developers snaked high-voltage electric cables through puddles of water and into the bay, where they powered underwater lights for partygoers. He complained to code enforcement, to city commissioners, and to representatives from Bermello and Miculitzki's company about the fact that work crews turned grassy areas near the water into muddy parking lots.
His griping probably caused a couple of headaches, but Murphy couldn't come close to impeding the giant's progress. Still he harbored hopes he could do more damage, maybe even stop the thing, by making noise at the public meetings where large-scale developments are regulated.
Over the past couple of years, a growing number of Miami residents have voiced the opinion that developers now have the run of the place, that the city's administrators and elected officials have put the desires of real-estate and development moguls ahead of ordinary citizens, that greedy businessmen are trampling over residential neighborhoods with abandon.
But that's not what you hear at the typical zoning-board meeting. There you hear the developers' hired guns wearily bemoan the endless red tape that has stymied their projects. Attend enough of these meetings and you'll hear many variations on the same theme: "My client has spent X months and Y thousands of dollars working with the city and the local residents to make sure this development is one we can all be proud of, and with all due respect I suggest that it is time to let this project go forward."
The reality is that both perceptions are grounded in fact. If Miami weren't developer-friendly, there would be no building boom. On the other hand, large-scale projects like Onyx 2 are in fact required to navigate through a long and winding approval process. On the other other hand, all the analysis done by the city's professionals, whose job is to assess the impact of new projects and make thumbs-up or thumbs-down recommendations, can be ignored or contradicted by the people ultimately responsible for making development decisions: the five-member Miami City Commission.
So last year, when Dana Murphy heard that the commission would be voting on the Onyx 2 project, he pulled together all of his carefully kept files -- copies of citations and digital photos he took of the mess made by Onyx construction crews -- and began preparing his case for an October 28 meeting. In the meantime his unrelenting complaints over tree-cutting on property adjacent to the Onyx 2 site -- property he thought was owned by the city -- had yielded some possible ammunition for the commission hearing. Murphy researched the title to the slender strip of land and found it was held in common by everyone on his block, and had been for decades. But Bermello and Miculitzki had already made a deal with the city: They would landscape the area and preserve it, along with the property across 28th Street from the Onyx 2 site, as a public park. In return they were allowed to build higher than the zoning laws allowed.
Murphy thought that if he could prove to city administrators that the strip of bayside land was private not public, that it was owned in common by the property owners on the street, he could keep Onyx 2's developers from using it to add height to their building. "I thought, öMaybe we could at least shave a little bit off the top of that monster,'" he says. "Onyx didn't have the land it needed for a monster building, so they took our park." Murphy began calling and writing everyone he could think of in the city's bureaucracy in an effort to get a ruling: Who did this property belong to? October 18, ten days before the commission hearing, he received a letter from the city's director of public works stating unequivocally that the parcel was not the city's, that it was privately held by the property owners on NE 28th Street east of Biscayne Boulevard.
Andrew Dickman, an attorney representing Betty Auerbach, who owns the property directly to the north of Onyx 2 on NE 29th Street, found an ally in Murphy. Initially Auerbach didn't imagine she'd need an attorney; she was happy to hear that something was about to replace the decrepit structure that had blighted the back of her 1913 Mediterranean-style home. But she was horrified to learn that, once Onyx 2 was built, the view from her backyard would be obliterated by a solid-concrete wall some 75 feet wide and an astounding 530 feet tall.
So Auerbach hired attorney Dickman, who teamed with Murphy, and together they combed through the Byzantine paper trail left by a project the size of Onyx 2. They found a few more fragments to bolster their case: The Design Review Committee, one of the boards that reviewed the project, had recommended that Bermello and Miculitzki's development company, BAP/GGM, should build a smaller tower or build two smaller towers facing each other across NE 28th Street in order to create, in the words of the committee, "a more appropriate-scaled project." They were also hopeful about the issue of traffic; after all, common sense would dictate that introducing an estimated 150 vehicles onto a 30-foot-wide street without a signal at its intersection with Biscayne would make for an unbearable morning rush hour. Or as Murphy puts it: "Those cars are going to be backed up into the bay every day. There are already too many cars on this street. I have to leave my garbage cans out in front of my driveway every night so nobody parks there and blocks me in."
Murphy and Dickman, however, would be frustrated by the city's traffic-analysis method. Although Miami requires developers to pay for traffic-impact studies, those studies don't bother with small streets like NE 28th; they look at only major roads and intersections with traffic lights. So the potential for gridlock on 28th was never even considered, a serious oversight, according to Michael Cannon. "No matter how much they ignore it, the traffic issue will be huge in the future," says Cannon, a respected real-estate analyst and vice president of Integra Realty Resources. "The infrastructure in that neighborhood just can't accommodate all the development.... To redevelop the whole area properly is going to take fifteen years. They're trying to do it in 30 seconds."
Bermello and Miculitzki were also prepared going into the October 28 commission meeting. Bermello even deigned to appear personally. The dapper developer (who favors slicked-back hair and three-piece suits) is the reigning Architect of the Year (as awarded by the Miami chapter of the American Institute of Architects) and former chairman of the powerful Latin Builders Association. He sits at the helm of two rapidly growing companies -- BAP Development and the successful Miami architectural firm Bermello Ajamil & Partners -- and is responsible for many notable Miami-area development projects, including Brickell on the River, Fortune House, the Four Seasons, and the controversial Brickell View, twin 39-story towers that surround and overwhelm 88-year-old Southside Elementary School. Last year Inc. 500 magazine ranked Bermello Ajamil among the fastest-growing private companies in the U.S.
The 55-year-old magnate's résumé also includes a couple of black marks. Bermello's partner Luis Ajamil was implicated in a scandal at the Port of Miami in the Nineties, when he produced wildly optimistic seaport business projections that proved consistently wrong and helped lead to serious financial problems and the eventual ouster of port director and Ajamil crony Carmen Lunetta. In 1996 Bermello Ajamil also designed two cruise-ship terminals that were built before the proper permits had been obtained, just two years after authorities discovered that a Bermello Ajamil-designed Miami Beach office building was also built without proper permits. (As the projects' architects, Bermello Ajamil bore some responsibility for the lack of permits.) And in 2003 Bermello, attorney Peter Yanowitch, and racing celebrity Emerson Fittipaldi sold their interest in the Grand Prix of the Americas' Miami event after claiming it was a huge success. A year later the company that took over discovered it was far from successful, then folded, leaving a two-million-dollar debt with the city and other public agencies. (Bermello, perhaps irked over stories critical of his audacious attempts to sell Miami on grand-prix racing, refused to speak with New Times about Onyx 2.)
Regardless of his more notorious enterprises, Bermello has clearly been one of Miami's most successful architects and recently has emerged as a prominent developer (BAP Development has about 2000 units planned or under way in Miami, as well as an immense resort project in the Dominican Republic). He knows the drill, which includes hiring a hot-shot attorney to make his case before the city's various regulatory officials.
To that end, BAP/GGM hired one of Miami's top development attorneys, Adrienne Pardo of Greenberg Traurig, to present their case. They also enlisted several Edgewater residents who were happy to tell the commission about the boost in business and property values the new development would bring to their neighborhood. None of them lives on NE 28th Street.
In advance of the October 28 meeting, each commissioner had received a four-inch-thick sheaf of papers detailing the traffic analysis, the Planning and Zoning Board report, the developers' plans, and all the other paperwork.
Dana Murphy and Andrew Dickman didn't realize the meeting was over before it started. In fact it was probably over the day Bermello and Miculitzki bought the properties at the end of 28th Street. "I don't think the commissioners really considered the neighbors or the existing uses there already," Dickman would say later. "My feeling is they're so focused on what they want there and on the future that they've written off the neighbors and the neighborhood."
The October meeting did have a perfunctory feel about it, as if commissioners were simply going through the motions. First Pardo and Bermello made their presentation, followed by the Edgewater residents in favor of the project. Commissioners were polite and brief.
But when it came time for dissenters, Murphy and Dickman were basically brushed off. "The first problem was that the city attorney's office conveniently issued an opinion that the land we were fighting over belonged to the city -- and we only got a copy of that five minutes before the meeting," recalls Murphy. The city attorney argued that because none of 28th Street's property owners had paid taxes on the small parcel for years, it had reverted to city control. Murphy and Dickman asked for a delay in the hearing so a judge could decide the matter, but commissioners weren't interested:
Mr. Dickman: And just on that point, I mean, and with all due respect to the attorneys involved, we haven't had a chance to submit an opinion. We didn't even know that the --
Commissioner Johnny Winton: Well, that's your problem.
Mr. Dickman: -- other side was gong to submit one.
Deputy City Attorney Joel Maxwell: It came in today and I've just given you, for the record -- I did give you a copy of it, Mr. Dickman. You had it.
Mr. Dickman: Five minutes ago.
Mr. Maxwell: That's right.
The commission quickly shot down any hope Murphy and Dickman held that the title question could be a wedge for downsizing Onyx 2. They moved on to other issues but were continually prodded by commissioners to hurry up, as were other NE 28th Street property owners who spoke against Onyx 2.
Adrienne Pardo gracefully deflected criticism of the building, but Bermello was incensed that people had spoken out against his development, and he took the dais to attack Murphy and another neighbor, Catero Manicuso. Bermello ignored commissioners' mounting objections as he tried to accuse the two men of extortion.
Mr. Bermello: These gentlemen sat in my office for three hours. I took time away from my family. At the end of the meeting, they said, "Mr. Bermello, what we're talking about here is we need an exit strategy. Do you know what that means?" I said, "No. You tell me what that means." They said, "Well, the exit strategy is, you either think about buying our property out --"
Mr. Maxwell: Mr. Chairman.
Mr. Murphy: That is not true. Do not go down that --
Mr. Maxwell: Mr. Chairman.
Mr. Bermello: I'd like to finish the statement.
Commissioner Jeffery Allen: See, this --
Chairman Joe Sanchez: Sir, you're out of order.
Mr. Bermello: I'd like to finish the statement.
Chairman Sanchez: All right.
Chairman Sanchez: Willy -- Mr. Bermello, hold on.
Eventually Winton got to the heart of the matter. The commission wouldn't stand in the way of this development because of the Eighties rezoning that permanently altered Edgewater's character. Because of that, argued Winton, it would be a violation of property rights not to allow Bermello and Miculitzki and others of their ilk to build mega-condos in Edgewater. "I've said it on every single project and have voted to approve all of them," Winton began, "because that's what the zoning is -- and just wait. Wait till we get ten more of these. Wait till seven get built and everybody's going to talk about traffic.... [Holding up a picture of Murphy's house] We're not going back to this. This house isn't going to be there in fifteen years. As much as I hate to say it -- this is a beautiful house -- it ain't going to be there."
Winton threw Betty Auerbach a bone, asking the developer to come up with some sort of design pattern to adorn the sheer north face of the tower. Then commissioners voted to approve the project -- unanimously.
Dickman promptly filed a lawsuit to quash the commission's ruling, which is why commissioners won't talk about it today. Murphy, for his part, has declared war on the city and especially on Winton. "He betrayed me and he betrayed all his other constituents in the name of some future constituents who aren't even here yet and let me tell you something, his ass is through," Murphy seethes. "There are a lot of people who feel this way and we're going to remove him from office and let him get re-elected by the future residents he's already working for."
In addition to forming a group to oust Winton and find a suitable replacement, Murphy vows he will file several lawsuits against the city beginning in April. The first will deal with the so-called park next to Onyx 2. "Let me tell you something, buddy boy, the city could have covered their ass by postponing a decision for a couple of weeks so we could get a better answer on this," he says, "but instead they had to go ahead and hurry up for their buddy Willy, and now I am going to sue the pants off them."
In the office of Miami's Economic Development director, Otto Boudet-Murias, hangs a computer-generated city map that must mirror the one in Gustavo Miculitzki's mind. Most of the city is filled in with drab blues and greens, but along Brickell Avenue and Biscayne Boulevard are vivid renderings of approved developments. Neon paeans to Miami's future, they rise out of the dense urban core of downtown, Edgewater, Wynwood, and Overtown.
"There is a difficulty with the perception of this new development boom," Boudet-Murias begins. "In a way, the city can't win. Before, we were criticized because the city was blighted and poor. Now we are criticized for allowing this new development to run roughshod. In the end, time will tell." Boudet-Murias believes that by pushing developers to include retail space on the ground floor of big developments, and by trying to encourage middle-income as well as luxury housing, the new condos will create a richer, more vibrant downtown.
Boudet-Murias's vision for Miami may not be anything close to that held by Dana Murphy, but it's not much different from Miculitzki's. "With regard to pricing," he says, "which a lot of people say is outrageous, in comparison to Paris or New York -- cities of the caliber we're reaching for -- we're only charging a quarter of the price. Miami has a lot more growing to do. And we're giving the people what they want -- a lifestyle of prestige."
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