The developer of the Ion East Edgewater has scuttled plans to develop the 36-story condo tower at 2701 Biscayne Boulevard, The Real Deal has confirmed.
In a company statement provided to TRD, Sakor Development said it is reevaluating, due to delays caused by a legal dispute involving one of parcels assembled for the project.
“With land values along the Biscayne corridor rising, we are configuring the property for mixed-use development,” the statement said. “This will ensure the highest and best use of the site given the appreciating land values in one of Miami’s fastest growing neighborhoods.”
According to a source close to Sakor, the developers were unable to close on one of the five parcels that make up the site’s footprint, due to an appeal of a street closure by a neighboring property owner.
Kent Harrison Robbins appealed the Miami City Commission’s decision to close off an alley behind one of Sakor’s parcels on December 23, 2013, according to Miami-Dade Circuit Court and City of Miami documents viewed by TRD. More than a year later, the Third District Court of Appeals denied Robbins’ petition, but Sakor lost ground to other developers.
Even though Sakor had pre-sold 40 percent of Ion’s units, other builders swooped in and poached a huge chunk of their buyers, the source said.
Since Robbins lost at the Third DCA, Sakor was able to close on the last piece and now owns all the land outright.
In the face of rising construction costs and the delay in closing on the last parcel, Sakor principals Barbara Salk and Stephen Kornfeld now want to build a mixed-used site that incorporates residential, office and retail, the company statement said. It also noted that Sakor has not suspended sales and will honor reservations with buyers who stuck it out.
Edgewater and surrounding neighborhoods have a huge gap in traditional office and retail space, said Peter Mekras, a senior vice-president for CREC. “There’s a lot of people who want to be there, but can’t find space,” Mekras said. “There is a lot of opportunity to capture tenants seeking traditional retail and office space.”
However, developing a mixed-used site requires a well capitalized funding source willing to make a long term investment, Mekras said. “For a large scale mixed use project, it becomes critical to have a capital source betting the market will reward them on a long-term commercial business plan,” he said.
Property records show the Ion site is owned by several entities controlled by Salk, a former Related Group executive, Kornfeld, and Miami Worldcenter developer Art Falcone through his cmpany, Encore Capital Management. “Encore is a well capitalized funding source,” Mekras said. “They have the resources to do it if they are willing to commit it.”
Sakor had hoped to start construction of the 328-unit project during the fourth quarter of 2014. Arquitectonica designed the tower, while Hirsch Bedner was handling interior design. The project planned one, two and three-bedroom condos starting in the low $300,000s. It also included six two-story townhomes.