BH3 is planning a nine-story retail development in Miami Design District’s Opportunity Zone, The Real Deal has learned.
The $55 million, 86,000-square-foot project at 3801 North Miami Avenue will have retail and showroom space, with 25-foot high ceilings on the ground-floor and 14-foot high ceilings on levels two through nine, according to Greg Freedman, co-founder of BH3.
BH3 is in the process of finalizing entitlements, which should be completed this summer, Freedman said. No variances are needed. He expects to break ground in the second quarter of 2020 and start pre-leasing at the end of the summer.
BH3 paid $15.1 million for the properties at 3801 and 3819 North Miami Avenue in 2017, before the Opportunity Zone legislation came out, he said. “We love the site regardless of any tax benefits associated with it,” Freedman said. But the Opportunity Zone designation does make the project “more saleable” to prospective investors, he added.
The entire Miami Design District is an Opportunity Zone. The program was part of President Trump’s tax plan, and was designed to encourage investment into low-income and distressed areas. The benefit for developers and investors in an Opportunity Zone is the ability to defer and potentially forgo paying capital-gains taxes.
The Design District development is not the first Opportunity Zone project for BH3. In Delray Beach, the company won a request for proposals to buy three city blocks, from 600 to 800 West Atlantic Avenue, where it plans to build a $100 million mixed-use development called Alta West.
The project will have 165 apartments, a 30,000-square-foot grocery store, 40,000 square feet of retail, plus 20,000 square feet to 30,000 square feet of office space. The Community Redevelopment Agency, which will sell the land to BH3 for $10, assembled the property which currently includes vacant parcels and vacant buildings. In exchange for the land, the developer is building 30 workforce housing units, 18 of which will be delivered this summer adjacent to the property.