David Martin’s Terra will be leading the development of the former Deauville Beach Resort site in Miami Beach. But he’s not doing it alone.
In the deal that was recorded this week, the Meruelo family retained majority ownership of the oceanfront property, once home to the historic resort that hosted the Beatles’ U.S. debut on “The Ed Sullivan Show” in 1964.
For some perspective, let’s look back on the recent history of the iconic Melvin Grossman-designed hotel.
- Damage from a fire and Hurricane Irma in 2017 forces the closure of the property at 6701 Collins Avenue. The Meruelo family, led by Belinda, her husband Homero and their son Richard, never reopen the resort. It falls into disrepair.
- In late 2021, months after the deadly Surfside condo collapse, the Meruelos submit a structural report to the city that determines it’s an unsafe structure.
- The city later orders the property to be demolished, which is later challenged in court but ultimately upheld. Because it was historic, the city could require replication of the property.
- Enter Steve Ross. In 2022, Ross, the billionaire chairman of the New York-based Related Companies, North Beach native and owner of the Miami Dolphins, goes under contract to buy the property for half a billion dollars — if and only if voters approve an upzoning referendum. Ross enlisted none other than Frank Gehry to design a new project.
- The ballot measure fails later that year. Talks with Ross continue, but ultimately that deal never comes to fruition.
- Fast forward to 2024. A year after the Florida Legislature considers and then drops a bill that would ease demolitions of historic properties, it passes a new bill that eases demolitions of coastal properties and strips local municipalities (i.e. Miami Beach) from requiring replications of those buildings if they are not on the National Historic Register, among other measures. Gov. DeSantis signs it into law.
- Enter, David Martin. Martin, who I’ve been told was competing with other bidders for the site, pays $12.5 million for a 25 percent stake in the Deauville. His public relations firm sends a statement that he will be leading the development, which will include a reconstruction of the Deauville. No further comments will be made at this time, the firm says.
I can say with relative certainty that the $12.5 million price likely does not represent the full value of Terra’s investment. The 25 percent stake values the entire 3.8-acre site at just $50 million. Martin’s firm could include a replication of some of the Deauville’s more iconic elements in its plans. It could be developed into a luxury condo, a hotel or both. My bets are on luxury condos with a little something else.
How Martin, considered a successful negotiator, works with the Meruelo family will also be something to watch. Many developers have tried before, and no one has ever been able to walk away from the closing table successfully.
What we’re thinking about: I’m on Live Local Act watch, waiting for DeSantis to sign the amendments into law. Are you working on any Live Local projects? Send me a note at kk@therealdeal.com.
CLOSING TIME
Residential: Ideavillage founder and CEO Anand Khubani sold the vacant oceanfront lot at 108 El Mirasol in Palm Beach for $85 million. A Delaware entity named for the address bought the 1-plus-acre lot.
Commercial: Jamestown paid $22.5 million for a Publix-anchored shopping center in Tamarac. Regency Centers sold the 18.6-acre, 124,000-square-foot Tamarac Town Square at 8129-8315 North Pine Island Road.
NEW TO THE MARKET
The oceanfront estate at 101 Jungle Road in Palm Beach that belonged to the late Gerald and Elaine Schuster hit the market for $54.9 million, as a development site. Christian Angle of Christian Angle Real Estate also has the property listed as a house. The Schusters, a philanthropic couple who were longtime friends of Bill and Hillary Clinton, bought the home in 2001. The 10,000-square-foot mansion, with six bedrooms and seven-and-a-half bathrooms, was built in 1955 on a 0.9-acre lot.
A thing we’ve learned
A neighborhood in Coral Gables, my hometown (officially unaffordable for me), topped a list of priciest neighborhoods in the U.S., surpassing Beverly Hills. A Zillow report found that seven of the top 10 ritziest neighborhoods are in Florida, led by Gables Estates, and three are in California’s Beverly Hills and Malibu, Bloomberg reported.
Elsewhere in Florida
- A ratings agency released a report that found the majority of small property insurers operating in Florida, which many homeowners rely on for coverage, wouldn’t meet federal guidelines to back mortgaged homes because they are considered so “financially weak,” the Tampa Bay Times reports.
- Six smalltooth sawfish, a critically endangered animal, washed up dead over the past week or so in the Florida Keys. So far this year, 38 have died, puzzling scientists for months. Five of the rare creatures typically die per year.
- The state tax on commercial leases will fall to 2 percent by June 1, part of legislation that DeSantis signed into law in 2021, Florida Politics reported. Senate Bill 50 requires online retailers to collect sales taxes; it also triggered the drop in commercial rent tax two months after Florida’s unemployment trust fund returned to the $4 billion pre-pandemic mark.