For nearly a half-century, Michael Swerdlow has been a driving force in retail and mixed-use development in Miami-Dade County.
In the early 2000s, the Coconut Grove-based developer teamed up with Bloomfield Hills, Michigan-based Taubman Centers to build Dolphin Mall, a 1.4 million-square-foot outlet retail and entertainment center in Sweetwater. He cashed out in 2002 when Taubman bought out his 50 percent stake in Dolphin Mall for $97 million.
The same year, Swerdlow negotiated an agreement with the city of North Miami for an ambitious proposal. He and his then-partner, Boca Developers, took over a former city landfill with plans to convert over 190 acres of contaminated government land into a $1 billion mixed-use residential community called Biscayne Landing.
In 2006, Swerdlow sold his interest in the project to Boca Developers, which went belly up following the real estate crash two years later. The land reverted to the city of North Miami. Swerdlow would reclaim the site with a new partner in tow, New York-based developer Richard LeFrak. In 2012, the joint venture won a second city bid for the 190 acres, agreeing to pay $17.5 million for a 99-year ground lease. Two years later, Swerdlow and LeFrak purchased 50 acres for $20 million.
In 2015, Swerdlow moved on again, selling his stake in Biscayne Landing to LeFrak’s eponymous firm. LeFrak brought in a new partner, Aventura-based Turnbery, and renamed the project SoLé Mia. The joint venture has completed portions of the $4 billion mixed-use development, including a 7-acre Crystal Lagoon, a Costco and three apartment projects.
Meanwhile, Swerdlow set his sights on Miami’s Overtown neighborhood. In 2020, he and his partners, Reston, Virginia-based SJM Partners and Miami-based affordable housing developer Alben Duffie, won a bid to buy a 3.4-acre city-owned site for $10 million. The joint venture recently completed Block 55 at Sawyer’s Walk, a mixed-use project with 578 senior affordable housing apartments, 175,000 square feet of retail, 131,000 square feet of offices and a 1,000-space parking garage.
Swerdlow recently spoke to The Real Deal about Block 55 at Sawyer’s Walk and his plans for other slices of government-owned land he’s eyeing for development.
What’s the current status of Block 55 at Sawyer’s Walk?
We got our temporary certificate of occupancy. For all intents and purposes, the apartments are leased up except for roughly 150 that have to go through a lottery with Miami-Dade County. We’re going to start move-ins [in late July]. Target and Aldi are opening in October. We also have Ross Dress for Less and Burlington. Pretty much every space in the entire building is accounted for.
In June, you sold the entire office component to MSC Group, a Geneva, Switzerland-based international shipping and cruise line company, for $67 million. Why did you decide to sell the office portion?
Because the best tenant ever wanted to buy it, instead of renting. By a stroke of luck, Cushman & Wakefield showed up with MSC. We were negotiating some retail leases that are on that floor when MSC said: ‘We want to buy the entire floor’. We were also able to give them a greater number of parking spaces than they would have gotten anywhere else.
The Block 55 at Sawyer’s Walk site has quite a bit of history. In 2018, the Southeast Overtown/Park West Community Redevelopment Agency selected your team to purchase the 3.4-acre Sawyer’s Walk site for $10 million. But the property’s previous developer, R. Donahue Peebles, sued you and your partners in 2020. The complaint alleged that you and city officials conspired to take the Sawyer’s Walk property away from him. In 2022, the case was dismissed and you were awarded $800,000 in attorney fees. How did you handle the allegations Peebles made against you?
The city put out a new request for proposals. They dumped Peebles. We were very confident we were going to win the lawsuit. [The allegations] were so ridiculous that the judge threw out every one of them on summary judgment. Nobody thought he had a chance.
Recently, Miami-Dade County agreed to sell you 17 acres in southwest Miami-Dade for $8.1 million where you plan to develop a Costco. According to published reports, two independent appraisals valued the land at $31 million. Did you get the land at a bargain price?
No. I am not going to make a great deal of money on that transaction, nor did I expect to. The price is based on the rent Costco could pay. But the community needed Costco. They bring hundreds of jobs, sell very cheap gas and [residents] have the benefit of having a Costco in their community. The choice was about whether the county wanted the public benefits. I have to invest significant money in that site. That site is in the floodplain, so I have to raise [the building], put drainage underground, and I have to fix the streets. If I’m lucky, I’ll make a 10 percent return on the whole deal.
So why do the deal then?
Because 10 percent is still pretty good. It’s not the end of the world. And I made a commitment to Costco and Miami-Dade commissioner Kionne McGhee. [The site is in McGhee’s district]. And I like to keep my commitments.
In February, you responded to a request for proposals from Miami-Dade County to redevelop county-owned properties along Little Haiti and Little River. Your plan calls for a $2.6 billion mixed-use project on 65 acres that includes private and county land. Can you provide more details about what you’re planning to do?
It’s three pieces of land. One piece is a county project where we’re doing a conversion from about 200 [apartments] to 3,000 units. There will also be a significant amount of retail on that piece, which is roughly 30 acres. The second piece [roughly 20 acres] is controlled by AJ Capital Partners, a real estate investment trust from Nashville. We have an agreement with them to zone, plan and assess their property. We have a level of control of their property. The third piece, we absolutely control. That’s about 15 acres. We’re going to be building up to 2,500 residential units on that piece.
Will all the units be affordable housing?
They will be either affordable or workforce housing. For the first project, between 600 to 700 units will be affordable housing. The rest will be workforce. No market rate. And the entire project will have 600,000 square feet of retail and a train station.
How do you expect to finance this ambitious project, and what is the timeframe for breaking ground and completion if Miami-Dade County approves your proposal?
We have the project fully financed. There’s no problem there. [Swerdlow declined to name the lender and the loan amount]. We are waiting to complete the lease and development agreement with the county. As soon as we do, we’re going to get to work.