Riverfront Interest High As Open Trade With Cuba Lingers
Written by Risa Polansky on July 3, 2008
By Risa Polansky
Despite a perception that industry along the Miami River is dead or dying, interest in commercial property along the river is high, brokers say.
Hopefuls are eyeing the river, some envisioning open trade with Cuba, as they wait for prices to settle during the aftermath of the residential building boom.
"The marine uses want to come back to the river," said John Rosser, president of boutique real estate firm John Paul Rosser & Associates. "There is a demand here — it’s just an issue of cost."
During the height of the boom, land prices along the river skyrocketed. Even recently, some have been upward of $4 million an acre, Mr. Rosser said.
But "the prices have come down a little bit," he said, in part because would-be residential developers who grabbed up riverfront land with condos in mind have begun backing away from plans.
Recent court rulings overturning City of Miami land-use changes that would have allowed for condos on historically commercial areas of the river may also be a factor, he said.
More than 40 acres are available now on the river, and prices sit at about $2.5 million to $3 million per acre, Mr. Rosser said. "It’s back to what it was before the big run-up."
He predicts more price drops.
"If the economy continues to fall, the prices will have to fall," he said.
Some sellers, however, are standing firm with higher prices, noted Adiba Michelle Ash, principal of Ash Property Group.
She said she has had three $3 million-an-acre offers for three different marine sites this year but "sellers wanted more."
Ms. Ash said she sold 3.5 acres on Northwest South River Drive for $8.5 million in 2006.
Owner Bruno Ramos, president of BEA International, an architectural and engineering firm that specializes in ports, plans to use it for offices, storage and shipping and has made more than $2 million in improvements to the sites, Ms. Ash said.
Though Mr. Ramos has received offers of up to $15 million for the properties, he did not want to sell, she said.
"Cuba made him hold on to the site."
The same is true for other river property owners, she said — they anticipate higher offers because of the potential for trade with Cuba or believe they’ll have their own bright future on the river for the same reason.
Residential developer Prestige Group "only purchased heavy industrial marine sites with proximity to the railroad, anticipating Cuba opening and running a busy shipping business," Ms. Ash said. "They purchased three sites. They did not look at residential sites."
She said she receives many calls from those interested in Cuba trade prospects.
Mike Hatami, owner of river-based Mirage Yachts and other properties along the river, has noticed the same.
"Their (buyers’) assumption is something is going to happen where shipping will go through the roof," he said.
He approached a river-based concrete company in hopes of buying its waterfront land, he said, only to find the company has ships in storage ready to head for Cuba to buy limestone should the opportunity open up.
"It wasn’t by accident that they ended up on the river," Mr. Hatami said. "They were there by design."
As for his own interest in accumulating river properties: "I’d bet the farm on the river" thriving in the future, he said. "It’s the safest place to put my money."
Ms. Ash also has noticed that companies that don’t produce their own construction materials in the Caribbean are setting up shop on the river to ship to themselves from here.
"Property owners are looking at owning their ships and having their own shipping line for more control," she said. "The Caribbean is at the top of the list due to the fact that they do not produce their construction materials in the Caribbean, and shipping from the river is key to controlling costs."
The trend, she said, "is kind of unique but is developing."
And shipping lines are headed now to countries other than Haiti as trade there continues to struggle, she said.
More and more, people are seeing opportunities in places such as Nicaragua and Panama.
"The new wave of buyers represents investors who have not typically been marine business owners," Ms. Ash added. "This reinforces the fact there is a lot more happening in the marine industry in terms of productivity on the river than there is in the condo development sites. As a matter of fact, most of the sites sold on the river have been for marine use over the last three years."
Mr. Hatami said he believes also that the recreational boating sector, booming in Fort Lauderdale, may make its way back to Miami as prices in Broward rise.
"The prices there make ours look cheap down here," he said, predicting a Miami revival.
But Miami needs more dry storage facilities, Mr. Rosser said.
Ms. Ash agreed.
"Major marina companies and investors have been looking at the river for dry storage. Some property owners want to purchase boat slips from other property owners on the river to increase their slips numbers," she said. "There is a lot more demand for slips in Dade than there is supply. Dry storage with enough slips to justify the cost offers a great economic model for marine sites."
Ms. Ash said her observations refute what Miami some Miami officials say they have seen on the river.
"This is real and is based on real jobs and real investors who have a serious vested interest in the marine industrial sites on the river," she said. "Many companies and investors nationally and internationally are eying the Miami River to place their money."
Miami Commissioner Angel Gonzalez said in May that "that river is dead," leading the charge as the commission voted to remove from its comprehensive land-use plan specific language protecting the marine industry.
The move already has had effects, Ms. Ash said.
"Serious buyers want to make sure their investment in a marine business will be protected," she said. "One such exclusive buyer opted out of Miami for now due to the threat to the marine industry properties."
Already the South Florida Regional Planning Council has come out against the city’s decision.
Rep. Juan C. Zapata, on behalf of the Miami-Dade Legislative Delegation, also has written to the Department of Community Affairs urging the organization to reject the city’s wording change.
"Numerous city-approved small-scale amendments, which removed marine industrial land uses in order to allow new residential developments, have resulted in an over 50% reduction in acres with industrial land use along the Miami River," his letter stated, "from an estimated 80 acres in 2000 to only 38 acres today."