Flagstone Property Group Pays Stays In City Deal For Watson Island Complex
Written by Jacquelyn Weiner on September 30, 2010
By Jacquelyn Weiner
New terms for Flagstone Property Group’s Watson Island mega-yacht complex have won Miami commissioners’ OK, but hurdles remain.
The next: securing a state waiver on a deed restriction to allow commercial development. The state gave the island to Miami in 1949 for public use.
The state granted a waiver in 2004, but the project must get another due to "all the changes that have taken place in the contract throughout the years," said Mayor Tomás Regalado.
Miami must also pay the state annually after Flagstone starts paying base rent, which kicks in after construction.
Under the past waiver, Miami was to pay the state 15% of base rent, or $300,000 of its $2 million a year.
Voters in 2001 approved Flagstone’s Island Gardens, a luxury hotel, retail and mega-yacht marina complex.
Miami gave Flagstone a 75-year lease that year and a building permit in 2004. The city has given Flagstone four extensions.
This month, Mr. Regalado asked commissioners to cut ties. They gave Flagstone one more week. But with an extension, they demanded Flagstone agree to all terms and pay $200,000 in back rent or the city would sever ties.
Last week, Flagstone consented and commissioners voted 4-1 to approve the agreement, with Frank Carollo voting no. Flagstone paid the $200,000.
Now the city must seek a state waiver within 45 days. Once the state gives a verdict, Miami commissioners must vote on it.
"So this is not a final decision," Mr. Regalado said, "and we get to keep the check" for back rent.
If Flagstone gets final OK, its lobbyist Brian May said the developer will approach "lenders and other equity partners to secure financing to, at the very least, begin constructing the marina. We are hopeful that we could try to do that by the first quarter" of 2011.