Surf Club President Rejects 40 Million Bid For Property

By Eric Kalis
The president of the Surf Club — one of the oldest social clubs and resorts in Miami Beach — flatly rejected last week an unsolicited proposal from a Miami developer to buy the club’s property for more than $60 million and build two condominium towers framing the clubhouse.

Coral Gables attorney Robert Mayer, a Surf Club member for 20 years, sent a letter to club members last month on behalf of Miami developer Martin Margulies offering to preserve and renovate the historic clubhouse and build two residential buildings on each side of the clubhouse. According to Mr. Mayer’s letter, the beachfront club faced mounting expenses last year, including $500,000 increases in property taxes and insurance costs.

"Given these numbers, I no longer believe that our club can survive much longer in its current form," the letter says. "I am not sure we have many realistic options open to us if we wish to preserve our club."

Mr. Mayer included a ballot with each letter to gauge the interest of proprietary members. Mr. Margulies will not move on his plans unless a majority of proprietary members approve the proposal, Mr. Mayer said.

Several calls to Mr. Margulies’ office were not returned.

Surf Club President James Cromarty responded emphatically to Mr. Mayer’s letter with a letter of his own to members last week in which he dismissed the proposal as "wildcat" and a "total sidetrack to the benefit of the Surf Club’s future."

"From time to time, your board of governors receives unsolicited letters from developers … indicating an interest to purchase and develop the club’s real estate and containing various schemes to continue the Surf Club in some form," Mr. Cromarty said in the letter. "We understand one such letter is currently being sent directly to all proprietor members and requesting a straw vote on their proposed plan.

"It is not our intention to sell the Surf Club," he said. "Instead, we are seriously looking into various short-term and long-term solutions to improve the club’s financial situation."

Mr. Cromarty declined to comment on the proposal when reached by phone Monday.

The club, at 9011 Collins Ave. in Surfside, opened in 1930. It was the site of parties for such personalities as Metropolitan Opera soprano Lily Pons and Elizabeth Taylor, according to the club’s Web site. The clubhouse is used for events such as charity balls, wedding receptions, luncheons and dinner parties.

Mr. Mayer conducted a study of the club’s operations and membership in the late 1990s, his letter states. The study found that membership was not growing and the potential for growth was dwindling as the surrounding community changed.

The club’s financial health is "substantially worse" today, Mr. Mayer said. "We pay more than three times as much in taxes per member than comparable clubs for land that is truly underutilized. We now have more proprietary members than ever, up from about 115 to over 160, but we are still stuck at that stubborn 330-member number — just as short of the goal of 400 active members as two decades ago. … This will continue if not accelerate in the near future."

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