10year Quest For Miami Megayacht Marina Heads To Florida Cabinet

By Jacquelyn Weiner
If Gov. Rick Scott’s cabinet OKs a state waiver allowing for commercial development on City of Miami-owned Watson Island, Flagstone Development Group’s long-planned project is just a "rubber stamp" away from breaking ground, the developer’s attorney says.

Yet that’s not how Miami Mayor Tomás Regalado framed the situation during the project’s last public vetting in September 2010, assuring commissioners they could still block the project with a vote after state approval.

"This is not a final decision," Mr. Regalado said at the Sept. 23 city commission meeting. "And we get to keep the check" for the $200,000 in back rent paid that day.

Voters approved Flagstone’s Island Gardens, the luxury hotel, retail and mega-yacht marina complex planned for the city-owned Watson Island site, in 2001.

Miami commissioners gave Flagstone a 75-year lease the same year and a major use special permit for the project in 2004.

Since then — years after fishermen were cleared off the waterfront land — the city has granted the developer several extensions. Flagstone has faced lawsuits and seen lenders and would-be hotel operators come and go.

Agreeing to new terms and a construction timeline in September, commissioners said this was Flagstone’s last chance.

Yet before the project can break ground, it requires a waiver from the state cabinet.

Because Flagstone’s Island Gardens project sits on an island given to Miami by the state in 1949 for public use, any commercial development requires state approval.

A previous waiver was approved in 2004, but a new OK is needed because the development agreement has changed significantly since then.

Disagreements between the city and state over payments initially jeopardized the waiver.

The state wanted Miami to start paying it a portion of rent revenues on the property immediately, yet under the previous waiver granted, payment was to begin after construction was underway.

To remedy the situation by the cabinet’s April 5 meeting, Flagstone agreed to pay the state what it is to collect from the city — 15% of rent — until construction begins.

Still, the issue was withdrawn at the cabinet’s April meeting.

In June, Madeline Valdes, Miami’s director of public facilities, wrote in an e-mail that "Flagstone is currently negotiating with the State the terms of the State Waiver. As soon as an agreement is reached, it will be heard before the state Cabinet."

Now, the waiver is expected to be voted on at the cabinet’s August meeting, said Flagstone representative Kevin Cowan, chairman of the real estate department at law firm Shutts & Bowen.

Flagstone has "gotten very positive, supportive input from the governor’s office," he said.

He said he’s also confident that if the waiver is granted, the project will move forward.

"If the state essentially approves the proposal that the city has made, then it’s simply an administrative approval," he said of the city commission vote required after the waiver. "There’s no need to revisit the transaction or any of the terms."

Mr. Cowan added that Flagstone hopes to break ground on Island Gardens in the first half of 2012 and doesn’t foresee financing difficulties.

"In light of the purchase of the Miami Herald site, the Miami Art Museum and several other developments in the downtown corridor…," he said, "Flagstone is even more enthusiastic about pursuing this development."

In the interim, however, the city is still looking to put its Watson Island space to good use.

At their most recent meeting, commissioners approved a revocable license agreement allowing contractor Bouygues Civil Works Florida to use a 4.5-acre parcel of city-owned property on Watson Island — the same spot slated for the Island Gardens project.

Bouygues is a subcontractor for the Florida Department of Transportation on the Port of Miami tunnel project.

The company is to use the Watson Island site for construction staging, storing materials and parking vehicles in connection with the Port of Miami tunnel, according to legislation.

With the city in a cash-strapped quandary, the agreement is to provide an infusion of $10,000 a month, increasing by 5% each year.

However, the agreement will be revoked when the state OKs Flagstone’s Island Gardens project.To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.