Investors including billionaire Jorge Perez have plans to build luxury condo towers on a lot they bought for $180 million on Fisher Island in South Florida. Miami-Dade County officials, suddenly panicked about the effect on the local economy, are trying to stop them.
The parcel is the last sliver of land available for high-end residential development on the posh island, which was recently named the most expensive ZIP code in the US. But it also houses a 700,000-barrel fuel depot that’s crucial for Miami’s port, the world’s largest hub for passenger cruises and a bustling cargo facility. The developers plan to replace the fuel terminal with condos.
“This is an existential crisis,” Miami-Dade County Commissioner Raquel Regalado said at a meeting last month, citing the port’s importance as an economic juggernaut.
County officials, under fire for failing to head off a real estate deal involving critical infrastructure, are rushing to find a solution and in some cases calling for legal action to force a sale of the land to the government. But the developers are plowing ahead even as mediation talks are ongoing: They shared plans with Bloomberg News to build two 13-story “ultra-luxury” condo towers.
“It’s the last masterpiece to complete the island,” said Jon Paul Perez, Related Group’s chief executive officer.
He’s the oldest son of Jorge Perez, whose long career developing residential projects in Miami earned him the moniker of “condo king.” Next door to the new site on Fisher Island, Related Group is completing a condo building in which it sold two penthouse units for $150 million.
The deal for the new lot closed last month. A joint venture between Related Group, HRP Group, Raycliff Capital and GFO Investments bought the land from a fuel-terminal operator at a record price for Fisher Island, capping over a year of working with local authorities on the proposed development. The land will require environmental cleanup.
Penthouses in the planned towers are expected to be priced at around $100 million, said Bippy Siegal, CEO of Raycliff Capital. On a square-foot basis, the condos — which will all be corner units with ocean views — will probably start at about $5,000 per square foot and “handshakes have already been done” for sales, Siegal said.
Jon Paul Perez said he estimates the project will have a total sell-out value of about $2 billion. The land sale came with a two-year leaseback agreement with the fuel-depot operators. Developers expect to break ground in 2027 and complete the luxury towers about three years after that, adding residential units to an island that has been home to celebrities such as Oprah Winfrey and tennis star Caroline Wozniacki.
Before the backlash from Miami-Dade County, the developers spent 18 months in talks with the island’s famously finicky community association and its country club – a process they called a “heavy lift.” While they said about 30% of residents opposed the project, citing worries about traffic and crowding in the exclusive enclave, many were eager to get rid of the fuel depot.
One person’s eyesore is another person’s lifeline, however.
In September, Royal Caribbean Cruises Ltd. CEO Jason Liberty pleaded with county commissioners to keep the fuel facility intact, calling it “the backbone” of port operations. Flanked by other cruise industry leaders, he warned that no major ports in the US operate without their own fuel bunkering.
A formal mediation process began Oct. 20. PortMiami’s director, Hydi Webb, said the property serves an “essential public purpose.” The port is reviewing options for building a new fueling site and “continues to actively pursue a path for potential acquisition of the Fisher Island site,” she said.
The developers said they were “committed to constructive, good-faith dialogue with PortMiami and Miami-Dade County to advance our shared goal of strategic, sustainable economic growth for the port, the county, and our planned residential development.”
Fuel Alternatives
County commissioners were caught off guard when they were called into a special meeting in September to first discuss the issue. They have been seeking answers from Miami-Dade County Mayor Daniella Levine Cava and her staff, as well as from port leaders, who acknowledged that the issue should have been raised when the property went on the market.
In an Oct. 9 meeting, Cava said officials were studying different alternatives but warned that there weren’t any viable options to replace the facility without hurting cargo and cruise operations.
The port itself is also located on an island, and the county estimated it would need six to 10 contiguous acres (2.4 to 4 hectares) to build a new fueling hub. That kind of space doesn’t exist on the port’s island or the densely populated surrounding areas.
Cava told commissioners that the developers had offered to build and fund a new $200 million fueling facility on the port, although there’s a lack of space. She said that previously they’d offered to lease the Fisher Island facility back to the county at a rate that would have added up to a tally of $1 billion over 30 years.
Miami competes for ship traffic with Port Everglades in Fort Lauderdale, along with cruise and cargo ports in Cape Canaveral, Tampa and Jacksonville. Officials and cruise-line professionals warned that Miami would be at a sizable disadvantage if it loses on-site fuel bunkering.
Commissioner Eileen Higgins, who will compete in a runoff to be the next mayor of Miami, said she was in favor of moving forward with eminent domain procedures, which allow the government to pay a market-rate price for property that’s of critical public interest.
The county is “negotiating with the worst possible scenario,” now that the developers’ land deal closed, Higgins said. “We do not need luxury buildings to ruin this economic vitality that is PortMiami.”