|By Douglas Hanks III, The Miami Herald|
Knight Ridder/Tribune Business News
Dec. 6, 2004 - Sure, the tranquil harbor waters between Miami and South Beach -- home to Fisher Island, Star Island and Shaq -- are a nice place to live. But how many people will want to visit there?
That's the question facing Mehmet Bayraktar as he prepares to convert Watson Island into the Miami area's newest resort, Island Gardens. On a sleepy 87 acres of land just off downtown Miami, the Turkish developer plans a pair of hotel towers with some 600 rooms, high-end shopping and dining, and a mega-yacht marina capable of tending to the world's largest pleasure crafts.
There's no question he has geography on his side. The city-owned island is flanked by majestic cruise ships to the south, skyline sunsets to the west, and South Beach nightlife to the east.
But location alone hasn't created a tourist trap on the island.
Parrot Jungle moved there last year and has been disappointed at its inability to lure cruise-ship passengers from the port docks just across the harbor. The Miami Children's Museum is there, too, but 80 percent of its visitors are locals. And the rest of the island is vacant, save for a sea-plane terminal and a pair of weathered fish markets.
"The view is nice and all that, but there's nothing else going on," said Scott Brush, a Miami tourism consultant.
Industry experts say the waterfront location and expansive views will go a long way to filling any hotel that opens on Watson Island, but not far enough. It lacks the beach that has families flocking to places like the Fontainebleau and the Eden Roc, the nightlife that makes South Beach a glitzy destination, and the financial district that fills downtown Miami's hotels with business travelers.
"It certainly needs additional uses to be more competitive," said Scott Berman, the PricewaterhouseCoopers analyst whom the city of Miami hired to score developers' Watson Island proposals in 2001.
"The key here is to create a destination."
Bayraktar, chairman of Flagstone Property Group, sees the good life -- that is, the 50-slip mega-yacht marina -- as the primary tourist magnet for Island Gardens.
The ogling that comes with a 120-foot power boat docked nearby -- the kind that often has a helicopter on the deck and a piano down below -- would create a ritzy cachet for Watson Island that would lift both the hotels and the 221,000 square feet of shops and restaurants on the ground floors.
"You are offering South Beach buzz," Bayraktar said, "much closer to downtown." Indeed, he's counting on Watson Island's straddling location -- not Miami, not South Beach -- thriving on its own. Families will have Parrot Jungle and the Children's Museum within walking distance, and a promenade of restaurants, bars and shops to entertain adults. And the steady stream of cars over the MacArthur would make Island Gardens an easy stop on the way to South Beach, though questions remain about how the island could handle the traffic that comes with being a major tourist attraction.
Bayraktar, whose family owns a conglomerate of companies in Turkey, including a hotel and marina complex in Istanbul, won a city contract to develop Watson Island in 2001 after city officials said they wanted to end Fort Lauderdale's domination of the region's $561-million mega-yacht industry. The yachts, defined as 80 feet long and up, are seen as significant economic engines for the wealthy passengers coming with them.
"It will create its own critical mass," City Commissioner Johnny Winton said of the yacht facility.
But if the marina is what drove the city to turn over prime waterfront to a private company, it's the rest of the Island Gardens plan that would generate Bayraktar's profits. Yacht owners tend to stay onboard and boats of that size often fuel up elsewhere, so Bayraktar expects the marina to account for less than 10 percent of his bottom-line earnings.
On top of that would come a one-time windfall from the sale of 105 time-share units, branded as "fractionals" for being sold off in seven-week shares rather than the industry standard of one-week ownership. He has yet to announce a hotel operator but said both towers, with 500 rooms in all, will carry luxury prices -- typically $300 a night and up.
Bayraktar declined to provide updated financial projections, but documents he filed with the city in 2001 predicted annual revenues of $103 million after five years of operation.
That a private developer could generate hundreds of millions of dollars off public land has drawn plenty of criticism. Two residents of nearby Biscayne Island -- whose southerly views are threatened by the 48-story and 37-story Island Gardens towers -- have sued to overturn the city's approval of the project, claiming the heights violate zoning laws. Voters approved the Flagstone project in a 2001 referendum.
Flagstone plans to open the hotel in 2007, and the lawsuit stands as one of the last hurdles Bayraktar must clear before starting construction on the site. Financing is another, though he said negotiations with major lenders are proceeding nicely. Miami-Dade County granted final approval of the marina last week, though federal permits are still needed.
Political hazards have always been the most perilous when it came to Watson Island. Miami spent much of the 1980s and '90s entertaining a succession of development proposals there, each collapsing under the weight of public opposition or ill-fated plans.
In the latest round, Miami invited developers to submit their proposals for Watson Island, this time granting permission for a large hotel as a financial incentive. Flagstone offered to pay Miami at least $2 million a year in rent, plus 1 percent of all revenues.
The surging hotel market -- occupancies and rates hit record numbers this year -- has Bayraktar and city officials confident Island Gardens is destined for success. But the island has had a slow start in its new life.
Once secluded in Pinecrest, Parrot Jungle has found its first year on Watson Island a bit disappointing.
Though the 480,000 attendance figure for the Jungle's first 12 months is up almost 50 percent from the draw at its former home, it's below the 750,000 visitors owner Bern Levine said he wanted for the jungle's kick-off year. Jungle executives blame the shortfall on both opening year hiccups and the park's failure to lure a significant stream of cruise passengers over to Watson Island.
Levine sees the problems as more wrapped up in the chronic struggle to convince cruise-ship passengers to extend their Miami stays.
Still, if any attraction seems positioned to succeed with that sector, it's one within sight of the ships like Watson Island.
And Levine promises Watson Island will, particularly once Island Gardens puts the destination on the map.
"It's a phenomenal location," Levine said. "This is like the greatest location on the East Coast."
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