|By Matthew Haggman, The Miami Herald|
Knight Ridder/Tribune Business News
Dec. 14, 2004 - Developer Jorge Perez has paid $94 million for the waterfront Sheraton Biscayne Bay hotel on Brickell Avenue, which he plans to demolish to make way for a mixed-use project that will include high-rise condominium towers.
The 598-room hotel will stay open for at least six months while plans for the project are developed, said Perez, chairman of Miami-based Related Group of Florida.
The Sheraton will continue to manage the property, he added.
The 5.1-acre property at 495 Brickell Ave. stretches to Biscayne Bay. The sale price is the highest total price Perez has ever paid for land.
Flanking the hotel are the Miami Circle, a protected Tequesta Indian site, and the 2.2-acre Brickell Park.
Springfield, Mass.-based MassMutual Financial Group sold the property to Perez.
Manuel de Zarraga, executive managing director of Holliday Fenoglio Fowler in Coral Gables, led the team that brokered the sale, which closed Friday.
Meanwhile, Perez is negotiating with the Brickell family to end their long-running lawsuit with the city of Miami over who controls Brickell Park. Both the city and the family at times have sought to sell the park to developers.
Perez, who says he wants to re-landscape the park, said he is offering "several million dollars" to the family if they drop their lawsuit against the city. Since 1988 the Brickell family and the city have been locked in litigation over control of the land, which has created uncertainty about the park's fate. Perez is bidding to end the lawsuit and ensure he will forever have open parkland on each side of his new development.
But, in a move that could prompt resistance from Brickell area residents, Perez is also asking that he be allowed to use a portion of Brickell Park as a staging area while the Sheraton hotel is demolished and the mixed-use development is constructed.
Miami City Manager Joe Arriola said he supports such a deal. "As long as he rebuilds the park, I am fine with it," he said.
Miami City Commissioner Johnny L. Winton also expressed support, calling the potential deal a "win-win" for Related, the Brickell family and the city. But Winton insisted that part of the park must remain open during demolition and construction.
Attorney Robert E. Gallagher Jr. of Stearns Weaver in Miami, who has represented the Brickell family, did not return calls for comment.
The sale of the property near the mouth of the Miami River is yet another indication of developers' ongoing bullishness for the South Florida real estate market.
Just in the city of Miami, nearly 50,000 condo units are in the pipeline to be developed, according to a November report by the Planning and Zoning Department. Perez's Related Group is among the biggest high-rise condo developers in the country with some 47 projects under construction or development.
Yet Related has never written such a big check for land.
The most Related previously paid was $52 million for a portion of South Pointe in Miami Beach on which it developed the Murano Grande condo tower and is developing the Icon condo, said Perez's longtime lawyer, Matthew B. Gorson of Greenberg Traurig in Miami.
Hotel revenues won't cover Related's loan payments but will "greatly reduce" its costs, Perez said. Related Group of Florida has not previously owned a hotel.
Perez said current zoning allows him to develop more than two million square feet of space.
Promising a "signature" project on Brickell Avenue, he said the development will have both residential and retail components.
Tom Daly, Perez's business partner, said office space and a hotel are also possibilities.
Miami architectural firm Arquitectonica has been hired to study the parcel's "preliminary possibilities," Perez said.
Meanwhile, Perez said he isn't worried about finding artifacts from the Tequesta Indians on the property.
A planned high-rise development on the adjacent property was scuttled when scientists discovered the Miami Circle there.
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