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Written by Mark Sell, BT Contributor; Photos by Silvia Ros   
June 2019

Solé Mia: North Miami must get this right

A new city-within-a-city is being created in North Miami. It’s called Solé Mia. It could transform everything.

ACoverPict just four months, Solé Mia is not only walking. It’s starting to run.

In fact, the $4 billion, 184-acre mega-development, a partnership between the real estate dynasties of the billionaire Soffers of Aventura and LeFraks of New York (hence the name), is off to the races, four years after breaking ground.

Turn east on 143rd Street from Biscayne Boulevard, and the messaging starts, with billboards showing fit, impossibly attractive people in an aquatic paradise, along with exhortations and information in compact Zen messaging:

“Engage. Retreat. Thrive.”

“Eight miles of jogging trails.”

“37 acres of active and passive parks.”

“Make the Most of Now.”

Less than a half-mile further on, an azure vision strikes the eye: the manmade, seven-acre lagoon, Laguna Solé, with Caribbean turquoise waters before an emerald palm forest with a beach of trucked-in sand and high-rise residential towers just behind (a second lagoon is also planned). You can look but you can’t touch. A black iron fence restricts it to residents only.

Strollers, dog walkers, and people on Rollerblades share the broad sidewalk alongside Solé Mia Way. Just behind the lagoon, the twin 17-story Shoreline at Solé Mia towers, which opened February 1, have been filling up fast. The newly relocated Costco is an early success, and the seven-story Warren Henry Infiniti-Jaguar-Land Rover dealership on the north side, slated to open by the end of the year, is touting North America’s largest electric car charging center and a gourmet café experience.

The developers are playing a long game that could be sweetened by new Trump-era “Opportunity Zone” tax law provisions offering breaks in capital gains against future investment. Signed into law as the Tax Cut and Jobs Act just before Christmas 2017, the provisions could well make up for the $100 million they’ve spent on roads, sewers, the lagoon, site preparation, and infrastructure.

CoverStory_1_leadAll the advertising, the tightly controlled messaging, the impeccable curation might bury Solé Mia’s history as a 170-acre landfill that included a 30-acre toxic Superfund site. But none of this can hide it, for the past is both present and future. The development sits atop six million cubic yards of compacted garbage, surrounded by channels, monitoring wells, and injection pumps. The site continues to hold surprises. When crews dig, they still sometimes unearth malodorous souvenirs from the landfill days and move them to remote piles.

But if the developers deliver, can the City of North Miami, which owns the land and has its own confounding past, keep up with this bounding toddler fast growing into a giant? Does the city have the sophistication, depth, and wherewithal to take the best advantage of this economic opportunity?

Those are open questions as the developers throttle up to fulfill the project’s mammoth ambitions: some 4400 residences in 12 towers up to 450 feet tall, with 10,000 people; 1.5 million square feet of commercial and office space; two giant swimmable lagoons; a commercial and community center; a school and a ten-acre UM Health System medical facility slated to open in 2023; an experience-oriented walkable city center with restaurants, a luxe dine-in cinema, and a specialty food retailer.

The location is enviable, directly between Miami and Fort Lauderdale, with easy airport access. It’s within walking distance of David Lawrence K-8, Alonzo and Tracy Mourning High School, and, a mile to the east, FIU’s Biscayne Bay campus. One can go from kindergarten to a Ph.D. without driving.


SCoverStory_2_0279udden as it all seems, it didn’t come with the wave of a wand.

The Richard LeFrak and Donald Soffer families fully entered the picture in 2015, with the site’s groundbreaking. But the City of North Miami has owned this land for three generations and leases 134 acres to the developers (who have also bought 50 acres outright) at about $1.5 million a year on a 200-year lease.

The land’s history has been one of false starts, dashed dreams, and follies, variously envisioned as a golf course, an amusement park, even a climate-controlled indoor ski slope.

The site owes its exalted elevation, on a berm roughly 13-30 feet above sea level adjoining Oleta River State Park, to one misbegotten folly: a 1972 joint venture between the city and Munisport Inc., which envisioned two golf courses, an Olympic-size pool, 16 tennis courts, and a recreation complex.

For two years Munisport filled submerged land with construction rubble and clean fill but started accepting unregulated trash to make money, and then digging limestone quarries as deep as 35 feet, well below the water table, creating eight lakes that the current developers have since filled. The landfill closed, and Munisport went out of business in 1981, earning the site a federal Superfund designation from 1982 to 1999, as government regulators determined how to treat an underground ammonia plume created by the decaying organic matter in the landfill, and keep it from reaching Biscayne Bay. In 1999, the federal government transferred supervision to the State of Florida.

Over the decades, the process has been brutal on potential developers, with the continuing environmental pressures a constant challenge. That has left the Soffers and LeFraks, collectively worth well over $10 billion, as the winners able to stay the course. The City of North Miami has granted Solé Mia permission to develop as it wishes, as long as it adheres faithfully to the master plan approved in 2015.

CoverStory_3_0304The potential tax windfall comes from their successful efforts to secure designation for the census tract around the project, as well as two adjoining tracts just on the west side of Biscayne Boulevard, as federal Opportunity Zones. The IRS presents these zones as a boon for jobs and relief from slum and blight, clarified with new rules that encourage startups and expanding businesses.

Investors in an Opportunity Zone can shelter capital gains from other investments, get a 10 percent capital investment tax rate break after five years, 15 percent after seven years, and pay no taxes on the entire gain if they wait ten years to sell the investment. In other words, if a $10 million investment increases in value to $25 million in ten years, the investor has a $15 million tax-free gain.

LeFrak apparently had a tax-break epiphany in August 2018, after he’d opened his Southampton estate for what Bloomberg in a follow-up news story called one of some “20 power sessions put on by the Milken Institute and hosted by billionaires at their homes.” Part of an annual multi-day fundraiser in the Hamptons for a Milken charity, LeFrak’s breakfast session, titled “Opportunity Zones and U.S. Housing Policy: Taking the Long View,” also featured Treasury Secretary Steve Mnuchin.

Again, according to Bloomberg, the panel compelled LeFrak to rethink what he was doing with Solé Mia: “Some of the biggest potential returns may be found in building office space and relocating companies into the zone, he said in a telephone interview after the meeting.”

“It’s not about the zone, it’s about the opportunity,” he said.

If the Superfund history is justification enough for a “blighted” designation, the forlorn 400-household Highland Village neighborhood (just to the south, part of North Miami Beach) closes the case. It took big beatings from landfill runoff and acrid smoke in a landfill-generated fire a generation ago. It also has a 30 percent poverty rate and a median income of less than $30,000 (see “Hidden Hamlet,” August 2014). North Miami and North Miami Beach, with median household incomes of around $40,000, both also lag state and national averages. 

North Miami Beach has been working to improve the Highland Village community with sewer lines, drainage controls, and street improvements. It sits squarely within the Solé Mia Opportunity Zone, although the developers have no contractual relationship with the community of North Miami Beach as they do with North Miami.


FCoverStory_4_0051or all the woes of the past, the new developers are building on strong legacies.

Pittsburgh developer Donald Soffer, now 86 and still active, bought 785 acres of wetlands in 1967 for $6 million and turned it into the planned City of Aventura. His children, Jackie and Jeffrey Soffer, in their early 50s and entrepreneurs and developers in their own right, are now the principal local partners in Solé Mia.

The LeFraks, in business since 1901, rivaled and surpassed the Trumps in the midcentury, building housing for New York’s working and middle classes, and creating the giant LeFrak City, completed in 1967 on swampy land in Corona, Queens, now recently renovated and still under LeFrak family ownership.

Since 1984, the organization has created the $10 billion Newport mixed-use development atop a 600-acre distressed railyard on the Hudson River in Jersey City, now with 15,000 people living in rental apartments. Newport has transformed the city’s gritty skyline into gleaming towers directly across from Battery Park, which the LeFraks started developing when it, too, was distressed in 1980.

Richard LeFrak, age 73, is a third-generation patriarch in the family business and is now increasingly sharing power with his sons Jamie and Harrison, in their late forties, who are vice chairs and managing partners. Jamie LeFrak recently bought a home in Miami Beach.

As Bloomberg reported in April 2019, LeFrak representatives wasted little time contacting North Miami city manager Larry Spring about the new IRS law. Spring, it turns out, had already been informed of Opportunity Zones and the local potential benefits. After a winnowing process, then-Gov. Rick Scott, now a Republican senator, approved Opportunity Zone designations for the Solé Mia property and the two adjoining census tracts across Biscayne Boulevard, one running west to West Dixie Highway between 135th and 151st streets, the other extending further west from 151st to 163rd streets, mostly in North Miami Beach. Those zones could accommodate a possible transit stop along the light-rail tracks, as well as transit-oriented business and housing developments; these three were the only Opportunity Zones selected for North Miami, out of a list of ten candidates submitted to the governor. (There are 68 Opportunity Zones in Miami-Dade and 8700 around the nation.)

Spring, an accountant by training, estimates that Solé Mia could increase the city’s $3.1 billion tax base by $100 million over the next year or two, adding $750,000 in tax revenue, and could more than double the tax base by the project’s completion. That would translate into another $30.2 million in annual tax revenue and an additional $2.5 million in sales tax revenue. He has called Solé Mia a game changer. For a city on the financial ropes, it could prove a life saver.

CoverStory_5_0045Yet one expert who has consulted both with LeFrak and the city says North Miami will need tough love mixed with iodine, icy water, and perhaps a tourniquet to stop the bleeding.

“North Miami’s got a gift, and they are the entity that can screw it up, because LeFrak and Soffer won’t,” says Frank Schnidman, a recently retired urban affairs professor at FAU and a national expert on public-private partnerships. “If there’s anything to restrain Solé Mia, it will be the incompetence and inexperience of North Miami.”

The city had an election May 14, and budget season is coming. With its $9.7 million deficit showing no clear sign of shrinkage, Schnidman says the city must treat the immediate dangers and opportunities as an emergency.

His three-step prescription: (1) Conduct a forensic audit, pronto. (2) Bring in a panel of wise men and women, perhaps former county manager Merrett Stierheim, and/or a SWAT team from the International City Managers Association. (3) Use a bidding process and find a nationally respected third-party consultant mutually chosen by the developers and city to act as a go-between in negotiations and dealings.

With or without the city, Solé Mia will likely do just fine. But the developers would no doubt prefer to break free of the 200-year ground lease and buy all the land outright.

Solé Mia now has secured access to 146th Street and Biscayne Boulevard with the $17 million acquisition of the old Costco site 1000 feet southwest of the new one. That acquisition effectively gives the developers control of 195 acres and eases the path toward another roadway to Solé Mia Way and the future UM medical center.


TCoverStory_6_0132he two Shoreline at Solé Mia towers, with 397 units and distinct rounded edges designed by Arquitectonica and Robert M. Swedroe Architecture, are billed as luxury apartments.

Rents start at $1750 for a studio and climb to nearly $4000 for a three-bedroom. Most two-bedrooms, with granite counters and up-level appliances, are laid out at just over 1000 square feet and run between $2500 and $3000 a month. These prices therefore target renters making at least $75,000 a year in a city whose median income is around $40,000.

Shoreline’s rental rates are slightly higher, and its units about 30 percent smaller, than those of the 25-story One Fifty One at Biscayne towers just to the north. Those 373 condos, many investor-owned and thus rented out, were built in 2007, not fully occupied until after 2013, and are entirely separate from the Solé Mia property.

The Shoreline makes up for the relatively tight master bedrooms with a rich package of communal amenities: a pool, Jacuzzi, well-appointed fitness center, barbecue area, dog park, first-floor business centers, and rooms for socializing and games.

Just southeast of the towers, near the concession under construction, sits a less publicized feature of the development: a giant water pump circulating a steady stream of freshwater into a deep injectCoverStory_7Carol_Keysion well at least 100 feet underground to dilute ammonia, methane, and other chemicals.

City and county officials periodically monitor those levels using above-ground PVC pipes throughout the site, and check for groundwater contamination. The landfill had little or no curtain to separate it from its surroundings or the earth and porous limestone beneath, so the wells and pipes are first lines of defense, not only for residents but also for the mangroves on which the marine life of Biscayne Bay depends.

The seven-acre crystal-clear lagoon Laguna Solé runs ten feet deep in the middle and is separated from the earth below by a high-density plastic liner about as thick as a dime with a 20-year lifespan and 10-year guarantee.

Entry areas are lined with poured concrete, and were all constructed, as the developers put it, “on layers of clean sand and geofabrics to offset potential differential settlement, in addition to deep dynamic compaction and preload techniques to further stabilize the soil.”

Its water is purified and constantly monitored onsite through a patented system of disinfection pulses and ultrasonic filtration developed by the global company Crystal Lagoons Inc. Founded in 2007 by Chilean scientist and biochemist Fernando Fischmann, the company is involved in 350 projects worldwide. Eric Cherasia, vice president of business development at Crystal Lagoons’ U.S. headquarters in Coral Gables, says the company now has 110 projects in various stages of development in the United States alone.

Solé Mia’s developers say they have relocated and added groundwater remediation wells to ensure the system properly functions, and coordinated with county wetlands officials to add drainage wells to the storm water system to ensure continued wetland protection.

Climate expert Harold Wanless, chairman of University of Miami’s Department of Geological Sciences and an authority on sea level rise, is not entirely reassured.

“The effect of sea level rise on any coastal dump from here to New York City is a very fair question,” he says. “The amazing thing on these Superfund sites is that they let the perpetrator figure out what the problem was and then design their own solution.

“Rising seas create greater pressure,” he adds, “and the limestone they dug into when they created this whole thing is very, very porous. We are getting more extreme flooding plains and have a huge problem coming up. This is a mega-problem that is not being addressed by anybody with respect to sea level rise and storm surge. It’s a problem so big that nobody wants to address it.”

With the developers and the City of North Miami tasked with the solution, they will need help. In 2004 the county granted North Miami $31 million to clean up the site. Of that original grant, $9.9 million remained as of September 30. That is far from the end of it.


SCoverStory_8_0330olé Mia was conceived in a deal with North Miami that was signed in early 2012, with six amendments thereafter.

In retrospect, the 200-year ground lease looks like a horse built by committee. One can only guess what Professor Wanless predicts for the site in 200 years, but the developers are looking at a 15-year horizon.

At the time of the lease, the city was still reeling from the Great Recession, dodging corruption probes under Mayor Andre Pierre, and strapped for cash. It wanted to get the property off its hands after an earlier project led by Boca Developers defaulted.

In 2012, developer Michael Swerdlow, who had owned the property before selling it to Boca Developers, offered the city $19 million to take it back with a 200-year lease deal. The city, stuck in a $6 million budget hole, took the money, replenished its coffers and thin reserves, and spent it.

Swerdlow brought in LeFrak, who then bought out Swerdlow’s interest and brought in the Soffers.

Since groundbreaking in 2015, Solé Mia’s developers have purchased 50 acres at $400,000 an acre, putting another $20 million in the city’s coffers, most of that also since spent. They’re ready to close on an additional 20 acres, giving the city another $8 million, and have signaled their wish to buy five more acres at $500,000 each, or $2.5 million. They tried to close on that offer in April, when the city was in the throes of election campaigns, until city manager Spring called off the deal. The issue will come back soon.

Some residents and civic leaders believe the property is severely undervalued. An inland single-family quarter-acre lot can easily run $100,000 before construction. Many residents complained that this was an 11th-hour, pre-election move.

“The city brought a knife to a gunfight,” says Bob Pechon, a planning board member and leader of the Keystone Homeowners Association. “These developers are smart, and the city was outsmarted.”

North Miami Councilwoman Carol Keys says the developers are simply exercising an option originating from a contract that, for better or worse, is there to be honored. “You can’t renegotiate a contract, but you can find some items subject to negotiation,” she says. “You can try to make a better deal out of a bad deal, but you do not want to micromanage these people. They know what they’re doing, and we are thrilled to have them.”

Keys does say that she would take a more rigorous view of any future land sales with the developers, as the market appreciates.

Also under the terms of the original lease with the city, the developers agreed to donate $2 million to the city for a seven-acre public park and community center.

Twenty-year Councilman Scott Galvin, who represents the Solé Mia property, wants to hold the developers to their word, and made that a central point in his campaign when he was elected to a final four-year term on May 14 with 65 percent of the vote.

“This area needs a park and community center for the greater use of residents,” Galvin said. “I intend to build the case and be ready when the time comes, whether or not I get the rest of the new council to agree.”

Then, too, the city is entwined with Solé Mia in other ways. Under a state Enterprise Fund program, the developers get tax breaks for ensuring that at least ten percent of their hires are city residents and that wages are at a certain level.

Solé Mia is also entirely within the boundaries of North Miami’s Community Redevelopment Agency (CRA), launched in 2006 to recycle tax revenues from newer developments to relieve blight in other sections.


OCoverStory_9_0373f all those involved, Richard LeFrak knows as much as anyone about environmentally troubled properties and moving dirt, with the Newport development as his model.

After Hurricane Sandy struck in 2012, devastating parts of New York and New Jersey, with extensive damage to Newport, LeFrak imported 50,000 tons of fill to raise the elevation of a new tower to comply with new post-Sandy regulations.

Worth an estimated $6 billion today, he’s the son of New York outer-borough housing master builder Samuel LeFrak, who outdid Donald Trump’s father, Fred Trump, in developing housing for the working and middle classes, mostly in Queens and Brooklyn.

The elder LeFrak, known for his flamboyant quotes and fierce negotiating tactics, laid down the LeFrak family motto: “Just be smart and never get caught overleveraged.” He also espoused a philosophy of “mass, not class.” Richard LeFrak reversed the latter formula, going for amenities, but he continued to use conservative financing. Under his leadership, the company has diversified its real estate portfolio to Los Angeles and elsewhere on the West Coast, and in South Florida, where the organization has developed 1 Hotel South Beach.

He has been a close confidant and golf partner of President Trump, and a significant donor to his 2016 campaign and current reelection bid. Shortly after Trump’s inauguration, LeFrak, a member of Mar-a-Lago, said Trump asked him about building a border wall for $20 billion, and LeFrak demurred. At about that time, Trump named LeFrak and Steve Roth, another New York property developer, to head a national infrastructure “advisory board,” which the White House dissolved in mid-2018 amid a federal lawsuit over alleged failures to abide by disclosure rules and White House attorneys’ claims that the group had never acted in an official capacity anyway.

LeFrak is married to Karen Tucker, a children’s book author, and both have given generously to philanthropies. In March 2019, Trump named her, as well as Roth’s wife, to the board of directors of the Kennedy Center.

Jackie and Jeffrey Soffer are each billionaires or mega-millionaires. Jackie and Jeffrey recently split their business interests but retained their stake in Solé Mia while expanding their father’s empire.

Jackie is now CEO and chairman of Turnberry Associates, which owns and manages Aventura Mall, the largest in South Florida and one of the nation’s most successful. She is spearheading the mall’s current expansion and will continue to develop an 800-room hotel connected to the Miami Beach Convention Center. She is active in art, design, and philanthropy. In another dynastic link, she is married to Craig Robins, arts patron and developer of Miami’s Design District.

Jeffrey heads Fontainebleau Development, with a portfolio in hospitality, residential, commercial, and luxury services. He’s also the majority owner of the Fontainebleau Miami Beach, among other hotel and residential projects, and the Big Easy Casino (formerly the Mardi Gras Casino) in Hallandale Beach. (Casinos are not a permitted use in Opportunity Zones.) He separated in 2017 from Australian supermodel and entrepreneur Elle McPherson.


Beyond its boundaries, Solé Mia has a vested interest in the surrounding area. This has extended to lobbying Miami-Dade County Commissioner Sally Heyman for a commuter rail stop at 151st Street. Heyman has announced her preference for that location, which also happens to be in an Opportunity Zone. That could entitle the developers to tax breaks, in addition to local transit-oriented development incentives.

But North Miami mayoral candidates and city council members have held out for a train station and transit development at NE 123rd Street and NE 14th Avenue, arguing that 123rd and 125th are major cross streets, and that a rail stop there is closer close to downtown North Miami.

That contentious issue is one of many that may lie ahead for the public officials and the private developers. But Frank Schnidman, the expert on public-private partnerships, sees unprecedented opportunities. This is the time, he contends, for North Miami and Solé Mia to think creatively and fashion new rules that balance profit and philanthropy.

“I see a better future for Solé Mia and North Miami than ever before,” Schnidman says. “Solé Mia can reinvest its profits into the city. There’s a lot it could do -- gut-rehab affordable housing in apartments in the middle of the city, provide training and paid internship opportunities, and step in to help improve public facilities and programs, whether it’s academics, the arts, or recreation.

“Solé Mia can be what it is supposed to be -- the catalytic project to re-create the entire City of North Miami, and a catalyst for honest, responsive government,” he adds. “The developers can do for this area what Andrew Carnegie did for Pittsburgh when he gave back to the place that made him one of the richest men in the world.

“The LeFraks and the Soffers will make a fortune from North Miami. If they spend enough there, they’ll be heroes.”

 

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