A condominium developer is purchasing the land that is home to the Coconut Grove Bank, bringing another high-rise project to the Grove waterfront and signaling the continued revival of Miami’s luxury real estate market.
The bank’s board this week approved selling the five-acre property to Terra Group, a development firm already in the midst of transforming the nearby Grand Bay hotel into a luxury high-rise condo complex.
Terra plans a similar project at the bank site, which would include a new building for the bank on the property off Southwest 27th Avenue. The existing 1959 building for the bank would be demolished, and replaced with a new bank site closer to the street.
No purchase price was disclosed, but the land is considered the last big chunk of developable land along the Grove waterfront. The property fronts Bayshore Drive and 27th Avenue, two of the Grove’s busiest streets. A highrise there would stand between Biscayne Bay and the Ritz-Carlton. And while the bank’s 1959 headquarters occupies only a small portion of the site, the parking lots behind it stretch for a block onto Mary Street.
“We felt this is one of the best sites that could be developed in Miami-Dade County,’’ said Pedro Martin, a Miami lawyer who runs owns and runs Terra with his son, David. Aside from the new bank building, Martin said the rest of the property likely will be centered on a luxury condominium complex.
He said the current plan is for roughly 200 units in towers that won’t be higher than 20 stories. He said that’s well below the 700 units allowed on the site under Miami’s zoning code. Martin said there aren’t plans for ground-floor shops and restaurants attached to the towers.
“We’re not planning retail right now,’’ he said. “Right now, it’s a very nice residential project.”
The Martins have begun clearing the Grand Bay hotel site to make way for a two-tower condo complex with 100 units. Prices range between $2 million and $6 million. The bank project will also target high-end buyers with construction on the residential complex starting in 2014.
“We think it will help the entire marketplace,’’ Martin said of the planned project. “We’re very bullish on this area. There’s less traffic [in the Grove]. There’s more residential. It has greenery. We have great views.”
The Martins were part of a drawn-out bidding war for the bank site, which went on the market as the local institution dealt with second global financial crisis in its history. The longest operating bank in South Florida, Coconut Grove Bank opened in 1926, a few years before the start of the Great Depression.
The bank’s CEO, Robert Coords, said the transaction made sense for a bank ready to extract cash out of land that mostly sat unused save for parking lots. That meant a hefty tax bill each year for the bank, without much of a return, Coords said. The sale will let the bank “get the value out of the non-earning asset and turn it into an earning asset,’’ he said.
Construction on the new bank building is slated to begin next year, Martin said. In a release, the bank said the new site will front 27th Avenue and include drive-thru lanes and an equal amount parking in a garage.
The bank faced a capital crunch during the global financial crisis, as bad loans mounted from a depressed real estate market. Last year it brought in a wave of new investors, including billionaire medical mogul Dr. Phillip Frost, who bought $32 million worth of shares. That helped ease pressure on the bank, and in September federal regulators freed the bank from a 2010 enforcement action stemming from losses and bad loans.
While a pile of cash on a bank’s balance sheet can be attractive to buyers, Coords said Coconut Grove Bank is not for sale. He described the sale to Terra as “more of a strategic move to grow the bank — certainly not to sell it.”
Building on the site could get complicated. The 1959 building is old enough to be considered a historic site under Miami-Dade’s preservation laws, and is admired by local preservationists. It was designed by the firm of a premiere Miami architect, Robert Law Weed, and is considered a prime example of the same style as the Herald, “Miami Modern.”
“If that’s not Miami Modern, I don’t know what is,’’ said Arva Moore Parks, a top Miami historian and leader of the preservationist movement.