“Miami is a little bit of full circle,” said Burke, whose father is American, mother is French, and who grew up mostly in Germany. “So Miami is not foreign to me. Even though I am the CEO of a fashion company, I know a little about Florida and Miami real estate.”
Burke, who was formerly chief executive of Fendi, met Robins through another of Robins’ projects, Design Miami/. The annual design fair held in Miami Beach and Switzerland, owned in partnership with Art Basel’s parent company, originated in the Design District in 2005. Looking to connect his fashion house with design, Burke made Fendi Design Miami/’s lead sponsor in 2009. Through that connection he learned about Robins’ idea for redeveloping the Design District.
“I thought maybe if we joined forces we could speed this up,” said Burke, speaking by telephone from New York recently. But the project would have to be “scaled up by a wide margin” if L Real Estate were to co-venture, he said.
So Burke brought Robins to Paris to meet with Arnault, Mathieu Le Bozec and Patrick Houel, managing partner and chairman, respectively, of L Real Estate.
“Mathieu and Patrick kept saying ‘No, it doesn’t fit our criteria,’ from a size point of view, and the U.S. was not on their map,” Burke said. “Asia, the Middle East, China, had been identified by the fund to invest in, and the U.S. was definitely not part of the horizon for the fund,” he recalls.
But Burke felt that of all the major U.S. markets, only one was “under stored:” Miami, meaning there was less retail square footage than buying power — especially in a city whose streets are clogged with expensive cars and where multi-million dollar penthouses have become commonplace. Yet the local bastion of luxury stores, Bal Harbour Shops, had space limitations and a “radius clause” that prohibits tenants from opening another store within a certain distance.
“Miami is not the Midwest. It is a world city. It’s the de-facto economic capital for all of South America, a banking capital, a trading capital and a transportation hub, and it happened to be under-stored,” Burke said.
Though he credits Bal Harbour’s owners, the Whitman family, as visionaries for developing the luxury shopping center 47 years ago and creating the radius clause, he said the restrictive clause has since “outlived itself.”
“We need to fulfill the desires of our clients and need more than one point of distribution in Dade County,” Burke said. “And we suggested to the Whitmans that they allowed a controlled way for us to open up another means of distribution and they were reluctant to do that.”
Matthew Whitman Lazenby, president and chief executive of Whitman Family Development, defends the radius clause as a common industry practice. But Lazenby, the grandson of Bal Harbour Shops’ founder Stanley Whitman, acknowledges that Bal Harbour Shops has been strapped by its size; until a planned expansion opens in three years or more, Bal Harbour is unable to offer many tenants expanded stores of 10,000 to 20,000 square feet.
Meanwhile, LVMH was not about to sit still and wait. Burke was busy convincing L Real Estate’s leaders of Miami’s potential — and Robins’ vision.