Developers chase a drug rehab center’s prime land in a once-seedy area

Beneath Edgewater’s looming condo towers, an aging drug-rehabilitation center housed in a converted motel — a last relic of this gentrifying neighborhood north of downtown Miami — is preparing to sell out.

The Village South substance-abuse treatment program opened in the 1970s, when drugs, crime and the sex trade made Edgewater a place few outsiders dared tread at night, unless they bore hearts heavy with sin. Now high-rises have replaced the crumbling apartments and seedy flop-houses. The streets around the rehab center teem with construction crews. Like alchemists’ gold, Edgewater has transformed into a magnet for foreign investors and local workers seeking sleek urban condos without hefty Brickell rents.

Owned now by a national nonprofit, the innovative and well-respected Village knows the cold, hard value of its land at Northeast Fourth Avenue and Northeast 31st Street — and Miami Beach developer Russell Galbut is ready to pounce.

Galbut says he’s nearing a deal to buy the Village’s 110-bed rehab facility and two nearby properties it owns for an as-of-yet undisclosed amount. The Village won’t comment on the price tag, either. But it did confirm receiving past offers of roughly $12 million.

Closing is expected in the next few months, pending approvals from Miami-Dade County and the city of Miami. For Galbut, one of the area’s biggest property holders, it’s a long-term play in a booming location.

“I don’t think anything is going to happen this cycle,” because of Miami’s cooling real estate market, Galbut said. “But Edgewater is just in the heart of everything. You have to view the Biscayne Corridor as the center of our community. I don’t think anything is growing faster than the area from Brickell to Edgewater.”

Galbut’s Crescent Heights development firm has submitted plans to Miami-Dade County to combine the smaller parcels that make up the Village’s main facility into one plot of 30,225 square feet suitable for redevelopment. Zoning allows for towers as tall as 36 stories. The real estate blog Next Miami first reported the plans had been filed.

A new home

The question for the Village is: Where will it go now? Few neighborhoods will welcome a drug treatment facility with open arms, even though experts say such services are essential. It’s an old song with a well-worn chorus: Not in my backyard.

The current two-story facility sits on prime land just a block from Biscayne Bay at 400 NE 31st St. Just to the east, Miami’s biggest condo developer, the Related Group, is building Paraiso Bay, a waterfront complex with towers more than 50 stories high. Next door, a Latin American development team has assembled parcels of land for a planned condo project called Naranza. The commercial corridor of Biscayne Boulevard lies a block to the west. Seen from across the bay, Edgewater is a forest of cranes.

“This neighborhood was drug-infested, prostitute-infested,” said Frank Rabbito, deputy chief operations officer for WestCare, the Nevada-based nonprofit that acquired the Village in 2003, and a former director of court services for Miami-Dade County circuit court. “We were like a beacon of light. We’ve done a lot over the course of the years to make this area more safe.”

 

 

The Village offers both residential and outpatient services to those struggling with drug and alcohol abuse. Many are sent by Miami-Dade County Drug Court, a program that allows non-violent, non-habitual offenders the chance to get clean and erase their criminal records. Others check themselves in to dry out. The average stay is about 90 days. The Village is also one of the few programs in Miami-Dade that lets parents bring their children with them into treatment. That means families can stay together instead of being broken up in foster care.

Drug abuse remains a major problem in the United States. Nearly one in 10 Americans have battled a substance abuse disorder in the past year, according to the National Survey on Drug Use and Health.

The center is one of the largest in South Florida. It employs about 200 people with a payroll of $8 million and relies on a combination of state, local and federal funding. And it receives more public money than any other substance-abuse treatment program in Miami-Dade, Broward and Monroe counties.

But its main facility — once the Seahorse Motel — is outdated and inefficient, Rabbito said. Property records indicate the structure dates to 1919, although it has been extensively renovated several times and looks far newer. (Patients still use the motel’s pool and can sign up for swimming lessons.)

The other two Village properties are located at 3031 NE Fourth Ave. and 3050 Biscayne Blvd.

Galbut’s firm owns more than a block of properties just south of the Village’s Biscayne Boulevard site, roughly eight acres of land. Much of it is parking lots and aging office buildings and shops. A major redevelopment is in the works. The city requires developers to hold a minimum of nine acres to qualify for a so-called special area plan that allows for more density.

“We’re planning a whole community,” Galbut said. “It will be a little bit of everything. … We’re not ready yet [to discuss it publicly].”

For the Village, a sale could provide the funds for a fresh start.

“We’d like to have more outdoor space and larger apartments with more modern bathrooms and a larger dining facility and kitchen,” said Rabbito, who added he believes most of the developers in the area would be happy to see the Village go. “When you’ve got people spending a million dollars for a condominium, a drug-treatment program may not fit in well.”

The center’s three properties have a total market value of about $10.5 million, according to the Miami-Dade Property Appraiser. Some single-family homes and low-rise apartments remain to the north and south. But many have been torn down and turned into high-rises.

With more density come more people and cars. The area that includes Edgewater, Wynwood and Midtown has seen its population grow to an estimated 17,649 in 2016, up 57 percent from 2000, according to Miami’s Downtown Development Authority. Homes in the area rent for an average of $2,220, up from $1,640 in 2010, according to real estate website Zillow.

Attorney and mental-health professional Matthew Gissen operated the Village from its opening until the acquisition by WestCare three decades later. He said he chose the neighborhood because the city of Miami only allowed residential treatment centers in low-income, high-crime areas. Now, Edgewater is nearly unrecognizable. And when the Village leaves, so will one of the last reminders of its rough past.

“The changes were slow to come,” Gissen said. “I hoped it would take 5, 10, maybe 15 years to clean up. But it takes a lot longer than you think.”

Not in my backyard

Finding a new location for the Village won’t be easy, especially since the facility wants to stay in pricey downtown, close to service providers and the courthouse. Neighbors often protest when drug treatment centers and other facilities that serve the needy want to move in.

In Miami Beach, residents of well-off Normandy Isle fought off a proposed detox center, saying it would decrease property values and disturb a largely residential neighborhood. The city’s planning director denied the project, leading to a lawsuit from the developers.

And Miami Commissioner Keon Hardemon expressed doubts when a shelter for battered women and children sought to expand in an area of impoverished Overtown slated for commercial development.

“[W]hat happens is Allapattah and Overtown become the dumping grounds for the homeless,” Hardemon’s chief of staff James McQueen told the Miami Herald in April.

(Hardemon ended up supporting the project after the shelter said it collected a petition with the signatures of hundreds of immediate neighbors.)

Academic research on the subject is mixed. One study from Johns Hopkins University researchers showed that in Baltimore liquor and corner stores attracted far more violent crime than rehab facilities. Another paper from Longwood University found central Virginia homes near residential treatment centers lost 8 percent of their value.

“Everybody wants great healthcare, great substance abuse treatment, but not in their backyard,” said Jeffrey Rosinek, a retired judge who led Miami-Dade’s drug court between 1999 and 2008.

Many of the 20,000 defendants who came before his court — established in 1989 as the first of its kind in the nation — ended up in treatment at the Village.

“It was an excellent program,” Rosinek said. “We got incredible results from people going there. In fact, a number of people working at the Village now went through the drug court. It changed their lives.”

Rosinek said the Village is especially important in diverting young people from a life of substance abuse and prison. About a decade ago, he recalls, the center held a prom for the teenagers in its care, helping struggling young adults feel like care-free kids again.

“They are given a chance to not destroy their lives,” he said. “You get arrested, it’s on your record forever. If you’re convicted you lose the opportunity of getting Pell grants to go to college, of getting a decent job.”

Tight window

The Village will have three years from the time the deal is signed with Galbut to vacate the properties. Rabbito hopes Miami-Dade County can help it relocate to public land, most likely in Overtown or Liberty City. Permitting issues with the city of Miami will also have to be dealt with, including a right-of-way issue over a utility pole and a dispute about a license for an in-house day-care facility.

Three years sounds like a long time but zoning restrictions on drug-treatment facilities could make for a tight race to the finish, said John Dow, president and chief executive officer of the South Florida Behavioral Health Network.

The nonprofit is tasked with distributing state and federal funds to pay for mental health and substance-abuse treatment for residents of Miami-Dade, Broward and Monroe counties who can’t afford it. In 2016, that amounted to a budget of $83 million.

Dow, who was not aware of the pending sale, said the Village receives more money than any other substance-abuse treatment program in the region: Roughly $6 million, he said, but he was not able to immediately provide exact figures.

He also said he would ask the Village to consider leaving the downtown Miami area it has called home for so many years. Other parts of Miami-Dade are in desperate need of drug rehab services, he said, particularly the outlying Kendall suburbs, where many people are moving.

“We’re going to want to weigh in on where they put the facilities,” Dow said. “West Kendall is the area that needs treatment the most.”

Miami Herald staff writers Joey Flechas, Andrés Viglucci and David Smiley contributed to this report.

This story was originally published December 28, 2016 at 4:26 PM with the headline "Developers chase a drug rehab center’s prime land in a once-seedy area."