Miami delays vote on $29M sale of Watson Island site. Commissioners need more info
Miami commissioners are not ready to approve the $29 million sale of a property on Watson Island, saying they need more information before selling the land to a developer that plans to build two luxury high-rise hotel and condo towers in a deal that some residents have criticized as a “giveaway.”
On Thursday, the City Commission voted 4-1 to defer a vote on the sale of the 3.2-acre site on the south side of Watson Island to IG Luxury, a subsidiary of the developer, BH3 Merrimac. Commissioners Miguel Angel Gabela, Ralph Rosado and Joe Carollo voted for the deferral, as did Damian Pardo, the item’s sponsor. Commissioner Christine King was the lone no-vote.
Carollo, who is termed out next month, referred to Watson Island on Thursday as “the most valuable piece of property anywhere in the city of Miami limits.”
“I don’t want to stop this development,” Carollo said. “I want them to go forward and make their money. But I want to make sure that the city is getting a fair shake for the future.”
The proposed sale follows a ballot referendum that Miami voters passed in November 2024 approving the land sale. The sale price was to be determined, but the charter amendment stipulated that it must be fair market value and no less than $25 million.
But a recently commissioned city appraisal found the property could be worth far more than the $25 million floor voters approved last November. That appraisal, finalized in a report this week, found that the land overlooking Biscayne Bay is worth between $257 million and $342 million, depending on the level of restrictions on development.
The $257 million valuation was based on “the development agreement terms reflected by the development plans provided, and confirmed in communications with the City of Miami, which require the property to include hotel and hotel residence units.”
The $342 million valuation was based on a situation where “a developer would be free to choose the development scenario that would optimize their return,” the report said.
But that same appraisal found that an existing long-term lease between the city and the developer on the site is worth $28.9 million. So through the deal, rather than paying for the land itself, the developer would effectively be buying the city out of the lease. As a result, the lease would be nullified, and ownership of the land would transfer from the city to IG Luxury.
Nitin Motwani, one of the principals of BH3 Merrimac, agreed with Carollo’s assessment that Watson Island land is valuable.
“We want to see Watson Island happen. We agree it’s great real estate, commissioner,” Motwani said. “The joke or the rumor that there’s a curse on this island feels more and more real every day. Because it’s been three years now, and every time we’re making two steps forward, we end up making three steps back.”
The city had previously leased the land to Flagstone Property Group, a different developer that was planning another project on the site. The Flagstone project ultimately fell through, and in 2023, BH3 bought the city lease from Flagstone for an undisclosed amount.
City Manager Art Noriega, a proponent of the sale, said the existing lease “encumbered” the land, reducing its value significantly. He told the Miami Herald on Wednesday that the $29 million price tag is “absolutely” fair.
Motwani and Greg Freedman, also a BH3 Merrimac principal, said in a statement before the vote that “the property is subject to existing restrictions limiting what can be developed.” They added that the $29 million purchase price “far exceeds” the $25 million floor that voters approved and noted that the referendum also requires them to give the city $9 million to be used for affordable housing and more.
“BH3 Merrimac has already invested more than $110 million in acquiring the lease rights and making infrastructure improvements to the property ahead of development,” Motwani and Freedman said. “Once this sale is approved by Commissioners, BH3 and Merrimac will proceed with developing the mixed-use destination that voters approved in November of 2024.”
READ MORE: A village on the bay? Miami voters to decide on $2 billion projects for Watson Island
But not all residents were convinced.
“Don’t take part in the biggest sellout in city of Miami history,” resident Gregory Frankel told city commissioners Thursday. He urged them to defer the vote and renegotiate the deal.
Miami activist Elvis Cruz told the commissioners to “do the right thing” and “save Watson Island from greedy developers.”
“The political legacy you save might just be your own,” Cruz said. “Don’t you want the voters to like you?”
Resident Albert Gomez called it a “massive land giveaway.”
“How can we justify handing over a public treasure at a steep discount?” Gomez said. “Let us instead demand a fair market value, let the city and its people see the proceeds, and let the asset service the public, not just private interests.”
By late afternoon, the commissioners weren’t confident enough to move forward with a vote that requires four-fifths approval.
Gabela said he has a responsibility to taxpayers and that he needed to be walked through the information more thoroughly, and Carollo similarly said he needed the city to provide more numbers before he could move forward. Rosado asked for the deferral, also directing the administration to provide a one-page document ahead of the next meeting on Dec. 11 summarizing the deal.
King was the only vote against waiting until next month.
“We have been going through this for years,” King said. “We negotiated an extensive community benefits package and — fun fact — the voters voted for this. This is not something that we’re making up. This is not something that we’ve taken on ourselves. This is a referendum that was approved by the voters. Not us.”
The deferral means the item will come back to the commission at Carollo’s last meeting before his successor is sworn in. There’s a runoff election for mayor and the open District 3 seat on Dec. 9, but the winners won’t be sworn in until the following week, according to the city clerk.
Next month’s commission meeting could also be the last for Noriega, the city manager, depending on whether the next mayor decides to replace him and how swiftly.
An approval by the commission would give the green light to BH3 Merrimac, which plans to build two high-rise towers containing hotel rooms and condo units on the site on the south side of Watson Island. The north side is the location of the Jungle Island site being developed separately by David Martin’s Terra and ESJ Capital Partners, doing business as Ecoresiliency.
Voters last year also passed a ballot question for the $135 million sale of that 5.4-acre site to Ecoresiliency. Some critics have pointed to the disparity in the price that Ecoresiliency paid for Watson Island land compared to the proposed $29 million sale for BH3 Merrimac’s site, even taking into consideration the difference in acreage.
BH3 Merrimac and the city have said there are multiple factors that contribute to the price difference, including the existing lease that puts limits on the property and further restrictions on development beyond those imposed on the Jungle Island site.
Reached for comment on the price difference, an Ecoresiliency spokesperson said the group has no position on the BH3 Merrimac deal, “as we were of course not engaged in that process in any manner, aside from our commitment to collaborate to make Watson Island connectivity and walkability improved for all pedestrians.”
“We believe that both matters are quite disparate, both in size, scope and benefits to the community,” the spokesperson said. “We moved forward with our proposal which was embraced by City of Miami residents, and we continue to work on finalizing plans for the extraordinary transition of the Ecoresiliency component of Watson Island.”
In a statement after the vote, Motwani and Freedman of BH3 Merrimac said their project, now in the pre-development phase, “will unlock a host of community benefits, including the creation of a publicly accessible promenade on Biscayne Bay.”
“This is an important project that will help shape Miami’s waterfront for generations, and we appreciate the Commission’s desire to spend three more weeks studying the plan,” the two said. “Once the Commission approves this plan, our team will have invested approximately $150 million for the rights to develop this site.”
This story was originally published November 20, 2025 at 6:56 PM.
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