Miami-Dade County

Flagstone touts progress on Watson Island, seeks changed plans

A rendering of the hotel, retail and mega-yacht marina project proposed by Flagstone Island Gardens. Dredging of the marina is under way, and the developer says the first phase of the project will open on time in December 2015.
A rendering of the hotel, retail and mega-yacht marina project proposed by Flagstone Island Gardens. Dredging of the marina is under way, and the developer says the first phase of the project will open on time in December 2015. Flagstone Island Gardens.

On the western edge of Watson Island, where dreams of a South Florida Shangri-la have withered for more than a decade, construction workers in orange and green vests are milling about a dusty lot on a brisk December morning, shoring up a seawall.

Rusty barges idle offshore, carrying cranes that haul muck from the bay bottom. A lone vessel putters about inside a circumference of yellow, inflatable turbidity curtains that wiggle on the disturbed surface of a turquoise Biscayne Bay.

After 13 years of inactivity, these are the first visible signs of progress for Flagstone Island Gardens, a project that is known more for broken promises and blown deadlines than the shops, luxury hotels and mega yacht marina that sold Miami voters on the developer’s 45-year lease in 2001. But amid a wealth of skepticism, Flagstone’s representatives are touting the work as proof that Turkish developer Mehmet Bayraktar is finally moving forward with the project, even as he’s still trying to change details of what he can build.

“People were wondering, is it going to happen? Is the project going to get done?” said Brian May, a Flagstone lobbyist. “People don’t have to wonder. It’s coming together. It’s getting done.”

If that sounds familiar, it’s because it’s been said before. Since getting the go-ahead from voters for the lease of 24 upland and submerged acres to build the hotels, shops, the marina and other uses, Flagstone’s project has stalled repeatedly. Promises to meet deadlines fell short, and the city approved several extensions and changes in the site plan and ground lease. In June, Flagstone said it had for the first time met a deadline to begin construction, arguing amid some guffawing that sending divers to map and survey protected corals and sea grasses that needed to be removed met the criteria in its contract.

So despite the developer’s assurances, and ongoing dredging, there remain high-powered skeptics who are wary of what’s happening at what may be the city’s most valuable chunk of undeveloped land, and not without reason: there are no cranes in the sky, no pilings in the water, no hotel flags, no equity partners and no building permits pulled with the city.

Meanwhile, Flagstone continues to make alterations to its nearly 18-month-old application to modify its 2007 Major Use Special Permit that lays out what it is allowed to build on the site. On Friday, the developer submitted another revision as part of its application for an administrative approval for its new plans, to the dismay of Miami Mayor Tomás Regalado.

“What I’m concerned is they keep changing, keep changing, keep changing the plans,” Regalado said. “This land is priceless and it’s time to come up with a real plan, not keep changing it.”

May and Miami’s Planning and Zoning Department say the plans hold only minor, mostly aesthetic modifications that are being reviewed in-house by staffers because they don’t increase the intensity or density of the project. But critics question whether that’s true, pointing to a series of revised plans that until the latest submitted Friday showed the amount of parking increasing at one point by 60 percent, and laid out the existence of 140,000 square feet of previously undisclosed restaurant and retail “hotel ancillary” space by the public promenade.

Stephen Herbits and attorney Sam Dubbin, who have sued repeatedly to stop the project and force the release of public records like property appraisals and traffic studies, say emails and previous revisions suggest the city has worked with Flagstone to reduce the size of a growing project — but only on paper.

“The latest proposal is a Trojan Horse for the City of Miami to allow the same massive increases in commercial and retail activity that the Related Group proposed in 2013, which it withdrew once the details of the traffic nightmare it threatened were finally disclosed to the public,” said Herbits, who lives on an island to the north of the project.

Though it’s not well known, Flagstone has been trying to tweak its plans since September 2013. Those first redesigns were submitted just weeks after uber-developer Related Group and Miami Dolphins owner Stephen Ross pulled out of a joint effort with Flagstone to jump-start the project by adding hotel rooms, an expo center and doubling the retail and restaurant space.

Related CEO Jorge Pérez and Ross announced their exit in August of that year after Miami Beach officials and residents went ballistic over concerns the MacArthur Causeway would become gridlocked. Flagstone, once again on its own, quickly announced it would pursue a project “with a more conventional plan consistent with Flagstone's pre-existing approved design.”

And one month later, the developer submitted plans to change the project once again.

In the latest plans, valued north of $600 million, much remains the same, according to Flagstone and Miami’s planning staff. The two hotel towers are 375 and 535 feet tall with the same number of rooms. The number of slips to accommodate yachts of up to 400 feet remains at 50. The mall on the eastern portion of the property holds steady at 221,000 square feet of retail and restaurants. The plans maintain a public space and promenade that take up more than half the site, and the project footprint remains the same.

But the developer is acknowledging the hotel ancillary uses and changing its parking garage, which previously stood at seven decks on the northwest corner of the island. Now it has been reduced to two levels beneath the project’s pedestal. The number of parking spaces in Friday’s plans increased by only about 100 spaces.

Previous plans showing a jump from 1,500 required parking spaces to 2,400 were the result of a calculation error by Flagstone, Miami’s deputy planning director Cesar Garcia-Pons explained this week after The Herald began asking questions about the increase.

In fact, Garcia-Pons told The Herald that what appeared to be significant increases in commercial and parking space are mostly changes driven by Miami’s new zoning code, Miami 21. He said his office hasn’t collaborated with Flagstone to keep its project behind the scenes, as Herbits alleges, but rather has provided guidance as it would with any applicant.

“The building is the same and the uses are the same, it’s just that Miami 21 sees them differently,” said Garcia-Pons. “If the new code would have reviewed the old project it would have been very similar.”

May, Flagstone’s lobbyist, said the developer is reviewing its plans not to expand them, but to give itself a chance to improve upon plans last approved seven years ago, when Miami was a different place.

But Miami Beach Mayor Philip Levine remains wary. He said the city continues to watch what happens on Watson Island, though he was unaware Flagstone had applied for a modified permit.

“This thing seems to change all the time. It’s a little bit like trying to herd cats,” he said. “You get different, conflicting stories.”

Lyle Stern, a prominent Miami Beach real estate broker who worried last year that Related’s plans would harm South Beach business, said if Flagstone deserves another look at its plans, the public should be afforded one too.

“It might be great,” he said of Flagstone’s plans. “But these are things that are going to impact us a long time, so let’s make sure. We shouldn’t be afraid to do these things in the daylight.”

Flagstone, meanwhile, is pushing forward with marina work. The developer has until Nov. 29 next year to finish the marina or face penalties for blowing its deadline once again. Regalado told The Herald he would not support another extension. Work on the retail and parking facilities has to begin by September 2016.

Flagstone General Counsel Nathalie Goulet told The Herald that Mehmet Bayraktar expects to have the marina open by December 2015, just in time to welcome massive yachts as Art Basel rolls into Miami Beach. The marina, even after 13 years, is considered a boon by city officials. Marine industry experts say one 200-foot yacht can pump as much as $8 million into the local economy over one year.

Flagstone has its county environmental permits. The developer isn’t yet obligated to pull city building permits, according to an email from Miami’s director of public facilities.

Once the project is completed, Flagstone will have to pay the $2 million yearly rent it promised back in 2001, when the land was worth far less. Recent appraisals suggest Flagstone should be paying $7 million annually to comply with a requirement in Miami’s charter that waterfront land be leased out at fair market value, but Miami officials have declined to push the issue.

Miami Commissioner Marc Sarnoff, whose district includes Watson Island, said the city should stand by Flagstone as long as it continues to meet its deadlines and financial obligations, which it does, according to Miami administrators. He said if anything, Bayraktar should be lauded for being able to hold onto the site despite two market crashes and a slew of lawsuits.

“As long as they’re within the boundaries of what the city commission has said and they’re fulfilling the obligations of the anniversary date, then I’m a supporter of them,” said Sarnoff. “I think it’s very telling they’re using their own money. I don’t think it’s telling a bad story. It’s someone believing in their own project.”