Coconut Grove

New developer eyes Grand Avenue amid slum and suits

Terra Group president David Martin in 2015, with the Grove at Grand Bay in the background. Terra Group is looking to buy dozens of properties on Grand Avenue.
Terra Group president David Martin in 2015, with the Grove at Grand Bay in the background. Terra Group is looking to buy dozens of properties on Grand Avenue. THE MIAMI HERALD

A massive but dormant development project that has long fostered hopes of revitalization and fears of gentrification in Miami’s historically black West Grove could be resurrected by one of the city’s more prominent builders.

Terra Group, which boasts $4 billion of new development under its belt, is attempting to purchase dozens of parcels along Grand Avenue for $35 million, the Miami Herald has learned. The deal took a year to work out and has been in writing since late June, but has been held in limbo by a civil war among partners who’ve tried for years to sell an assemblage of vacant lots and apartment buildings between Plaza and Margaret streets.

“There is a potential buyer right now, but we’re running into tremendous problems,” said Julio C. Marrero, one of the shareholders of about a dozen corporations that began buying up West Grove property in the early 2000s.

Though it remains possible that the sale could fall apart — as three previous contracts to unload the land already have — Terra Group’s interest in Grand Avenue signals a potential turnaround for efforts to overhaul the main drag that runs through the Bahamian enclave from U.S. 1 to CocoWalk.

 

Others with less wherewithal, including Marrero and his partners, have tried to return the sleepy avenue back into the bustling corridor of shops and homes that once existed. Instead, apartment buildings fell into disrepair, businesses closed and homes were razed to make way for new construction that never came.

Now, the circumstances are such that Terra Group is potentially entering into a legal and political morass.

Not only is Marrero’s partnership fighting amongst itself in state and federal court, but the city of Miami has also sued the group’s corporate entities and accused them of allowing a dozen apartment buildings to become, in effect, slums. The buildings’ tenants, meanwhile, protested in the streets and camped in vacant lots along Grand Avenue this month after evictions began.

“They’re pushing us out. And no one cares,” a sobbing Renescha Coats told city commissioners recently at City Hall. “People are being uprooted from their homes.”

With a sale pending, the city inserted itself into the situation in July by suing Marrero’s corporations. The city’s complaint asked a judge to force the landlord to make repairs or deal with code violations at buildings with a combined 183 rental units — some of which they said had leaky roofs and back-flowing sewage — and find new housing for tenants living month to month on $400 rent. In September, Miami sought to foreclose a lien on a 28-unit rental building on Hibiscus Street currently under a demolition order.

Ken Russell, the city commissioner who represents the Grove and pushed for the city to file its lawsuit, noted that the litigation “is not helping their efforts to sell.” He said the city is concerned about displacement.

“We’re in settlement talks about unencumbering that [property] so they can do what they need to do,” he said. “They’ve got to make good with these residents that are being evicted.”

But the city’s lawsuit may be the least of the roadblocks standing in the way of a contract with Terra Group. Court records show Marrero and his partners have been fighting for years with Orlando Benitez Jr., a shareholder who according to documents acquired mortgages on the group’s properties during a dispute between the partnership and lender Bank United. During the dispute, two of the partnership’s corporations filed for Chapter 11 bankruptcy protection.

In July, Benitez, who could not be reached for comment, asked a judge to stop the sale from going through, despite stating that he brought Terra Group to the table.

Marrero said the “rogue stockholder” has blocked previous attempts to sell the real estate collection, refused to accept debt payoffs, and made repairing Grand Avenue’s buildings difficult by pocketing meager rents. Benitez, on the other hand, accused Marrero in court recently of using the partnership’s corporations as a “personal piggy bank.”

“Unfortunately, the only thing we’ve done here is lose a tremendous amount of money,” said Marrero, a real estate attorney. “I can’t tell you how difficult it’s been.”

For now, just as it’s unclear if Terra Group will actually buy the land, it’s also murky what they’ll do if they succeed. David Martin, president of the company, declined to comment through a spokesman.

But a signed purchase and sale agreement for the entirety of the Grand Avenue assemblage posted in bankruptcy court hints at what may be on the horizon. The document mentions possible negotiations to also purchase properties owned by Pointe Group Advisors, a developer that in the late 2000s secured a special permit to build apartments, shops, a supermarket and offices on the site but never put a shovel in the ground.

It also notes that Terra Group could work within the existing framework of Pointe Group’s permit, but work with the city to replace space reserved for shops and office space with additional housing units.

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