The South Florida Business Journal reported yesterday that MCZ, converter of the Flamingo Apartments, is giving back deposits to buyers in the north tower of the Miami Beach complex, because the developer hasn't been able to nail down unit closing dates.
MCZ Chief Executive Officer Michael Lerner said Monday, “If the people don't want to wait, because we can't give them a closing date, we will give them the deposits back". Sales in the north tower stalled at 200, and blames the Miami real estate market downturn, not the product or location, he said.
They don’t know when the building will be converted to Miami Beach condos in the North tower but they did say they have to hit a critical number before they can start converting.
The north tower will continue as a rental until sales hit the critical threshold, Lerner said. The exact number has not yet been disclosed. The oval shaped building in the center, which is the newest and the crown jewel of the complex, also remains a rental.
Fortune International, he said, which is handling sales, has shifted its attention to the south tower, which has 562 units and is nearly sold out.
MCZ/Centrum, in 2005, signed a deal with owner AIMCO, a Denver-based real estate investment trust, to pay $625 million for the 1,600-unit Flamingo on Biscayne Bay. So MCZ/Centrum, a joint venture of two Chicago developers, could break up the financing, the deal was structured in three phases, one for each of the towers.
The south tower was sold by AIMCO for $163.5 million. It also provided MCZ/Centrum with $5 million options on the two remaining towers. Lerner said he would renew the options when they come due.
AIMCO still owns the center and north towers and their Miami condos, Lerner said but the developer agreed to pay $169 million for the north tower and $267.5 million for the 513-unit, center building. The South Florida Business Journal placed a call to AIMCO regarding this but it was not immediately returned.
AIMCO, as part of the 2005 deal claimed the first $19.8 million in profits from unit sales, whether or not the other sales went through. William Bloom, the Holland & Knight partner who represented MCZ/Centrum, did not immediately return a call seeking comment.
Adam Greenberg who owns a Miami Beach studio in the south tower and has a contract on a 1,080-square-foot unit in the north tower says he's had $29,000, his 10% deposit, tied up in the project for nearly a year. He thought he would have closed on the one-bedroom unit by fall 2007.
Greenberg said he's ecstatic to be able to get his money out because he can use it for other real estate investments or to pay down debt.” The thing is the south tower did so well and the north tower had a short time period to get off the ground," he said. "The market is just not the way it was."
Contributed by MLR Realty
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