By Robin Benedick
and Prashant Gopal Staff writers
January 21, 2003
With available land in South Florida's suburbs dwindling, developers of large tracts are returning to eastern cities they left behind during their westward push.
Small and medium-size builders in recent years have proven that urban redevelopment is profitable.
And the nation's two largest builders, Lennar and Centex, have followed their lead, creating departments focused exclusively on rebuilding South Florida's earliest settlements. Other large developers like Minto, known for giant subdivisions of single-family homes, are now erecting downtown condos.
None of the planned eastern projects of Centex and Lennar have been built.
"Just now we're seeing the well dry up out west," said Kevin Borkenhagen, who is leading Centex's 2-year-old South Florida redevelopment team. "Three years ago we would ride by and not even look at a property because it was next to the railroad tracks. These are now the sites we're looking at."
Some experts say the arrival of large builders could herald a broader movement to redevelop coastal cities from Miami-Dade to Palm Beach County. This trend isn't unique to South Florida. Large builders from the Washington D.C. area down the East Coast to Florida are moving into redevelopment.
Young professionals, young couples and empty-nesters who have tired of suburban life and traffic are choosing to live in or near downtown, where they can walk to restaurants, bars, theaters and the beach, and quickly reach Interstate 95.
"Most of the places out west remind me of a gigantic strip mall," said Ryan Kayser, a Connecticut transplant who recently bought a new three-bedroom townhouse in Fort Lauderdale's Victoria Park neighborhood, just east of downtown, with his wife, Karen. "I have always lived in cities or small towns that had a community feel, and the area where we bought had that community feel."
Although he works in western Broward County in international sales and marketing, Kayser said he never wants to live there. He and his wife paid between $450,000 and $500,000 for their home in an area where a flurry of redevelopment is fast driving up prices and property values.
Buyers also look east
Realtors said it's demand that is bringing more small- and medium-sized builders into older eastern neighborhoods.
"We're seeing more builders recognizing that people want to move east and they want a piece of the action," said Jacquelyn Scott, a broker-associate at Re/Max Partners on Las Olas Boulevard in Fort Lauderdale.
As in-city housing options grow, so will their popularity, experts say.
Large developers can help speed the process because they can more easily finance ambitious projects and use political muscle to change laws that are unfriendly to redevelopment, said Deron Lovaas, deputy director of the Smart Growth Program for the Natural Resources Defense Council in Washington, D.C.
"Once the big boys get behind it and see opportunities inherent in it, there's a real chance you'll see the whole marketplace change," Lovaas said.
Redevelopment often takes longer than building cookie-cutter suburban subdivisions. It takes time to assemble odd-shaped tracts of land or cobble together pieces of land for a project in an older neighborhood. Because vacant properties are rare along the coast, developers must hunt for rundown houses, automobile dealerships, and gas stations that can be torn down and replaced with condos or townhouses.
All of this requires more patience and a different approach and expertise than suburban builders are used to.
"This kind of development takes longer and is usually more complicated, but the value to a builder can be very high because you can sell the home for much higher in the older, inner-city areas than out on the fringes," said John McIlwain, senior fellow for housing at Urban Land Institute, a Washington, D.C.-based real estate redevelopment think-tank.
Some smaller developers say they aren't concerned about the competition. There are advantages to being small, such as less bureaucracy and less pressure to make big profits, said Tim Hernandez, a strong advocate for redevelopment whose 3-year-old New Urban Communities has built several urban projects in Palm Beach County.
"This has been the case for awhile, and the big builders are just now waking up to something some of us had noticed sooner," Hernandez said.
Coconut Creek-based Minto Communities Inc. is building its first eastside project in South Florida, WaterGarden, a 315-unit condo tower on the New River. The building, with prices ranging from the $200,000s to $500,000, is scheduled for completion next year. Its prices are lower than those of surrounding condos being built, some of which sell for several million dollars.
Harry Posin, the company's executive vice president, said Minto is looking for other projects in eastern Broward, Palm Beach and Miami-Dade counties. The company would like a mix of projects -- high-rises, townhomes and garden units in low-rise buildings in and around downtown areas. Minto has built several master-planned communities, including Riviera Isles and Lido Isles in southwest Broward and Madison Green in Royal Palm Beach.
"We made the decision that we're a South Florida-based builder and, with the land supply growing in short supply in the suburbs, before we looked to other markets we were going to pursue the urban market in our home territory," he said.
Longtime eastside builder Sea Ranch Properties welcomes the residential competition in downtown Fort Lauderdale, where a dozen construction cranes punch the sky.
"We've got company now, but the market is there because there is no land out west," said Walter Collins, the company's president. Sea Ranch Properties, which has built 1,000 high-rise condo units since the mid-1970s and 2,000 homes in the west, is building Las Olas Grand, a 38-story tower on the New River in downtown Fort Lauderdale that will feature 211 condos ranging in price from about $500,000 to several million dollars.
Miami-based Lennar Corp., South Florida's largest single-family home builder, turned its sights on eastern areas of Broward, Palm Beach and Miami-Dade counties about two years ago when Lisa Maxwell, formerly of the region's builders' association, became the company's director of redevelopment.
Lennar is one of the few top homebuilders in South Florida that has ventured into eastside redevelopment in a big way. But it isn't proposing luxury high-rise condos on Las Olas Boulevard or swank apartments on the New River.
Instead, the company is choosing to build moderately priced homes in neighborhoods that have struggled with crime, vandalism and a spotty image.
"We're in areas that have been blighted and are among the most difficult to redevelop," Maxwell said.
She said the company sees potential in sites that others might shy away from, and hopes that its efforts spin off more redevelopment in those neighborhoods. Lennar has redevelopment projects in Fort Lauderdale and Pompano Beach in Broward; Lantana in Palm Beach; and near Kendall and North Bay Village in Miami-Dade County.
Gerald Stender, 45, a retired chiropractor, four years ago bought a winter home in Lake Charleston off Hypoluxo Road east of Florida's Turnpike in Palm Beach County. But Stender, who lives with his wife in Albany, N.Y., most of the year, wants to be closer to the ocean.
Last weekend, Stender put down a 10 percent deposit on a $460,000 two-bedroom condominium at the planned $100 million Moorings at Lantana development on the Intracoastal Waterway. Stender is one of 220 people who have reserved homes at the Moorings, which is expected to open in early 2005 with 357 condos, 21 townhouses, a restaurant, waterfront cafe and shops. The joint venture between Lennar and the Related Group, both based in Miami, will be built on 11 acres that was formerly a boatyard and more recently a storage area for antique cars and will have a Caribbean-Colonial style.
Stender said he already has a deposit on a 45-foot powerboat, which he hopes to start using once he moves into his new house.
"Traffic out west isn't getting any easier," Stender said. "And being right close to the water is ideal."
Robin Benedick can be reached at email@example.com or 954-385-7914. Prashant Gopal can be reached firstname.lastname@example.org or561-243-6602.
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