Richard Meier Beach House: 3rd time the charm?

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Prodigy Network sent me an email recently, announcing “exciting news” about the “progress” of the Beach House Designed by Richard Meier in Surfside. My new concerns stem from the fact that during the last two years or so, this project has switched developers twice. In April of 2006 the original developer, Lynx Strategic Development, announced a new partner, Turnberry Developers, a well-known and well-respected residential and commercial developer. Fast forward to my email of last week, yet another TOTALLY different development team, Wavestone & Development Services Solutions is in place and “ready to bring to life the design of one of the masters of modern architecture”. So for me, this email did not offer “exciting news”. Quite the contrary; this email reinforced concerns I already HAD regarding this project, and raised some new ones on top of that.

1. Who are the new developers? What is their track record?

2. What happened to Turnberry? With all the resources available to Turnberry, did they not feel this project was worthwhile, and if so…WHY?

3. Why has it taken three developers to bring this project to where it is today? (two years behind schedule)

4. If pre-sales were so strong, why would it take so many development teams to get this project built?

Regarding #4 above, attached to the email was an inventory list of available units. What surprised me was the low number of units available, as I know this project well and remember in April, 2005 (coincidentally the pinnacle of the recent real estate boom in Miami) bringing clients to the project when it was first announced. Even back at the beginning, this project was, in my opinion, both chaotic and disorganized. So much so that my clients and I put The Beach House on the back burner. We just didn’t get a good feeling and decided not continuing to pursue purchasing at the Beach House. Sometimes you have to go with your gut, even when you can’t put your finger on the concern in a factual way.

I’m not saying that this is a bad or undesirable project, what I am saying is that the history of this project gives me cause for concern. In fact, I hope that “The Third Time’s A Charm”, and the Wavestone Group can deliver the unique design of Meier’s vision. But this situation with The Beach House, highlights the risks of preconstruction development I have addressed in the past. Even with a strong developer involved like Turnberry, markets change, construction costs vary, and projects may never be built. In Florida, it is likely that only the first 10% of the monies paid to the builder are placed in a protected escrow account. Any additional deposits, or pre-payments of upgrades, may be used by the developer for construction costs. If the developer shuts down, some portion of the buyer’s money could be at risk.

That said, even with all the uncertainty of the market and the development teams, Richard Meier’s name and design, combined with a prime oceanfront location, has created a lot of interest among the international elite. I wish them well and will take a fresh look at the project as it moves forward. Everyone is best served when a new construction project finds its way to a satisfactory resolution. I always hope for the best, as a bad market is bad for everyone. But this project will have to prove itself to me, and I will have ten times the questions I might normally have, given its history, before I could comfortably recommend it to my clients.

  • http://www.Miamism.com Ines

    Hey Kevin, are you still in Orlando? I wrote about the Beach House a couple of weeks ago with a different perspective and that was the architecture. It really is too bad that they cannot get their act together because the project in my opinion is amazing and it can’t get any better than Richard Meier – I’ve been waiting for him to build something in Miami, I hope this materializes.

  • http://www.kevintomlinson.com Kevin Tomlinson

    Ines,

    YUP, still in Orlando until tomorrow! The hotel that is on the site in finally closed, so that is a good sign. But I still feel that I need a bit more progress to feel comfortable that this project will actually be moving forward.

  • http://www.Miamism.com Ines

    They’re supposed to start demolition this month – at least that’s what they announced, let’s see if it happens.

  • http://www.BeachHouseSurfside.com Mott Marvin Kornicki

    I can relate to your diagnosis. I’ve had a few buyers walk away from that project due to delays and mass confusion by the original development team. Richard Meier’s credibility and talent are undisputed. This various developers/developer’s marketing company has some serious issues regarding ethical business practices and some less than desireable management policies. The Beach House, if ever built, will certainly be a showcase property.

  • http://www.kevintomlinson.com Kevin Tomlinson

    Mott-
    Hey good to see you here! It was VERY frustrating for my clients, and I was frustrated for them. Let’s see if it goes this time!

  • Jake

    I hope the project goes through but I am also concerned about the change in developers. We live next door at The Waves and it would be nice to have such a building next to ours. My concern with the all glass building is how hot are the west facing units going to be with the sun hitting on them all day long. We face the ocean to the east and it is very pleasant but west side apartments do get the brunt of the sun. Love all your insights.

  • http://www.kevintomlinson.com Kevin Tomlinson

    Jake,

    As you know, it seems like the building is getting ready to be brought down. I think once they start, the project will have a good probability of being finished.

    That western sun would be a deal-breaker for me. The do make a film that is optically clear which reduces the heat AND rays by up to 98%! I think i’ll do a post on that!

  • Nancy Wilden

    What is the deposit here? Are they really asking for more than 10% escrow?

  • http://www.kevintomlinson.com Kevin Tomlinson

    Nancy,

    Initially 10%, yes.

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