City of Miami Targeting Idle Construction Site Owners

Aug 02, 2011 No Comments by

The city of Miami has fired its first volley in a planned legal offensive against the owners of abandoned construction sites, a campaign aimed at ridding the city of idled excavations it deems dangerous.

A failed Brickell-area project is the city’s first target and mixed initial results show how complicated the initiative could be.

Rickety fences line the 2.3-acre site upon which two of Miami’s most stunning towers were meant to rise. The mixed-use residential and retail Capital at Brickell development never materialized due to the housing crash. What remains on the vacant lot is a large crater filled with puddles of stale, green water and the foundation’s metal grating patched with graffiti. Metromover passengers on the Brickell loop are treated to a full view of the crater on their daily rides to work in the financial district.

The city wants the site, which is one block west of Brickell Avenue in Miami’s Brickell Financial District, filled in and brought up to code.

A July 7 lawsuit was filed against City National Bank of Florida and several entities of Cabi Developers, but the few weeks since serve as a case study for the tough fight that lies ahead.

In the case of another similar project in downtown, Everglades on the Bay, Cabi lost two towers late last year when an investment firm bought the distressed $209 million note at a 33 percent discount and renamed it Viscayne. The title was tossed around several times, and the Capital property is now in the possession another Cabi affiliate in the midst of Chapter 11 bankruptcy proceedings, which could put the brakes on the city’s efforts.

In a July 19 pleading filed by Cabi SMA Tower I LLLP, Bilzin Sumberg partner Mindy Mora asked that the lawsuit be stayed during the bankruptcy, which was filed in December 2010. When interviewed Monday, she defended the developer and said the property’s condition is not an issue.

“My client has been very diligent about sending out clean-up crews,” she said. “The concerns that are being expressed by the city … are absurd.”

Ray Benitez, a city code compliance inspector, came to a different conclusion on a recent visit. “It’s not only an eyesore, but it presents a danger to people that are living or working or walking around it,” he said.

Benitez tested the strength of the grated metal fences, tilted wooden panels and movable gates as he circled the one-block site, which is lined by Southwest 14th Street on the north and South Miami Avenue on the east. As he walked the side along Southwest First Avenue, he pointed to a 20-foot drop behind the fence, showing just how close the edge comes to a sidewalk frequented by Brickell-area bar hoppers.

In its lawsuit, the city describes the site as “in complete deterioration for over a year,” and claims “containment walls are in danger of collapse, thus endangering the safety and health of the community by possibly sinking the foundation of the right of way.”

It also notes accumulation of stagnant water will provide a breeding place for mosquito larvae. The city’s complaint comes at a time when local governments across South Florida are battling a worsening mosquito season — one that’s so bad the usual small planes that used to spray the city were replaced Tuesday by specially equipped C-130 Hercules cargo planes from Homestead Air Force Reserve Command’s 910th Airlift.

City inspectors such as Benitez have filed several violations against the property, including failure to keep the area clear of trash and failure to keep the lot safe and clean.

Although the lawsuit is essentially a foreclosure of a code-enforcement lien, Benitez explained the city’s true intentions: getting the owner’s attention. “We’re simply looking for them to do one of two things. They can continue with the job site and get it going, or they can come in here and back fill it so that this becomes a safe site again,” he said.

Neither seems likely in the near future.

The development entity that currently holds title to the property, Cabi SMA Tower I, has yet to receive approval for its Chapter 11 plan, which could determine how it hopes to pay creditors, possibly complete, sell or give up the project and address a class-action lawsuit.

Back filling the property would be costly and continuing the construction is not likely in the current market, which is flooded with unsold and foreclosed single-family homes and condos.

Reviving development of the project — which promised two high-end, shining, silver and blue towers modeled after New York’s Chrysler and Empire State buildings — has encountered other complications, too.

Although the title to the property came back to the developers after being passed around from City National to a successor trustee to Cabi SMA Tower I, Mora said the note on the debt has landed in the hands of a direct competitor. And that competitor is opposing Cabi’s reorganization plan, which could drag out the bankruptcy proceeding and potentially delay the city’s effort to address safety and public nuisance concerns.

In the meantime, the city will target at least four other properties it claims pose similar dangers. Miami Assistant City Attorney Victoria Mendez declined to comment but provided a list of properties, which includes the southwest corner of Fifth Street and Southwest 22nd Avenue and another open excavation site at 1430 SW First Street.

If the city’s lawsuit is stayed, Miami will have no way to force Cabi to cover the uncapped, sharp tops of steel rebar jutting from the ground until after the bankruptcy is resolved. The city will also have to wait for a stronger fence to replace the tilting wooden wall that easily allows people to enter the property and tag it with graffiti. And the crater will stand in strong contrast with the many towers that rise above it nearby.

Benitez blames the recession, but he said it’s not an excuse. “This high-rise building would have been built. But nevertheless, it’s a problem for us and for the citizens and we want the owners to correct it,” he said.

Source:  DBR

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