North Miami gets Biscayne Landing site back

The city of North Miami on Thursday afternoon regained control over the undeveloped property that was once envisioned as the luxury condo community Biscayne Landing.

Dade Circuit Judge Peter Lopez ruled that the lease on the approximately 190-acre Biscayne Landing property is terminated effective March 31. The property must be returned to the city by no later than April 13.

Wells Fargo, acting as trustee for the property’s main mortgage holder, agreed not to fight the city’s efforts to terminate the lease because it no longer saw the benefit to paying millions of dollars on a lease that had no value in today’s marketplace, said Lee Mackson, attorney with Shutts & Bowen, who represented the bank group.

“The lease was not economically viable, and the city was unwilling to negotiate new terms,” Mackson said.

Since placing the bank group in default last December, the city had been pursuing legal action to regain control of the land, which has had a checkered history dating back to the 1960s. But the process appeared as if it were going to drag on as the lenders tried to negotiate a payout from the city in order to walk away.

“This is the best case scenario that maybe nobody had really expected to happen,” Councilman Scott Galvin said. “I totally attribute it to the residents who made it really clear that we want our land back.”

The Wells Fargo group had taken control of the property after Boca Developers defaulted on its loans, a victim of the collapsing condo market. But despite efforts to solicit buyers, provisions of the 2003 lease requiring the developer to spend $28 million on off-site city improvements was just one of many restrictions that hampered any deal. The former Superfund Site requires an extensive environmental clean-up process.

Biscayne Landing once owed the Wells Fargo group $196.3 million, making it the poster child for the collapse of commercial mortgage-backed securities. Mackson said the bank group intends to sue the city of North Miami to recoup some of those losses.

“We are not going away,” Mackson said. “We reserved the right to bring claims against the city at the appropriate time.”

The court decision clears the way for North Miami to start over on its process to find a developer. The city expects to ask for proposals of interest and will discuss a process at its April 12th council meeting.

Developer Michael Swerdlow, who signed the original lease with the city in 2003 and then sold it to Boca Developers, has already voiced interest in returning under new terms. Equity One, a North Miami Beach real estate investment trust that owns primarily shopping centers, has also expressed interest.

While there is no room currently in the marketplace for condominiums on the site, it has been considered a prime location for big box retail development.

“Fundamentally the property is great,” said Jonathan Kingsley, managing director of Grubb & Ellis. “The problem has been the structure under which the property is owned and leased. It’s a very desirable piece of property when it’s valued properly.”

This story was originally published March 31, 2011 at 5:00 AM with the headline "North Miami gets Biscayne Landing site back."