BH3 Management, Merrimac Ventures Pitch Offices and Condos for Florida’s Watson Island

BH3 Management and Merrimac Ventures want to bring offices, retail space and condos to Watson Island, a public enclave between Downtown Miami and South Beach.

Last year, the joint venture purchased a 10.8-acre ground lease on the island for a sum that’s likely over $50 million from Flagstone Property Group, which had failed to substantially expand the property and became embroiled in litigation with the City of Miami. 

The waterfront site at 888 MacArthur Causeway is approved to house 221,000 square feet of retail space, 500 hotel rooms and 105 timeshare units. 

The developers are seeking to switch all the timeshare units to condos and reduce the retail component to 97,430 square feet. Nearly all of the remaining space, 100,350 square feet, would be turned into offices. 

“As we studied the property and the approved plans for the site, it became clear that the timeshare units originally contemplated for Watson Island are now out of step with the present-day market in Miami’s urban core,” according to a statement from BH3 and Merrimac.

As part of the proposal, the joint venture is seeking to extend the ground lease by 24 years to 99 years. Miami’s commission will hear the proposal Thursday. If at least four of the five commissioners approve the plan, the proposal will go before Miami voters, likely in November. 

BH3 Management and Merrimac Ventures aren’t the only developers seeking to build on Watson Island. Earlier this month, ESJ Capital Partners, the owner of the 18-acre Jungle Island, a theme park there, and David Martin’s Terra announced plans to convert 5 acres of the park into a condo complex.

Julia Echikson can be reached at jechikson@commercialobserver.com.