Miami Voters Approve Condo Developments on Watson Island
By Julia Echikson November 6, 2024 2:43 pm
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Miami voters on Tuesday approved two major condo projects on Watson Island, a city-owned enclave between Miami and Miami Beach, spearheaded by high-profile developers Terra, BH3 Management and Merrimac Ventures.
In the largest deal, Miami residents approved by a nearly 59 percent margin a deal to sell 5.4 acres on Watson Island for $135 million to a joint venture led by David Martin’s Terra and ESJ Capital Partners. ESJ currently holds an 18-acre ground lease, operating the Jungle Island theme park at 1111 Parrot Jungle Trail.
The joint venture plans to build about 600 condos on the site, a proposal that still requires approval from city officials.
As part of the approval, ESJ Capital Partners will return 13 acres to the City of Miami to build a new waterfront park. The joint venture will also contribute $15 million toward affordable housing, infrastructure and other public benefits, according to the ballot proposal.
“While this is a first step in the process, we look forward to work with both City of Miami officials and the City’s residents to bring a transformative public park to our community, all while generating positive financial benefits from the plan’s residential component,” according to a statement from the joint venture.
Back in 2017, ESJ Capital Partners paid $60 million for the ground lease, and the following year, voters approved plans to add a 130-foot-tall hotel with up to 300 rooms, a zip line and water slides. But the Aventura-based firm never moved forward with the expansion, and last year it partnered with Terra to develop a condo complex.
In the second ballot measure, nearly 64 percent of Miami voters approved a deal to sell a 3.2-acre ground lease on the other side of Watson Island for $25 million to BH3 Management and Merrimac Ventures. Voter approval boosts the length of the lease 24 years to 99 years, and the developers will be allowed to build 105 condos instead of 105 timeshare units as well as an office component at 888 MacArthur Causeway.
The project, called Watson Harbour, will also include a 2.2-acre public promenade along Biscayne Bay, a retail component, and two hotels. In return, the joint venture will contribute $9 million toward affordable housing, infrastructure and other public benefits.
“We are committed to making Miami proud,” according to a statement from the joint venture.
Last year, BH3 and Merrimac partnered to assume the 10.5 acre-lease ground lease from Flagstone Property Group, which had received voter approval in 2001 to build 221,000 square feet of retail space and 500 hotel rooms, in addition to the timeshare component. But the Turkish developer failed to substantially expand the property and became embroiled in a years-long legal dispute with the City of Miami.
Julia Echikson can be reached at jechikson@commercialobserver.com.
