South Florida Business Journal - by Oscar Pedro Musibay
MCZ/Centrum, converter of the Flamingo apartments, is giving back deposits to buyers in the north tower of the Miami Beach complex because the developer hasn't been able to nail down unit closing dates.
"If the people don't want to wait, because we can't give them a closing date, we will give them the deposits back," MCZ Chief Executive Officer Michael Lerner said Monday.
He said sales in the north tower stalled at 200, and blames the market downturn - not the product or location.
"We don't know when the building will be converted to condo," Lerner said of the 614-unit north tower. "We have to hit a critical number before we start converting."
Lerner said the north tower will continue as a rental until sales hit the critical threshold - a number he would not disclose. The elliptical building in the center, which is the newest and the crown jewel of the complex, also remains a rental.
He said Fortune International, which is handling sales, has shifted its attention to the south tower, which has 562 units and is nearly sold out.
In 2005, MCZ/Centrum signed a deal with owner AIMCO, a Denver-based real estate investment trust, to pay $625 million for the 1,600-unit Flamingo on Biscayne Bay. The deal was structured in three phases - one for each of the towers - so MCZ/Centrum, a joint venture of two Chicago developers, could break up the financing.
AIMCO sold the south tower for $163.5 million. It also provided MCZ/Centrum with $5 million options on the two remaining towers. Lerner said he would renew the options when they come due.
The developer agreed to pay $169 million for the north tower and $267.5 million for the 513-unit, center building. AIMCO still owns the center and north towers, Lerner said.
A call to AIMCO was not immediately returned.
As part of the 2005 deal, AIMCO claimed the first $19.8 million in profits from unit sales, whether or not the other sales went through.
William Bloom, the Holland & Knight partner who represented MCZ/Centrum, did not immediately return a call seeking comment.
Adam Greenberg, managing director of BayBridge Real Estate Group, owns a studio in the south tower and has a contract on a 1,080-square-foot unit in the north tower. He's had $29,000, his 10 percent deposit, tied up in the project for nearly a year. He thought he would have closed on the one-bedroom unit by fall 2007.
Greenberg said he's ecstatic
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