|Biscayne Plaza, Meet Your New Boss|
|Written by Erik Bojnansky -- BT Senior Writer|
His name is Mr. Valero and he thinks you have a very bright future
For nearly 30 years a business partnership headed by Edward Easton and Allen Greenwald owned the Biscayne Plaza Shopping Center at 79th Street and Biscayne Boulevard, a sprawling retail center with stores like Sabor Tropical Supermarket, dd’s Discounts, and Family Dollar that cater to the limited budgets of people residing in Palm Grove, Little Haiti, and other working-class enclaves.
That era came to an end this past March 27, when their company, Green-East Ltd. #2, sold Biscayne Plaza to Global Fund Investments and MMG Equity Partners for $12 million.
Doron Valero, Global Fund Investments’ managing partner, recently gave BT a tour of the 59-year-old shopping center while describing his plans. He’s a slender, energetic, 56-year-old Israeli who has been acquiring shopping centers across the United States since 1985. His company, which he co-founded in 2007, owns 32 malls in Florida and Texas.
“This is one of the most exciting projects I’ve done since 1997, when we bought Skylake Mall,” Valero says, referring to the enclosed, 1959 shopping center on Miami Gardens Drive that was a zombie mall by the time his company (at the time Equity One) bought it for $14 million. Within two years, the 320,000-square-foot shopping center was demolished, replaced by the somewhat smaller, open-air Shops at Skylake, which includes Publix, LA Fitness, TJ Maxx, and several restaurants, retail outlets, offices, banks, salons, and medical practices.
“We revitalized that neighborhood,” Valero declares. “Here, it’s going to be the same.”
The 79th Street corridor is already in the process of changing. The Adler Group recently broke ground at the site of the aborted Oasis on the Bay condo project next to the 79th Street Causeway, where the company plans to construct a pair of 20-story buildings called Shorecrest Luxury Apartments.
Just across the street from Biscayne Plaza, the Fifteen Group last year bought the gold-clad office building that once served as the Immigration and Naturalization Service’s Miami headquarters. (See “Going, Going, Gone!” April 2013.)
The Upper Eastside’s neighborhoods straddling Biscayne Boulevard have been steadily gentrifying since the late 1990s. More recently, the MiMo Biscayne Boulevard Historic District (along the Boulevard between 50th and 77th streets) has been attracting investors like developer Avra Jain and restaurateur John Kunkel.
Valero sees the shopping center as a kind of commercial bridge between the area’s two worlds -- the middle class and the working class. He’d like the new Biscayne Plaza to act as a connector between those worlds by retaining the bargain stores and attracting classy restaurants and cafés of the sort that are popping up throughout the Upper Eastside. “I believe in people surviving together,” he says. “I don’t think you need to pick one or the other to be doing well.”
To accomplish that, Valero will take a page from the Skylake handbook: He wants to make Biscayne Plaza, a 347,000-square-foot complex of five commercial buildings, somewhat smaller. That means knocking something down.
A few weeks ago, the City of Miami received an application to demolish what Valero calls a “monster building.” This is the portion of Biscayne Plaza that is located on the northwest corner of Biscayne Boulevard and 79th Street, where its largest store, Payless ShoeSource, operates.
About 100,000 square feet in size, the building continues west for another 500 feet or so, parallel to 79th Street, with most (but not all) of its ground-floor retail facing the former INS building across the street. A second-floor pedestrian bridge (one of two at the plaza) connects the “monster” to another retail building along NE 81st Street. That bridge is rarely used these days, Valero says, because the offices on the second floor of the “monster” building are empty. Prior to 2008, they were mainly filled by immigration attorneys. When the INS left the area, so did they.
After relocating Payless ShoeSource and most of the building’s tenants to other parts of Biscayne Plaza, Valero will level the monster and its bridge. In its place, and at the corner where Payless now operates, will be a 14,000-square-foot CVS drugstore. Then Valero wants to build a pair of buildings fronting 79th Street -- one for a bank and the other for a restaurant.
That is, if the City of Miami approves the demolition and construction plans. “We have a signed lease with CVS, subject to site-plan approval,” says Valero, who’d like to see that building completed by 2015. “It’s in the application process now. There’s no indication that there should be a problem, but until you have it, you don’t have it.”
The news that Valero wants to demolish part of Biscayne Plaza might displease some MiMo architectural enthusiasts, who appreciate the shopping center’s “car-centric” design, created by architect Robert Fitch Smith in 1954. However, Valero says he only wants to destroy the “monster” building. Everything else, he asserts, will get a modernizing “face-lift.”
He’s already started renovating one small retail building, and aims to upgrade the large retail building along 81st Street (where d.d’s Discounts and Family Dollar now do business). He’ll even keep the four decorative towers that stand on the plaza’s outer edge.
Valero is particularly eager to repurpose a glass-walled, triangular structure at the rear of the “monster” building. This triangle building is adjacent to Glasshaus Studios, the former Admiral Vee Hotel, which is not owned by Global Trust Investments. During the 1960s, the triangle building served as a bank branch. “I’m envisioning it becoming a nice restaurant,” Valero says, “something like Soyka’s.”
Grant Stern, president of Morningside Mortgage, says Biscayne Plaza can be something more than just a shopping center. Under the city’s Miami 21 zoning plan, the 18-acre tract could become the next Midtown Miami -- a community with condos, apartments, offices, restaurants, and retail. Prior to the real estate crash, Green-East Ltd. #2 hired Miami architect Allan Shulman design just such a mixed-use development to replace the old shopping center. The $400 million project never got off the ground.
“Their best bet is to redevelop it as a mixed-use project,” Stern says. “That way they can get Class-A rents.”
Today’s tenants are not paying anything close to Class-A rents. According to Valero, rents now range between $12 and $24 per square foot. Once the enhancements are complete, Valero intends to charge up to $30 per square foot. As for a residential component, Valero says he might build up to 70 affordable apartments on a parcel at 82nd Street near the Little River, but nothing more -- at least not yet. “I’m not a dreamer. I’m a realist,” he quips. “In real life, that is not the place for it right now. Maybe in the future.”
In addition to redeveloping Biscayne Plaza, and possibly building some affordable housing, Valero is interested in the creation of a public park along the banks of the Little River. Last year Green-East Ltd. #2 attempted to sell its vacant land holdings along the river to the city for $730,000, with the idea of creating a park. That effort was unsuccessful.
Now that Global Trust Investments owns the land, Valero says he’s contacted the Trust for Public Land, a nonprofit, open-space advocacy organization, to find a way to make it a park. “There were like 30-something manatees swimming in the river last time I checked,” he says.
Valero is also enthusiastic about the prospect of a train station for a proposed commuter rail line near 79th Street, just west of Biscayne Plaza. “Our vision is to try and have a center that will serve the community,” he says. “We own a lot of property here, and I’d love to see that become part of a park, and one day part of a train station. If you think about it, Biscayne Plaza would be a wonderful train station.”
Volume 14, Issue 3, May 2016
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