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Written by Erik Bojnansky, BT Senior Writer   
September 2017

All hopes are on new contractor to get downtown Flagler Street roadwork back on track

GFlagler_1reg Baverey has had a very bad year. He and his family opened the French-menu Salt & Sugar Café at 20 E. Flagler St. just as the Flagler Street renovation project was getting started in January 2016.

“It’s difficult to open a business with construction and you expect it to take two months,” he says, “and instead it takes more than one year.”

“We had a lot of problems with the construction,” adds Jorge Ferreira, Baverey’s brother-in-law and a Salt & Sugar Café partner. “We didn’t have any visibility with the business. It was so hard, it was very hard -- and now we have to restart again.”

Budgeted at $13 million, the Flagler Street Beautification/Reconstruction Project, from NW 1st Avenue to Biscayne Boulevard, was supposed to be completed in two years. Its purpose was to make Flagler a walkable street, with 150 shade trees, brand-new wide sidewalks that would allow for more sidewalk cafés, valet drop-off points, and updated underground infrastructure.

In an effort to lessen the negative impact on businesses along Flagler, the project was broken into 13 phases that were each supposed to take 60 days.

Instead it took 18 months to substantially complete just four phases, from NW 1st Avenue to N. Miami Avenue. And from June 2016 until late July 2017, the streets and sidewalks from the courthouse to N. Miami Avenue were cratered, shredded, and fenced off.

“Everything was ripped open, the sidewalk, too,” says Harry Sederis, owner of the Italian restaurant La Loggia at 68 W. Flagler St. His business went down by more than 60 percent, he says.

Now the rest of Flagler Street awaits its turn as the City of Miami scrambles to find a new contractor. After angry complaints from business owners, the Miami City Commission fired Chicago-based contractor FH Paschen in April, although, as part of its contract, the company is still completing punch-list items for the first four phases of the project.

As of deadline, the city is negotiating with Lanzo Construction, a contractor chosen from a state pool and that has the backing of the Downtown Development Authority’s Flagler Street Taskforce, says Hector Badia, assistant director of the City of Miami’s Office of Capital Improvements. 

Flagler_2

That hasn’t stopped some ongoing work along Flagler Street east of N. Miami Avenue. Telecommunications and gas companies have performed underground work there in preparation for the reconstruction. “They are either upgrades to their systems or [they’re] moving their facilities so as to not conflict with our project,” Badia explains.

The work performed by these companies was done at night and left a long scar along Flagler Street there.

Ironically, utilities were part of the reason the construction work took so long west of N. Miami Avenue. According to area business operators who spoke with the BT, construction often ground to a halt when electrical lines and old pipes were discovered.

The utility companies that owned those lines took their time responding to calls from the contractors, according to Brian Alonso, co-chairman of the Flagler Street Task Force and a Flagler Street property owner. “Any utility company is slow unless it’s an emergency,” he says. For example, he adds, last May a backhoe hit a gas line, prompting the evacuation of several downtown buildings, and TECO Peoples Gas responded quickly.

Officials of the City of Miami’s Capital Improvements office also previously blamed unmapped utilities for the work delays. In fact, when the city terminated FH Paschen, it didn’t blame the company for any wrongdoing. Instead city officials simply cited a “convenience contract” clause.

As Alberto Parjus, Miami’s assistant city manager overseeing the Flagler Street project, told the Miami Herald in a story dated April 27: “I wouldn’t call it amicable, but there was no fault.”

However, Brian Alonso alleges that FH Paschen’s supervisors weren’t aggressive enough in trying to contact the utility companies. They had few workers on the job, too. “There would be two construction workers working,” he says. “They weren’t throwing all their resources at it, or attacking the problem or the project. My understanding is that they had subcontractor issues.”

FH Paschen did not respond to a request for comment.

This is the second project the street has undergone in recent years. Back in 2005, Flagler underwent a $9 million streetscape project. That endeavor was reportedly just aesthetic in nature. (For more details, see “Once and Future Flagler,” August 2015.)

The current road project was seen as so important to Flagler Street’s evolution that Miami-Dade County’s Economic Development Fund contributed $6 million, the City of Miami gave another $6 million, and Flagler property owners charged themselves a special assessment of $1 million.

Even so, the project’s launch was delayed by two years. When the city initially requested bids, no company responded. The project’s plans also had to be redrafted to accommodate an acceptable drainage system for the street. Under the redrafted plans, ten deep-water wells will be placed to help prevent flooding, Alonso says. Two of those ten wells were installed in the first four phases of the project.

As per city regulations at the time, the company that submitted the lowest bid got the job. In this case it was FH Paschen, with a bid of $10.3 million, about $2.7 million lower than the city’s budgeted amount. Of that $10.3 million construction budget, only $3.3 million has been spent, Badia states.

Flagler_3

Alonso says he’s confident that Lanzo Construction, which has offices in Deerfield Beach and Roseville, Michigan, will complete the job on budget. Besides having a good local reputation, Alonso says, 75 percent of the jobs are “self-performed,” meaning they are actual Lanzo Construction employees.

“That’s a big deal,” Alonso notes. “FH Paschen self-performed very little of their work and subcontracted out nearly everything.”

Of course, this comes too late for businesses along Flagler Street that closed during the road construction. Among the small businesses that shuttered was Granny Feelgood’s, a natural food restaurant that operated in the downtown area since 1971, and at 25 W. Flagler St. since 2002.

Terrell Neil Fritz, a redevelopment consultant who attends Flagler Street Task Force meetings regularly and lives in a Flagler Street condo, says the road project chased away many small businesses both west and east of N. Miami Avenue. Those small businesses, he adds, aren’t being replaced.

“Flagler has never had so many vacancies in its entire history,” Fritz says.

But why are businesses closing east of N. Miami Avenue, where major construction has yet to take place? Fritz says it’s because potential new tenants don’t want to open in the midst of a protracted road construction project. And, he adds, no one is sure when the next phases of the project will even begin.

But Alonso says the road construction is only partly to blame for the vacancies. Developer Moishe Mana has spent more than $258 million since 2010 buying property along Flagler Street. Mana’s Flagler fiefdom includes 1 million square feet of retail and office buildings, and 9.2 acres of land, according to a June 22 The Real Deal story. Mana is currently developing a new master plan for the street with the help of architect Bernard Zyscovich. In the meantime, he’s not renewing leases or seeking new tenants for his spaces.

“He [Mana] doesn’t want a tenant in his way,” Alonso explains. “He wants the buildings to be clean for when he gets all his ducks in a row.”

Another factor is the Internet. Alonso says many retail operations are shutting down because they can’t compete with online sales and services. That’s why his family shut down their La Epoca department store last November, after 51 years of operating at various locations along Flagler Street.

“Unless you’re manufacturing your own goods, it’s getting harder and harder for retailers to compete,” he says. After initially listing the historic Walgreens Building at 200 E. Flagler St. for sale, which La Epoca occupied for the past 12 years, the family is now exploring ways to repurpose it. Lost Boy Dry Goods, an Alonso family-owned chic clothing store, also shut down. It will reopen as a bar run by Brian Alonso’s brother, Randy.

Fritz says the road construction has been helpful in one endeavor: encouraging property owners to form a business improvement district along Flagler Street.

Flagler_4Led by Alfred I. DuPont Building owner Gary Ressler and supported by Mana, the proposed BID will provide enhanced services to Flagler Street and advocate for the street’s businesses and property owners. Fritz, who directed the Washington Avenue Association BID in South Beach in the mid-1990s, has been hired as a consultant for the endeavor.

“It may be that things are so bad it made people more motivated,” he says.

In Fritz’s opinion, the city has done a poor job overseeing the Flagler Street project. “This is completely out of hand,” he says. “We are losing money left and right. Why would anyone lease on Flagler Street when we can’t even get a [construction] schedule? And it took them a year to finish 300 feet of Flagler! It was outrageous.”

Priscilla Alvarez is angry at the city, too. She and her husband, Sederis, bought La Loggia Restaurant in 2013, figuring they’d get regular business from the courthouse across the street. She’s still resentful that the city demanded they remove their sidewalk café seating without warning last year, just days after the couple bought a $5000 permit. Alvarez also says Flagler-area businesses had to hire lawyers and threaten to sue to get any information from the city.

“There was not a single person who could give you a straight answer,” Alvarez complains. “It was frustrating.”

Sederis says La Loggia’s business has rebounded about 25 percent since the street was opened in July.

Greg Baverey says Salt & Sugar barely survived the road construction. “We just tried doing the maximum to stay here,” the café owner tells the BT. Key to that survival was adaptation.

“We did takeout,” he says, “a lot of takeout.”

 

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