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Nov 14th
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Written by Erik Bojnansky, BT Senior Writer; Photos by Armando Colls   
May 2019

 

Allapattah is changing -- fast

Massive investment is disrupting Allapattah, and its working-class residents pray they can afford to stay

FCoverStory_1_Leadather José Luis Menendez recalls that when he was assigned as the full-time pastor to the parish of Corpus Christi, more than 30 years ago, some of his colleagues assumed it was a form of punishment. That parish includes not just the main church at 3220 NW 7th Ave. in Allapattah, but also three smaller missions in that same neighborhood, as well as the San Juan Bautisa Mission in Wynwood and the San Francisco y Santa Clara Mission in Edgewater.

Back then Allapattah, Edgewater, and Wynwood were impoverished, high-crime areas. But for Menendez, the assignment wasn’t a punishment. It was an adventure. “I hate to be in a good neighborhood,” he says. “You don’t do anything.”

Today Edgewater is full of luxury high-rises. Wynwood’s old warehouse district is a thriving arts and entertainment area with new offices and high-end retail.

And Allapattah? It’s still a gritty neighborhood of warehouses, wholesalers, single-family homes, retail stores, hospitals, car repair shops, and at least two active cement factories.

Located between the Miami River to the south and the Airport Expressway (SR 112) to the north, and from I-95 west to NW 27th Avenue, Allapattah, whose name means “alligator” in Seminole, measures five square miles, more than twice the size of Wynwood. And by many measures, it is also Miami’s most diverse neighborhood.

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It’s in Allapattah that you’ll find the Civic Center, also known as the Hospital District, a place that includes Jackson Memorial Hospital, University of Miami Hospital, the Veterans Administration Hospital, Holtz Children’s Hospital, the University of Miami Miller School of Medicine, the Bascom Palmer Eye Institute, the Richard E. Gerstein Criminal Courthouse, the Miami-Dade State Attorney’s Office, the Miami-Dade County Medical Examiner’s Office, the Miami-Dade County Pre-Trial Detention Center, and more justice-related businesses. Oh, and also Converge Miami, a 252,000-square-foot office building for bio-medical startups.

Here you’ll also find Little Santo Domingo, a corridor of Dominican-owned businesses along NW 17th Avenue, as well as Juan Pablo Duarte Park, named after the Dominican independence leader.

It’s where you’ll find wholesale trading hubs that provide food and merchandise to stores and restaurants throughout South Florida and beyond. That includes the Miami Produce Center, a sprawling eight-acre warehouse complex that’s been operating at NW 13th Avenue and NW 21st Terrace for the past 84 years.

Also in Allapattah is the Chapel of La Merced, a Spanish Revival church on the main campus of Father Menendez’s Corpus Christi. La Merced hosts classical music concerts and houses documents, books, and religious artworks, many from Colonial-era Peru.

There are the new restaurants, bars, and studios in Allapattah opened by entrepreneurs and artists who started in Wynwood but headed west in search of more affordable rents. Many of these happen to be along NW 7th Avenue, a corridor that’s sometimes referred to as West of Wynwood, much to the annoyance of many Allapattah residents.

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And it’s in Allapattah that you’ll find nearly 42,000 people, about 73.6 percent of whom are Hispanic, 21.2 percent black, and 4.1 percent white, according to Statistical Atlas, a website that uses data from the U.S. Census Bureau.

The median annual household income of Allapattah is $22,600. According to the real estate website Trulia, 77 percent of Allapattah’s households are rentals. Father Menendez notes that undocumented immigrants account for some 26 percent of area’s population.

As in Edgewater and Wynwood, crime in Allapattah is much lower now than it was in the 1980s and 1990s, with the exception of crimes of opportunity, like car burglaries or (more on this later) unlicensed bars with flirty waitresses.

Father Menendez tells the BT that most of his Allapattah congregants aren’t so worried about crime anymore. Instead they worry about having proper papers, having a driver’s license, having affordable housing, having ICE not come over here. “Those are the concerns,” he says, adding, “When you’re scared of these things happening, you don’t live in peace.”

Adding to that anxiety, and some anticipation, is a wave of private investment by investors looking for deals. In recent years, some of the biggest names in South Florida real estate, including Jorge Pérez, Michael Simkins, Moishe Mana, and Lyle Stern, have been buying properties in Allapattah. Also showing increasing interest are out-of-state real estate investment funds and investors from South America.


TCoverStory_4hose property purchases have increased land prices in Allapattah from $58 per square foot in 2014 to around $275 per square foot in 2018, according to a recent study from Colliers International South Florida. Not all of these investors know exactly what they plan to do with their acquired land. “Some have clear visions, others are waiting a bit,” observes Carlos Fausto Miranda, principal of the commercial brokerage Fausto Commercial, who has traded property in Allapattah for 11 years.

Real estate investors and art collectors Don and Mera Rubell are among those with a clear vision. The Rubells are moving their private art collection and museum, currently in Wynwood, into a 100,000-square-foot warehouse they bought as part of a $4 million deal that closed in April 2015. The facility is slated to open in December and will include a library, lecture hall, gardens, event space, and a restaurant, according to the Rubell Family Collection Contemporary Arts Foundation.

Andrew Hellinger, the principal developer of River Landing and Shops on the Miami River at 1500 NW North River Dr., tells the BT that his team invested nearly $425 million building the 2-million-square-foot mega project of 528 apartments, big-box retail, and new offices to capitalize on an underserved market of medical professionals and attorneys who work in the Civic Center.

“We were attracted to the health district because it has a 70,000 daytime population and the highest payroll of any submarket,” Hellinger explains.

CoverStory_5And then there’s Robert Wennett, a real estate developer known for his iconic 1111 Lincoln parking garage, designed by the firm Herzog & de Meuron. Three years ago Wennett paid $16 million for the Miami Produce Center, located near two Metrorail stops and less than a half-mile from the Civic Center. It’s here that Wennett intends to build a mixed-use complex designed by renowned Danish architect Bjarke Ingles that could total 2.9 million square feet. Wennett’s project will include urban farms, restaurants, vocational schools, creative work spaces, 227 hotel rooms, and up to 3037 residential units in buildings as tall as 20 stories.

Wennett’s concept has been receiving attention lately, not just from local media but also architectural publications marveling at Ingle’s early designs of stilt-like residential towers hovering above warehouses, public plazas, and urban farms that are growing food for restaurants operating within the complex.

Cynthia Aracena, a lifelong resident of Allapattah, likes what she sees so far. A former member of the Allapattah Neighborhood Association, she says she hopes the Wennett development will help fill the void of several longtime businesses, many of them Dominican owned, that have shut down recently owing to rising retail rents. And she hopes it will further increase property values for single-family homeowners like herself. Single-family homes and condos have already gone up 24.6 percent in value over one year, to an average price of $190,000.

“It will be a community benefit in a sense that we will have jobs and restaurants that we don’t have now,” Arecena says.

Pat Gajardo, who also grew up in the neighborhood and is president of the Allapattah Neighborhood Association, has mixed opinions. On the one hand, he’s thrilled that developers and new businesses are coming to Allapattah. “I tell people all the time that I’m proud of the fact that investors and outsiders are starting to realize what I’ve known for a long time -- that Allapattah can be a great place to live, work, and play,” he says.

At the same time, he fears that mega projects like River Landing and the new Miami Produce Center will further inflate home prices and rents, making it even harder for low-income residents, who already spend more than half of their earnings on rent, to continue living in Allapattah.

“Some people are going to be priced out, whether or not that project comes,” he says. “But it’s going to accelerate the process.”


TCoverStory_6ime operates differently at the sprawling produce center. Here the workday starts at 2:00 a.m., when the first trucks arrive, and tends to peak by 8:00 a.m., when restaurateurs, local store owners, and business owners or their representatives from other parts of the country and the Caribbean arrive to haggle with the 30 or so fruit and vegetable trading businesses that operate here. The vendors even haggle with each other. By noon, the produce center is practically a ghost town, except for a few employees.

The produce center is a legacy of the years when Allapattah was a predominately white farming settlement that came into existence in the late 19th century. “It has some of the richest soil in Miami-Dade County,” says local historian Paul George. And that farming continued until the late 1950s, even as retail, homes, and industrial uses were built in Allapattah.

By the late 1960s, white non-Hispanic “Anglos” began leaving Allapattah for the suburbs as black residents, displaced by the construction of expressways in neighboring Model City and Overtown, moved in. Hispanics soon followed. After the 1980 McDuffie riots, wrecked Anglo-owned businesses along Allapattah’s main commercial thoroughfares were taken over by Hispanic entrepreneurs, many of them from the Dominican Republic.

But while Allapattah changed over the years, the produce center kept on running more or less as it had since 1935, except that now the fruit and vegetable wholesalers and distributors are usually Hispanic and most of the produce is grown in Latin America.

Hector Caro of Colombia and Jorge Fernandez of Cuba have been operating Eco Produce Inc. out of a produce center warehouse for the past 17 years, selling tropical fruit by the pallet, grown by contracted farmers in Colombia, Guatemala, and Ecuador. They tell the BT that business is good.

CoverStory_7“We move all the produce and the merchandise for all the supermarkets in Florida,” Fernandez says. “People in New York come and get produce here. From California.”

Nevertheless, Eco-Produce’s time in Allapattah is coming to an end, along with the dozens of other produce sellers. While Wennett says he plans to incorporate the warehouses into his mixed-use project, he won’t be keeping the sellers. Instead the warehouses will be converted into retail for stores and restaurants, and workspaces for artists and other “makers.”

But the transformation of the former produce center into a commercial center for Wennett’s new community of apartments, schools, and hotels won’t happen for a long time. “We obviously have plans for the market in the future, but as of now everyone has a lease of at least two years, and we probably anticipate at least more,” says Jeff Weinstein, Miami Produce Center’s director of development and a partner of Wennett’s.

That’s because Weinstein doesn’t expect work to begin on the new Miami Produce Center for “a number of years.” It was only April 25 that Wennett’s special area plan (SAP) zoning was approved by the Miami City Commission. Weinstein contends that there’s still an enormous amount of design work and permitting left to do before they can break ground.

Nevertheless, change is already taking place. In the summer, Bill Durney, owner and pit master of Hometown Barbecue in Red Hook, Brooklyn, will be opening up another Hometown Barbecue restaurant in a warehouse space fronting NW 12th Avenue. Weinstein says the restaurant will make the complex a true 24-hour operation. “We think it will add to the site,” he predicts, “and we think it will add to the character of the neighborhood.”

When the new Miami Produce Center does open, he says, it’ll create thousands of jobs and a unique educational and recreational destination for Allapattah. The developer claims he’s received inquiries from trade schools all over the world about opening up in the complex.

Although most of the units at Wennett’s project will rent at market rates, just as they do at River Landing, there is also an affordable housing component -- barely. In exchange for generous building rights, the developers will reserve 110 residential apartment units as workforce housing, meaning for individuals making between $31,740 and $74,000 per year. Rents will range from $849 to $1982 per month -- unaffordable for most Allapattah residents.

Wennett has also made a formal proposal to the city to create 600 “co-living spaces,” each of which would include four efficiency units with a shared kitchen area. Planners from the City of Miami hope that those 600 co-living spaces, which they noted in an April 25 report really amount to 2400 dwelling units, could be utilized as cheap rentals.

But Allapattah activist Pat Gajardo is worried that the Miami Produce Center

will push rents in Allapattah even higher. It has already started, in fact; a recent study by the city’s Housing and Community Development Department, whose findings were disclosed at an April 17 affordable-housing workshop, shows that the asking rate for a two-bedroom apartment increased from $820 a month in 2008 to just over $950 a month in 2018. While $950 a month is still pretty cheap in most parts of Miami-Dade County, it’s extremely expensive for Allapattah renters, 53 percent of whom are what the county calls “very low income” households, or households making less than 30 percent of the area’s median income.


WCoverStory_8ennett’s new Miami Produce Center, as well as the future Rubell Collection, will likely speed up another Allapattah trend: the displacement of wholesalers.

Alfonso Carrera, director of operations for Rex Discount Wholesale, says his parents moved their family business to a warehouse facility at 1090 NW 12th St. in 1992 because it was near the produce center and other wholesalers. Now many of those wholesalers are gone, their spaces purchased by real estate investors. That includes Trujillo & Sons Quality Food, just across the street from Rex, which moved to a new location in Brownsville soon after the Rubells bought their property five years ago with the intent of converting it into a museum. But that’s not the only purchase the Rubells made in Allapattah. They also paid $8.6 million for another former Trujillo warehouse at 1101 NW 23rd St. in March 2016. And, Carrera tells the

“But we had the right of first refusal,” Carrera says. Following the Rubells’ inquiry, in June 2016 the Carrera family immediately bought the property they had been leasing for the past 27 years for $4.5 million. (The Rubell Collection declined to comment to the BT.)

Carlos Fausto Miranda of Fausto Commercial Realty, who brokered Wennett’s purchase of the produce center, notes that many of these Allapattah food distributors have been moving to other parts of Florida for several years.

Still, Caro and Fernandez of Eco-Produce aren’t thrilled about the prospect of leaving Allapattah. “We move 12 or 13 [cargo] containers a week,” Fernandez says. Plus the hundreds of employees who work at the produce center live in Allapattah. “They will have to find new jobs in different places,” he says.

CoverStory_9Produce distributors the BT spoke to had no idea where they’ll move. Fernandez says the produce center is built specifically for the producer-seller needs, particularly its spacious coolers. Another hitch is that for their business model to work, at least 17 of the wholesalers that operate in the complex have to move together. Each produce business has its own contacts, explains Denia Olguin, co-owner of Olguin Family Inc., and those businesses often trade with one another or cooperate to help fill customers’ orders. “We need to go all together,” she says. “We can’t go alone. We’re not going to do even half of the business.”

Alfonso Carrera says his parents may have felt the same way 20 years ago. Early on, Rex Discount’s strategy was to capture the spillover of customers purchasing from the produce center. But that’s not the case anymore. Not only does Rex supply small convenience stores, it now provides merchandise for large chain stores like Winn Dixie and is exporting products into the Caribbean. “The business has been amazing,” he says.

Carrera adds that he’s actually thrilled there will be a museum across the street from Rex, and he’s pleased about Wennett’s project. Both developments help Rex Discount’s property values, although the 30-year-old predicts that value hike will eventually lead to the family business moving elsewhere.

“In the long term, it won’t be a feasible operation to run a business out of here because the value of the land won’t go with the type of products we sell,” Carrera says, later adding: “It’s going to get us to a place and time where it’s better to build another building four times as big.”

Pat Gajardo actually doesn’t mind that the produce center will be replaced by Wennett’s future project. In fact, that’s the part of the development plan he likes.

“That area, ever since I was a kid, was always an eyesore, and over the years it’s gotten worse,” says Gajardo, who lives less than a mile from the produce center.

He’s also glad to see the disappearance of what he calls “dive bars,” drinking establishments that operate as cafeterías in the daytime but by dusk, convert into unlicensed bars where friendly waitresses and bar girls encourage male customers to buy them overpriced drinks. Such places, Gajardo contends, were havens for drug activity and prostitution.

“The Miami Police Department has been cracking down on them,” he says, “and kudos to them.”


JCoverStory_10ames Quinlan, a sales associate with Central Commercial Real Estate, says Las Rosas Bar at 2898 NW 7th Ave. used to be one of those shady drinking spots until Cesar Morales, owner of the successful Wood Tavern in Wynwood, took over the space and turned it into a popular bar and live music venue in November 2016. Quinlan should know -- he’s been one of Las Rosas landlords since October 2014.

“It was a place where... [pause] ...working-class gentlemen would find companionship,” says Quinlan, who is also chairman of the Rhythm Foundation, the local non-profit that produces world-music concerts and events at the North Beach Bandshell and elsewhere. “There was kind of a friendship aspect to it,” he continues. “There were companionship ladies there who entertained the guests.” But that’s over now, he says, after Morales made “a lot of upgrades on every level.”

Quinlan, Central Commercial Real Estate founder Ari Dispenza, and Miami Beach investor Doug Levine spent $4.3 million obtaining several properties at

NW 29th Street and 7th Avenue. Besides Las Rosas, those properties include a breakfast and lunch spot called Jacky’s Café, a boutique athletic shoe store called Daily, Laguna Restaurant, a dance school, a parking lot, and a former lumberyard.

That lumberyard, at 728 NW 28th St., almost became a food and craft venue run by Cesar Morales called Allapattah Market -- that is, until the city shut it down in February 2017 after Morales failed to obtain the proper permits. It’s been closed ever since, although a new group from Venezuela is looking to reopen Allapattah Market with the help of Ken Lyon, the caterer and chef who helped run Wynwood Yard prior to its recent closing, and helped revive South Beach’s Lincoln Road when he opened the food market Lyon Frères et Compagnie in 1992.

Quinlan says he’s bought properties in Wynwood and Little Haiti in the past. But now it’s Allapattah’s NW 7th Avenue corridor that has his focus. “NW 7th Avenue, which I really do believe in, that was the original north-south highway before I-95, and I think its days are coming back,” he says. “We just went through a two-and-a-half-year road improvement project. And we’ve been experiencing great new tenants.”

NW 7th Avenue is also just a short distance from Wynwood. Here on this Allapattah street, you’ll find Wynwood-style murals, businesses with names like the Wynwood Bike Repair Shop, and even artists who helped turn Wynwood’s depressed warehouse region into a bustling arts district.


Francisco “Paco” de la Torre made the move from Wynwood to Allapattah when he bought a 79-year-old, two-story retail and storage building at 2928 NW 7th Ave. seven years ago for $325,000.

“I came here out of a desire to have my own space, to own instead of rent,” says de la Torre, founder of Butter Gallery, whose old space in Wynwood is now a clothing store. “I was in Wynwood before the explosion of Wynwood, then I got priced out, so I wanted to stay as close to Wynwood as I could, figuring that the art scene would stay there somehow -- which it didn’t -- and I decided to establish myself here and also give the opportunity to the people that are here who were also neighbors of mine from the Wynwood days.”

Indeed, his modest building not only houses his own studio and exhibition space, but also provides a home for graphic artist collectives like Project 81 and Cushy Gigs. Spinello Projects, a contemporary art gallery, is moving in. Space is being sublet for Acosta & Lichter, a law firm specializing in family and criminal law. And there’s a garden where de la Torre grows plants that he often uses in his artwork.

Wynwood Radio is here, too, occupying a space on the second floor. Prior to the move to Allapattah back in 2012, musician and sound engineer Adrian Olivares ran the online radio station, which he describes as a “love art project,” mainly in his Midtown Miami apartment, although he also used to do public podcasts from a barber shop located in Goldman Properties’ zebra-painted Wynwood Building. That barber shop has since been replaced by a tattoo parlor.

Olivares says he feels at home in Allapattah: “It’s kind of like what the old Wynwood was, more off the beaten path. Artists look for places like that.”

When he first moved here, de la Torre says, the street was a desolate commercial corridor. And it nearly became desolate again when the street was ripped apart during the renovation of NW 7th Avenue. “That’s what killed commerce here,” he recalls. “I saw them [small stores, restaurants, and shops] going out of business one by one.”

Now that the roadwork is over, the street is starting to grow active once again, although de la Torre notes that there are still plenty of empty buildings, including the auto repair shop next door.

Indeed, real estate broker Carlos Fausto Miranda notes that property values aren’t going up everywhere in Allapattah, just in some spots. “Allapattah is a large neighborhood, with many moving parts and sub-markets,” he explains. “Some areas have tripled in price, others have stayed the same, others have jumped in value and then receded.” For example, closing prices along the NW 7th Avenue corridor have actually decreased in the past three years, he tells the BT. On the other hand, land prices have been going up between 5 percent and 15 percent annually in the Little Santo Domingo/NW 17th Avenue corridor. Miranda also notes that land prices in the Civic Center have increased 5 percent to 12 percent annually over the past five years.

Developer Andrew Hellinger actually doesn’t even consider the Civic Center/Health District, where he’s building River Landing, to be in Allapattah. And he’s unsure that Allapattah, outside the Civic Center, is a good place to build new multifamily buildings. “It seems that land prices are still inflated for condominium asking prices,” he says, “and we’re not seeing the market right now for apartment development.”

As for Robert Wennett’s project, Hellinger opines that it is “an incredible plan, although it begs the question, can the market afford that kind of development and that amount of construction?”

Father Menendez says he still sees plenty of vacant lots and empty buildings. That leads him to believe Allapattah isn’t quite the next frontier for real estate developers, at least not yet. Instead they’ll continue to seek opportunities on the east side of I-95 in places north of booming Edgewater and Wynwood, like Little Haiti.

“Sooner or later they [developers] will come here, but I think they’ll keep going north,” Menendez says. “I think it’s the east that’s going to be developed. Then it will affect us over here.”

 

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