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Real Estate
A mall theme-park in Miami-Dade?
Trust Miami to attract the latest jawdropping real estate project to Florida. In the triangle where I-75 meets Florida’s Turnpike in Miami-Dade County, Canada’s Ghermezian family wants to build the nation’s biggest mall-theme park.
The 175-acre triangle would become home to American Dream Miami, a $4-billion project with 2,000 hotel rooms and 6.2 million square feet of retail and entertainment, including performing arts venues, an aquarium lake, an ice skating rink and a 16-story indoor snow ski hill. It expects to draw 30 million visitors a year — more than the annual draw of Disney’s Magic Kingdom.
In tandem, Miami’s Graham Cos., the company of one of Florida’s most influential families, wants approval to build its own project on 340 acres immediately to the south: A 3 millionsq.- ft. business park with another 1 million square feet of commercial and retail areas and 2,000 apartments.
The projects, in unincorporated Miami- Dade near the Broward County line, already have cleared several local planning bodies and are moving toward a final approval this summer or early fall. They’ve cleared state review as well. Even opponents expect that, as early as July, the Miami Dade County Board of Commissioners will green light changes in the sites’ industrial designation in land-use plans that will make the projects legally possible.
At that point, the question will be whether the Ghermezians can make their dream a reality. Miami has seen big promises before. In 2011, as Florida emerged from the real estate recession, Malaysia- based casino-resort developer Genting announced it would build a $3.8-billion Resorts World Miami on the bayfront. Miami’s still waiting. In 2013, an entity proposed building a 70-acre, 20th Century Fox theme park adjacent to ZooMiami. It hasn’t been heard from in months.
The Ghermezians’ Triple Five company developed and owns Canada’s largest mall, the West Edmonton Mall in their hometown, and they own the United States’ largest mall, the Mall of the Americas in Minnesota. In 2013, they took over a project two previous developers had failed at — building a mega-mall in the Mead-owlands in New Jersey. Their half-built American Dream Meadowlands went on an extended construction hiatus last year while awaiting $1-billion-plus in public financing, but construction resumed in April. American Dream Miami spokesman, Miami landuse attorney and former state Sen. Miguel Diaz de la Portilla, says American Dream Meadowlands is on schedule to open in 2018.
Questions about the prospects for the Miami project seem especially in order, given the state of mall retailing. Shifts in consumer spending, especially to online, and struggles and closings of mall anchors like Macy’s, JCPenney and Sears have called into question the viability of the enclosed mall.
“I think it’s a very good idea,” says New York retail consultant Howard Davidowitz, but “I just think, given the environment, so many store closings and so many bankruptcies, the malls are doing so badly, I’m negative.”
Some brokers believe the Ghermezian project is so different that it could succeed, however. Stan Rutstein, a veteran retailer and Bradenton-based commercial broker — and no optimist on the future of traditional malls — says the Ghermezian project could work because it’s in one of the nation’s great tourism markets and because of the entertainment draw. With the right tenant mix, it could “turn out to be a pretty good venture,” Rutstein says.
“Miami and south Florida continue to grow on a daily basis,” says Zach Winkler, senior vice president and retail lead for south Florida for commercial real estate firm JLL. “I do think there’s room for more. I think it has to be done the right way.”
The Ghermezian way recognizes a mall has to offer more than shopping. Its vision of the future of retail is a hybrid mix of shopping and entertainment: Best-in-class tenants benefiting from families drawn for a day trip by Chinese acrobats and Cirque du Soleil-style shows, skating and skiing. “To call that a mall is really a misnomer,” says Ken Krasnow, executive managing director of the south Florida region for Colliers International.
The Ghermezian plan sets aside 1.5 million square feet for entertainment, and as much as half the 3.5 million square feet of retail will be “retail-tainment” style, says Robert Gorlow, a project principal. “We’re not a mall. We’re an entertainment-retail center,” he says. He says retail stores at Triple Five’s other two malls are performing well and talks of trends in which brick-and-mortar stores become showrooms for customers who order online, akin to the Tesla store in Dadeland Mall where customers can configure the car they want.
Crying foul
Competitors argue that the Ghermezian way relies on lowering costs through government aid. Organized opposition to the Miami project has come from south Florida mall owners, including Indianapolis-based Simon Property, owner of Dadeland, Miami International Mall in Doral and Sawgrass Mills in Sunrise in Broward; Michigan-based Taubman Centers, owner of the Dolphin Mall; and Chicago-based GGP, owner of Pembroke Lakes Mall in south Broward. New malls and shopping centers are the single biggest threat to an existing mall’s health.
The companies created the South Florida Taxpayers Alliance to squelch any government subsidy for American Dream. “They welcome the competition from another mall owner, but they want to make sure the new mall owner competes on a level playing field and doesn’t get any breaks that haven’t been offered to other developers in the past,” says the group’s attorney, Jeffrey Bercow of Bercow Radell Fernandez & Larkin in Miami.
American Dream hasn’t asked for subsidies. Diaz de la Portilla says the malls fear competition. “None of their many malls has the attractions American Dream will have,” he says.
Locally, citizens and elected leaders in Miami-Dade and in Broward fear what the projects will mean for already jammed roads. Diaz de la Portilla says Triple Five will upgrade interchanges and roads as required by law. “Triple Five and the Grahams will have 4 billion good reasons to make sure” roads function efficiently, he says. “They want to have a successful project.”
The Ghermezians and the Grahams say their projects combined will provide up to 32,000 construction- related jobs and 25,000 permanent ones. “American Dream will have a tremendous positive impact on the economy of south Florida,” Diaz de la Portilla says.
Even if the county approves the land-use change in July, a long series of negotiations and approvals lies ahead. The Ghermezians, optimistically, hope to be open for business in 2022. “We’re very confident the project will go forward,” Gorlow says.
