Residents, village officials air feelings on sale of Bal Harbour Club property

Let's discuss the article posted in June by Miami Herald.

The article portrays the feeling of upset Bal Harbour residents who felt that they been robbed. I would want them to calm down. First of all, if the project would get thought the city, the will become more rich and would be able to afford more on spending on infrastructure and perhaps even minimizing taxes for their residents. Does it sound not true? We will see... The second and most important issue is that that the project did not do correct calculations. It will depends on how the real estate market for luxury real estate in such cities an Bal Harbour or Sunny Isles continue to perform. What do I mean by that? The project does not have the right calculations yet. In order to be implemented into real life, the project still need a market appreciation about 15%. How will I be able to prove it? The last sales in the newest and most prestigious condo, St. Regis of Bal Harbour, goes for around $1,000.00-1,100.00 per foot for smaller units and $ 1,500.00-1,600.00 for larger, premium units without no obstruction. The new Argentinean developer would have to sell his project around $ 1,800-$ 2,000.00 per foot in order to make a profit. Let me show you my calculations. According to the article, the developer, Consulato Bal Harbour LLC has bought the land for $220,000,000 or $880,000 per unit. I have shown before that larger units at this market are selling with a premium. Let's assume or hope that the developer would be able to build the condo with average an space close to 3,000 sq ft. The cost of the each unit would be around $500,000.00 plus cost of the land and about at least least 15% for marketing and cost to keep the condo before it get's sold. All of these factors would send just the cost of the project over $1600.00 per foot. What I am trying to say? Unless the market appreciates another 15 %, which is possible on this market, the residents of Bal Harbour could still enjoy the club, which by modern measures is just plain outdated.

Residents, village officials air feelings on sale of Bal Harbour Club property

    The construction of a 250-unit luxury high-rise condominium on the site of the Bal Harbour club could begin as early as the third quarter of 2013.
    Bal Harbour residents recalled their memories of the Bal Harbour Club as word got out that the property had been sold.
    Village resident Dina Cellini had been a member of the club for more than 20 years. She said she remembers celebrating several family occasions there, and that the sale of the building was unfortunate.
    “The sale of the property is disappointing for many reasons, not the least of which is the loss of the open space and breeze that the original village planners envisioned and created from the ocean to the bay,” she said in an email.
    Argentine developer Consultatio Bal Harbour LLC purchased the 5.5-acre property at 10201 Collins Ave. for $220 million. Plans are to build a luxury high-rise condominium with approximately 250 units priced at over $2 million each. Consultatio is the prime shareholder. The site would also include a small amount of commercial development, including an upscale restaurant.
    This is the firm’s second major acquisition in Miami. Consultatio this year began construction of another luxury condominium project on the site of the former Sonesta Key Biscayne, which it purchased in 2009. Argentine businessman Eduardo Constantini owns the development and financial firm. Chief executive of Consultatio North America Marcos Corti Maderna said the original one-story club building will vanish.
    “We will demolish the actual club and build a residential tower,” he said.
    Village Mayor Jean Rosenfield said she is optimistic about the new development.
    “The Bal Harbour Club will always have a place in the history of our village,” she wrote in an email. “We are very excited about the future of this property. The site’s developer has always built quality luxury properties, and we are anxious to learn what the vision is for this site.”
    Village officials say they are open to public comment and that the site plan will be reviewed publicly before any final determination is made.
    Village planner Michael Miller said Bal Harbour will keep an eye on any possible traffic issues.
    “The regulatory agencies will review the traffic plan and determine if an impact fee is appropriate and that connections to Collins Avenue are optimal,” he said.
    Maderna said construction could start by the third quarter of 2013 if the approval process goes smoothly.
    Plans are for access to the beach to be enhanced for residents, he added.