HOME » Press Room » Sunday, October 8, 2006
 News Article:  Retail Goes Urban
    Published by the Miami Herald



Ada Portillo is tired of trekking 45 minutes from her West Miami-Dade County neighborhood just to eat a nice dinner. After she moves into her downtown condo next summer at Met Miami, she won't have to. The restaurants, a movie theater and a grocery will be right there.

Portillo is part of a growing group of South Floridians buying into a lifestyle that allows them to live, work and play in the same area. It's a concept that new urbanists have preached for years but has been slow to catch on here, where suburban sprawl and strip shopping centers have long ruled.

''Where I live, it's very pretty,'' said Portillo, 46. "But there's no life at all.''

Not anymore. The way we shop is undergoing a huge transformation. Mixed-use development -- combining stores, restaurants, condos and offices -- is all the rage. The trend is most obvious in the eastern corridor, an area once largely avoided by many national retailers but now in an unprecedented building boom. Instead of building out, developers are going up, as in New York and Chicago.

You see it everywhere from The Shops at Midtown Miami to Young Circle in Hollywood, Mary Brickell Village in Miami to Las Olas Riverfront in Fort Lauderdale. In the city of Miami alone, there's almost 1.5 million square feet of retail space under construction and 5.7 million square feet proposed, despite a slowdown in the condo market. If all eventually gets built and filled with tenants, that would be more than 26 times Miami's existing retail space.

''It's going to be like living in Midtown Manhattan,'' said Marcos Campuzano, 39, who is buying a condo at one of the area's biggest urban developments, Midtown Miami, where Target has its grand opening today. "It's just so convenient.''

In many ways, we're coming full circle after decades of building out to the Everglades. Now, we're re-creating the type of urban environments that developed naturally in major metropolitan areas.


''It's about creating places that people want to be a part of, that become a destination,'' said William Voegele, a regional director of development for Forest City, which is building the Village at Gulfstream Park in Hallandale Beach. "It's the place where the mayor gives the State of the City address or they hold the local art festival. It becomes the identity of the city.''

Industry experts say it's a trend that had to happen. With land prices spiraling out of control and very little vacant undeveloped land available, developers have to make the best use of limited space. Combining residential, office and retail on one site helps make projects financially viable.

''You need the residential interaction to get the quality retailers,'' said Don Hall, attorney for Boca Developers, which seeks to convert the Las Olas Riverfront into a mixed-use project.

Like Las Olas, many mixed-use projects will come from renovating existing retail centers that have struggled or whose prime real estate can handle more development.

Others involve changing the way property is used. Developer Jeff Berkowitz plans to turn the former Ford of Coral Gables auto lot into Gables Station, eight stories of retail and offices. One of Coral Gables' first completed projects, the Village of Merrick Park, stands on a former city equipment yard.


''We're just at the beginning of a trend that's going to go on for a long time,'' said Michael Beyard, senior resident fellow for retail and entertainment with the Urban Land Institute. "It reflects the maturing of our cities. We're really seeing a generational shift in retail that's as important as the introduction of the suburban shopping mall.''

Society is also fueling this shift. Baby boomers are empty-nesters now, so they are willing to trade the big house in the suburbs for convenience. The lifestyle also appeals to time-strapped young professional who can't stand the daily traffic jams.

For years, Lisa Schiller lived on Brickell Avenue and worked just a stone's throw away in downtown Miami. But that all changed a year ago, when her law firm, Rice Pugatch Robinson & Schiller, consolidated its employees in its Fort Lauderdale office.

The single 42-year-old woman has curtailed her workouts and social activities to make up for the hours each day spent behind the wheel of her Porsche 911, a car she used to love and has grown to despise. Schiller has had enough. She put her Brickell condo up for sale, and she's shopping for a place to rent on Las Olas Boulevard.

Schiller can't wait for the day when she can walk to her office, the courthouse and her favorite dining spots. ``I cannot take it anymore. It's affecting my life. Now I understand why people have road rage.''

Planners argue that these urban living environments are getting people off the roads because they can find all the amenities they want in their own neighborhood. A selling point for projects like Downtown Dadeland and Met Miami is accessibility to Metrorail.

''This is what everyone my age really wants,'' said Dean Friedland, 23, who is buying a loft at Met Miami and expects to take Metrorail when he starts law school next year at the University of Miami. ``We were raised in the suburbs, and that's why we want to get out of there.''

Integrating public transportation and creating environments that encourage walking will be key to the success of mixed-use developments, said University of Miami architecture dean Elizabeth Plater-Zyberk.

''For years, everyone said that nobody will walk in South Florida,'' Plater-Zyberk said.  "But that's changing.''


Even before the recent condo boom created the opportunity for new retail in Miami-Dade's urban core, the market void was already there. Thousands of residents from Miami Beach to Morningside and Brickell Avenue have long been starved for convenient access to many large national, big-box stores.

Count lawyer Jonathan Neuman in that group. Since moving to the Design District in 1999, he and his wife have had to trek to Aventura just to visit a Bed Bath & Beyond.

That's all about to change with this week's opening in Midtown Miami. Target will be joined by Circuit City, Linens 'N Things and Marshalls, all scheduled to open by next month.

Also coming soon: Ross Dress for Less, Loehmann's and West Elm.

''A lot of people are going to be really happy to have that stuff close by,'' said Neuman, 36. "Frequently, we just go without stuff because we don't want to make the trip. It's an all-day hike to go to Aventura, especially with all the construction on Biscayne Boulevard.''

Two other proposed big-box developments in the downtown area -- City Square and Bayview Market -- could move the market from void to glut. Bayview announced last week that it secured Lowe's, and competition for retail tenants is sure to begin heating up.

Also, in South Beach, Berkowitz is moving forward with Fifth & Alton, a three-level development with six levels of parking. Tenants are expected to include Best Buy, Staples and Publix.

Building these projects in urban settings is more time-consuming and expensive, particularly because of soaring construction and land costs. Parking garages alone can add as much as $30,000 or $40,000 per space to a mixed-use development.

Dan Herman, senior vice president of development for Developers Diversified, says cost is one reason the Midtown Miami project wouldn't have happened if not for about $170 million in government subsidies.

''It was too much of an economic burden,'' Herman said. ``Tenants have a threshold of how much they can pay. Just because it costs more to develop doesn't mean they can afford to pay it.''

While retailers and restaurants are buying into ''true mixed-use projects,'' like Midtown Miami and Mary Brickell Village, experts say the prospects are not too encouraging for the ground-floor retail that is part of almost every condominium.

Much of that space is poorly designed to accommodate the needs of national retailers, and comes with potential parking problems and little walk-by traffic, retail brokers say. That's why local, service-oriented retailers are likely to fill those spaces.


''It's not working,'' said Jeremy Larkin, president of NAI Miami, a local retail brokerage firm. "They're being driven by the residential component, and the retail is an afterthought.''

To make more small streetfront retail successful, one industry expert suggests that property owners need to coordinate efforts.

''If we're ever going to be a great city, then all the developers need to hold hands and have a commitment to a merchandising plan,'' said Lyle Stern, whose Miami Beach firm, Koniver Stern Group, has been doing the leasing in many of Miami's urban projects. "No higher-caliber restaurant or clothing store wants to jump in without knowing who their neighbors are going to be.''

Some retailers also still need assurance that there is enough of a market to support them. With the recent housing slowdown in South Florida, retail brokers say that luring tenants has started to become more difficult. Potential tenants are waiting to see who is going to be living in those condos before they commit to a project.


''When a market is very hot, sometimes a retailer will compromise a little on the basic criteria,'' said Mickey Finkle, managing director for Koniver Stern Group. "But if the market cools down, they step back and say let's hold out for what we want best.''

That is likely to mean that not every proposal will end up with tenants -- at least right away. And mixed-use projects not yet out of the ground are likely to be delayed until the condo market regains strength.

But for shoppers like Portillo, a single mother, more mixed-use development can't come soon enough. Once she moves in to her Brickell condo, her 12-year-old son can do the shopping at Whole Foods -- without leaving the complex.

Portillo certainly won't miss the couple of hours she spends daily dropping Christian off at school and driving to work at an adult living facility she owns in Miami. "This is going to be so much better for me.''

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