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Miami Worldcenter Was Almost A ‘Dinosaur.’ Now It’s A $6B Juggernaut

April 25, 2024 | BISNOW

The Miami Worldcenter team had just broken ground on its debut tower when its plans began to fall apart.

Macy’s and Bloomingdale’s were set to anchor the first phase of the 27-acre, $6B development in the heart of Miami, but in mid-2015, the company’s stock was cratering as Americans shifted to shopping online.

The 60-story Paramount Miami Worldcenter condo development was meant to be a proof of concept of sorts for the broader project, but the development team was facing a stark reality about their plans to anchor the project with a traditional mall with big-box retailers.

“It was a wake-up call for everyone,” said Dan Kodsi, CEO at Royal Palm Cos. He was developing the building with Miami Worldcenter’s master developers, Nitin Motwani and Art Falcone.

“Everybody realized we were going to build a dinosaur,” he said.

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The 27-acre Miami Worldcenter rose from a sea of parking lots and low-rise industrial buildings.

Peggy Olin, the CEO of OneWorld Properties, who had been diligently working to sell Paramount’s 569 condos, remembers the moment Kodsi told her that they were abandoning plans to build a mall next to the tower. She was on a family vacation in Vail, Colorado, when the phone rang.

“I’m freaking out,” Olin said. “We thought we were going to lose all the work we have done.”

Instead, the team pivoted to billing the Paramount as having “the most amenities in the world,” Kodsi said, with basketball, tennis and racquetball courts replacing promises of an indoor shopping destination.

“I was literally redesigning the plans and building the foundation at the same time,” Kodsi said. “We just kept pushing through it.”

Olin reached out to every buyer who had already purchased a unit and sold them on the project’s new vision. Not a single buyer canceled, she said, and the property opened its doors in July 2019 with around 90% of its units sold to buyers from 56 countries and total sales approaching $500M.

Unforeseen circumstances have in some ways defined the path that Miami Worldcenter has taken, transforming 10 blocks of surface parking and low-rise industrial buildings. The Global Financial Crisis accelerated Motwani and Falcone’s efforts to assemble the land for the project, and the pandemic has propelled it into one of the most successful large-scale projects in the city’s history.

“There’s a great joke that we all make plans and God laughs,” Motwani told Bisnow from the construction office at Miami Worldcenter this month.

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Nitin Motwani and his partner, Art Falcone, began buying land for Miami Worldcenter nearly 20 years ago. Motwani at one of the development’s pedestrian streets.

Today, the neighborhood has 1,447 residential units, 2,527 apartments or condos under construction and another 7,026 planned. A 351-room hotel opened early last year, and another 219-key offering is being built alongside 300K SF of retail space that’s either open or nearing completion and 600K SF of proposed office space.

Around $2B in development is completed, $2B is under construction and another $2B in projects are planned, said Motwani, who also helps lead the Fort Lauderdale-based developer Merrimac Ventures.

The decision to scrap the indoor mall had a profound impact on the whole plan for Miami Worldcenter. The team needed to reassess its retail component, and Motwani, Falcone and their partners came up with a new plan that included ground-floor retail along wide, walkable sidewalks anchored by a central shopping plaza that today is known as the Jewel Box.

The new layout was settled, but even with the Paramount coming out of the ground, Motwani was still selling the dream of what Miami Worldcenter could be.

“We actually built a staircase out of wood and you put on these VR goggles because we couldn’t explain to people what this is going to be,” Motwani said during a walking tour of the property.

The area he pointed to that had once hosted the stairs was fenced off, a 19K SF Apple Store is rising in its place.

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An Apple store is being built in front of the Jewel Box retail plaza where Motwani once used VR goggles to show clients his vision for the development.

When Motwani and Falcone started acquiring land for the project in the early 2000s, the thought of an Apple Store opening in an area that was primarily used by Miami Heat fans for parking was inconceivable to many in South Florida’s commercial real estate community.

“I was getting calls from people saying, ‘Are you insane? How are you thinking of launching something there?’” Olin said of the 2014 launch of sales at the Paramount. “We were asking $700 a foot at the time and they said ‘You’re insane, nobody is going to buy that.’”

The project ballooned in size to 27 acres, in part because the recession allowed Motwani and Falcone to consolidate land from distressed buyers who were forced to sell. The developers made deals with more than 43 sellers assembling the land, spending at least $206M in the process, according to a Bisnow analysis of property records.

Motwani and Falcone created Miami Worldcenter Associates as the entity that would manage the project and brought in Los Angeles-based CIM Group in 2011 as an equity partner.

All the while, Motwani was attending twice-weekly community meetings organized by The Southeast Overtown/Park West Community Redevelopment Agency to pitch the project. Overtown, on the western edge of Miami Worldcenter, is a historically Black neighborhood with a long history of underinvestment that has led to skepticism among residents.

“Trust me, oftentimes, [Motwani] was getting pounded and pounded and pounded” by local residents at the meetings, said James McQueen, the CRA’s interim executive director. “But he stuck with it.”

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Miami Worldcenter has 300K SF of retail space, including shops that line two streets that were closed to vehicle traffic.

Community members and local officials were skeptical of the developer’s tax increment financing proposal that would see Miami Worldcenter Associates pay $200M for the infrastructure improvements that creating a web of towers necessitates. Elected officials were wary of agreeing to return a portion of the future taxes generated from the new towers to the developers, but the program was ultimately approved.

Miami Worldcenter Associates and the CRA also made a deal to hire people from the community for the construction. The developer held job fairs, created a job training program and agreed to bring in Black-owned construction firms to help build the towers.

“I take my hat off to Nitin [Motwani], because he’s a businessman first, but he has been a very good community partner,” McQueen said.

Motwani even brought his wife and kids to games to cheer on the Booker T. Washington Senior High School football team. Before and after each game, Motwani provides food for the players, many of whom McQueen said come from disadvantaged families and might not otherwise have access to a meal.

“He’s really been a guy who has been very sensitive to trying to make not just Miami Worldcenter better, but the entire community better,” McQueen said, stressing that the developer doesn’t want publicity for his community engagement.

The infrastructure deal has also proven to be a boon for the neighborhood, McQueen said. He pointed to the recent renovation of 400 apartments at Overtown’s Town Park Plaza, financed through those tax revenues, as a project that wouldn’t have happened without Miami Worldcenter.

As the infrastructure was being laid in place, the area around the planned development was also being transformed. Site work for the Brightline rail connecting Miami to Fort Lauderdale and Palm Beach began in 2015, with a station at the edge of Miami Worldcenter. The Pérez Art Museum Miami and Phillip & Patricia Frost Museum of Science opened in 2017 to the east of the development. Miami-Dade College expanded just south of the project site.

Entire new neighborhoods were sprouting up in Edgewater and Midtown to the north as Downtown Miami was drawing a wave of condo development to the South.

“Now everyone talks about transit-oriented development. We’re the largest transit-oriented development in the Southeast,” Motwani said. “Everyone talks about arts, culture and entertainment. We’re all of those things. It was our vision to fill the hole in the doughnut.”

As The Paramount was being built, Falcone, Merrimac and CIM Group were also building Caoba, a 444-unit apartment tower that was the first project to officially open in Miami Worldcenter in January 2019.

WeWork’s former CEO Adam Neumann bought the property in 2021 for his Flow multifamily startup, which officially launched this month. Flow again partnered with Falcone and Merrimac to add a second 41-story tower to the property that’s slated to deliver later this year.

Construction on the 43-story luxury apartment tower, now known as Bezel Miami Worldcenter, started in 2019, around the same time that the 351-key citizenM hotel began construction.

The second phase of major project development is well underway, and every yet-to-be-developed block of the property has a planned tower or developer in place, Motwani said.

“It took 10 years to get the first billion dollars of capital,” he said. “It took 10 months to get the second.”

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Miami World Tower 1, right, is slated to deliver lated this year as the first of four towers from Lalezarian Properties.

Kodsi’s Royal Palm Cos. broke ground on his second Miami Worldcenter project in August 2021, a condo-hotel development called The Legacy Hotel & Residences that’s slated to open this year. New York-based Lalezarian Properties topped off the 52-story Miami World Tower 1 apartments in July, with plans for three more towers on its site.

South Florida’s most prolific developer, Related Group, partnered with Motwani’s Merrimac to break ground last January on The Crosby, a short-term rental condo project with 450 fully furnished units. Aria Development Group and Merrimac began construction earlier this year on the 32-story 600 Miami Worldcenter condo tower.

Naftali Group paid $40.5M for a site in March 2022 where it’s planning the JEM Private Residences, a 67-story luxury tower with 259 condos sitting above 500 apartments.

Miki Naftali, the firm’s founder, moved to Miami over a decade ago, but JEM is the well-known New York developer’s first project in the city.

He was drawn to Miami Worldcenter because it’s one of only two neighborhoods in the city that he sees as truly walkable, which he said is increasingly important as Miami’s growing population has created more gridlock on its streets.

“You don’t need to have a car every second of the day. You can walk to the market and wherever else, which is a little bit more like the major cities around the world,” Naftali told Bisnow in an interview.

Miami Worldcenter Associates was careful to curate a mix of towers for the overall development that didn’t cannibalize each other. Rental units exist next to luxury condos that are designed for both full-time residents and short-term stays. The citizenM hotel bills itself as “affordable luxury,” while the Legacy is planted firmly in the upscale space.

JEM, which broke ground earlier this month, is part of the third phase of development for Miami Worldcenter. Naftali said that timeline gives him confidence that he’ll be delivering a project into a mature neighborhood that offers the walkability and experience his clients demand.

“If you don’t have a vision, it’s hard for you to envision how this neighborhood will look in 12 months, not in 12 years,” he said. “My project is going to take four years to complete. By the time that I complete my project, the neighborhood will be completely different.”

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The JEM Private Residences sales gallery at Miami Worldcenter includes a model of the apartment and condo tower.

Miami Worldcenter’s 300K SF of retail space has been rolling out as towers are completed, with stores like Sephora and Lululemon open and The Container Store and Rihanna’s Savage X Fenty slated to open this year.

A dozen restaurants have signed on, offering meals at a range of price points. Three restaurants have already opened, along with a Lucky Strike bowling alley. The latest addition is a planned rooftop tequila bar from pop star Nick Jonas and menswear designer John Varvatos.

Motwani said walkability and public art were part of the ethos that defines Miami Worldcenter. He and his partners selected Boston-based Elkus Manfredi Architects as the project’s master planner specifically because its pitch centered around creating walkable streets.

Miami Worldcenter will have 200K SF of private property dedicated to public use, including open plazas, green space and widened sidewalks. A 20K SF plaza and event space is being built in front of the Jewel Box and adjacent to the upcoming Apple Store.

Motwani said he received complaints when he opted to close two streets to car traffic and design them as retail-centered walking paths. Now that the pedestrian streets are complete, those same people are calling to thank him.

Miami Worldcenter has yet to deliver any significant office space, but 600K SF is planned. Abbhi Capital, a Miami-based investment firm, won approval in September from Miami’s Urban Development Review Board for a two-tower plan that includes a 59-story residential building and 484K SF of office space across 33 stories.

Other office space is rumored to be in the works from Neumann’s Flow, which owns a long strip adjacent to its apartment tower. The property is currently fenced off and undergoing site work, but a low-rise building with ground-floor retail topped by office space is expected to rise there in the coming years.

Motwani said the office space was always slated to come late in the project’s development cycle. Today’s office tenants demand access to the restaurants, retail and amenities that the developer has worked to get in place.

Olin, who has sold more than 2,500 units at Miami Worldcenter, said her job has only gotten easier as those offerings begin to deliver.

“Now we don’t sell the dream,” she said. “We sell the reality, and the reality is here.”

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