Marinas: Developer says Watson Island marina will start on time
The developer of a stalled resort on Watson Island is now current on his back rent to Miami, and he says he’s optimistic about his chances to build a marina there.
The developer of the stalled Island Gardens yachting resort on Miami’s Watson Island has repaid $100,000 in back rent for the city-owned site and vowed to start construction on a luxury marina there before a February deadline.
In his first interview since facing a default notice from Miami earlier this summer, Mehmet Bayraktar said he lost a major financial backer in the retail and resort complex. But the CEO of Flagstone Development said he felt confident he can hold onto the lender that has agreed to fund a $31 million “mega-yacht” marina on the site, where boats as large as football fields could tie up for the evening.
“It’s there,” Bayraktar said of the financing deal for the marina. “But we basically have to redo the numbers.”
Bayraktar’s interview in the posh but idle Island Gardens sales center shed new light on how this year’s economic crisis rattled a $640 million project endorsed in a 2001 city referendum and years behind schedule.
Banks that had agreed to sell the construction debt on Wall Street have backed off, he said. High-end stores that signed up to rent space in a mall on the island reneged, and Shangri-La, the Hong Kong hotel chain slated to manage one of two hotel and luxury time-share towers at Island Gardens, also put its commitment on hold.
The most recent blow came in May when ING Clarion pulled back on a deal to secure $175 million in equity from an investor for the project, Bayraktar said. The agreement included a provision for ING to reimburse Bayraktar about half of the $50 million he says he has personally pumped into the project.
“It’s nobody’s fault. It’s the fault of the financial world,” said Bayraktar, a retail developer in Turkey. “Basically, we had to take a break.”
The project faces claims of $2 million in unpaid bills from its former general counsel, its former architect and contractor and the building where it rented office space in Miami Beach. In June, Island Gardens missed the first of two $50,000 monthly rent payments for the 11-acre site, prompting stern warnings from Miami to pay or risk losing its development deal for the waterfront parcel.
Aldo Bustamante, the city of Miami’s real estate manager, confirmed Island Gardens has paid the back rent, calling it a “positive indication” as Bayraktar faces a February 2010 deadline to start construction.
The developer said his plan is to begin work on the 50-slip marina, while waiting two years at the most before starting construction on the hotel and retail components.
He would not predict when he could finalize the loan for the marina, but said he would make the city’s February 2010 deadline.
Marc Sarnoff, the Miami commissioner with Watson Island in his district, said he would not support building a marina on the site without some sort of retail component for residents to enjoy.
“I think the marina is a great idea,” he said. “But there has to be something done with the upland [area]. It may not need to have the [resort] towers, but you need to have some connectivity that brings people’s interests there.”
By DOUGLAS HANKS for The Miami Herald