Wanted to share with you a connection that I made today that I doubt you've heard or read anywhere else -
yet.
Today's
USA Today has a largely flattering profile on the front page of its Money section (by
David J. Lynch) on
Jorge Perez, CEO of Miami's own
The Related Group -complete with a
Tom Wolfe-style "Master of the Universe" photo of
Perez towering above a scale model of his
Icon Brickell project.
http://www.iconbrickell.com/Titled "
Executive Suite — Today's Entrepreneur: Miami magnate gives city a makeover," it's the latest in
USAT's continuing Executive Suite series.
See this link or the copy of the article I made at the bottom of this posting.
http://www.usatoday.com/money/companies/2007-03-11-perez-usat_N.htmAnd just so you know,
Mr. Perez isn't just any
'billionaire developer" of properties
"in what was once a desolate downtown landscape." Heavens, no!
You see,
Mr. Perez has bigger dreams; he wants to be one of
Hillary Clinton's future ambassadors.
"If the New York senator goes all the way to the White House, he muses, an ambassadorial post would be a nice career capstone."Lest you think Mr. Perez doesn't have true artistic aims for his condos,
"The entryway to Icon Brickell, the triple-towered 2,000-unit condo and hotel project, will be adorned with a series of enormous heads modeled on the statues of Easter Island." http://www.iconbrickell.com/(Personal note: My mother was a secretary for the principal general contractor that built One Biscayne Tower on Flagler Street & Biscayne Blvd. in the early '70's, when it became THE largest skyscraper south of Atlanta.She still has photos of various phases of the project as it grew, and when you see them, it really gives you a remarkable sense of how small -or should I say short- the downtown Miami area really was. And I say that as someone who has seen almost all of the photos of old Miami in books and myriad local museums.Obviously, this was before Brickell was home to million-dollar condo complexes with iconic holes in them, made famous by the opening credits of Miami Vice.While 1BT was going up, her firm had their offices across the street on the north side of Flagler in a building that no longer exists, and one of the perks of that was that familes of the firm could watch the annual Orange Bowl Parade pass by from an immense second-story balcony overlooking Flagler that looked like, well, something out of a large-budget antebellum flick starring Elizabeth Taylor. Or Cleopatra! It was great!!!) The USAT story is replete with the usual South Florida touches: overblown ego, lots of hype masquerading as fact or philosophy, and a general glossing over of inconvenient facts, with revisionist history thrown in for good measure.
And, of course, because he lives in South Florida, lots of nuggets are dangled about the
CO$T of things:
"Perched in a corner office that offers a sweeping bay view, Perez exudes a spend-what-it-takes ethos. There's enough modern art, much of it from Latin America, to outfit a first-class gallery. He sports a purple-checked shirt, purple tie and matching cufflinks. His driver ferries him between development sites in a gleaming silver Mercedes S550, which carries a list base price around $86,000."In short, it's what South Florida has come to accept as the norm down here everytime an 'outside' publication has tried to tell part of the confounding story of South Florida and the people who make it so unique or bizarre over the past 40 years.
(Read the excerpt from
Joan Didion's "
Miami" on this blog or my other one,
http://www.southbeachhoosier.blogspot.com/ for a good example of that unreality.)
Even during the 15 years I lived in DC, and would habitually pick up a newspaper or magazine at a great-but-tiny new stand next to the Farragut North Metro station -just a few feet away from the
WSJ's Washington HQ- I could smell those crazy half-baked assumptions, agenda-driven, slice-of-life stories on Miami or one of its myriad 'personalities' from a mile away.
But for whatever reason, the country has never tired of hearing about South Florida's quirky, dysfunctional nature, and why it was the way it is,
even if the people down here were actually suffering under an acute civic leadership shortage while
Miami Vice was suddenly making this area seem sexy and wild instead of backward and dowdy, esp. over on South Beach when Lincoln Road was like a crypt.
What's really missing from the
USAT story though is the current condo conflict that today's
Daily Business Review cover story captures perfectly in a three-page spread by their
Oscar Pedro Musibay, who ties together the reality that you and I have seen or heard about for months, no matter where we go:
Has the market for expensive or over-the-top condos hit a plateau?
It's a story which should be required reading for everyone in South Florida with a brain and a long-term interest in the area, esp. local TV station news directors, who seem to shy away from giving this kind of story the amount of time it deserves, perhaps for fear of alienating potential advertisers: "
Escape Act: In Down Market, Condo Buyers Need Houdini Skills To Break Contracts, Avoid Costly Purchases"
And guess which company the
DBR story mentions that seems to be taking the most adversarial p.o.v., and fighting buyers the hardest to get out of contracts when costs, esp. monthly ones, are 100% higher than buyres were told? That's right,
The Related Group.
It recounts a particularly typical deal which, when the buyer tried to flip it due to the additional costs, the sticker shock,
"Related made it clear the Miami-based developer would fight him.""They tell us, 'We are not accepting cancellations." If you want to get out, you are going to have to fight them, and in the end you will not win." "They bring you into this trap, and then you are done."The story gives lots of evidence to the current state of murky FL law that some legislators, inc. usual consumer-friendly local favorites like Sen.
Gwen Margolis, are trying to clarify in favor of, yes, developers, though it does say that some efforts are underway to require
"developers to prepare budgets using "good-faith estimates" and "keep a record of how the numbers were
generated."The odds of something the developers hate actually passing in Tallahassee are oh, what, a thousand-to-one? About what the Marlins chances of ever getting a stadium in South Florida as long as their current brain trust of
Jeffrey Loria and
David Samson is running things.
[Giving credit where credit is due, I only first became aware of Mr. Perez and his role in things down here a few weeks ago, when he headlined the Miami SunPost's list of "Super Developers."
http://www.miamisunpost.com/archives/2007/02-01/superdevelopers.htm
Super Developers
What better way to honor some of the pillars of the real estate industry than by having a special section dedicated to them in our Super Bowl issue?
Below are some of the individuals who are now actively reshaping Miami-Dade County with brand-new residential, commercial and mixed-use projects. We say “some” because there are so many more than just the few we have listed below. South Florida still remains one of the most desirable places to live. As such, the demand for new projects is ever present and ever growing.
However, we feel we have compiled a fairly diverse and accurate list of some of the influential and potent players in South Florida real estate development. So for the tens of thousands of Super Bowl visitors, as well as our loyal local readers, we give you the Super Developers.
Jorge Perez
For the Related Group of Florida, there is no such thing as a real estate market slowdown. Even now, the Related Group is actively forging partnerships throughout South Florida and beyond. Among its latest projects: 300 Grove Bay Residence, three condominium towers, the tallest 410 feet high, that will be constructed beside Mercy Hospital in Coconut Grove. The 300 condos will go on the market for between $3 million and $15 million, according to a recent Miami Herald article.
Founded in 1979 by Chairman and CEO Jorge Perez, the Related Group has constructed more than 55,000 condos and apartment buildings all over Florida. Last year, Related racked up sales of more than $3.2 billion while its real estate portfolio assets grew to more than $10.7 billion. Perez has been hailed by his peers as being on the cutting edge of South Florida’s urban growth. Some of his better known projects are Portofino Tower, Murano at Portofino, Murano Grande in Miami Beach and CityPlace in West Palm Beach. In Sunny Isles Beach, Perez partnered with Michael and Gil Dezer and Donald Trump to develop the ultra-luxurious Trump Towers.
A collector of Latin American art, Perez is on the board of directors of the Miami Art Museum and is part of the fundraising campaign for the construction of Museum Park in Bicentennial Park. Perez is also vice chair of the Miami-Dade Cultural Affairs Council, director of the Miami Film Festival, a member of the board of the Downtown Development Authority and a member of the University of Miami’s Board of Trustees. UM’s Architecture Center has been named after Perez, while the Miami Wellness Center has been named after Perez and his wife, Darlene.]One of
Mr. Perez's 11 projects that I'm particularly peeved about is
The Beach Club, right on AIA and Hallandale Beach Blvd.
http://www.beachclubstyle.com/It's a triple-tower project like
Icon Brickell, and is a property that the incompetent HB mayor and city council approved a few years ago
without requiring a 'shadow study' on a once popular family-friendly beach.
When my family moved down here in 1968 when I was seven years old, from Memphis, it had beautiful Australian Pines and actually had some height to the shore, which made it very unusual, and the iconic HB Water Tower was a greenish color very different from its current beach ball colors.
For this blog site, I've been watching it closely as it continues to pollute the public beach next to it, North Beach, with garbage and debris from the site regularly winding up on the beach or even greeting you as soon as you walk up to the sidewalk. Things that people going to the beach would not be bringing along, like crumpled up boxes that had once contained kitchen, living room and bedroom decorations and supplies, as well as large chunks of Styrofoam.
Last Friday, I found large chunks of insulation material wafting along the beach, and made a point of getting some new photos to add sometime soon to the blog.
Believe me, seeing is believing, and it's all right there in the open.
Last year, I made a point of going into the sales office of
The Beach Club underneath the HB Water Tower, and told them in very direct terms that they had a real problem with garbage and debris from their property getting onto the public beach, and that it needed to be solved pronto.
While the City of Hallandale Beach seemed to just wink at the problem and act like it wasn't happening,
the residents and citizens of the city had noticed.
In the intervening months, they've made little tangible effort to prevent it from happening over and over on a daily basis, since their large dumpsters on the north side don't even have regular lids or makeshift ones to contain their loads.
Practically every day, you can find material from their construction activities on the beach or on the access road that connects to the HB Fire Station and
The Beachside Cafe.
The Beach Club really should've listened to the warning I gave them last year.
Now, like HB's own incompetent and apathetic city govt., they'll see that actions have real consequences
Check out the
DBR story where you can, for instance, at the public library branches in Hallandale Beach and Hollywood and see for yourself, and then let me know what you think.
____________________________
Executive Suite — Today's Entrepreneur: Miami magnate gives city a makeoverBy David J. Lynch, USA TODAY
MIAMI — If you stand in just the right spot on the Brickell Avenue Bridge, it's possible to think that every new building in this rapidly evolving city — every single glass-walled pillar of aspiration and ambition — belongs to one man: Jorge Perez.
Of course, that's not the case. Even an urban developer as ubiquitous as Perez can't be everywhere. But visible from the modest concrete span over sparkling Biscayne Bay are the three towers of the $1.5 billion Icon Brickell hotel and condominium project, the multihued facade of another condo building called 500 Brickell and the eye-catching Loft 2, distinguished by a public transit system that passes through an opening in its midsection.
NEWS, PROFILES, TIPS:
Executive Suite indexThe three projects are among 11 freshly minted buildings that Perez, chief executive of closely held The Related Group, has under construction in what was once a desolate downtown landscape. Coupled with earlier projects already completed, the distinctive cluster puts Miami on track to have a people-friendly downtown worthy of a city that bills itself as the unofficial capital of South America. And it's cementing the Cuban-American entrepreneur's standing as one of the nation's most prominent Hispanic businessmen.
"We're going to finally have a center!" Perez enthuses. "This is going to be the epicenter right here!"
Yet, even as the contours of Miami's years-long downtown renaissance materialize, Perez, 57, is shifting focus. After a decade-long run, South Florida's real estate wave — like housing markets across the USA — has crested and turned down. So, the developer is turning his attention to foreign turf, seeking to export the dealmaking savvy and creative vision that transformed a one-time municipal planner into a billionaire who hobnobs with A-list celebrities from Donald Trump to Hillary Clinton.
"There's a lot of capital in the world," says the man Forbes magazine ranks No. 197 on its list of richest Americans.
A recent day spent touring his premier South Florida projects provided a glimpse of the Perez style: hands-on, jocular, cost-conscious but intensely focused on the artistic element. His developments are intended to be distinctive, inside and out. Example: The entryway to Icon Brickell, the triple-towered 2,000-unit condo and hotel project, will be adorned with a series of enormous heads modeled on the statues of Easter Island.
A born salesman
Perched in a corner office that offers a sweeping bay view, Perez exudes a spend-what-it-takes ethos. There's enough modern art, much of it from Latin America, to outfit a first-class gallery. He sports a purple-checked shirt, purple tie and matching cufflinks. His driver ferries him between development sites in a gleaming silver Mercedes S550, which carries a list base price around $86,000.
At each development, Perez indulges in the superlatives of a born salesman. Icon Brickell's spa is "like nothing you've ever seen." The French architect Philippe Starck is "the most creative mind I've ever met." 50 Biscayne is "an amazing building." Striding through the morning's fourth lobby, he suddenly pivots: "The mailroom! Let me show you the mailroom!"
And as mailrooms go, this one is a winner, shimmering with mirrored metal, bathed in light from a gleaming chandelier.
But Perez isn't blinded by self-regard. After crawling through northbound traffic on I-95, he reaches Ocean 4, the last in a quartet of condo towers he's erected along Miami's Sunny Isles Beach.
On this day, residents are moving in, although the building still isn't 100% done. As Perez steps into an elevator, he's accosted by Oscar Torres, who's upset that he has to wait while workers use the elevators.
"I'm an owner, and I'm not too happy with the way things are going," he tells Perez. The developer offers sympathetic noises, hands him his business card and tells him to e-mail if the situation doesn't improve. Torres seems mollified.
Later, inspecting a commons room with a sweeping view of the ocean, Perez instantly sizes up deficiencies in the Spartan decor. Comfortable chairs are needed, here, here and here, he gestures. "Have them come back," he orders the building manager, referring to the designer.
"That one is definitely, definitely not finished," Perez says as he climbs into the back seat of the Benz.
Miami's real estate market peaked almost three years ago, and last year's sales of 137,000 units represented a 34% decline from 2004, according to Michael Cannon, managing director of Integra Realty Resources. Perez acknowledges that new sales of his condo units have slowed, but he seems to be insulated from the full brunt of the downturn thanks to heavy pre-sales. A full 100% of the 633 units in the 500 Brickell development, for example, already have been sold.
But Cannon says an unknown number of buyers who've signed contracts to purchase condos may walk away from their down payments. "The real losses haven't arrived yet. We'll see in '08 and '09," he says.
Perez already has begun targeting other domestic markets, such as Atlanta, as well as underserved foreign markets, where his skills will face less competition. He also has minimized his financial exposure to any market plunge, Cannon says. "That's what's smart about Jorge. It's other people's money and his expertise," he says.
Leaving Cuba for good
Perez was born in the Argentine capital of Buenos Aires to Cuban parents. His father was an executive with drugmaker Eli Lilly, his mother, a pro-Castro intellectual. The family returned to Cuba six months before the 1959 revolution to retrieve an inheritance only to see their ancestral wealth nationalized, spurring a decision to leave for good. As they flew out of Cuba for the last time, Perez says, "I remember clearly leaving the airport and the people taking the jewelry away from my mother as we were getting into the plane."
Perez grew up in Colombia before studying urban planning at the University of Michigan. After graduation, a year spent touring Europe — through London, Paris, Rome, Barcelona and Istanbul — launched his life-long romance with the world's great cities.
He worked as a planner for the city of Miami before bureaucratic torpor drove him into the private sector and a successful vocation as an entrepreneur. In 1979, he established The Related Group, which concentrated initially on affordable housing and garden apartment rentals.
The work married his father's gift for sales with his mother's sympathy for the downtrodden. But Perez chafed at the creative limitations involved in affordable housing, ("You had to build boxes") and turned in the mid-1990s to luxury condominiums instead.
As other developers pushed west with new suburban communities, Perez zeroed in on the city. His affinity for authentic urban cores, where people could walk, eat, shop and be entertained, thus made it an easy sell when Miami Mayor Manny Diaz sought his help in revitalizing the city's nondescript downtown.
Among the first residential projects that jump-started the long-overdue redevelopment was a pair of condo towers called One Miami that Perez erected at the mouth of the Miami River. "Developers don't like to be pioneers," Diaz says. But, "Once somebody with the reputation of The Related Group or Jorge is present there, everybody else says 'he must see something.' Lots of people followed."
Today, Related Group says it has built and managed more than 55,000 condo and apartment units in Florida. Revenue grew from $683 million in 2002 to more than $3 billion in 2005 before slumping to $1.4 billion last year. The company blames the drop-off on a decline in the number of projects completed. "This market was insane. It was on fire. We had to exploit that. … We felt we exploited it well," Perez says with a quiet chuckle.
Seeking international buyers
There's long been an international dimension to the company's business. Roughly 50% of the condo units sold in Miami are purchased by foreign buyers, according to Cannon. Many are Latin American business executives, but as the dollar sagged against the euro in recent years, Europeans likewise have poured into the market.
To attract Latin American executives who have frequent business in Miami, Perez is offering a number of furnished floors in Park Suites at 50 Biscayne, slated to open later this year.
As the South Florida market crested a couple of years ago, Perez began scouting for opportunities outside the USA. He ruled out Brazil, Latin America's largest economy, because the main language is Portuguese, not Spanish. Likewise, Venezuelan officials who have sought to lure him into their oil-fueled market, have gone away empty-handed.
To Perez, two Latin markets hold great potential for his Icon brand: Mexico and his native Argentina. For Americans seeking a retirement or vacation home, a familiar name from back home provides comfort. For an affluent Mexican or Argentinean, it promises cachet. "There's a large premium paid in these countries for what I would call branded product," Perez says.
Last month, Perez announced plans to invest $1 billion in Mexican projects over the next two years. First up: Icon Vallarta, an upscale oceanfront condo where units will be marketed at between $200,000 and $1 million. Opportunities in Argentina, which has rebounded from defaulting on its sovereign debt in 2001, he likens to South Florida "10 or 15 years ago."
Yet even as he readies his international foray, Perez, a father of four who married for the second time in 2001, is looking beyond business. A Democratic stalwart who displays prominently in his office a golfing photo of himself with former president Bill Clinton, Perez blasts President Bush for "killing young men for absolutely no reason" in Iraq.
In recent months, several Democratic candidates have come courting, seeking his support. ("I'm a pretty good fundraiser," he says. "I know how to squeeze.") Illinois Sen. Barack Obama and New Mexico Gov. Bill Richardson have been to his home. But the developer is a Hillary Clinton fan who happily recalls during the Clinton administration when the president would tap his knowledge of Latin America.
Now, Hillary Clinton's status as the front-runner for the 2008 Democratic nomination allows Perez to indulge himself in speculation about his own possible foray into public service. If the New York senator goes all the way to the White House, he muses, an ambassadorial post would be a nice career capstone.
"The money's been made. More money or less will not change my life. Now, the important thing is legacy," he says.
