MIAMI | Island Gardens (Watson Island) | FT | FLOORS

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Appraisal claims Watson Island developers getting substantial discount from city

As developer Flagstone Property Group begins work on its massive mixed-use development on Miami’s Watson Island, an ardent project opponent is claiming city officials hid from the public a real estate appraisal proving taxpayers are getting stiffed on millions of dollars in annual rent, The Real Deal has learned.

A draft of the appraisal, completed by Coral Gables real estate consulting firm Joseph J. Blake & Associates, was submitted to Henry Torre, the city’s public facilities director, on April 30. A copy obtained by TRD shows the fair market value of the guaranteed minimum payment Flagstone pays the city should be $6.1 million in today’s market. The analysis also estimates Flagstone will collect at least $36 million in retail and hotel revenue in 2018, when the project is complete. By 2036, the annual revenue is projected to exceed $150 million.

The latest appraisal information, which the city has concealed from the public, confirms that city commissioners are prepared to lavish multi-million dollar subsidies for a private developer to build a commercial project on Watson Island,” Stephen Herbits, a resident of the 1000 Venetian Way condominium and project opponent, told TRD.

Herbits claims the Blake appraisal should have been disclosed during a May 8 city commission hearing when Flagstone won approval to modify its deed with Miami. At the hearing, Herbits and his lawyer, Sam Dubbin, argued the city gave away valuable public property at outdated rates based on appraisals completed 10 years ago. The commission’s unanimous vote paved the way for Gov. Rick Scott to sign off on the $575 million project two weeks later.

Flagstone is moving ahead with the project. May said the developer started environmental mitigation — removing sea grass in preparation for the marina component.

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