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Miami Condo Colossus Is Monument to Excess

Miami Condo Colossus Is Monument to Excess

Icon Brickell, a new condominium complex in downtown Miami, was intended to be Jorge Perez’s answer to the Time Warner Center, the massive mixed-use building developed in Manhattan by his longtime business associate, Stephen M. Ross.

Mr. Perez, the chairman of the Related Group (an affiliate of Mr. Ross’s New York-based Related Companies) and the undisputed condo king of South Florida, has peppered the waterfront with residential units in recent years, but he has never built anything on the scale of the $1.25 billion Icon Brickell.

At the point where the Miami River meets the Biscayne Bay, it has 1,646 condos, a 28,000-square-foot fitness area and a two-acre pool deck with a 12-foot-high limestone fireplace. The 22-foot-tall sculptured columns, 100 of them, marking the entryway were inspired by the monumental moai statues on Easter Island and cost $15 million.

But instead of representing a triumph for Mr. Perez, 59, Icon Brickell has become a symbol of the excesses of the building boom in downtown Miami. Since 2003, 83 towers with nearly 23,000 condo units have been added to the downtown skyline, from fancy Brickell Avenue through the more modest Biscayne Corridor, causing an oversupply of epic proportions in this city of 400,000 people.

Florida county may declare itself an economic disaster

Florida county may declare itself an economic disaster

Just five years ago, Port St. Lucie was America’s fastest-growing large city. Then the foreclosure crisis slammed it like a hurricane.

Today it sits in one of the hardest-hit counties in the nation. Thousands of houses are empty or unfinished. Neighborhoods are littered with for-sale and foreclosure signs and overgrown, neglected yards. Break-ins are on the rise.

But one politician believes he has a unique solution: Declare St. Lucie County a disaster area as if it had been hit by, well, a hurricane.

“This is a manmade disaster,” County Commissioner Doug Coward acknowledged. But he said that is why “we’ve got to do something. Clearly, the economic crisis of the country far exceeds the ability of local governments to solve it, but we’re trying be a part of the solution.”

Turn the foreclosure tables

Turn the foreclosure tables

On Thursday, the Mortgage Bankers Association reported that Florida ranks third in mortgage delinquencies, second in foreclosures started and first in foreclosure inventory. At year’s end, 22 percent of mortgage borrowers were at least a month behind on payments.

Everyone pays, directly and indirectly, for these often vacant, blighted foreclosed properties. Abandoned homes can pose public safety hazards and further deflate property values. Cities and towns may have to maintain the properties at taxpayer expense. Nearly two-thirds of the 1,589 condo and homeowner associations surveyed recently by the law firm of Becker & Poliakoff say they face financial problems because of the foreclosure crisis. Homeowners who can’t pay their mortgage often don’t bother with association dues. Lenders that have been slow to foreclose often don’t pay outstanding maintenance fees.

Greenacres Mayor Sam Ferreri said several condo associations in his city are close to bankruptcy. Many can’t pay garbage collection fees to the city. “It’s the highest delinquency rate of garbage we’ve ever had,” said Mr. Ferreri, even though Greenacres has the lowest rate in Palm Beach County at $6 a month. “Do we raise our rates?” In Royal Palm Beach, the village is keeping up the lawns of abandoned homes.

Help for Owners Near the Edge

Until recently, the only way for cash-strapped homeowners like Kevin and Jennifer Norris to renegotiate the terms of their mortgage was to default on the payments, because no bank would consider their request unless they were in arrears.

“But I’ve never missed a payment on anything, and we have a near-perfect credit score,” Mr. Norris said. “I don’t want to ruin that.”

Mr. Norris, 33, recently lost his job with American Express, and the couple now rely on Mrs. Norris’s earnings as a market researcher. They have considered selling their one-bedroom one-bath condominium in Rye, which they bought for $412,000 two years ago at the height of the market, with no money down.

Tell Us Your Real Estate Story

After months of serious searching I closed Thursday on a home I’m planning to rent out. I paid $125,000 for a house that sold four years ago for $355,000. If you’re thinking about buying a bank-owned home I’ve learned a few things. One is that good ones go fast so if you see something you like make an offer. Avoid foreclosure auctions. The houses all need a lot of work and you don’t have time to do proper inspections. Also, the houses at the end of the auctions sell for a lot less than the ones that start off the day because buyers leave. I got outbid early in one auction. Later the same day my friend picked up a three-bedroom home in the close-in Los Angeles suburb of Van Nuys for $163,000 that sold a few years ago for $500,000.

I’d been looking for months in my neighborhood of Los Angeles and while prices had come down I wasn’t seeing anything that was likely to produce positive cash flow, even with a sizable down payment. I made an offer on a short-sale—a home in which the owner is trying to sell it for less than what he owes—but withdrew it when the listing agent didn’t present my offer to the bank. Stay away from short sales.

Lawmakers look for ways to aid condo associations

Harvey Berman, president of Royal Oaks condominium in the California Club area of Miami-Dade County, takes a lot of flack from dues-paying residents in his building who are peeved about other owners in foreclosure and behind on their association fees.

”A man has been in a unit for 17 months and hasn’t paid a nickel for anything and that is not right,” Berman said, “Nobody should be allowed to live on a piece of property for free, especially in a condo where the condo pays the water, cable, laundry, lawn maintenance, the pool, the garbage.”

Still, Berman admits the problem in the 180-unit complex is not as bad as in many other South Florida condo communities where nonpaying units are swamping budgets and forcing associations to cut back on services and hike maintenance fees. But, he says, preventing that takes enormous effort.

The system that allows lenders to avoid paying maintenance fees is broken, says Berman, and needs fixing when Florida legislators meet for their annual session, which starts Tuesday in Tallahassee.