Brookfield Selected To Develop 50-Acre Broward County Site
After a failed attempt in 2016, the Margate City Commission has chosen a new development partner to rebuild its city center.
After some back-and-forth, Margate’s Community Redevelopment Agency voted 3-2 on Wednesday evening to select Brookfield Properties over Coconut Grove-based The Related Group to build on 51 acres of city-owned land, the South Florida Business Journal first reported.
The city decided between three development firms for the mixed-use project — New York-based Brookfield, Coconut Grove-based The Related Group and New Jersey-based The Michaels Organization — for the empty land at the intersection of Margate Boulevard and Highway 41.
Brookfield, an affiliate of Canadian equity giant Brookfield Corp., proposed 40K SF of retail, more than 300 parking spaces in a garage and more than 844K SF of residential that would hold 911 units, according to public documents. It also would build civic office space on the lakefront and a new community center.
“I have high expectations. At the end of the day if the developers agreement is not what I think is best for the city, I'm not voting for them,” Vice Mayor Antonio Arserio board said at the meeting.
Brookfield would sign a 99-year ground lease with a $100K base ground lease payment and 3.45% of effective gross income for the first phase of the project and 5.25% for the following two phases.
"We are excited about this first step and look forward to working with the City and engaging the community on a plan to realize the potential of the site to the benefit of Margate and its residents for a long time to come,” Senior Vice President of Brookfield Real Estate Frank Frallicciardi told Bisnow in a statement.
This marks the city’s second attempt at partnering with a developer to revitalize the site, following a 2016 agreement with Delray Beach-based New Urban Communities for a $150M mixed-use project that called for 968 apartments, 100K SF of commercial space and an 80-room hotel, according to the New Urban Communities website.
The deal ultimately unraveled and led to six years of litigation, which finally settled last year. Two weeks later, the city tapped Colliers to find a new developer to build on the property.
“It's about trust, the city in general has been burned. You guys probably have been burned in the past, right?” Arsenio said, speaking to the developers. “There's a risk, you know we were in a lawsuit before, you were willing to take that risk. We’ve got to take a little bit of risk too and select someone.”
Arserio and Commissioner Tommy Ruzzano initially moved to select Related Group due to the company's local roots. Related, run by Jorge Pérez and his sons, Jon Paul and Nick, offered to build an 80K SF civic component, 87K SF retail and 696K SF of residential, which would hold 800 units.
Related also offered $100K per year with 5% increases in gross payments to the city every five years and 50% of the retail space's income.
Ultimately, the motion lost in a 3-2 vote after Mayor Arlene Schwartz moved to select Brookfield, which commissioners Anthony Caggiano and Joanne Simone supported.
The Michaels Organization submitted plans for 65K SF for a civic component, 2.2M SF of retail and 2.5M SF of residential with more than 2,000 apartment units and 158 townhomes. They did not submit negotiations on the ground lease or financials.
For years, the city has been hoping to see its central area transformed into a downtown that provides opportunities for businesses, arts and entertainment, visitors and residents. Colliers’ Brooke Mosier, Bastian Schauer, Mark Rubin and Ken Krasnow were tapped by the City of Margate to market the property. Krasnow left Colliers to join Cushman & Wakefield in January.
“After collaborating with Colliers to solicit proposals from across the nation, the City of Margate is thrilled to select Brookfield as their partner in the exciting transformation of Margate’s downtown,” Mosier said in a statement. “Brookfield’s reputation as one of the largest owners and managers of multifamily and retail properties in the U.S. makes them an ideal partner for the City.”
CLARIFICATION, MARCH 17, 5:13 P.M. E.T.: Ken Krasnow joined Cushman & Wakefield in January. A previous version of this story incorrectly stated that he still worked at Colliers.
