Two recent deals for properties in distress along the New River are expected to help renew a key stretch of downtown Fort Lauderdale, although the developers face challenges, an expert says.
In the last week of December, Miami-based Cymbal Development paid $11.5 million for nearly 6 acres on the south side of the river, a site that once housed the Shirttail Charlie’s waterfront restaurant. Cymbal is planning a $135 million project that will include retail and residential.
Across the river, an investment group spent $16.7 million last summer on Las Olas Riverfront, the once-thriving entertainment landmark that has struggled during the past several years.
Cymbal bought its property from Cabi New River, which filed for bankruptcy last year. And Riverfront had fallen into foreclosure before the investors acquired it from creditors.
The two projects, along with roughly 2,000 rental units proposed nearby, will play an important role in the downtown’s future, said Chris Wren, executive director of the Downtown Development Authority.
“Downtowns, like any communities, need to grow,” he said.
Cymbal says it has developed $1 billion in real estate in Miami, New York and Los Angeles. This is its first foray into Broward County, and the company hopes to build $500 million worth of projects in South Florida in the next several years.
A marina with 200 storage spaces sits on the 5.8-acre site now, along with a water taxi service. Shirttail Charlie’s closed in 2007 and the restaurant now is Pirate Republic Seafood Grill & Bar. Cymbal assumed the existing leases as part of the purchase.
Cymbal President Asi Cymbal, a Miami resident, said he intends to move near the property to get a better feel for redeveloping it. The land is positioned between Fort Lauderdale’s business district and the Broward Performing Arts Center and is seen as a key link between the two.
“The site itself, we believe, has tremendous potential,” he said last week. “It’s not about building a box. It’s about contributing to the community.”
The Las Olas Riverfront LP investment group is renovating the 280,000-square-foot project and hopes to sign leases with about 20 new businesses, said partner Dev Motwani.
The investors are in the final stages of negotiations with an Italian restaurant and also a coffee shop, Motwani said. They’re talking to restaurants, bars, gym operators and clothing retailers. They’re also looking to upgrade the existing movie theater.
Riverfront opened in 1998 as an entertainment destination. After initial success, it fell into disrepair. Some merchants closed their shops, and the escalators stopped working. Part of the second story is still sectioned off with yellow tape.
Motwani said his group plans to spend more than $1 million renovating the project. Included in that will be new lighting to make Riverfront feel safer at night, he said.
The center is 70 percent vacant, but Motwani expects it to be almost fully leased during the next six to nine months.
“The goal is to reincarnate the center based upon what it was in its glory days,” said Motwani, whose family-owned company, Merrimac Ventures, has helped redevelop Fort Lauderdale beach.
Still, development on both New River sites will be tested beyond the nation’s economic troubles, said Jonathan Kingsley, a senior vice president of the Jones LangLaSalle commercial real estate firm in Miami.
Access on the south side of the river is difficult, which is part of the reason Shirttail Charlie’s closed, Kingsley said. He doubts that upscale office or retail development can succeed there long-term.
As for Riverfront, it needs a presence from national retail chains, but they aren’t likely to open there because it’s not a traditional shopping district or easily accessible, Kingsley said.
Abacoa, a similar development in northern Palm Beach County, opened about the same time and saw many individual retailers close, in part because the center doesn’t have a big national draw.
“Local retailers can survive on their own for only so long,” Kingsley said.
The development authority’s Wren acknowledges those concerns but points to transit projects planned for the next several years that will improve access in thedowntown.
He’s also impressed with the credentials of the developers, saying they have the expertise to attract the right mix of tenants to the area.
“I think they can help break the mold,” he said.