CLIENT NEWS: Lionstone, Flag, Ben-Josef plan condo project between their South Beach hotels

July 6, 2023

The three families that own the Sagamore Hotel and adjacent Ritz-Carlton, South Beach propose a 15-story condominium on a portion of their hotels’ lots, as part of a larger aim to breathe life into a two-block stretch of Lincoln Road.

The Lowensteins’ Lionstone Development, the Kanavos family’s Flag Luxury Group and the Ben-Josefs’ Ben-Josef Group want to build the 30-unit building behind the Sagamore at 1617 Collins Avenue and cantilever it over part of the Ritz-Carlton lot at 1 Lincoln Road, according to city records. Essentially, the condo would be “right between” and east of the hotels, Peter Kanavos told The Real Deal.

While the condo building would be separate from a planned revitalization of Lincoln Road, the projects are inherently connected. Both aim to give a facelift to the area and prevent it from succumbing to blight, according to Kanavos.  The developers and city are partnering on some of the Lincoln Road improvements.

“It’s one holistic program,” Kanavos said. The “residential building isn’t in isolation. … We don’t look at this just in terms of the Ritz-Carlton. We look at it as a component and part of a greater whole.”

Because the hotels are part of a city historic district, the Miami Beach Historic Preservation Board is expected to take a final vote on the condo project and street improvements at its Sept. 12 meeting. On Wednesday, city commissioners unanimously approved sending the proposals to the board.

The developers and city would partner on the one-block stretch between Collins Avenue and the beachwalk. Plans call for underground infrastructure improvements, as well as improved traffic flow, walkability and landscaping, and a Morris Lapidus-inspired arch. For their part, the developers, who own a northern section of this stretch, will focus on that portion of the street, including improvements to the Ritz-Carlton entry and loading dock areas.

This project could cost up to $12 million, according to a city staff memo sent to commissioners. Miami Beach would shoulder either half or $4 million of the cost, whichever is lower, and the developers have to match the city’s share and also pay for a lobbyist to seek funding to close the gap, such as state grants, the memo says. The city has until 2027 to ante up its share, though the developers can start on their work in the meantime.

For improvements to the Lincoln Road block between Washington and Collins avenues, the developers would not pay any project hard costs, but will get the project ready for construction, including paying for planning and design costs, as well as for a lobbyist who will seek financing. The plan is to close this section of Lincoln Road and make it entirely pedestrian.

Designed by Kobi Karp, the condo building aims to create a residential sector in an area that’s largely home to hotels, Kanavos said.

This “land-use imbalance” has had a downside, he said. “It has allowed the neighborhood to slide, because there really haven’t been engaged residents,” Kanavos said.

The Sagamore and Ritz-Carlton came under common ownership in 2020 when the three families merged their ownership of the two hotels, as well as of the Ritz-Carlton in Bal Harbour. Prior to that, New York-based Flag and Miami-based Lionstone, led by Diego Lowenstein, owned the two Ritz-Carltons, and New York-based Ben-Josef owned the Sagamore.

In 2020, Lionstone and Flag also scored a $230 million refinancing for the Ritz-Carlton in South Beach.

Published on July 3, 2023 on

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