Islands of Calm
Saturday, March 22nd, 2008
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MICHAEL BENISTY knows what it is to be love struck. “When I have a crush on something or someone, I make a fast decision,” said Mr. Benisty, a stockbroker in New York.
Seated on his patio overlooking Biscayne Bay, he gestured expansively, showing off his current lust object, his 1950s fan-shaped house.
“I needed a pied-à-terre in Miami,” said Mr. Benisty, a partner in a South Beach restaurant. “But I intended to watch the market at first.”
Temptation got the better of him, and in February, Mr. Benisty, who is 39, snapped up the first house he saw, paying $3,150,000 for a 3,500-square-foot, four-bedroom weekend retreat on Di Lido, one of the Venetian Islands. The house retains many of its prized original features, including travertine floors, a generous patio and coral-stone exterior wall.
To say nothing of the view. Gazing beatifically across his private stretch of palm-fringed bay, Mr. Benisty said, “The thing that I like is that here, there is only you and God.”
He is one in a small number of second-home buyers to discover the serenity of the Venetians. For years, as I can attest, having moved to the Venetians part time in 2003, the islands have stood in contrast to buzzing South Beach and its successive revivals.
This chain of 11 artificial islands, six of which are inhabited, stretches across Biscayne Bay between downtown Miami and Miami Beach. Some are part of Miami, others part of Miami Beach. They are linked by the Venetian Causeway, a scenic road with 12 bridges erected by developers in the mid-1920s to lure buyers.
“People were really into theming,” said Arva Moore Parks, a historian and the author of “Miami: The Magic City” (Centennial Press, 1991). Venice was an obvious point of reference, she said, one with “a very romantic, glorious cachet.”
Today the causeway, with its old-fashioned lampposts, its skaters and cyclists, offers views of some of the most romantically secluded properties in the area.
The islands form a slice of tropical suburbia that extends eastward almost to Lincoln Road in South Beach, with its proliferating shops and restaurants. They stretch west to the mainland and the Adrienne Arsht Center for the Performing Arts, the $461 million downtown complex that opened in 2006.
Their centralized location has helped the islands prosper. A pocket of stability in an otherwise volatile real estate market, they are positioned comfortably between extremes: on the one hand, downtown Miami, with falling prices and climbing inventories that have placed it at the leading edge of the nation’s real estate crisis, and on the other, the strenuously hip environs of South Beach, where prices continue to climb, albeit slowly, keeping waterfront properties out of the reach of most buyers.
“A lot of the heartbeat of Miami Beach is living on the Venetian Causeway,” said Todd Glaser, a developer. Affluent and often young, buyers are enticed, he said, by the prospect of finding that rarity, a relatively affordable home with a water view. Given those attractions, it was only a matter of time before the islands — some with Old World names like San Marco, San Marino, Di Lido and Rivo Alto — would attract attention.
“The Venetian Islands are growing just the way they are supposed to, quietly and with distinction,” said Gary Hennes, a local developer, whose newest property, Lincoln Square, is a 35-unit condominium building in South Beach just east of Belle Isle, an apartment enclave that is the easternmost of the Venetians. “There aren’t McMansions on every single piece of land. And there are affordable properties on many of the islands.”
Pointedly, he added, “The Venetians have not had the hype of other areas in Miami Beach, and they don’t need it.”
Of course, hype in Miami has never been in short supply, especially among real estate insiders eager to exploit an area that, until now, has enjoyed the status of a best-kept secret.
“The Venetians are hot, I think the hottest area of Miami,” said Seth Semilof, a former real estate broker and the publisher of Haute Living magazine. “There’s still an upside here; you can get luxury properties at under $10 million. That’s true nowhere else on Miami Beach.”
REAL estate agents and developers do agree that a slump across the country, and in many parts of Miami, has not affected high-end markets. Second-home buyers on the Venetians (about 20 percent of the market there) typically pay from just below $200,000 to over $400,000 for an apartment on Belle Isle, and on other islands from about $1.3 million to over $7 million for a modern multibedroom villa with a commanding view of the bay.
“There is a sense that things here did not shoot up like crazy to begin with,” Mark Zilbert, an agent selling apartments on Belle Isle, said of the Venetians. Nor have they drastically plummeted. Compared with Miami, which has seen a decline in prices estimated at 12 to 25 percent since 2005, prices on the Venetians have remained relatively stable, real estate agents and builders say.
“Sales will be stagnant much of this year,” predicted Ashton Coleman, a mortgage broker and real estate agent in Miami and Fort Lauderdale. Of over 50 homes on the Venetians listed for sale, only two have sold within the last three months, he said, one for $2.7 million and the other for $1.3 million. The 50 do not include a handful of private sales, not in his listings. But limited inventories have created a demand at the ultra-high end, Mr. Coleman noted.
According to Jill Herzberg, a partner in the Jills, a Miami Beach real estate agency, $7.4 million was the highest price paid last year for a single-family home, a 10,500-square-foot house on San Marco, directly on the bay.
Second-home buyers on the islands are often in their 30s and 40s, said Nicolas Brocherie, a builder who is also a real estate agent with the Barclays Real Estate Group. They are lured by the promise of privacy, a marked absence of the commercial development that has taken over parts of South Beach, and by the islands’ proximity to the fabled retreats of the rich on North Bay Road and on the nearby Hibiscus, Palm and Star Islands.
Compared with Star Island, which has been home over the years to Will Smith, Gloria Estefan and Madonna, the Venetians have sought to remain resolutely unpretentious and low key. Small crafts and even kayaks line the waterfront; Dodge pickups and Harleys are parked in some driveways.
“The area has gotten looser, with a little bit of a Bohemian aspect to it,” said Todd Davis, a Washingtonian who owns a 1938 historic home on Di Lido Island. It is also a magnet for Europeans and South Americans taking advantage of a weak dollar to snap up bayfront homes.
“The Venetians are a kind of a melting pot,” said Mr. Davis, a partner in Brown Davis, a design firm. “Five years ago they were still undiscovered,” he said, “but that’s no longer so.”
May Mallouh, a former banker turned trader, purchased a 3,000-square-foot waterfront house on Rivo Alto about four years ago. Ms. Mallouh, 44, who shuttles frequently between her primary residence in the Hollywood Hills and her house on Biscayne Bay, views the islands as a “hidden gem.” Many of her neighbors, families with children, live there year round, she said, “so the place provides stability, if you will, and a feeling of neighborhood.”
The area, however, is clearly on the cusp of change, gaining a reputation as a genteel hideaway for celebrities like Paulina Rubio, the Mexican pop singer; Eddie Irvine, the former racing driver; and the 34-year-old hedge fund wizard Jim Pulaski, who rents his home. Most tend to keep a low profile, but their presence has contributed to the area’s growing cachet.
So has the Standard Hotel, a 106-room bungalow resort and spa on Belle Isle, an understated refuge for vacationing film stars, art world denizens and members of the fashion tribe.
Its developer, André Balazs, sees it as “almost a living room for the community, attracting not just travelers but local residents,” including “cosmopolitan people” who have purchased properties nearby.
About three years ago, before the Standard was completed, there was no commercial development in the area, and, “nothing really high end,” said Mr. Semilof of Haute Living. “The Standard is a huge value added.”
Value on the Venetians is measured by an increasingly fancy yardstick. Some people are spending over $3 million for homes so spacious and towering (as high as 45 feet) that they could pass for multi-unit dwellings. Most are packaged with features like open kitchens, hurricane-resistant glass shutters, overflow pools, rambling rooftop terraces for entertaining, and clinically sleek interiors.
“The market,” Mr. Glaser, the developer, said, “is all about modern, slick design.”
Typical is the Di Lido Island home away from home of Mr. Brocherie, a Parisian in his late 20s, who built it and designed its interior. The 3,500-square-foot house has four individual bedroom suites, each with a private entrance; powder rooms with leather walls; white marble floors; an open kitchen; and a 1,500-square-foot rooftop terrace with its own kitchen. Its modernist, white stucco exterior, superimposed on a 1930s Key West-style house, makes it something of an anomaly among the more modestly renovated, 1950s bungalows, neo-Mediterraneans and ranch houses characteristic of the area.
A CERTAIN funky, historic charm is part of the islands’ allure, but so is the potential for living large. Michael Stern, a commercial developer who has owned homes on Hibiscus and in Miami, bought a 10,000-square-foot double lot on Di Lido Island for $8 million last year. He is building a Mediterranean-style villa designed by the Miami architect Ramon Pacheco. A house on the second lot will incorporate an indoor basketball court, said Mr. Stern, an avid fan of the game.
Other buyers are more attracted by the islands’ relative seclusion. Ms. Mallouh’s bilevel house, a Mediterranean-style bungalow, is tucked behind high hedges. An iron gate greets visitors. In lieu of a doorbell, Ms. Mallouh keeps a Jack Russell terrier that barks when company arrives.
“I don’t want people ringing,” she said drily. “I want to receive only the people I know are coming and who I want to see.”
To be sure, the islands have their drawbacks. Until 7 p.m. on weekdays, traffic on the Causeway grinds to a halt every half-hour, when the bridges are raised to accommodate passing boats and barges. An absence of commercial development means there are no visible convenience stores, hairdressers, dry cleaners or other services.
Far more daunting to prospective buyers, though, are the astronomical property taxes — about 2 percent of the assessed value of the property, or around 20 percent of the purchase price.
“That turns people off,” Mr. Stern conceded with a gusty sigh. “But the people who can afford it, they pay.”
Sphere
