MALL FEVER HITS SOUTH BEACH
Byline: Rebecca Kleinman
MIAMI — Look out, South Beach — America’s got your number.
Sure, the models still sip decaf skim lattes at the News Cafe, waiting for the light to be just right. And in the evenings, of-the-moment photographers will grab a cosmopolitan at Tantra or a mojito at Albion. But it isn’t just for the uber-trendy anymore.
Like many hip zip codes, once the district is featured on “Entertainment Tonight,” the mainstream moves in. That’s what’s happening here.
South Beach, nestled between the Atlantic Ocean and Biscayne Bay, is attracting lots of tourists from across America and with them, an influx of stores and eateries that make them feel right at home, like Banana Republic, Starbucks and Pottery Barn.
The area is less than a mile wide and 23 blocks from north to south, and the portion experiencing the most widespread development is even more concentrated, starting at Lincoln Road, which runs from east to west between Sixteenth and Seventeenth Streets, and extends as far south as Fourth Street.
South of Lincoln, national names have been popping up along other main drags, including Ocean Drive, running north to south along the beach, and Collins Avenue, a block west of and parallel to Ocean Drive.
The outcome is something like an outdoor mall makeover along Lincoln and Collins.
In the latter half of 1999, chains like agnes b, Urban Outfitters, Via Spiga, Mayor’s Jewelers, Pottery Barn and Williams-Sonoma took their first leaps on Collins or Lincoln, while the Gap and Banana Republic, present in the district since 1996, opened second locations on Lincoln.
And it’s not just the clothing and home chains.
In the past year, Starbucks Coffee added two of its three South Beach locations, national floral chain Gerald Stevens bought out the upscale shop Flowers & Flowers, an 18-screen Regal Cinemas with 50,000 square feet of retail space opened at the corner of Alton and Lincoln roads and T.G.I. Friday’s opened on Ocean Drive.
There was even a rumor of a Red Lobster coming to the former South Beach Brasserie space on Lincoln, turning many a tan face green with disdain. But a tourism official now says the space will go to a Denver-based supper club chain.
More changes are on the way.
According to the City of Miami Beach, 2,000 more hotel rooms will be added in the next two years, including The Ritz-Carlton at the eastern end of Lincoln Road and a Marriott on Second Street and Ocean.
An eight-story office building with 28,000 square feet of retail space and a 600-car garage will begin construction in the summer on the corner of Sixteenth Street and Washington Avenue, which is the district’s main thoroughfare, running north to south a block west of Collins Avenue. And another 700-car garage is proposed to go up along Lincoln.
Also slated to open by year’s end are Billboard Live, a state-of-the-art concert complex on Ocean; a Victoria’s Secret, Bebe, White House/Black Market and Sunglass Hut/Watch Station on Lincoln, and a Polo Sport, Club Monaco, Quiksilver and Intermix on Collins. Scoop, the trendy Manhattan and East Hampton retailer, plans to open a unit called Scoop Shore Club on Collins in August. Along with women’s clothing, it will be the first of its stores to carry men’s.
Heading up much of these projects is Michael Comras of The Comras Co., a local developer. As the owner or leasing agent of much of the retail space on Collins and Lincoln, he and developer Tony Goldman, the visionary behind Collins Avenue’s Fashion District, have turned South Beach into an international tourist destination akin to Times Square or Piccadilly Circus.
Both developers have had experience with similar ventures.
Comras’s past projects include The Shops at Sunset Place, an outdoor mall in South Miami that he developed with the Simon Property Group, and Palm Plaza in Coconut Grove, Fla. Goldman’s work can be seen in New York’s SoHo and financial districts, and in Newark and Philadelphia.
The transformation took a while longer in South Beach, which became a hip destination in the early Nineties when the fashion, music and entertainment crowds discovered it. And when Gianni Versace converted a rundown hotel into his private palazzo, it cemented the neighborhood’s cool quotient. Although Armani A|X, the Gap, Express and Banana Republic had been on Collins since the mid-Nineties, retailers needing more space, like Pottery Barn, were unsure of where the next retail hot spot would be.
All eyes turned to Lincoln, once referred to as “the Fifth Avenue of the South.” The road had fallen into disrepair, its real estate primarily used for artists’ galleries and studios. Then an $18 million infrastructure and cosmetic renovation came in 1997.
Afterward, national retailers couldn’t speculate as to where their place would be amid its 10 wide blocks.
According to Comras, many looked for space some five years before Regal, Banana Republic and the Gap settled on its west end.
“National retailers are like sheep. They like to congregate around each other,” he said, adding that without a critical mass, this level of retail can’t exist.
But critical mass isn’t the only catalyst behind the boom.
According to Michael Aller, tourism and convention director for the City of Miami Beach, the area is the top tourist destination in the world. He adds that more than 14 million tourists visited Miami Beach in 1999, 70 percent coming for South Beach alone.
For this reason, Comras said South Beach has graduated to a “must-be” location for any major retailer.
“Retail sales volumes run about $600 to $1,100 per square foot, compared to the national average of $250 to $300,” he said.
Aller agreed that retail is stronger than ever since the nationals arrived on the scene.
“Banana Republic on Collins has two Wells Fargo pickups a day. The chains boost tourism and vice versa,” he said.
As a popular summer destination for South American tourists because of the reversed seasons, South Beach business is becoming less seasonal. Jeff Bechdel, vice president of business development for the Miami Beach Chamber of Commerce, reports that the amount of money spent on food and drinks in the summer of 1999 equaled that of the 1995 peak season.
Its growing popularity as a place of residence, especially for young people, also creates steady sales. According to Bechdel, 95,000 people live there year-round, swelling to 200,000 during peak season.
Also adding to its appeal are the presence of the film and fashion industries, as well as famous residents and visitors.
“It’s a playground for the stars…what Beverly Hills used to be,” said Aller.
Now that South Beach has the world’s attention, officials spend their efforts keeping the attractions and aura that put it on the map, aside from the ocean: the Art Deco architecture, glamour and local flavor.
Developers realize the architectural preservation constraints and public concern.
“You don’t come into a community like this and try to buck the system. You must take a grassroots approach and talk to everybody,” said Comras.
Each renovation must go before the Planning Board, Design Review and Historic Preservation committees.
Strict codes, such as down-zoning buildings so that they remain at a certain height or storefront length, preserve the area’s unique look.
Citing free enterprise and the lack of rent control, many officials report that these codes are the saving grace of the district, especially Lincoln. Nationals won’t find big storefronts in its middle and eastern sections, with the exception of Victoria’s Secret, housed in the Miami City Ballet’s former 11,000-square-foot space. Its corner location allows for 75 feet of storefront. In contrast, most of the road’s spaces are narrow and deep.
To further complicate matters for chains, most of the road’s buildings belong to different owners. And due to the preservation codes, it is virtually impossible to consolidate buildings.
Comras reports chains have learned to accept imperfect features like entrance steps or lower ceilings. He cites Banana Republic as an example of a chain that has adapted well to preservation codes. The company’s renovations of two bank buildings have received rave reviews.
Situated in a former Chase Federal bank, its Lincoln location kept the original marble teller stations as checkout counters, vault door as the entrance to the dressing rooms, transaction stations as display tables, and an intricate, Art Deco metal air shaft as decorative art. In addition, the windows, Art Deco light fixtures and terrazzo floor are all original.
The company also installed the same type of flooring in its rear extension.
According to a spokeswoman for Banana Republic, the retailer is known for its dedication to restoring historic buildings for some of its stores.
“We’re in lots of historic buildings now. We even received an award from the National Trust for Historic Preservation last fall,” she said.
Beyond preservation, the community is especially concerned with striking a balance among national, regional and local names. Their greatest fear is losing the area’s unique charms, whether it be a kitschy store or a Cuban coffee bar.
Randall Robinson Jr., a planner for the Miami Beach Community Development Corp., believes that time is of the essence, adding that his greatest challenge now is balancing national names with local flavor.
For the most part, though, he supports the change.
“It’s silly to think that the chains wouldn’t come. It’s too dynamic, cosmopolitan and beautiful a place,” he said. As a longtime resident, he finds it convenient to buy basics at the Gap or see a movie at the Regal Cinemas. Beforehand, he would have to drive across the bay.
In a public hearing, Goldman noted, “It’s impossible to do anything about controlling the arrival of the national names, but it’s not the end of the world, as long as they don’t dominate. Once you lose the indigenous flavor of the community, then you become a mall, to some degree,” adding that a good balance would be 50-50 or 60-40, nationals to locals. When asked for a solution, he stated that it’s up to the community and government to give tax incentives to, or share revenues from, other occupancy taxes with mom-and-pop establishments like Puerto Sagua Restaurant, a favorite spot on Collins.
Developers believe that national chains will benefit local retailers in the long run, while some local retailers don’t see how they can compete with rising real estate costs. According to Comras, prices on Lincoln range from $40 to $70 per square foot. On Collins, the minimum is $65, if there’s space available.
How well local retailers can deal with the change primarily depends on their lease situations. The trend is temporary leases, with property owners holding out for national tenants.
But even the retailers with fairly secure leases report that the shift in customers has hurt business.
“The retail climate has changed. If they had brought in higher-end retailers and a better caliber of customer, then designer specialty stores like Magazine could have survived, rather than the Gap,” said Carlos Marin, an owner of Mars, a women’s and men’s specialty store on Washington.
Kenneth Cole expanded into Magazine’s space, which closed in January after a 10-year run. Alan Aaronson, Magazine’s owner, said he had struggled for years with landlords and rising costs and that he couldn’t compete with the nationals’ deep pockets.
“It’s a shame what’s gone on here. They’ve taken the charm away. Everything is homogenized. I look at Lincoln Road and think of all its potential. It’s going to become like Coconut Grove, which used to be so beautiful — and now look at it,” he said.
Other retailers are banking on their niches and clientele to pull through the development. To set itself apart from chains, Liberty boutique recently changed its direction from contemporary to higher-end clubwear, much in tune with New York’s Patricia Field.
“The conservative shops are good for us. They’ll make us stick out even more,” said Joey Rolon, an employee.
Orlando Font, Liberty’s owner, agreed, thinking that mall customers are bored with monotone chains. Having seen rents triple, he’s thankful for a supportive landlord, not to mention his 10-year lease.
“If the nationals help clean up the beach, then I’m supportive. But I don’t want to see the entrepreneurs who made this place special get squeezed out,” he added.
Other specialty retailers, such as Steven Giles, an owner of Base, a specialty store on Lincoln Road, consider more chains a win-win situation. Although he lost his lease when FKS Realty Group decided to consolidate its three spaces in the hope of attracting a chain store, Giles is happier with his new space. Located in the pristine Art Deco-style Sterling Building, his new store is not only 1,300 square feet bigger, but situated in Lincoln’s west end. He feels especially lucky since his landlord could have had any national tenant.
“I am completely optimistic. There aren’t many areas in the United States that have this mix. It’s like the city has passed a grade, and we’re in the major leagues now,” he said.
Giles also disagrees with retailers who take on an elitist attitude. Always keeping the bottom line in mind, he doesn’t see any point in turning away the same customer who shops at Banana Republic.
Regarding the loss of local flavor, he believes the residents will ultimately define South Beach’s culture, rather than the tourists or chains.
And for those who really dislike change, locals like Robinson point across the bay to Miami’s upper east side along Biscayne Boulevard — what’s likely to become the next hot spot.