By Deirdra Funcheon
By Chris Joseph
By Deirdra Funcheon
By Terrence McCoy
By Chris Joseph
By Chris Joseph
By Deirdra Funcheon
By Chris Joseph
A dapper and affable salesman, Freedman cues Frank Sinatra's "I've Got the World on a String," then walks his alligator-skin shoes along the dark wood floors. He passes the black granite countertops and the Sub-Zero appliances in the kitchen on his way to the 500-square-foot terrace that demonstrates why someone just might plunk down $1.95 million for this opulent, 3,400-square-foot pad at Las Olas River House.
"This unit gives you the terrace that wraps around," he says. Outside the glass doors is a view of Broward unmatched in any other building in South Florida. The city hums below as workmen tar the roof of the Fort Lauderdale Museum of Art, a marching band plays several blocks away, and a park fountain sprays. To the north are the hazy outlines of beach condos and the fetid ziggurat nine miles away better-known as the county landfill. To the west, 'burbs sprawl toward the Everglades. To the south, in the distance, a tiny bar graph shaped like downtown Miami breaks the horizon.
"There's a beautiful sunset view here, and at night, with the airport, all the lights twinkle," Freedman says. "It's very exciting."
But not nearly as exciting as the project's motto -- "Where Las Olas Meets Fifth Avenue" -- would imply. In fact, the building is surprisingly empty. During the day, the dual, 42-story, 452-foot-tall blue towers of the luxury condo are visible from all over. At night, though, its 287 units cast so few lights that the behemoth appears like a silhouette on the skyline, as sparsely lit as the commercial towers it dwarfs.
Why, fully 10 months after it opened, does the city's most conspicuous residence resemble a haunted house? Quite simply, because as much as you might like to live there, not many people actually do.
According to county property records, 68 of 287 units in River House remain unsold. What's more, records suggest that only about 25 percent of people who purchased a condo at River House live in the building. Meet the people who bought a piece of the American dream, Fort Lauderdale-style:
Of 219 owners, only 55 have registered a River House mailing address with the county.
Of those 55, only ten have registered homestead exemptions, a tax break for primary residences.
Corporations own 13 units.
Thirteen groups of people own more than one unit.
River House billboard great Dan Marino, who purchased unit 3302 for $1.35 million, lists his Weston home as his mailing address.
Even more telling, of the 219 units that have been sold, roughly 33 have been put back up for sale (some might say "flipped"), according to a recent review of records on the Multiple Listings Service, a widely used database of properties for sale. Many of these re-sellers are expecting lucrative, if unrealistic, returns:
These numbers seem to bear out what many have been speculating at the water cooler: New condominiums in South Florida, particularly in Miami-Dade County, have come to represent commodities more than homes. "Just doing straw polls, it's been about 70 to 80 percent of the units bought by speculative investors planning on cashing in on the South Florida real estate pot of gold," says Jack McCabe, a real-estate industry analyst from Deerfield Beach.
With so much money in real estate these days, it's shocking that River House needed public assistance. But it did. Years before the housing boom sent South Florida real-estate prices skyrocketing, the Fort Lauderdale City Commission was trying desperately to encourage development in the city center. It found a partner in the Tribune Co., parent company of the Sun-Sentinel, which at the time owned a parcel of land next to its sand-colored skyscraper.
To make the land more attractive for potential developers, Tribune asked the Fort Lauderdale City Commission for a break on impact fees -- money that developers pay to compensate for increased traffic brought by any new project. The commission complied, agreeing to waive $1.6 million in fees.
That paved the way, literally, for Tarragon South Development Corp.'s Las Olas River House.
Fort Lauderdale Mayor Jim Naugle, an ardent critic of overdevelopment in the city, remains bitter about subsidizing such an extravagant housing project. "We forgave $1.6 million in impact fees," he says. "That's the price of a single condo at River House."
But the results are truly amazing. Sitting in a 16th-floor office in the Sun-Sentinel building, James R. Helman, Tarragon South's executive vice president, points out the window. His Las Olas River House rises next door, its sharp lines stretching so high that it reaches beyond the window's view.
"River House is the type of building you'd expect in Manhattan, but it's right here in South Florida," Helman says.
Asked why so little life is apparent in the building, the developer points out that the units, sold "designer-ready" (some might say "completely hollow"), require that owners spend months to design, permit, and finish the interiors. Some owners have opted not to move into their units while the construction is as thick as it has been. What's more, the developer has been selling units in small groups, holding on to certain condos to allow time for the market to drive up prices -- and profits.
"We have consistently moved the price, moved the market, at a nice, steady, increasing pace, and we've had sales every month," Helman says. According to Helman, public records haven't caught up with sales and fewer than 40 new units remain unsold.
But some of River House's residents allege that the situation isn't so rosy inside the building. In interviews with New Times, River House residents complained that the developer has been slow to finish many of the building's amenities. "Projects that were supposed to be complete by now still aren't finished," says Bill Dilodovico, who bought his unit in January for $760,000.
Even though the first residents began unpacking in December 2004, River House's pool, library, and bistro weren't finished until March. Mailboxes were finally installed last month. And even today, the health club, elevators, and many hallways are still under construction. Even the bike room, which the developer claimed would be finished in August, isn't ready, residents say.
Helman says minor delays are to be expected with such a large project. "We were under a lot of pressure from many of the buyers to close on their units as soon as possible," he says. "I don't think the common-area stuff has been a problem."
But some of those residents disagree. "What the hell does it take to finish a bike room -- a few metal racks?" says one resident who asked not to be named for fear of retribution. "The building is a total zoo."
That might explain why River House remains a dark tower. Its prices, starting now just shy of $1 million, are no doubt out of reach for most buyers in South Florida.
But save your nickels, because last month, Freddie Mac CEO Richard Syron predicted that such high-end real estate had reached its price peak and would likely decline. If prices drop nationwide, South Florida's market will likely lead the way.
Deerfield Beach's McCabe predicts a 10 to 30 percent correction (some might say "crash") in South Florida luxury condos in 2006. A glut of available units, coupled with a dearth of affordable housing, could precipitate a fall, the analyst says.
"The problem is that developers have been led to believe there's a much greater market for luxury condominiums -- particularly $700,000-and-above units," he says. "But the majority of people who were buying them were not true end users. What it's done is overinflate the true demand. So we've built this oversupply, because developers have had a lot of cheap money to do it with."
Even Helman, River House's developer, admits that some investors have irrational expectations. Asked specifically about unit 2910, purchased in January for $1.145 million and now on sale for $2.095 million, Helman smirks.
"He might have it on the market for that, but he won't get it," he says.
Real-estate attorney Howard Kurzweil remains optimistic about the building. He bought his unit for $1 million in December 2004, and although the constant flow of construction crews in the elevators is annoying, he has high hopes.
"I think it'll be the ultimate condominium in Fort Lauderdale," he says. "You just have to give it time."
Helman concurs: "The people who have been attracted to the River House, they wouldn't want to live anywhere else."
That goes for at least 55 of them, anyway.