McMansions Are Taking Over Miami Beach, to the Horror of Preservationists and Residents

Todd Glaser steps onto the Sea Tabby, a wood-trimmed 1938 Mathis Trumpy yacht docked off Allison Island, a spit of land in Biscayne Bay just north of the Fontainebleau hotel. As he sits at a table toward the back, he calls out for a Johnnie Walker. An older, fully uniformed gentleman he introduces as Captain Andy quickly delivers the liquor in a glass.

Towering behind the 61-foot luxury vessel is Glaser's new home, a massive eight-bedroom, two-story house with 12-foot-tall, floor-to-ceiling windows and gleaming onyx-marble bathrooms. When Glaser bought the property in 2014 for $3.8 million, a squat one-story 1950s home faced the water.

Glaser struggles to remember what the exterior looked like and can't say anything about the interior, because he never went inside. Instead, he did what he has done to dozens of other properties all over Miami Beach: He ripped the house down within weeks of closing and began building a new megapad, which is now listed for $13.9 million.

Unlike the others, this one isn't for sale, he says. Glaser plans to move into the 8,500-square-foot home on Tax Day with his wife and four children. "We list everything because we're machines," he explains. "If someone calls for this, we'll get 'em in something else."

"No one's going to buy that house for $10 million with the air conditioning on the roof."

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As the sun dips below the horizon, Glaser's boat glides along the glittering waterfront. The developer points out other aging homes he suspects will soon crumble under a wrecking ball.

"There's a very good chance a house like this will get knocked down," he says, passing a '50s-era home. "That one's going to get bulldozed, no doubt," he says, pointing over the bay at another. "No one's going to buy that house for $10 million with the air conditioning on the roof."

The 52-year-old is unassuming in a pair of Asics, blue jeans, a long-sleeved black T-shirt, and a faded red ball cap from Nantucket, where his family spends two and a half months of the year. The developer might not be a household name, but he has become the biggest local player in a booming trend in Miami Beach: buying up older houses, knocking them down, and in their place, erecting luxury "spec" homes that are built to sell without having identified a particular buyer.

Over the past five years, Glaser says he has built about 28 sprawling new houses on the Beach. He won't say exactly how much he's made in the process but acknowledges, "My partners and I have done very well."

Amid an unparalleled housing boom fueled in part by foreign cash, developers like Glaser are ripping down Miami Beach's older homes at an unprecedented rate. Before 2011, less than a half-dozen homeowners per year sent in applications to demolish their pre-1942 houses. But in 2012 and 2013, residents asked for permission to tear down 24 of them. A whopping 38 applied for demolition permits in 2014, and last year, 34 property owners submitted requests to raze old homes. In their place, spec houses boasting everything from water slides to fingerprint-access wine rooms have been erected and then sold, often to cash buyers with no plans to move in.

To preservationists, it's a troubling trend in a city famed for its architecture, from turn-of-the-century Mediterranean-style gems to the world-renowned Art Deco District. Longtime residents, meanwhile, have been spurred into fights and lawsuits over what they see as a hostile takeover by absentee speculators who routinely bend city rules. The feds have become so concerned by the trend that they've begun tracking all cash sales of more than $1 million in Miami-Dade County. And they have good reason — the recently leaked Panama Papers laid bare how many cash purchases are made by politicians and oligarchs tied to corruption.

Dirty or not, the huge sums of money flowing into the city have changed both the way it looks and the type of buyer it attracts.

"We became very famous for our style of architecture," says William Cary, a former Miami Beach planning director who retired in 2014. "And like so many places that became popular, we became the victim of our own popularity. All of a sudden, these wonderful, low-scale, gracious, tropical, single-family residential neighborhoods were rediscovered by people who had a lot more money."

But developers such as Glaser scoff at those concerns. He says that the vast majority of developers are bringing legit buyers to town and that the boom is good for property values. If a few unwanted, older houses are lost in the process, well, that's just the market.

"Nobody's complaining when they're selling," Glaser says.

One of Glaser's earliest memories is cruising North Bay Road with his parents — a hairdresser and a homemaker — and staring open-mouthed at the beautiful mansions lining the celebrity-occupied stretch. Even today, he can still spout off the addresses of his two favorites: 5446 N. Bay Rd. and 5790 N. Bay Rd. The latter once belonged to the Bee Gees' Robin Gibb.

That he would later own both houses — and in fact would tear one of them down — would never have crossed his mind as a working-class kid from Bay Harbor Islands. He's always been a hustler, though. Back in high-school shop class, he carved the block letters of his father's name, Kenneth, and gave it to his dad to display at the Americana Hotel, where he cut hair. His customers liked it so much that Glaser offered to make the nameplates for $5 a letter.

"I always made money somehow," he says.

Glaser's mom, a Baltimore native, and dad, who is from Chicago, landed in Miami shortly before he was born. His family never owned the apartments they lived in — Glaser says his father was a lifelong renter who on his deathbed still worried about how to provide for his wife.

After graduating from Miami Beach High in 1982, Glaser skipped college because his family couldn't afford it. Instead, he took a job as a waiter at Bal Harbour's Regency Hotel and often worked private events for owner Lou Brandt and his friends.

Glaser's life changed, though, after a tragic fire killed more than 80 people at the Las Vegas MGM Grand in 1980. Soon, Florida passed a law requiring hotels and other public lodging facilities to have fire sprinklers installed. Smelling an opportunity, Glaser took up a family friend's offer and became a fire sprinkler engineer.

Business boomed, and by the time he was 25, he was able to purchase his first home, a two-bedroom Key West-style wood-frame in Coconut Grove. Not long after, a neighbor put her home on the market. Glaser made a deal with her, renovated the home, and flipped it for a profit. He never stopped.

Entering the real-estate market, Glaser was diving into a business that's been changing the face of Miami since its very beginning. Miami Beach's boom and bust real-estate cycles began with a peak in land prices in 1925, although they crashed the following year. Things picked back up just before World War II and then again came to a halt as building materials were diverted to wartime efforts. The advent of air conditioning in the late '40s made Miami Beach a year-round resort town, and builders began developing hotels and motels to meet rising demand.

The Beach fell on hard economic times in the mid-'70s, but as art deco grew in popularity, developers began buying up the older hotel properties and restoring them to suit the modern guest. By the '90s, Glaser was in on the early days of the latest boom — and he took full advantage.

Throughout the '80s and most of the '90s, real estate wasn't his full-time gig. The restless entrepreneur still worked in the fire sprinkler industry and also owned a clothing store called Animal Farm and a popular line of streetwear called Pervert that was worn by celebrities such as Janet Jackson. In 1997, he went full-time into development — and eventually had the chance to get his hands on those houses he had dreamed about as a kid.

In 2009, Glaser completely remodeled Robin Gibb's house. Three years later, he snatched up the other home that had caught his eye so many years ago. "As a kid growing up in Miami Beach, as a hairdresser's son, these were the most unbelievable homes to me on the street," Glaser recalls. But walking in as an adult, it was "the biggest letdown of my life — low ceilings, chopped-up, 1970s." It had to come down. He demolished the house and built a new one.

A $43 million spec pad came on the market with a Miami-rich-guy starter kit: a 55-foot yacht, a Jaguar, and a Warhol.

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Glaser has always had a talent for timing, and in 2006 he felt the winds shifting. He unloaded a glut of properties and mostly went on hiatus — just in time for Miami's worst property bust in decades. As the subprime housing bubble exploded nationally, Miami-Dade's own market tanked, with houses losing three-quarters of their value and condo towers left abandoned.

Five years later, he smelled a new opportunity brewing. Banks still weren't lending freely, but Glaser partnered with investors who had cash to finance deals. And among those superrich buyers was a growing hunger for waterfront property — or at least for luxury digs in which to park their money.

By 2014, that trickle had become a full-on torrent of cash pouring into the Beach as foreign buyers from Venezuela, Russia, Colombia, Italy, and France snapped up anything they could — the more luxurious the better. "So many people came in and bought because they wanted the money out of their countries," he says.

Although Glaser says he saw a slowdown in foreign buyers beginning in early 2015, he believes their purchases gave U.S. buyers confidence to invest in real estate again. "They really helped the economy in South Florida and built a strong foundation," he says of foreign investors.

Developers began competing to build the most eye-catching spec mansions possible to attract all of that cash. This past January, one listed a $34 million home with a 42-foot water slide connecting the second-story family room to the pool. A $43 million spec pad in Bal Harbour came on the market in December with a full Miami-rich-guy starter kit: a 55-foot yacht, a Jaguar, and a Warhol.

Glaser hasn't gone quite so overboard. But he does take care to add special touches to all of his properties, like making sure multiple refrigerators at each house are equipped with high-quality icemakers that churn out various shapes to meet every buyer's preferences. He installs an elevator in nearly every home but has bigger plans for future projects. "I'm dying to put an escalator in a house," he says. "I've never seen a house with an escalator."

To build all of those new luxury wonderlands, developers have had to knock down older Beach houses.

From an economic standpoint, Glaser says, it just makes sense to buy properties for the land and then build something new. He estimates it costs $22,000 to knock down a 6,000-square-foot home, versus $240,000 to surgically gut it. To rebuild a shell of a home of the same size runs about $440,000, he says. With a budget of $3.5 million, for 7 percent more, "you can have a brand-new house." For a home to be worth saving, he needs it to have great bones, high ceilings, large rooms, and, ideally, in these times of sea-level rise, a location above flood level.

Glaser laughs at the idea of many homes in Miami Beach being labeled historic, contrasting the city with spots like Rome or even New York. He points to the 1960s as a time when much of the Beach's historic architecture was torn down to build high-rises.

"They knocked down all these beautiful oceanfront Mediterranean estates," Glaser says. "That's when Miami Beach should have gotten tough."

One Friday morning last October, Miami Beach Police Officer Robert Mitchell was dispatched to a disturbance at a home in the posh Sunset Islands neighborhood. He was assigned to the department's violent crimes/homicide bureau, but this was no brutal murder. It wasn't even much of a disturbance.

It was a fight between neighbors about a Styrofoam cup.

The day was windy, and the cup had blown onto Terry Bienstock's property from the construction site next door, where 51-year-old millionaire George Lindemann Jr. had torn down a 1930s home to erect a 7,200-square-foot pad. Bienstock took the cup and placed it on the hood of a construction vehicle. Then the superintendent of the site called the cops.

It was a comical moment for police to get involved, but it came during a dead-serious war between neighbors who had spent two years duking it out in court about the property line. Just three weeks earlier, the dispute had gone to a six-day trial in front of a Miami-Dade Circuit Court judge. Stakes were high: Bienstock estimated he had spent three-quarters of a million dollars on legal fees, and Lindemann had spent $6.4 million on the property.

As longtime neighbors clash with wealthy newcomers amid Miami Beach's real-estate boom, few stories better illustrate the simmering tension — and the absurdities of the collision of money and power at work — than the fight between Bienstock and his neighbor.

Originally from New York, Bienstock is a 61-year-old former Comcast attorney with bushy salt-and-pepper eyebrows and the booming and self-assured voice of a TV news pundit. He moved to Miami out of law school in 1978 and lived for a few years with his wife in Brickell. But as they grew older, the couple wanted something waterfront and family-friendly. Drawn to the character of the 1937 home, they bought the property on Sunset Island III in 1986.

Since then, Bienstock has obsessed over restoring the house to its former glory, adorning his air-conditioning vents with covers in the same design as the trim around his fireplace. When a contractor ruined the original hand-painted Cuban tile in his living room with an abrasive cleaner, he waited eight years until he found the only remaining Cuban guy in Miami with the mold to make the tiles and the skill to reproduce the pale-red painted design on each one.

"We loved the house and wanted to bring it back to the way it was in the '30s," Bienstock says.

Lindemann is the son of George Lindemann Sr., a contact lens and cell-phone company tycoon whose net worth is estimated at $2.6 billion. George Jr. and his two siblings grew up in the New York area and attended school at Manhattan's Lycée Français, a bilingual French private school that boasts alumni such as novelist Danielle Steel and Strokes frontman Julian Casablancas. After graduating from Brown University in 1986, George Jr. became a highly ranked equestrian with Olympic hopes. Instead, in 1995, a federal jury convicted him for his role in the killing of a failed show horse named Charisma with hopes of collecting the insurance money.

Court records and testimony suggest George Jr. was frustrated with the horse's performance and wanted it gone. A couple of weeks before Christmas Day 1990, a hit man who said he had been hired by Lindemann popped into a bar in Greenwich, Connecticut. He later testified he liked to get drunk before doing the deed. Gin and tonic was his drink of choice.

Fueled by the alcohol, the hit man crept onto the Lindemanns' horse farm and attached one alligator clip to Charisma's ear and another to its rectum. When he plugged in an attached cord, an electric current shot through the horse's body, and Charisma collapsed dead. The method left little physical evidence, leading most insurance adjusters to believe the horse had died of colic. The killing was discovered only after the feds stumbled upon the hit man while investigating the disappearance of candy heiress Helen Brach. (Lindemann had no involvement in that case.)

Lindemann was convicted of wire fraud related to the horse's killing and served about 19 months in federal prison.

By all accounts, Lindemann made a new name for himself in Miami Beach, becoming president of the board of the Bass Museum of Art in 2008, a position he still holds. In 2013, the Miami Beach Chamber of Commerce gave him a Better Beach Citizen Award in the category of Citizen at-Large.

"Since moving to Miami Beach in 1996, I have worked diligently to be a responsible and productive member of our community through my professional, philanthropic, and civic efforts," Lindemann said in an email. "Rather than be defined by a painful chapter of my life 25 years ago, I strive to be the best person I can be today."

As the sun sets over the bay on a recent afternoon, Bienstock sits poolside recounting his beefs with Lindemann's construction project. He claims the installation of a seawall next door caused $60,000 worth of damage to his home, which took six months to repair. (Bienstock later dropped his claim because his homeowners insurance covered the cost.) Frequently, he says, his cars were covered in concrete dust, which had to be scraped off instead of rinsed so the concrete wouldn't set. And, annoyingly, there had been another incident involving Styrofoam when a group of workers next door had cut large pieces, sending pebbles of debris flying into Bienstock's pool. (A spokeswoman for Lindemann suggested he wasn't to blame for the debris, indicating city roadwork contributed to the problem.) The two neighbors couldn't agree on the shared property line and proper setbacks, and each filed suit against the other in September 2013.

This past February, Circuit Court Judge Jerald Bagley sided with Bienstock, meaning that parts of Lindemann's property, such as the seawall and the driveway, were over the property line. Portions of the house were also too close to the property line.

Lindemann's attorneys were granted a rehearing, which has been scheduled for the end of April. In the meantime, the judge's ruling has been stayed. "My intent was to build a pretty dream home for myself and my four kids," Lindemann told New Times.

Bienstock says his conflict isn't an isolated incident. As huge homes are rising across Miami Beach, residents are getting fed up with absentee owners and constant construction.

"These are not residents building their own homes. When they were originally built, they were custom homes — you bought the lot and then you built the house you wanted to live in," Bienstock says. "Now they are all developers building spec homes, marketing them overseas to people who are not going to live here."

On a tour of his Sunset Islands neighborhood, Bienstock pulls up to a new luxury home with huge windows. Riding in the back seat is Daniel Ciraldo, a family friend who grew up in Sunset Islands and is now a historic preservation officer with the Miami Design Preservation League.

Ciraldo points at the middle of the second floor, where the untinted windows offer a clear view of a bed. Just to the left, tucked into the corner, the bathroom is visible from the street.

"You can see the toilet!" he says.

To critics like Ciraldo and Bienstock, it's the perfect illustration that these houses aren't really meant as homes to raise families or to retire — or even to live — but rather as investments.

Detractors of the Beach's megahouse boom have two major complaints: Residents like Bienstock say the homes are too intrusive, too large, and too out-of-character with the rest of the city. And preservationists like Ciraldo say priceless history is being lost when homes are wrecked for the new structures.

As Bienstock zips through the neighborhood, he points out homes that have been scheduled for demolition. "This is going to be taken down... They just applied to have this taken down... This is an original house that they got approval to take down... That one's for sale to be taken down," he narrates.

Most of them, he says, will never be lived in. "It's a place to park your millions. They're being sold off paper," he says, sometimes to people who buy the properties sight unseen.

Activists and the government have pushed back. The feds announced earlier this year they would require title insurance companies to report the true buyers of properties purchased for more than $1 million in cash. The provision was targeted at only two markets in the Unites States — Manhattan and Miami-Dade County — in an attempt to crack down on money laundering through real estate.

More than half of all local sales were made in cash in January, according to the Miami Association of Realtors, a rate double the national average. Last year, foreign buyers in particular snatched up 10,600 properties worth a combined $6.1 billion.

Heavier criticism of the industry is likely to come, thanks to the Panama Papers leak. Among those exposed in leaked documents from a Panamanian firm that sets up offshore shell companies were numerous frauds such as Miami Beach father-son duo Mauricio Cohen Assor and Leon Cohen-Levy. The documents suggest the two, who were convicted in 2010 of conspiring to defraud the IRS and filing false tax returns, used the fake companies to shield property from the IRS, including a nine-bedroom waterfront mansion on North Bay Road.

"These islands are literally going to be continuous construction projects."

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On the preservation front, meanwhile, fights in court and city hall have become more regular. The most notable came in late 2012, after The Real Housewives of Miami star Lisa Hochstein and her husband, a plastic surgeon known as the "Boob God," purchased a 1920s estate on Star Island with intentions to knock it down. The couple wanted to build something that looked more like a Greek temple.

Retired planning director William Cary remembers the Hochsteins' architect swinging open the door to the planning department with the blueprints tucked under his arm.

"I said to him, because I knew it was coming: 'Don't even walk in the door,' " Cary recalls. " 'You're proposing to demolish one of the most architecturally significant houses in the city.' Of course, I had no authority to stop anything on it."

That's because in Miami Beach, single-family homes are given historical designation only if the homeowner initiates the process. In the case of the Hochsteins, Ciraldo's organization, the Miami Design Preservation League, petitioned the city to designate the home against the couple's wishes. But city commissioners eventually sided with the owners.

"That made it very clear to preservationists that the city commission was not going to prevent the demolition of historically significant homes," Cary says.

Even Glaser agrees there's not enough incentive for property owners to have their home historically designated. When it's time to sell, the designation can often mean a lower asking price because the buyer won't be able to make significant changes to the exterior.

"There's no benefit," he says. "If I come in... and the house is historic, I'm not buying it."

But Glaser does push back against critics like Ciraldo and Cary. He says most of the houses he tears down are badly outdated or just plain ugly, "one-story 1950 or 1960 horrible homes."

"Everybody perceives me as the guy building modern homes, but everybody forgot I saved Cher's house, I saved Robin Gibb's house, the Carl Fisher house," Glaser says. "I've probably saved more historic homes than anybody in Miami Beach."

He says he always asks for proof that cash buyers have money in a U.S. bank before selling his properties. He also takes issue with the idea that the homes are destined to sit empty as oversized investment vehicles. These days, he says, the majority of his buyers are relocating to Miami Beach full-time.

"The last 15 houses I've sold, maybe one has been for a family only living here part-time. We're building homes that fit a family for people who are going to stay," he says. "That's why the houses are bigger."

Ciraldo isn't so sure. The overdevelopment of residential areas, he worries, will eventually make Miami Beach unlivable.

"If we don't have the right zoning, these islands are literally going to be continuous construction projects, and it's really going to affect the quality of life," he says.

As Captain Andy pilots the Sea Tabby around Biscayne Bay, Glaser points out houses he's built and sold to a who's who of celebrity clients — Billy Joel, Lil Wayne, A-Rod, Hulk Hogan. For the most part, he doesn't mind being tagged as a spec builder or the face behind the so-called McMansions. The market is always changing, he says, and he'll be there to capitalize on it when it does. That's one reason Glaser has been selling off the last of his waterfront properties, now preferring to snatch up "dry" real estate inland.

"All the copycat people are coming in behind me and doing what I was doing," Glaser says. "I'm the one who made the market, so I can't chase the market."

No one knows what the future holds for Miami Beach's topsy-turvy housing market. The Panama Papers might just herald the beginning of the end of the latest cash-driven boom, and local politicians and activists are pushing changes that might make demolitions tougher. But developers like Glaser have a hard time seeing the good times ending anytime soon.

Locally, there's some political will to address the megahouse boom. Commissioner Kristen Rosen Gonzalez has pushed for a "third-party professional" to survey homes for a database that could help city officials determine which homes should and shouldn't be historically protected, but she says her pleas have fallen on deaf ears.

"The fact that we don't have a database is disturbing," she says. "I think we need to start with information, which is something we don't have."

Rosen Gonzalez contrasts Miami Beach with other coastal communities that place more value on their history. "If you look at a place like Saint-Tropez, it looks the same way it did when Brigitte Bardot was floating around on a yacht in the '60s, and there's a reason for that," she says.

Cary, meanwhile, says he'd like to see the city crack down on loopholes in the preservation laws and the size restrictions on existing houses. "What's happening now is so much pressure is being put on the city commissioners by this very, very large money that it's now changing the balance," he says.

"If Miami Beach is no longer a place to raise families, tell us."

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Although the city offers a tax abatement program for homeowners who remodel instead of demolish, it's not always the most cost-efficient method. Rosen Gonzalez says the city needs to find new ways to incentivize preservation.

"We have to be friendly to people who want to restore homes, not just to people who want to destroy homes," she says. "It's definitely changing the face of Miami Beach. The question is, what do people want? Is it architecture? Because we're losing our cityscapes."

Another proposal could make it more difficult to demolish a home in Miami Beach. City commissioners are considering a move to require that all house demolitions, not just for homes built before 1942, receive approval from a panel similar to the city's Design Review Board. That change would need to be placed on the ballot for voters to approve.

Giving whole neighborhoods a historic designation is another option, although not many of them exist in the city. In 1999, Miami Beach native Sheryl Gold and her neighbors had their area just north of 17th Street designated as the Palm View Historic District, meaning their homes could be renovated or enlarged, but not demolished. Their neighborhood is "a model for how this can work without demolishing what's valuable," she says.

"This hasn't happened in a vacuum," Gold adds. "It's because residents have been very, very vocal about what it takes to protect this."

For Gold, her concern is not about the style of the McMansions. She takes issue mostly with the scale of the houses and the fact that so many are built as speculation, rather than to meet a new resident's needs. "These are spec houses by developers hoping their vision of what Miami Beach is supposed to be in the future will appeal to a buyer," she says.

Bienstock says the debate really comes down to one question: Will his neighborhood continue to be a place he can live or will it become a series of streets with enormous empty houses?

"It's been a nightmare, and that is what's driven our residents crazy," Bienstock says. "As my wife said a few years ago: 'Look, if Miami Beach is no longer a place to raise families, tell us. If it's only going to be a second-home vacation market, development spec-home market, party houses, if that's what it's going to be, tell us. We'll move somewhere else.' "

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Jessica Lipscomb is news editor of Miami New Times and an enthusiastic Florida Woman. Born and raised in Orlando, she has been a finalist for the Livingston Award for Young Journalists.
Contact: Jessica Lipscomb