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Deirdra Funcheon, Bisnow South Florida
Today, Nitin Motwani is developing one of the biggest real estate projects in America, the $2B Miami Worldcenter. But he has also seen the flip side of the business, growing up with motel-owner parents in Fort Lauderdale when it was a scrappy, declining strip of beach and wet T-shirt contests were the biggest draw.
Nitin Motwani’s parents bought the Merrimac Hotel on Fort Lauderdale Beach in 1986, precisely the wrong time. The city’s famous spring break had lured 350,000 college students the year before, but that number was about to collapse as residents fought the tacky party atmosphere that had grown with the signature event.
As the students left and the beachfront became depressed, the Motwanis’ two sons, Dev and Nitin, watched their parents struggle for decades. After high school, both boys fled for careers on Wall Street.
But then, in the early 2000s, both returned. Over the past decade, Fort Lauderdale Beach transformed into a high-end destination, and parcels that the Motwani family had assembled during the downturn became earmarked for luxury properties: the Conrad Fort Lauderdale Beach and a Four Seasons Hotel.
Dev is currently redeveloping the Las Olas Riverfront and building the luxury Gale Boutique Hotel & Residences. Nitin became managing director of Encore Capital Management, a private equity fund with about $1B in assets, and is managing principal of Miami Worldcenter Associates, which is building the $2B Miami Worldcenter mixed-use development in Downtown Miami.
Motwani said the 27-acre Miami Worldcenter is the second-biggest urban mixed-use project in the U.S. after Manhattan's Hudson Yards, which clocks in at 28 acres. It is a close call: Washington, D.C.'s The Wharf has 24 acres of land, but also has 50 acres of water. The $3B Water Street Tampa will redevelop 50 acres, but has not broken ground yet. The $6B redevelopment of San Francisco's Treasure Island is still in the shoring-up-infrastructure phase.
Miami Worldcenter will include a 1,700-room Marriott Marquis hotel with a 500K SF expo center and an 1,800-car garage, a 45-story office tower and 450K SF of high-street retail modeled after Miami's Lincoln Road and the Third Street Promenade in Santa Monica. The residential portion of Worldcenter includes Caoba (Spanish for mahogany) a 43-story, 444-unit apartment tower with 20K SF of ground-floor retail, which just topped off, and Paramount Miami Worldcenter, with 564 condos under construction. Nearby will be Luma, a 434-unit luxury rental tower developed by ZOM. Plans for another, 40-story, 429-unit tower have also been approved.
Nitin Motwani, who will be a panelist at Bisnow’s upcoming 2018 Forecast event Feb. 27, answered a few questions about the project.
Bisnow: Having grown up on Fort Lauderdale Beach, how is it for you to look back at its transformation? Could you have envisioned what it is today?
Nitin Motwani: For us, that was hell. My parents always had that vision. My brother and I struggled. We saw how much work our parents put in. We worked in the motels. As young kids, we were very surprised to see our parents devote so much time when they couldn’t afford to. We intentionally attempted to get away. But here we both are. The city gave our family a star along the beach last year. My father passed in 1994, but my mom, she has a lot of pride. My brother’s doing the Gale and the Four Seasons. We finished the Paramount Fort Lauderdale. We’ve been very active on that beach. It’s surpassed even my parents’ expectations. I’m very happy. Very proud.
Bisnow: How did you connect with [Miami Worldcenter partner] Art Falcone?
Motwani: I moved back to South Florida from up north. I had been an equity derivatives trader at Goldman and realized I wanted to come back in 2004. We met socially through a friend, and two years later were in business together. We talked ideas when we flew to Dubai and India on Art’s plane, across the world and back to look at a project in India. I learned on the plane that Art was also doing research for what would become Worldcenter.
When I got involved, it was noncontiguous land. There were other developers involved. It was a turning point, from speculating on land to developing a master plan and vision. A good thing in our relationship is that neither Art or I can say it was my idea or his. Together, we did design charrettes, looked at projects all over the world, and with [architect] Howard Elkus — he passed last summer, but his team has been with us the entire way — it’s been an incredible process. We’ve got a billion dollars under development and some of the biggest names in real estate in the world as our partners.
Bisnow: You scrapped plans for an enclosed mall, and now each of these buildings, some of which have different development partners, will have its own retail. Will they be competing against one another to fill all that space?
Motwani: Each of the vertical buildings has retail at the base. That’s 360K SF all being leased and managed and owned by Forbes/Taubman Properties. They did the Waterside Shops in Naples. There’s 100 years of retail experience between the two groups. It’ll be designed, leased and managed as one big neighborhood. Each building is designed by a different architect, so it won’t feel like Disney, yet it will have a unified feel, like a city within a city. We’re not going to to have a Macy’s or Bloomingdale’s or a traditional department store anchor. Forbes and Taubman are in active conversations right now with retail and restaurants.
Bisnow: You want to make a lively, walkable downtown, but that’s been a challenge in Miami, where 35% of all home sales are to foreigners, many of whom are holding them as investments or vacation homes. You drive by and there are no lights on at night. How will Worldcenter be different?
Motwani: I think a key component is that, of the 2,000 residential units in Phase 1, 1,300 are for-rent apartments. Caoba has 444 units opening at the end of this year. ZOM’s Luma, that’s 434 apartments. Phase 2 of G West, which is the sister to Caoba, has another 420 units. That’s 1,300 apartments right there. With Paramount’s 564 units, our average unit size is 1,600 SF. For a lot of buyers, this may be their second home, but buyers are spending more time here. They’re buying bigger units to spend more time in. That, coupled with the residential units we are not developing, that PMG and Melo are developing, there’s going to be a lot of activity in walking distance.
Bisnow: Worldcenter includes a massive hotel component. Will the Marriott keep its current JW Marriott Marquis in downtown or vacate that?
Motwani: The same developer, MDM, did both. This will be a [convention-oriented] Marriott Marquis as opposed to a [luxury] JW Marriott Marquis; big conferences, conventions, entertainment, a different hospitality experience. I think their success has given them the conviction to move forward with a Marriott Marquis — that there's demand for different experience at a more moderate price point.
Bisnow: Worldcenter has reportedly been pitched as part of Miami’s bid for Amazon’s HQ2. Assuming they choose Miami, how would that shake up the current plans?
Motwani: I cannot speak to anything involving Amazon.
Bisnow: Have you met Jeff Bezos?
Motwani: Unfortunately not. I will say that we do have a shovel-ready, mixed-use office tower by Hines that will be breaking ground in the fourth quarter this year. That happens to be part of the RFP requirements — they wanted a 500K SF building. A train station is opening this summer, which ties to Palm Beach and Broward counties, Orlando even. We're bringing together arts, transportation. Worldcenter will have a pedestrian experience.
We live in a beautiful city. People should enjoy it. We’re incorporating a pedestrian-only promenade and improving Metromover stations, and ultimately, Tri-Rail or whatever comes down the road will hopefully find a way to the beach. There's arts, culture, including [David Beckham's proposed soccer stadium]. It feels like Worldcenter will finally be the hole in the doughnut that's filled in and ties everything together.
Bisnow: What has been the biggest lesson for you through all of this?
Motwani: I think that, as I learned from watching my parents, these transformational projects just take time, especially if you want to do them the right way. We’re doing something that embraces the urban fabric, on 27 acres, uniting a disparate downtown. This was 10 parcels with 40 sellers that sat vacant for 50 years. It’s taken tremendous persistence to get through all of that. Art and I were able to persevere.
Bisnow: What keeps you up at night? Do you worry about a downturn?
Motwani: What keeps me up at night is my 10-month-old! I have three boys. I haven’t slept in six years. But in this cycle, we’re incredibly well capitalized and low leveraged. I have great partners with augmenting skill sets. What keep us up at night is thinking what else we could be doing to improve the area? When we started, there was no Uber or autonomous cars. These things require changes.
What keep us up at night is the responsibility of developing a city within a city. It’s not just building a building. There’s a level of responsibility. What an opportunity — most people will never be able to develop a city within a city, a global city. We spent a tremendous amount of time with the community, with mayors, various departments. We went through a dozen votes with public bodies and they were all unanimous. That’s the greatest accomplishment: getting the community to agree. It speaks volumes. And we did it on our own. We didn’t hire a big team. We met directly with community members, with politicians, and were open and transparent with them. And we got unanimous approval.
Bisnow: You talk about responsibility. That area of Downtown Miami has long been flooded with homeless people. There are also not many options for schools, should families want to live in downtown. Are you doing anything on either of those fronts?
Motwani: There’s a lot going on with the Downtown Development Authority. Those are two of our biggest priorities, homelessness and schools. We try to figure out effective solutions. The school board owns a lot of land around there. The Omni CRA [is involved]. Southside Elementary, Booker T. Washington, Overtown ... There's a lot [in the works].
Bisnow: And a Miami developer's favorite question: What about climate change?
Motwani: I think people really underestimate all that's going into Miami. Voters just passed a bond with $200M for resiliency efforts for the city of Miami. Our site is 12 feet above the water table. It's the highest downtown. And after Hurricane Andrew, our building codes improved dramatically. There are hurricanes in other markets — New York, New Jersey, the Carolinas — but when storms hit Miami, we're a lot more resilient by virtue of the code we have here. All our buildings will be LEED certified. No one's head is buried in the sand. But it's February and beautiful — 70 degrees, while everyone else is freezing. Post-tax reform, post-winter, a lot more people will be considering coming to Miami.