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What to make of the CityPlace default

The partnership behind CityPlace, the mixed-use development in West Palm Beach, has defaulted on a $150 million mortgage, according to Trepp, which tracks commercial mortgages. Unfortunately, you could see this one coming for years.

For me it started with “where are the shopping bags.” I’ve been to CityPlace dozens of times since attending the groundbreaking in the late 1990s, but I’ve always remarked during my excursions about how few shopping bags I see people carrying around.

Questions started being raised about CityPlace a couple of years after it opened in 2000. There’s a 2003 story on CNU.org about how the returns on the $550 million project were coming in below expectations. CityPlace was hit with a foreclosure in 2011, but Miami Dolphins owner Stephen Ross and his partners kept control. He has deep pockets, so this may be what’s called a “strategic default,” which is the start of a negotiation process about how to restructure the debt.

The most consistent allure of CityPlace seems to be that it’s a great place to live in an urban environment or catch a  movie or spend a weekend afternoon walking around, since there are plenty of restaurants, a sprinkling of entertainment venues and nicely landscaped outdoor areas. There are some solid elements of everyday living, such as Macy’s and Publix, but neither are a unique draw. CityPlace Tower also seems to be a very successful office tower, but it’s under separate ownership.

While the restaurants offer some allure there seems to be two problems. One is tenant turnover, which hits the property owner’s bottom line. The other is mix. Panera Bread, Miami Grill and Moe’s  Southwest Grill are places I patronize in general in at any number of South Florida locations, but I’m skeptical they represent the authentic, unique dining experience that’s in vogue these days. These days I’m more likely to drive to the Design District and Wynwood in Miami than CityPlace. None of these neighborhoods were on the radar in 2000 when CityPlace opened, so that’s a sign of how much retail dynamics have changed.

The entertainment aspects of CityPlace, which have experienced turnover, also have to compete with Clematis Street, which falls more into the category of organic development.

CityPlace is far from unique in struggling. Las Olas Riverfront in Fort Lauderdale is a waste of prime real estate on the New River. (There are hopes of redevelopment.) The new owners of CocoWalk in Coconut Grove are trying to turn things around.

The broader question is whether the much ballyhooed turn of the century new urbanism works as well as its proponents had hoped. Rather than new construction, the formula now seems to be adaptive reuse of neighborhoods that create a clear sense of identity and uniqueness. With the high population density of downtown Miami, it will be interesting to see if the new Brickell City Centre in Miami has a formula that works.

 

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Drew Limsky

Drew Limsky

Editor-in-Chief

BIOGRAPHY

Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.