North Miami to invest up to $15M in $86M apartment project

For North Miami, a small Black-majority city with big ambitions, the first building block in a long-sought revamp of its old-school downtown may be falling into place. And it will help fill a hole in one of Miami-Dade’s worst housing crunches.

The city’s community redevelopment agency has agreed to put up millions of dollars in tax revenues to subsidize the largest workforce housing development in its history, a planned 384-unit apartment complex that would occupy four acres just one block from its traditional main street, Northeast 125th Street.

City leaders hope the private $86 million project — a mix of income-restricted and market-rate rentals — will help turn around perceptions of an underutilized downtown whose long-sought revival has never materialized. The CRA has agreed to provide up to $15 million toward infrastructure and other costs for the ELEVEN55 NoMi project.

North Miami is now also seeking developer interest in a public-private partnership to refashion low-density city-owned land in its downtown, including city hall and the city police headquarters. The vision calls for a denser urban center around one of its crown jewels, the publicly owned Museum of Contemporary Art, which draws visitors from around the world. The plans also envision a transit or “mobility” hub that would capitalize on the city’s central location and its pedestrian-friendly bones.

The goal, North Miami Mayor Philippe Bien-Aime said, is to kick off development of a mixed-income community that provides affordable new housing for the city’s residents, many of them first- and second-generation immigrants from Haiti and the rest of the Caribbean, while boosting overall prosperity.

“It’s the first of a series of projects we are planning,” Bien-Aime said of the new housing project. “Right now, we are in talks with several private developers. We have a plan for mixed-income housing in downtown to bring a more friendly downtown where people can live there and shop there and go to the gym there.

“We need to boost our economy and we need to increase revenue. And the best way to do that is to get private investment in our city.”

That North Miami, with a population of around 62,000 people, is in a position to do so is partly thanks to city foresight and the opening nearly two years ago of the first phase of Solé Mia, a massive housing and commercial development on the site of a onetime landfill on the edge of Biscayne Bay. Solé Mia has been called “a game-changer” for the city.

A substantial portion of the property taxes generated by Solé Mia and other new development within the CRA boundaries go to the city agency, created under state law to combat poverty and urban blight. The Solé Mia site, then known as Biscayne Landing, was included inside the CRA’s boundaries when the agency was created in 2004. Prior plans never came to fruition.

The arrangement reflects North Miami’s split personality as both a city of immigrants and of wealthy residents who live along its waterfront neighborhoods.

Once a predominantly white town, North Miami experienced a demographic and racial transformation starting in the 1990s, as Haitian immigrants looking for better living conditions began moving north out of Miami’s Little Haiti enclave, where they first settled. As white residents moved out to the suburbs, immigrants were drawn by the city’s stock of solid housing and inexpensive rents and home prices, especially west of Biscayne Boulevard.

Today the city is about 60% Black, according to U.S. Census Bureau estimates. But the population is split geographically, with more affluent white residents concentrated near Biscayne Bay and east of the Boulevard.

For the less-affluent, the housing and economic picture is severely strained, according to a report commissioned by the city from Florida International University’s Metropolitan Center in 2018. Because of little new construction on the west side, that housing stock is aging and deteriorating even as prices and rents rise, making if less affordable to residents, the report concluded.

The city’s housing supply is badly in need of a refresh, FIU said. About 68% pof homes in the city were built before 1970, and nearly 47% is more than 50 years old. Some apartment buildings older than 40 years have yet to obtain the legally required recertification to ensure they remain safe to occupy, Bien-Aime said.

Citing 2016 estimates, the report put the city median household income a
t $37,490, or 15% below the median household income of the county. North Miami’s poverty rate of 24% is also significantly higher than Miami-Dade’s at nearly 20%. And household incomes are dramatically lower in some Census tracts in the heart of the CRA district at around $23,700, the report says.

That means more than 60% of renters in the city are considered cost-burdened because they spend more than 30% of their income on housing. Forty percent are “severely” cost-burdened, FIU concluded, spending more than half their income on housing costs.

At the same time, rising home prices have put home ownership increasingly out of reach for many North Miami residents. Zillow puts the average price of a home in the city at $274,000 — a 7%-rise in one year.

The planned new housing would provide studios to three-bedroom apartments in the heart of North Miami, across the street from a public elementary school and a short stroll from MOCA and shops, offices and cafes.

It would occupy the site of 12 small aging apartment buildings, bought by Omega Investors Group for $5.3 million in 2018. Omega also purchased the one single-family home on the block for $500,000 in 2019. Omega partners include Sebastien Scemla, a former fashion designer and retailer who transitioned into real estate with early investments in the Miami Design District and Little River neighborhoods, and Shawn Chemtov of CMG Capital Group, a prominent Miami-Dade mortgage lender. A third partner is Jose Lago, of Preferred Aliance Group, which owns and manages apartments in south Miami-Dade.

Scemla said Omega has been working on its plan for three years.

Under an agreement with the CRA, 10% of the units, or 38 apartments, would be set aside for people making 80% of the Miami-Dade median income, now $59,100, with rents topping out at $1,190. The rest of the units are classified as “workforce” housing, aimed at people making up to 140% of the county median. Those rents range from $1,050 for a studio to $2,500 for a three-bedroom, Scemla said.

The building, designed by Behar Font & Partners of Coral Gables, will also boast a fuLl suite of amenities, including a swimming pool, yoga rooms, a ground-floor café, pet spa, bicycle storage and a gym.

North Miami residents, including residents of the apartment complex the new project would replace, would get preference on the affordable units, Scemla said. Existing tenants who decide to move will get relocation assistance, he said.

To offset costs and keep rents at affordable rates, the CRA would provide up to $7 million spread out over several years. The agency will also spend $8 million for new infrastructure, such as water and sewer systems, undergrounding of utilities, sidewalks and outdoor lighting. The CRA would turn over the funding only after Omega completes its financing and secures a construction loan. Clawback provisions allow the agency to get its money back if Omega doesn’t get building permits within two years.

Scemla said he has his partners are “pretty close” to securing all financing and hope to break ground by mid-2021. Omega will retain ownership after completion and manage the complex. Scemla said Omega plans to be in North Miami long term. The firm set up headquarters in an office building the partners bought next to the project site and Scemla has joined MOCA’s board of trustees.

The project’s low-rents are possible not just because of the CRA’s investment, Scemla said, but also thanks to the relatively low cost of land in North Miami, rock-bottom interest rates and a decision at the end of 2019 by the city commission to significantly boost residential density in the area, to 150 units per acre. That kind of density makes it financially feasible to redevelop and bring in enough rental revenue to keep rents low, he said.

“My goal is, I want nurses, teachers, first responders, students coming out of FIU,” Scemla said. “This area needs this.

“We want to bring an identity to North Miami. North Miami is about affordability and providing a tremendous amount of value in an area that’s so central,” Scemla said. “Now the zoning is in place, and we have a board that is pro-development. They want to transform the city. I see an incredible bright future here.”

Bien-Aime said ELEVEN55 is the first and largest of three affordable housing developments being planned. The city has an ambitious goal of adding 500 units of affordable housing annually for the next several years, both in new construction and rehabilitation of existing but aging buildings, he said.

The city also intends to negotiate with the developers of Solé Mia to integrate affordable housing units on site as they seek approvals for a new phase, Bien-Aime said. The project’s developers have made a verbal commitment but no specifics have been agreed on yet, he added.

The approval of the ELEVEN55 funding comes as the city has been hard hit by the COVID-19 pandemic, which has disproportionately sickened minorities working in service industries — the source of employment for many North Miami residents, as the FIU study shows.

The CRA has shelled out around $3 million to help residents and keep small businesses afloat during the pandemic. But the ultimate goal is to leverage tax revenue from new development to boost residents’ prospects in the long run, Bien-Aime said.

“We are a diverse community, whether its economic-wise or whether it is race-wise. We want to make it more livable for everyone,” he said. “So we try to maximize everything that we have. We have a depleted stock of affordable housing. They are old. They need an upgrade. Especially in those difficult times.”