The Sun Shines Again in Miami
New York Times
By Alexei Barrionuevo
POWERBOAT tours of Star Island here offer a pretty good bang for the buck, especially if you love hearing about celebrities and their homes on the renowned enclave for the jet set, or if you want to feel like Sonny Crockett for a day, bouncing over the waves, reliving some “Miami Vice” moment.
If you’re looking for reliable information? Not so much.
Yes, Gloria Estefan, Rosie O’Donnell and Sean Combs do, in fact, all own stunning homes there.
But other claims from the tour guide don’t hold up. Sylvester Stallone never had a house on Star Island, nor did Madonna, Elizabeth Taylor, Julio Iglesias or Al Capone (he had a house on neighboring Palm Island). And Phillip Frost, the pharmaceutical billionaire who does live on Star, did not actually invent Viagra. But that inconvenient truth would get in the way of Manny, a guide for Thriller Miami tours, telling his joke about Mr. Frost being the “biggest drug dealer in Miami.”
Given the long-running hype machine of the Miami real estate market, perhaps it is only fitting that visitors should be subjected to such bow sprays of misinformation. If they had more current intel, the Thriller folks might have noted that sales picked up sharply in 2011 on the man-made Star Island, which added its second Russian billionaire in three years.
As in New York, the very high end of Miami’s market is surging. The buzz among top brokers here is of big-ticket sales to deep-pocketed international buyers, rather than foreclosures, painful lessons from easy credit and unrestrained speculation.
After sitting on the sidelines during the crash, rich buyers started piling back in last year. “They realized that if they were going to buy they had better do it now,” said Jill Hertzberg, a broker with Coldwell Banker.
Six homes sold on Star in 2011, Ms. Hertzberg said. The cheapest sale was a piece of land that went for about $6 million, and the most expensive was a 9-bedroom 11-bath home to Roustam Tariko, the founder of Russian Standard vodka, for $25.5 million.
Throughout Miami, about 15 single-family homes sold for more than $6 million apiece in 2011, Ms. Hertzberg said. Of those, about 40 percent were sold to Russians, with the remainder split about evenly between Americans and South Americans, brokers said.
Mr. Tariko’s purchase followed the sale of Shaquille O’Neal’s Star Island home in 2009, during the housing crisis, for $16 million (at one point Mr. O’Neal was asking $35 million), to the construction magnate Vladislav Doronin, who is dating the model Naomi Campbell. (Manny told Thriller passengers that Ms. Campbell was the owner.) Neighbors and brokers say Mr. Doronin has sunk more than $20 million into renovating the house.
The buying spree at the high end is not just for single-family residences. Driven by demand for more spectacular homes, developers of luxury condominium projects have scrambled to combine units, and have even sold entire floors.
The St. Regis, a luxury development in Bal Harbour that opened last year with 245 condo units and a hotel, sold 5 units together, combined into a full floor of 14,400 square feet, for $20 million, said John Manrique, the vice president for sales and marketing.
“Several buyers have been requesting bigger units,” he said. “About 14 months ago we went back and looked at what we could combine.”
About 70 percent of the St. Regis’s sales — with an average price of $3.8 million for about 3,300 square feet — have been to international buyers, most from South America but also some Italians, Britons and Canadians, said Jim Cohen, the vice president for residential sales.
Thomas Kramer, a German real estate developer who lives on Star Island, said buyers had recently signed contracts on two penthouses in Bal Harbour that are each in the $20 million range. “You are going to see a market explosion,” he said. “And not one of the buyers is American.”
Developers, still struggling to get bank loans for new projects, are generally unable to offer any financing options for buyers.
They “are expressly telling the buyers that it is an ‘all-cash’ purchase and if you choose to take financing after you close, that is at your option,” said Vanessa Grout, the chief executive of Douglas Elliman Florida. “But they are not going to have any contingency or delay at the closing for inability to get financing.”
Some buildings are asking for 60 percent deposits, a practice more typical in a country like Brazil, Ms. Grout said.
Some developers are also “trying to test the waters” of buyers’ appetite for risk by taking deposits and putting them toward construction, rather than placing them in escrow accounts, Mr. Manrique said.
How far they get with that remains to be seen. As Ms. Grout noted, “a lot of people were burned a few years back, and their memories aren’t so short.”
Mr. Kramer, a 20-year resident of Star Island who has bought and sold 14 properties on the island, said that in the past six months four other Russian billionaires, all friends of Mr. Doronin’s, had toured his 13-bedroom home, complete with a fingerprint-scanner panic room and a wine cellar, which is now on the market for $60 million. “These are serious buyers,” Mr. Kramer said. “These guys buy high-end properties and customize them.”
Mr. Kramer is famous for the parties and philanthropic events at his home, where he has a couple of fog machines in the backyard that he says he uses to shield his sometimes-naked guests from the passing tourist boats.
Created by dredging around 1920, Star Island is, for all its exclusivity, actually a public neighborhood connected to the causeway into South Beach by a bridge. A guard house at the entrance gives the illusion of being a private community, but anyone can enter after stopping at the gate. Some tourists passing by in boats heckle homeowners.
Despite the privacy challenges, the island remains one of Miami’s premier neighborhoods, a place filled with colorful people and colorful stories.
Carol and Marco Iacovelli have lived in the island’s original house since 1988. Built in 1924, it was once owned by Hetty Green, “the witch of Wall Street,” who was one of the richest women in the world. Her one-legged son, Edward Green, used some of the 20 rooms to house young girls and had “one of the most extensive collections of pornography” of the time, Ms. Iacovelli said in an interview.
Don Johnson himself lived on the island during the “Miami Vice” years. He got helicopter visits from Barbra Streisand when they were dating, and the television show filmed parts of episodes in the Iacovellis’ home.
One day a “crazy lunatic” swam under the bridge and ran through the island trying to get into Mr. Johnson’s house, Mrs. Iacovelli said.
Thomas Morgan, a Denver oilman, sometimes rented his 15,000-square-foot home on the island for as much as $25,000 a day, to hedge funds, film crews — and to the singer Usher, who rented it for the Video Music Awards and hosted a raucous party, Mr. Morgan said.
Last April Mr. Morgan sold his home to Mr. Tariko, a longtime renter of the home who also owns the Miss Russia pageant and is close to Donald J. Trump.
As the powerboat pulled away from Star Island one recent sunny afternoon, I couldn’t help thinking there were plenty of interesting stories for Thriller Miami to tell passengers that also had the benefit of being true. When I asked Charles Keith, the owner of the tour boat service, about this, he acknowledged that there were some “nontruths” in his tour. “But if you don’t have a story to tell,” he said, “whether it is true or not, it becomes a boring old boat ride.”
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