A significant legal battle in South Florida's real estate sector has taken a major step forward, as a judge recently denied a motion to dismiss a lawsuit filed by Bal Harbour Shops, LLC. The case centers around the high-end shopping mall's ambitious redevelopment plan, which seeks approval to build three high-rise towers with hundreds of residential units and dozens of hotel rooms on top of the mall, located at 9700 Collins Avenue in Bal Harbour.
The lawsuit, filed under Florida's recently passed Live Local Act, aims to force the Village of Bal Harbour to endorse the application for the project, despite objections raised by village officials. This case could have far-reaching implications for developers, municipalities, and affordable housing efforts in the region, making it one of the most closely watched legal disputes in South Florida real estate.
Judge Denies Village’s Motion to Dismiss
On September 18, Miami-Dade Circuit Judge Charles Johnson denied the Village of Bal Harbour's motion to dismiss Bal Harbour Shops, LLC’s amended complaint. This ruling allows the case to move forward, with village officials given 20 days to file a response. The lawsuit revolves around whether the proposed project complies with both the letter and spirit of the Live Local Act, a state law designed to promote affordable housing.
In response to the judge’s ruling, Village Manager Jorge M. Gonzalez noted that it was "too early" to determine if a conflict exists between Bal Harbour Shops' application and the commitments it made under a previous development agreement with the village. However, he expressed optimism that the village’s position would ultimately prevail, stating, "The Village continues to believe that such a conflict exists and... remains optimistic that the Shops' claims in this case will fail."
While village attorneys declined to comment further, Bal Harbour Shops’ attorney, John Shubin, expressed confidence in the project's legal standing, noting that the redevelopment was designed to align with the Live Local Act. Shubin emphasized that the development aims to address Miami’s ongoing housing affordability crisis, stating, “Bal Harbour Shops' ownership has every intention of seeing this project through."
What is Florida’s Live Local Act?
The Live Local Act, passed by the Florida legislature in 2023, aims to tackle the state’s growing housing affordability crisis by incentivizing developers to include affordable housing in their projects. Under the law, developers are granted the highest density permitted by a municipality if 40% of the units in a proposed project are dedicated to affordable housing.
The law also removes certain procedural barriers, requiring municipalities to process applications administratively, without the need for a public hearing. This is intended to expedite the development of affordable housing and make it easier for developers to meet local demand. The state's definition of affordable housing includes units priced for individuals earning up to 120% of the area median income (AMI), which is approximately $95,400 for a single household in Miami-Dade County.
Bal Harbour Shops' Proposed Redevelopment
In January, Bal Harbour Shops LLC, owned by Whitman Family Properties, submitted an application under the Live Local Act to redevelop the 18-acre shopping center with a massive mixed-use project. The proposed development would include three towers, each rising up to 275 feet, with a total of 600 residential units and a 70-room luxury hotel.
Of the 600 residential units, 40% would be designated for workforce housing, which would be housed in a separate building from the luxury units. These workforce housing units are intended to meet the affordability criteria set out by the Live Local Act, which allows developers to benefit from greater density in exchange for providing much-needed housing for middle-income earners.
The village, however, expressed concern about the scale and density of the project, arguing that it conflicts with existing zoning regulations and the terms of a 2017 development agreement with the mall. That agreement allowed Bal Harbour Shops to expand its retail footprint by 340,387 square feet, but did not include provisions for residential or hotel development.
Zoning and Legal Conflicts
One of the key legal issues in the case is whether Bal Harbour Shops must comply with updated zoning codes that the village enacted after the passage of the Live Local Act. The new zoning code, passed in April, imposes stricter requirements on new residential developments, including a minimum apartment size of 600 square feet and a prohibition on separating market-rate and affordable housing units into different buildings.
Bal Harbour Shops argues that these zoning changes were made specifically to undermine its Live Local Act application, and that the project should be allowed to move forward under the previous zoning regulations. The shopping center’s lawsuit claims that the village’s new rules unfairly target their development, hindering the creation of affordable housing units in the process.
In its July motion to dismiss the lawsuit, the village contended that the shopping center owner had not yet exhausted its administrative remedies, as the village had not officially rejected the application. The village’s countersuit argued that the Live Local Act should not be used as a “bludgeon” by developers to bypass local ordinances and regulations in the name of affordable housing.
What’s at Stake for Developers and Municipalities
This case raises important questions about the balance between state-level affordable housing mandates and local zoning authority. The outcome could have significant implications for how municipalities regulate new developments in the era of the Live Local Act, particularly in high-demand, affluent areas like Bal Harbour.
For developers, this case highlights both the opportunities and challenges presented by the Live Local Act. On one hand, the law provides a clear path for increasing density and fast-tracking projects, which could help address Florida’s housing shortage. On the other hand, municipalities still wield considerable power through local zoning rules, which can complicate or delay projects, as seen in the Bal Harbour Shops case.
The Future of the Bal Harbour Redevelopment
As the legal battle unfolds, the future of Bal Harbour Shops’ proposed redevelopment remains uncertain. Both sides are preparing to make their arguments in court, with the potential for long-term ramifications for developers and local governments across South Florida.
In the meantime, developers and property owners in South Florida should pay close attention to this case, as it could set a precedent for how municipalities and developers navigate affordable housing requirements and large-scale redevelopment projects.
Contact the Mastropieri Group for Expert Real Estate Guidance
Navigating South Florida’s complex real estate market requires expert knowledge and insights. At the Mastropieri Group, we have the experience and local expertise to help you navigate zoning laws, real estate developments, and investment opportunities in the region.
If you’re considering a residential or commercial real estate project in South Florida, contact the Mastropieri Group today at 561-544-7000. Our team is here to guide you through every step of the process, ensuring you make informed decisions in this fast-paced market.
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