Low-rise condo on Sunny Isles Beach, facing major repairs, sells its piece of paradise for development

Article Courtesy of  The Miami Herald

By DONNA GEHRKE-WHITE

Published February 5, 2006

Dozens of windows are boarded up at the '50s mom-and-pop motel turned condo. Walkways are propped up by scaffolding. Some of the siding is gone with the wind, while tarps cover some of the roofing.

The 172-unit Seashore Club South in Sunny Isles Beach looks bombed out after Hurricane Wilma and years of decline that led to 30 feet of walkway collapsing last March.

Still, its owners may get top dollar for their million-dollar view of the ocean. A New York-based real estate investment firm is proposing to give owners $441,000 each for a unit the size of a motel room, about $76 million for the complex.

In a novel move that may be repeated elsewhere, the owners have banded together to sell their deteriorating property -- on three oceanfront acres -- en masse rather than wait for a developer to buy individual units.

Thanks to South Florida's oceanfront building frenzy, the Seashore owners may emerge the lucky ones while others in older Wilma-damaged condos face thousands of dollars in special assessments for repairs.

When Wilma blew off old roofs and shattered old windows, it exposed many condos' lack of maintenance.

''There is no free lunch in owning any real estate,'' says real estate analyst Michael Y. Cannon, managing director of Integra Realty Resources.

Seashore owners might not have felt such pressure to sell if they had properly maintained the building over the years, he says.

However, many condominium owners still do not realize the costs and responsibilities involved in sharing an older building, Cannon says. Oceanfront buildings especially have to be protected from salty air and water intrusion, but many condo owners balk at making repairs or doing routine maintenance.

At the Seashore, many owners took pride in their low monthly maintenance fee. Owner Dottie Iavarone says Seashore's fee is $172 a month, cable and water included.

She can remember only two special assessments in the 16 years she and her husband, Stephen, owned their unit: $250 per unit for new stairwell banisters and $450 to improve the oceanfront patio.

''People don't have the money,'' Iavarone says. Or, she adds, ``They don't want to spend the money.''

NICELY PAINTED

Seashore owners John and Kathy Colatrella say they thought past condo boards were properly maintaining the complex. The buildings were always nicely painted and the grounds had lots of flowers, she says.

Association attorney César Sordo adds that he is not sure any repairs could have helped, given the ocean's destructive force -- and the fact that beachfront prices have escalated to the point that mom-and-pop condos or motels don't make economic sense any more.

The current board ''is one of the best boards I have ever seen,'' he says.

Nevertheless, the Seashore's deteriorating condition became apparent last March when about 30 feet of a second-floor walkway in the rear of a building toppled.

Colatrella, in another building, heard the crash. If anyone had been under them, they'd have been crushed,'' he told The Herald after the accident. No one was injured.

Sunny Isles Beach inspectors blamed the collapse on spalling, which occurs when the steel rebar that runs through concrete to reinforce it rusts, causing the rebar to expand and chunks of concrete to fly off.

Owners of buildings -- particularly older ones -- are supposed to check for signs of spalling and to replace bad concrete and the rusting steel.

Miami-Dade County requires owners of buildings to hire experts to inspect for structural problems once they turn 40 and then pay for 10-year check-ups.

Built in 1953, the Seashore should have had its first structural inspection in 1993 and a follow-up in 2003.

But the city of Sunny Isles Beach, formed in 1997, does not have any county records to show the county oversaw the 1993 inspection.

SLIPPED THROUGH

As a newly incorporated city, Sunny Isles Beach was in charge of making sure the Seashore hired an engineer or architect to inspect its buildings in 2003. But Clayton Parker, building official/administrator of the Sunny Isles Beach building department, says the city didn't receive county notice that Seashore was up for the inspection.

''It slipped through the cracks,'' Parker says.

After the 2005 walkway collapse, the city ordered the inspections.

Sunny Isles Beach also decided to condemn the entire complex. The city posted notices giving people an hour to vacate their homes because of the danger.

However, the Seashore's board of directors begged for a reprieve and quickly hired crews who shored up the walkway and made other emergency repairs.

The city then allowed most residents to stay, with only the owners near the crashed walkway forced to evacuate.

Rey Aguirre was one of those. Nearly a year later, he and several other owners are still shut out.

In October, he complained at an association board meeting that he had not even been able to get inside to remove the rotting food in his refrigerator. Board members then arranged for him to be able to clean up.

Later that month, Hurricane Wilma brought more damage to the Seashore with shattered windows and leaking roofs.

Aguirre, for one, is ready to sell and leave the mess.

The luxury condo boom in Sunny Isles Beach, he says, makes it only a matter of time, before the Seashore's modest two-story buildings will be torn down for million-dollar digs.

''I know we are sitting on a piece of gold on Sunny Isles Beach,'' he says. ``It's only obvious we will get out when you see the skyscrapers.''

''It's the best investment I have ever made,'' adds Aguirre, whose main home is in Kendall.

He bought his unit for $57,000 in 1997 as a vacation home. Like many others, he has rented to snowbirds during the winter.

Now he stands to make a nearly $390,000 profit from the sale to New York-based Property Market, a real estate investment firm that has other property in Miami Beach. (The company declined to comment.)

Still, others are sorry to sell.

WANT TO STAY

Many owners, particularly the elderly, would rather stay. Some are in their 80s and don't know where they will go. Others blame the city for demanding the costly repairs that are forcing them to give up their share of surf and sand.

''The city is harassing us,'' says owner Colatrella. ``We don't want to go.''

Sunny Isles Beach Mayor Norman Edelcup says he sympathizes but the city has a responsibility to keep its residents safe.

''If they maintain it,'' Edelcup adds, ``it's not a problem.''

Meanwhile, others, such as the Iavarones, are trying to keep things in perspective.

''I absolutely love this place,'' says Dottie Iavarone. ``The ocean is just so calming. That was my back yard.''

She and Stephen have bought a house on Florida's west coast, although not on the ocean.

Attorney Sordo says officers of several other older oceanfront condos -- with the same maintenance problems -- have consulted him about taking a similar route.

''I want to protect these homeowners,'' Sordo says.

Owners may not receive as much for their property if they sell units to developers individually.

A year ago, when a catwalk first collapsed, developers were offering individual Seashore owners about half of what they now expect to receive, says board member Edmond Turcott, who lives six months in Canada and six months at the condo.

''I love this place but we have no choice,'' he adds.

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