MIAMI—Flagler Street is getting plenty of attention these daysas the city looks to modernize the historic area. MeloGroup is doing its part with Flagler on the River—butthere may not be much more opportunity for multifamily developerson the street.

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GlobeSt.com caught up with Carlos Melo,principal of Melo Group, to get his thoughts onwhy that's the case, as well as how the Miami River may be enteringa new phase when it comes to redevelopment in part two of thisexclusive interview. You can still read part one, “Melo Sees MiamiRiver Multifamily Revival,” if you missed it this morning.

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GlobeSt.com: Did you have to change the zoning ofthe two sites where you are building Flagler on the River and thesecond restaurant?

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Melo: We didn't change the zoning or land useto be able to build the tower. The project consists of a parcelfacing the river and a second site across the street from it on thesame side of the river. So we did the following: We transferredmost of the development rights that we had on the riverfront parcelto the site away from the water.

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Our goal was to build the most density away from the river toprotect and preserve its character. We kept enough developmentrights on the waterfront site to be able to build a two-storyrestaurant. The restaurant starts on the second floor as the groundfloor was left undeveloped to avoid blocking the views of the riverfrom the street level. The river belongs to everybody so we wantedto make the river easily accessible to anyone.

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GlobeSt.com: Is the Miami River entering a new phasewhen it comes to redevelopment?

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Melo: In every real estate boom, the MiamiRiver is rediscovered, but the wave of development is differentevery time. In the last cycle, you had some developers wanting tobuild large condo towers on the river, trying to get rid of marinasand ship yards, which is at the heart of the working river.

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Many of them failed because their projects got tied up inlitigation with river advocates and missed the condoboom. This time around, you have more river-consciousprojects being proposed on sites that support large density orpromote water-related uses. For example, The Miami River Commissionrecently ok'd the development a 55-story luxury condominium knownas the Edge; and Miami developer Andrew Hellinger is building RiverLanding, a $150 million mixed-use megaproject on the site of theold Mahi Shrine building, which will include 440 rental units andmore than half a million square feet of big box retail space.

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Miami-based Related Group and New York-based GTIS Partners areproposing One Brickell, a 4 million square foot mixed-use megaproject which will include residential, hotel, office and retailspace at 444 Brickell Avenue and its adjacent parcel on the MiamiRiver. Doral-based HCD Developers is proposing a "Miami Mega YachtMarina" on the Miami River, across from Curtis Park. The projectincludes covered slips for 16 mega-yachts of up to 200 feet inlength, each of which include covered parking for 3 vehicles,indoor storage, and captain/crew quarters – a relatively new andunique concept in private marina design.

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GlobeSt.com: Is there room for more luxury rentaltowers on the river or land values don't support that type ofdevelopment anymore?

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Melo: The answer is no. But it is not so muchabout land values as it is about land availability. There is almostno land available for this type of development. There is one sitenear Brickell Avenue that is for sale, but the price is way toohigh.

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The demand for land on the river is such that people are payingexorbitant amounts of money for the limited number of developableland. We bought our site on the river during the recession so wepaid prices typical of a depressed market. Our site used to be hometo the East Coast Fisheries, one of Miami's first seafoodrestaurants. The eatery closed during the last condo boom and therestaurant was demolished so the site sat vacant until we boughtthe property to build Flagler on the River. We bought the land at alow price, compared to today's values.

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