Tony Goldman’s Big Bet on Miami’s Wynwood

July 24, 2010

June 28, 2010 By: Paola Iuspa-Abbott

Tony Goldman

ony Goldman made his name and a sizable fortune turning around dilapidated neighborhoods in which only he saw development opportunity.

First came New York’s Soho neighborhood in the late 1970s, when he bought and restored more than a dozen buildings and filled them with high-end boutiques and restaurants, helping to create one of Manhattan’s trendiest districts.

DBR TV: Tony Goldman made his reputation turning around dilapidated neighborhoods. Now he wants to revitalize the industrial district of Wynwood

Then came South Beach in the 1980s. While drug wars simmered in South Florida, Goldman acquired neglected art deco hotels and brought them back to life, helping put South Beach on the map.

Yet, despite the challenges and rewards of his past ventures, his latest bet is probably his riskiest. As the region struggles to shake off the lingering effects of the recession, Goldman wants to revitalize Miami’s Wynwood, a former industrial district that’s home to aging warehouses and factory buildings.

Unlike some developers, Goldman shuns the idea of bulldozing old buildings. Rather, he plans to covert them into office, galleries, stores and restaurants. The challenge is to attract quality tenants, he said, adding that 30 percent of his properties are vacant.

“Needless to say, we are all affected by this terrible economic downturn,” said Goldman, 66, chairman and chief executive of Goldman Properties, which has offices in New York and Miami Beach. “We were doing fine until this happened; but we will persevere.”


When the economy was humming in 2004, Goldman set his sights on the area between some of Miami’s roughest neighborhoods. He borrowed more than $23 million from various lenders to buy almost two dozen warehouses.

Real estate is a business dominated by “location” and Wynwood’s is less than stellar.

Wynwood has no impressive architecture. No historic significance. No beach. No inspiring views. There is nothing distinctive about Wynwood, the site of race riots in 1990 and 1992.

And while Goldman has earned the title “visionary,” he didn’t see his biggest challenge coming: the deepest recession in decades. It drove down the value of his properties by more than 30 percent and put any redevelopment prospects on hold for years.

In a market where even South Florida’s most desirable districts are depressed, it remains to be seen how Goldman will salvage his Wynwood play.

Goldman says he has no doubts that he will succeed.

“There is no question that the economic crisis has set back our momentum and all it does is it puts more years on the plan,” he said while sipping iced coffee with milk at Joey’s, a family-run restaurant in Wynwood. “But you will never see us go away as a result of these crisis — never.”

Goldman said his company has the financial resources to carry on with his plans. Goldman Properties, a privately held company, does not disclose its finances.

Goldman is selling a few of the more than 20 properties he owns, but just to streamline his portfolio, he said, not to abandon his vision for the area.

“And so what?” Goldman said about selling a few buildings. “If you are in it for the long term, then you have to make some adjustments. If you have to sell a piece or two, you sell a piece or two. But the big picture is, you maintain your Monopoly [board] that drives your vision.”

Unlike many developers who amassed property before the real estate downturn and now face foreclosures and lawsuits from lenders, public records do not show any actions against Goldman. Public records do show that he has continued to pay down at least 17 mortgages on properties in Wynwood.


His love affair with Wynwood began in 2004 when his son, Joey, discovered the district, once home to bustling clothing manufacturing operations.

The area was plagued by crime and blight, but a few art galleries and studios of emerging artists were renting cheap space.

“I thought there was a wonderful critical mass of a certain style of industrial architecture,” Goldman recalled. “It’s not just what you are looking at; it’s what you see beyond. Most people will see the reality of deserted streets, boxy buildings and warehouses.

“But there is more than that. There are sidewalks and street grids that will have pedestrians in the future. There are warehouse boxes that will be occupied by galleries and restaurants and cafes and very interesting, creative shops.”

Goldman liked the area and with his son began drawing what they call their “Monopoly board.” On the board, they mapped the properties they would need to acquire to connect streets and establish a pedestrian flow.

“We always strategize the whole thing at the front and spend a decade actualizing the original plan,” Goldman said.


Goldman believes in giving neighborhoods a second chance; something that he has experienced himself.

Two years ago, Goldman, who was suffering from a lung condition that hampered the transfer of oxygen to his blood stream, received a double lung transplant.

The major surgery gave him the opportunity to return to jazz singing, one of his many passions.

“I am working on my second record,” said Goldman, a theater major at Boston’s Emerson College. “It’s been 15 years since my first one. I think I am going to call it ‘The Second Time Around,’ but I am not sure yet.”

Goldman, wearing fashionable Y-3 sneakers and baseball cap, said the CD will include his favorite song, “Ol’ Man River,” a song that describes the hardship and struggles of African Americans in the early 1920s working along the Mississippi River.

“And you ask, why’s an old Jewish guy singing that song?”

He explains that the song talks about overcoming adversity, possessing a discipline and work ethic that makes someone keep going, even if that person has reasons to give up.


Goldman encountered little adversity when he began investing in Wynwood and before values surged.

A few were acquired at the height of the market in 2007, when properties traded at an average of $130 per square foot, real estate broker Danny Zelonker said.

“Now the average is about $80 per square foot,” he said.

As both a broker and owner, Zelonker sold a number of properties to Goldman in 2004 and financed some of the deals.

Not long after he finished assembling the properties, the recession hit. Yet, Goldman has pressed ahead.

He opened a restaurant, Joey’s, in late 2008 and is months away from opening another one.

He recently signed a lease with the Miami Light Project, a group that produces dance, music and theater events.

Goldman believes the Miami Light deal is key to the area. He hopes live performances will bring people to the streets of Wynwood.

“This is a perfect example of creating something valuable that everybody benefits from,” he said. “[It] is going to bring hundreds of people a week into Wynwood and [they] will support restaurants, other galleries and facilities that are there and will stimulate even more growth.”

Goldman plans to charge Miami Light and other nonprofits a base rent of $8.50 a square foot, about 35 percent below the area’s market rent, according to a business associate.

“Just from a cold-hearted real estate point of view, you need to … proactively think outside the box as to how to create something from nothing,” he said.

Remodeled warehouses is Goldman’s nod to the future
Paola Iuspa-Abbott
Wynwood already has the art galleries, which are busy during the week of Art Basel every December. Now, artists from the worlds of dance, music and theater are moving into the former industrial district north of downtown Miami.

The move is a victory for New York developer Tony Goldman, whose family has been on a lengthy journey to revitalize the neglected industrial neighborhood.

Goldman took an unconventional path when he brought the Miami Light Project, a nonprofit that presents live performances, to one of his remodeled warehouses.

He agreed to join Miami Light in applying for a $400,000 matching grant so the group could build a theater, exhibition area, rehearsal space and offices in a former clothing factory. With Goldman pledging to pitch in another $400,000, the John S. and James L. Knight Foundation awarded Miami Light the grant in November, to be paid over three years.

“This initiative is going to energize and stimulate the neighborhood,” said Dennis Scholl, the foundation’s Miami program director and vice president of arts. “The grant will help get the space built out and help the developer reduce rent for a period.”

Goldman, chairman and chief executive officer of Goldman Properties, pursued the nonprofit at a time when finding tenants for large spaces was, and continues to be, extremely difficult.

Goldman’s former tenant, the Museum of Contemporary Art of North Miami, closed its satellite location in the 12,000-square-foot warehouse in September.

In April, Goldman and Miami Light signed an eight-year lease.

The Light Box at Goldman Warehouse, at 400 NW 26th St., is to open in early 2011.

Goldman owns about 300,000 square feet of warehouse space plus vacant land in Wynwood. Since the recession started in late 2007, he has seen the vacancy rate in his properties creep up to about 30 percent, Goldman said.

In a depressed economy, vacancies are a landlord’s worst enemy since they push property values down even deeper. So Goldman did whatever it took — including offering up $400,000 — to get Miami Light in one of his properties.

“This is about being creative, about creating what doesn’t exist as opposed to waiting around for someone to call you,” Goldman said. “Developers today are in trouble if they follow the traditional models that have served them over the last decade. That game is over.”

Miami Light will share the space with about four other similar nonprofits. Their goal is to share expenses, from telephone service to rent.

It is rare that nonprofits in the performing arts share a home, said Miami Light executive director Beth Boone.

“This is going to be probably the first time [for this collaborative effort] to be put into practice in this manner, at least in Miami,” she said.

Boone began exploring ways to reduce expenses three years ago when corporate donations and government funding began to decline.

“Individuals were starting to tighten their belts,” she said. “There were warning signs that contributed income to support our organization was starting to dwindle and shrink.”

Miami Light, with an annual budget of about $600,000, was paying close to $60,000 a year to rent space in a building at Biscayne Boulevard and 30th Street.

By the time the lease expired in December, Boone had decided to move to a more affordable place.

At the Wynwood location, rent will be about $12 to $14 per square foot, including operating expenses. She paid $22 a square foot at the organization’s former home, she said.

Goldman wants his warehouses to become offices and retail space. He is not interested in keeping them as industrial and storage space.

“The future is in adaptive-reuse for low-cost offices and studios and retail spaces, and it is not in the $6 to $7-per-square-foot range,” Goldman said. “The future is in the $14, $15, $16, $17-a-square-foot range. That means that you’ve got to have … the balls to invest the necessary dollars to make sure that your spaces are clean, marketable and ready for that next level of clientele.”

Paola Iuspa-Abbott can be reached at (305) 347-6657.

Goldman said bringing in the right tenants has been the key to revitalizing other districts. And to entice them to his properties, Goldman is willing to make serious concessions.

For an example, look to South Beach, said Nancy Liebman, a former Miami Beach City Commissioner and community activist who fought for the redevelopment of the art deco district.

She remembers how Goldman used free rent to lure high-end boutiques like Armani Exchange to his restored buildings on Collins Avenue until the area caught up, she said.

“It was amazing the way it worked,” Liebman said. “One by one, they all started to come. Now, Collins Avenue is a vibrant shopping street.”

It’s now home to a plethora of top retailers, including Banana Republic, Gap, Kenneth Cole, Club Monaco, Ralph Lauren and Diesel.

Liebman points to Goldman’s organic approach to reviving neighborhoods. He goes beyond restoring properties, she said.

For example, Goldman helped put together the Wynwood Arts District Association early last year. Some property owners tried a similar effort years earlier, but it didn’t gain much traction, said David Lombardi, the second-largest property owner in the district after the Goldmans.

Like he did in the ’80s for South Beach, Goldman brought with him the credibility to engage public officials and other leaders and the gravitas to bring together disparate constituencies behind the goal of improving Wynwood.

Goldman is following a model that worked well for him in South Beach, where he helped create the Ocean Drive Association.

“When we go into a neighborhood, it is our responsibility to reach out to others,” said Goldman, who doesn’t use computers or smart phones to communicate. “I don’t expect others to come to me.”

The Wynwood association has grown to nearly 130 members. It printed and distributed 90,000 maps showing art galleries and eateries, contracted for security and hired residents from the Lotus House, a homeless shelter for women in Wynwood, to clean the streets.

“Goldman put up money of his own for those initiatives,” said Lombardi, a longtime Wynwood activist.

Goldman said his contribution is relative to the amount of real estate he owns.

“We carry our own weight proportionately,” he said. “And it’s not just about one big player. It’s about a lot of interesting players [who] are equally important to each other and for each other. Developing a neighborhood is a very embracing, holistic approach.”

The association recently launched to promote the district.

Impressed by the changes in the warehouse district, Miami City Commissioner Marc Sarnoff last month gave the association a $100,000 grant from his office’s discretionary fund.

“We are trying to give them a leg up,” Sarnoff said.


Just like food can cure the blues, Goldman believes restaurants can reawaken neighborhoods. His daughter, Jessica, 40, plans to open Wynwood Kitchen and Bar in November. Jessica Goldman has spent the last 12 years running the family’s historic Park Central Hotel and The Hotel in South Beach.

“No business brings people like restaurants,” Goldman added. “It’s been part of our formula. We had 12 restaurants in our history, and we always used restaurants to ignite neighborhoods.”

Property owner Lombardi said the Goldmans’ first restaurant in the district, Joey’s, is helping draw people to the neighborhood.

“Joey’s was an enormous shot in the arm for this area,” he said.

Joey Goldman, 37, joined his father’s business 20 years and runs Joey’s.

Opening restaurants in Wynwood was almost impossible before Goldman came to town. He campaigned to have the district rezoned to allow up to 25 restaurants in former warehouses that didn’t meet the city’s parking requirement. His effort led to the creation of the Wynwood Café District.

It’s a tried and true page from the Goldman playbook.

Street cafes helped fuel the revival of the art deco district, Liebman said.

Goldman also organized Ocean Drive property owners in the late 1980s to pass a $3 million bond initiative to improve the Ocean Drive sidewalks from Fifth to 15th streets.

“As soon as the sidewalks were finished, those cafes were up and running,” she said. “It brought people to the area. That really woke the city when they saw all that activity.”


Goldman got his start in the business by managing properties for an uncle and later brokering deals. He launched Goldman Properties in New York in 1968, renovating brownstones on the Upper West Side.

“I didn’t start with a bundle of money,” he said.

In addition to being a businessman, Goldman is also an art lover, a historic preservationist, a singer and was once an avid roller-skater.

He finds ways to merge his various passions with his business.

For example, in December, he invited graffiti artists to cover the exterior walls of some of his properties with art, creating a mural garden in the heart of Wynwood.

“He is kind of an artist and approaches real estate as an artist would approach art,” Commissioner Sarnoff said. “He sees it as sort of a canvas.” [Cont.]


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Paola Iuspa-Abbott can be reached at (305) 347-6657

Copyright © 2010, ALM Properties, Inc.