Restaurant reformation takes place in South Beach

Paola Iuspa-Abbott

2012-04-03 12:00:00 AM

When real estate investor Nelson Fox walked into a dilapidated warehouse in South Beach a few years ago, he

saw abandoned vans stored atop each other.

“It was like a scene from the movie Escape From New York,” he said, referring to the 1981 science fiction action

film featuring Manhattan as a giant maximum-security prison. “It was surreal.”

Now, the space is a fine-dining restaurant called Fogo de Chao. The neighborhood, in the southernmost tip of

Miami Beach and home to some of South Florida’s most luxurious condos, is known as SoFi, for south of Fifth

Street.

After spotting the rundown warehouse, Fox and his partner Lyle Stern assembled a group of investors, bought the

space, gutted the place and built in the restaurant. Piece by piece, over six years, the partners have assembled a

half-block and turned old warehouses into high-end restaurants like Fogo de Chao.

“We saw the development that was taking place and realized there was going to be a void of quality retail and

restaurants south of Fifth,” Stern said.

One of the newest additions to the collection on First Street between Washington and Jefferson avenues is

upscale Greek fishery Estiatorio Milos.

Milos’ entrance to SoFi underlines a trend that is transforming one of Miami Beach’s oldest neighborhoods into a

fine-dining destination. The small area, south of Fifth Street and between Biscayne Bay to the west and the

Atlantic Ocean to the east, has more than 14 restaurants, most of them for fine dining.

Some of the recent additions to SoFi include, along with Fogo de Chao, Lolita Cocina & Tequila Bar and Symcha’s. They join older high-end restaurants like the legendary Joe’s Stone Crab and Smith & Wollensky.

The growing number of high-end eateries on the tip of the island makes it stand out.

“South of Fifth has one of the greatest concentrations of fine-dining restaurants south of New York and east of

Las Vegas,” Fox’s partner Stern said.

Lynne Hernandez said she began noticing the influx of upscale restaurants in the last couple of years.

“More obviously, in the last year,” added Hernandez, who is South Florida regional director of the Florida

Restaurant & Lodging Association.

Hernandez said other pockets in the region, including Delray Beach, South Miami and Miami’s Wynwood and

Design District, are becoming fine-dining destinations that don’t compete with SoFi, but complement it and each

other.

“But the beach is its own animal,” she said, referring to SoFi.

At least two new restaurant spaces there are already permitted, and the owners are looking for high-end tenants.

“The city didn’t do anything to promote that area as a dining” destination, Miami Beach City Planner Thomas

Mooney said. “It sort of evolved on its own.”

HOUSING BOOM

Milos’ interior build-out is almost finished, now that the snow-white marble for the flooring has arrived from Greece — along with a Greek marble installer.

Milos, with locations in Montreal and New York, is set to open its SoFi doors this month.

Restaurateurs began pouring into the area after the recent housing boom, when SoFi’s shoreline was walled with

luxury high-rises. It became a magnet for affluent condo buyers from around the world.

Yet, most of the customers seen waiting in line for tables at the pricey restaurants are tourists and business

people who drive over from the Brickell corridor, Aventura and Coral Gables.

The trailblazing restaurateurs have transformed dilapidated and historic properties into some of the nation’s most

successful eateries. That was the case of Prime One Twelve, a steakhouse that serves 500 to 1,000 customers

on any given day — the average check is $110 per person — and grosses more than $20 million in annual sales,

owner Myles Chefetz said.

“The only restaurant in Miami that does that kind of [sales volume] number is Joe’s, which has been around for

100 years,” he said. “Typically, a successful restaurant would do $6 million to $8 million a year,” he said.

Chefetz opened the Prime One Twelve steakhouse in a restored historic hotel in 2004. Two years ago he opened

Prime Italian across the street on Ocean Drive.

When he opened his first SoFi restaurant in 1995, the area was still a ghost town of abandoned properties. Back

then, he rented a space for the now-defunct Nemo, a restaurant at 100 Collins Ave., for about $10 per square

foot.

Today, the high demand for restaurant space has pushed rental rates up to $60 a square foot, not too far from the

$100-per-square-foot rate that landlords charge restaurateurs on trendy Lincoln Road in Miami Beach, Chefetz

said.

POSITIVE IMPACT

Fox and Stern recently bought an old two-story, wood-frame apartment building at 850 Commerce St. and got city

permits to turn it into a restaurant with a courtyard dining area. Stern is talking to several interested high-end

restaurateurs to lease the space, he said.

“The fact that they are restoring and preserving it speaks very highly of their intentions and the positive impact

that an adaptive reuse like that can have on a property,” said Mooney, the Miami Beach planner.

On the other hand, Milos will open in one of the properties assembled by Fox and Stern. The partners brought in

developer Russell Galbut to build a robotic parking garage next to Milos and serve their warehouses-turnedrestaurants.

The mechanical garage will have 104 spaces and a penthouse home for Galbut, Stern said.

Even during the economic downturn, Fox and Stern push forward with their redevelopment plans. They built

Clarke’s, Fogo de Chao and Jeronimo’s Bar in a row.

Stern said they put together the abutting properties to be able to determine the look and feel of First Street. (To reade the entire article visit http://www.dailybusinessreview.com)

 

 

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