The Battle Of Bal Harbour

More on the headline, down below. But first, a simple question. What is it that makes this little town (pop 3,000), nine blocks north of Miami Beach, one of the best-known and most desirable places to live and visit on the East Coast?

Whitman Family Development CEO Matthew Whitman Lazenby, 38, whom we snapped last week in his offices, thinks the answer’s pretty clear…

…yep, the presence for 51 years of the 450k SF ultra-high-end, internationally renowned mall he runs, and which his grandfather Stanley Whitman (who at age 97 still comes into the office most days) started, introducing European luxury to South Florida. Back in 1965, Stanley said he wanted to make his Shops the Fifth Avenue of the South (and, to a lesser extent, the Lincoln Road of the North, which years before had been the epicenter of Miami luxury).

Does anyone doubt that the reflected glamour of the Bal Harbour Shops is a major reason the St. Regis hotel and residences were built directly across the street in 2011…

…or that 240 swank condos are being finished up the street at Oceana…

…or that three blocks south of the mall, in Surfside, the lavish Fendi Chateau delivers later this year…

…or that three blocks south of that starchitect Richard Meier has designed 150 Four Seasons residences and 80 hotel rooms? It is commonplace to hear observers say these days that Surfside is becoming an "extension of Bal Harbour"—and that the Shops are ground zero.

With so many Rollses and Maseratis pulling up (700,000 total cars a year), no wonder the Shops are considered the Rodeo Drive of the east, except that their sales-per-square-foot are actually greater. (Matthew notes that the last time ICSC ranked US shopping centers by that metric, in 2012, it placed the Shops at No. 1.) They're not just for locals, but up to 80% visitors, rivaling percentages seen in Las Vegas and Hawaii. And they've become a destination not just for shopping but for food as well—have you ever been to Carpaccio, Makoto, Le Zoo, The Grill, etc., when there were no lines?

In its early years, the mall grew rapidly: In 1971, Neiman Marcus created its first department store outside Texas; in 1976, Saks arrived as a second anchor; Gucci staked its claim the next year; and by 1983 a second floor had to be added to contain all the top brands that wanted in. Since then, growth has been constrained. Today there are 100 stores, and most are seeking considerably more space—e.g., from 2k SF to 5k or more. (As one example, for 30 years Louis Vuitton was at 5,600 SF but when it got a chance, it took 16k SF at Aventura Mall.) The Shops long ago reached capacity and are bursting at the seams, Matthew says.

As a result, the mall for years has wanted to add 400k SF. It’s not a matter of wishful projections—it has current demand it’s trying to satisfy. So since 2006, it’s evolved a plan: add a third floor, enlarge Saks from 130k to 180k and Nieman from 90k to 140k, add 1,000 parking spaces (in an existing structure behind the stores by adding two levels below and two above)…

…and insert a 50k SF Barney’s where Saks used to be. With a sleek new glass design, it will actually look bigger than Saks was, even though it will be much smaller. That's because, Matthew says, the new design will have a more open look compared to the mall's previous "fortress" style.

But here’s the rub. The expansion requires new land. So what they’re looking for is…

…an extension on the west side of the mall, along 96th Street. They’ve already bought and demolished the Church-by-the-Sea, but would also like to do a land swap with the city to acquire the Village Hall, i.e., the city’s offices on one-third of an acre. In return, Whitman has offered two acres nearby, plus doing the actual building of replacement offices, or what they've calculated as $130M in new “public benefit”…

…consisting of one high-profile acre right at the southern entrance to Bal Harbour where SunTrust bank is currently located…

…so a new village hall would be the first thing you see as you come up Collins…

…and another acre at the north end of the mall, encompassing both the current Collins Avenue parking lot and Fairfield Manor, both of which could be used for more offices or just green space.

Overall, Matthew says, Bal Harbour Shops are such a jewel, no retailer could afford to replicate them today—as much as people love outdoor retail, it’s not the most valuable use of such well-located land. That’s the reason, he says, that Brickell City Centre (where Whitman is co-directing half a million SF of retail with Simon Properties and Swire) is mixed-use, with tall condo towers, office and hotel, because those assets produce more dollars per foot than a level or two of stores. Yet for some reason, two members of the City Council seem opposed to the land swap, votes have been delayed (the latest seen in this screenshot from the town's website), and lawyers have been heatedly going back and forth about it. Why the opposition? Matthew says it’s a deepening mystery.

Nonetheless, Matthew appears patient and cheerful and says he believes the Bal Harbour community fully appreciates the critical role of the Shops in both its history and future, and is supportive of expansion. So we think it only a coincidence that his favorite music group is R.E.M., known for the song "It's the End of the World as We Know It." Other factoids you may not know about Matthew:

Favorite movie: anything with Cate Blanchett
Favorite restaurant not in Bal Harbour: Joe's Takeaway
Go-to food joint: Eat24
Weakness for: Twizzlers
Vacation destination: Anyplace other than Disney World
Family: wife Kristin and two sons Will and Clayton (third boy on the way)
Favorite hobby: boating with them
Startling fact: licensed helicopter pilot and rescue diver (editor's note: remember that 50 years from now if water levels rise)