Miami’s Watson Island liquidation sale to developers for lowball $25 million

Miami City Hall is at it again, mismanaging public land like it’s a clearance rack at Ross.
The city commission on Thursday will consider what looks like a fire sale on Watson Island, and the only ones getting a bargain are — surprise! — the developers.
On the agenda for the last commission meeting before the city gets a new mayor and a new District 2 commissioner (timing totally coincidental, por supuesto), Commissioner Damian Pardo is sponsoring an item to sell 3.2 acres of Watson Island to IG Luxury LLC — a Delaware company, because of course — for a grand total of $29 million.
Except, not really. Because Miami has to cut a $4 million check to the State of Florida just to lift deed restrictions on the land the public already owns, because it was given with the caveat that it stay public. That means taxpayers net $25 million.
Except, not really. Because the city already had to pay a $20 million settlement in what is arguably a botched lawsuit (thanks “Tricky Vicky” Mendez) from the former lease holder who didn’t do anything for 15 years. That means taxpayers net $5 million.
Read related: Miami City Commission to consider two Watson Island developments
On waterfront land worth at least 50 times as much. It’s at least 10 times the $25 million on paper. According to a new appraisal received Monday — three days before the vote — the land is valued at $257 million “with use restrictions” and $342 million without them.
Why do those numbers matter? Because Miami voters approved a ballot measure last year authorizing the sale of the land for “fair market value” — not a penny less. The actual ballot language said “shall City Charter be amended to revise existing leases at 888 MacArthur Causeway, sell 3.2 acres of leased property to tenant for fair market value of not less than $25,000,000, reduce overall development, extend term 24 years, waive bidding and authorize, at no cost to City: $9,000,000 contribution to affordable housing plus infrastructure improvements; timeshare units become condominiums; mixed-uses to include office; and expanded public waterfront and pedestrian promenade along Biscayne Bay?”
Forget all the bells and whistles, which is what Pardo and Commission Chairwoman Christine King will call “public benefits” Thursday. The key words here are “fair market value.” That is what 62% of the voters approved.
And this ain’t that.
The city is selling Watson Island for about 10 cents on the dollar. Even Walmart marks things down less aggressively.
This is going to be the most valuable land giveaway since, well, the Donald Trump library — and hotel — on downtown Miami-Dade College land.
It’s going to be interesting to watch Pardo defend this and explain why the land is not really worth $300 million. He’s a finance guy, after all. He must know it’s a bad deal. That’s probably why he didn’t return a call and a text from Ladra. Again.
But this is the same guy who tried to cancel this year’s mayoral and commission elections, extending his term by a year, and is under fire from Coconut Grove to Morningside for upzoning and pouring concrete.
Read related: Miami Commissioner Damian Pardo loses support, inspires recall threats
The backup documents insist this deal magically meets the voter-approved “fair market value” requirement because $25 million is the minimum floor written on the referendum. Which is like saying $500 for a 1982 Datsun 280ZX is “fair market value” because someone once paid that price for one in Hialeah. That is not how math works.
Taxpayers have already eaten a $20 million settlement with the first Watson Island developer, who sat on the land for 15 years, did nothing, and still walked away richer than most of the families the city claims this $9 million “affordable housing contribution” will help.
That $9 million — negotiated by Chairwoman King — is laughably tiny considering she is waving goodbye to more than $200 million in new revenue that could actually build, preserve, or rehab affordable housing across the city. It’s like dropping a gold bar into the bay and celebrating because you found a quarter under the sofa cushion.
Developers BH3 Management and Merrimac Ventures — who purchased the lease from Flagstone Island Gardens in 2023 — need four of the five commissioners to vote yes. It would authorize the city manager to negotiate everything — the purchase agreement, the CBA, deed modifications, the quitclaim deed, estoppels, amendments, lender docs… basically a blank check. It would provide a private residential and hotel project for IG Luxury, a subsidiary of BH3 IG — fancy names to distract you from the fact that this is public waterfront land being privatized.
This isn’t a negotiation. It’s a goodbye letter.
And what if Art Noriega is no longer the city manager after the Dec. 9 mayoral runoff? One of the candidates, former City Manager Emilio Gonzalez, has already said he will immediately replace him (maybe with former Police Chief Jorge Colina). Would he or Miami-Dade Commissioner Eileen Higgins, who is in the runoff with Gonzalez, veto this sweetheart deal?
Ladra suspects yes — which is precisely why this is coming up now and not next month.
Pardo’s office is making the argument that the land is actually only worth $25 because that’s what the value of the lease is.
“For background, there was no ‘public’ land on Watson Island as it was under a long-term lease arrangement,” wrote Pardo’s community liaison Bradley Mills in an email to residents last month. “Had this joint venture not moved forward, we would simply have what currently exists on Watson Island (without the below listed benefits and revenue to the City of Miami) plus a 300 room hotel potentially for 74 years.”
Not public land?
The property is “encumbered by the existing 99-year lease owned by BH3 Merrimac,” said Greg Freedman, one of the principals of BH3 with Nitin Motwani.
“The property is subject to existing restrictions limiting what can be developed,” Freedman said in a statement. “The $29 million purchase price far exceeds the minimum sale amount of $25 million approved by voters and reflects the highest valuation calculated by multiple independent appraisers, as approved by both the city and the state of Florida.”
Key word this time: Minimum. The ballot language literally required “fair market value,” not “bare minimum we can get away with.” And how does $29 million “far exceed” $25 million, anyway?
A BH3 Merrimac rendering of Watson Harbour’s promenade
The city charter required the administration to also solicit appraisals of the land on a “fee simple basis,” as if there was no existing lease in place and that led to comparisons that were not fair, the developers argue. These are the appraisals that pegged the property at $247 million without restrictions and $342 million with.
“The City does not own the land on a fee simple basis, has not owned it for more than 20 years, and would not own it for an additional 99 years as the land is encumbered by the lease rights owned by BH3 Management and Merrimac Ventures. To be clear: the City of Miami presently only owns the right to collect contractual rent payments for the next 99 years pursuant to the lease rights owned by BH3 Merrimac,” Freedman said, and it sounds a lot like a ransom note, don’t it?
“BH3 Merrimac is also paying an additional $9 million above and beyond the purchase price as a contribution towards affordable housing, infrastructure, and resiliency improvements in the City,” Freedman added, just for good measure.
Oooooh, how generous. It’s not like you’re getting the deal of the century.
Freedman’s argument is that BH3 Merrimac — which is already calling the project Watson Harbour on its website — has already invested more than $110 million in acquiring the lease rights and making infrastructure improvements to the property ahead of development. “Once this sale is approved by Commissioners, BH3 and Merrimac will proceed with developing the mixed-use destination that voters approved in November of 2024,” he added.
Key words, Greg: “Fair market value.”
Former Commissioner Ken Russell, who just came in third in the Nov. 4 mayoral clusterbunch, says this might feel familiar to Miamians. “This happened with Melreese, as well,” Russell told Political Cortadito, referring to the giveaway of Miami’s only public golf course to Jorge Mas and company for the construction of Miami Freedom Park, a real estate complex disguised as a soccer stadium. “They wanted to pay the value of the land as contaminated, not once it was cleaned up. Just as commissioners can tomorrow, I was able to use my position in that vote to demand the higher appraisal.
“I don’t know what mental gymnastics they’ve had to do to justify this price,” Russell said of the $25 mil.
The developers in this case are also framed as “good guys,” same as Miami Freedom Park, but some might also call them good bandits. Because what they are getting is unprecedented and, frankly, insane. The city is selling a piece of property, not a lease. They should get the value of the property, not the value of the lease.
Read related: Miami Freedom Park gets its full $20 million back for 58-acre public park
“If we’re going to get rid of it forever, and it will no longer bring residual value to the city, I would owe it to my constituents to get the maximum appraised value,” Russell told Ladra. “You go with the highest one, especially in a no-bid situation. You sell it for what it’s truly worth.”
After all, there are single family homes in Coconut Grove that are priced at $25 million — and more.
Expect some public speakers to resist this. Residents. Public land advocates. People who can read a spreadsheet. Anyone allergic to corruption perfume.
But with Pardo and King behind it, Ladra won’t pretend this isn’t greased to pass. Commissioners have a tradition of going along with district commissioner initiatives, even though this would be a huge financial loss for citywide taxpayers.
And Miami has a long tradition of undervaluing its own land so private equity can come in and flip it like a Magic City Airbnb.
Because let’s be clear about this: The city is giving away a piece of Watson Island — some of the most valuable land in the state of Florida — for pennies, while pretending it’s doing the public a favor.
This isn’t a community benefit. This isn’t a fair market value sale. This is a giveaway, plain and simple.

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The post Miami’s Watson Island liquidation sale to developers for lowball $25 million appeared first on Political Cortadito.

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