With their financial backing and practical know-how secured, the developers set out to begin construction of "Interama" on land currently occupied by Oleta River State Park and Florida International University Biscayne Campus.
Only, construction never actually got much further than preliminary steps.
The Interama project languished over several decades. With each passing year, backers withdrew, and budget constraints forced the project managers to rethink their plans. The grandiosity of the project fluctuated with each revision -- pie-in-the-sky revision three featured an underwater pavilion under a clear plastic dome, accessible via a submersed airtight walkway.
The 1970's saw the final nail hammered into Interama's coffin. Out of money and with nothing to show for it but an undeveloped site, the project's backers sought to repurpose the land for the U.S.'s upcoming bicentennial celebration in 1976. That plan was halted in its tracks by 1974, when the federal government cut funding to the Interama project.
Plans B and C
Shortly before Interama went bust, the City of North Miami purchased a sizeable tract of the project land. The purchase was financed through $12,000,000 in municipal bonds. Then, in 1972, the city leased the land to
Munisport, Inc., with the purpose that Munisport develop a golf course on the land. For reasons not entirely clear, Munisport instead turned the premises into a landfill -- a landfill located on prime oceanfront property, and on wetlands that provide the county's source of fresh water to this day.
In 1976-77, county investigators discovered several leaky fifty-five gallon drums on the Munisport Landfill. These drums were labeled as containing toxins. The EPA stepped in. During the course of its investigation, the Agency declared it a superfund site. The land was placed on the EPA's "National Priorities List", which the Agencydefines as its list of the most polluted sites in the nation.
The property sat idle for decades, owing to the land's then-precarious physical condition and legal status. By 2005 its status had been upgraded to a brownfield, by which time Boca Developers commenced construction of the $1 billion, 5,000-unit condominium known as Biscayne Landing, located on the selfsame land. The project was completed in 2007.
One Of The Biggest Bond Busts In History
During construction of the condominium towers, the State was in the throes of a real estate crisis. The bottom had all but fallen out of the market by the time the towers were opened to residents. The full 100% of the Biscayne Landing investment was written off, making it one of the biggest mortgage securitization failures in history.
In order to understand the magnitude of the failure, here's a quick primer on how the bond market works: homebuyers solicit mortgage loans from lenders, such as banks and thrifts. Since most home purchase loans have long maturities (20 to 30 years), the lenders typically don't hold the loans through repayment. Instead, they sell them off to Wall Street firms, who bundle them according to their size and risk. The Wall Street Firms then package the bundles into bonds, which they sell on the stock market as mortgage-backed securities.
The bonds themselves are divided into tranches, and each tranche is priced according to several factors: the amount of interest it pays, its riskiness, and its stability, among others. Junior tranches tend to be cheaper because they involve greater risk, but they pay higher interest rates. Senior tranches are safer, but are more expensive and the interest paid on them is less.
When a bond fails, sometimes it gets written down. This credit risk is inherent in the investment. If there is any recovery, senior tranches get paid first, while junior tranches take the losses first. If there is any money left over after all the senior tranches are paid, then the junior tranches may receive some of what's left over, otherwise, they get nothing.
In the case of Biscayne Landing, the entire bond structure was written down. That means not even the most-protected senior tranches got any money out of it. Everyone who invested in the project lost every last cent.
Castles In The Sky
When you buy a car, you kick the tires. When you buy a house, you do a walk-through. These are steps you take to protect yourself by making sure you're getting what you're being sold. Banks do this too, when you request a loan from them. The first thing they do is check to see if you're creditworthy. The next thing they do is ensure they're protected if you default on your loan. In the event of a foreclosure, they need to be sure they can take ownership of the land underlying your loan.
You'd think a bank would be extra careful when extending $200 million of loans on a condominium project, right?
The City of North Miami owned the land when construction began in 2005. It granted Boca Developers a 200-year lease of the property. Boca Developers, in turn, obtained construction loans with its leasehold as collateral. When the lenders prevailed in their foreclosure action against Boca Developers, they were in for a rude awakening. Instead of actually holding title to the land free and clear, all the lenders had to show for their trouble was a leasehold -- they weren't owners but tenants, with the city as landlord. And the city wanted its money. When the lender/tenants failed to pay, the city sued to terminate the lease and prevailed.
All That Glitters...
Biscayne Landing's towers as serve home to the families who live there, but several units are still vacant. In the midst of the nationwide economic conditions, the community can be a tough sell.
When you look upon this land today, it's hard to imagine the world-class magnificence that was practically its birthright back in the early twentieth century. Throughout its history it's been a land of frustrated dreams, broken promises, bureaucratic ignominy, and crushing ruin.
Not all that glitters is golden, but when all one has is dreams, even yellow stones can be gold and shiny rocks can be diamonds, if only in dreams.
In the Atlantic lie the remains of a city wiped off the map.
In Biscayne Bay stands a monument few can visit.
In the Everglades, an abandoned rocket waits to fly man to the moon.
Miami-Dade has seen many places come and go in its 178-year history. In this book is a collection of places abandoned, demolished, hidden in plain sight, or that never were - places that helped shape Miami-Dade into the amazing county it is today. Photographs, addresses, and coordinates are provided for context.
Discussed in this book:
- The infamous "Krome Insane Asylum"
- The lost site of Miami Municipal, Amelia Earhart's departure point
- Opa-locka's vanished golf course, archery club, & aquatics center
- Interama, the futuristic cultural expo that never was
- And many more . . .