For 65 years, the Wallack family has owned the property at 900 Ocean Drive, operating it both as an adult living facility and, for the past 28 years, as Mango’s Tropical Café. Now, as efforts pick up to “reimagine” South Beach’s MXE district away from a heavy emphasis on entertainment and more toward an arts and culture destination, the Wallacks are considering their exit.
Founder and CEO David Wallack, and his son, Josh Wallack, the company’s COO, have put three adjacent properties on Collins Avenue under contract over the last six months and have hired CBRE to market the assemblage as a redevelopment site. CBRE’s listing calls it “a once-in-a-lifetime opportunity to transform ±0.78 acres in the heart of South Florida’s most exclusive enclave, Miami Beach.”
“Located in the Art Deco Historic District with frontage on both Ocean Drive and Collins Avenue, the Site is the epicenter for art, culture and entertainment in South Florida and is among the best locations for vertical development in the world,” the listing states.
The Wallacks hired illustrator/urban designer Chris Ritter to create drawings of what “might” be possible on the site showing how it could fit in with the pedestrianization of Ocean Drive that is being discussed by the Mayor and City Commission. Josh Wallack said the illustrations are a “vision” of what a future Ocean Drive could look like but emphasized, “There is no plan” and whatever is ultimately proposed for the site would come from the new owner.
The assemblage consists of 900 Ocean Drive (0.3 acres) and three adjacent parcels behind it along Collins Avenue (909, 919 and 929 Collins), a series of low-rise mixed-use commercial properties totaling 0.48 acres. “The Owners of 900 Ocean have recently secured an option to purchase the three Collins Avenue properties and are now seeking proposals to sell and redevelop the entire assemblage,” according to the listing.
Among the selling points, CBRE notes, “Immense Barriers to Entry” as “Developable oceanfront land in South Beach is virtually nonexistent and both zoning laws and historic preservation requirements are extremely strict… This offering presents the unique potential for significant development.”
Michael McShea, Executive Vice President and co-leader of CBRE’s state and local government practice, said the opportunity is being marketed globally “to between 20,000 and 30,000 investors and developers… We expect all kinds of interest – local, national, international.”
Lee Ann Korst, SE Regional Manager for CBRE, said almost immediately there were inquiries from Luxembourg and Ireland. “That global exposure’s already happening.”
The RFP was sent out unpriced, McShea said. “At the end of the day, it really depends on the density that’s permitted on the site.” Any proposed development will have to go through an approval process including community outreach “before anyone knows what they actually can build on the property and that will drive the price. Because of its unique location… I think it’s going to receive a premium because it is an important property in an important city in South Florida.”
While there is global interest, Korst said, “Despite COVID we are seeing a lot of activity and interest in the South Florida market.”
Bids are due middle of February. Following an evaluation and vetting process, the list will be narrowed down by mid-April, according to Korst and McShea.
Josh Wallack said this is an opportunity for one of the largest and longest-owned businesses on Ocean Drive to help “change the narrative” from what is there now to what could be with a new Arts and Culture District proposed by Mayor Dan Gelber. Gelber wants to get away from what he calls the “anything goes” atmosphere and this summer challenged City staff to come up with ideas to transform the area.
While the Wallacks were in the middle of assembling the properties on Collins Avenue, City staff proposed an idea to create incentives for hotel development for properties connecting between Ocean Drive and Collins Avenue. Josh Wallack said he was looking at ways to further the idea of “having Ocean Drive and Collins become one,” similar to what has been done successfully at The Betsy at the north end of Ocean Drive and is in process at The Tides. Recently, the Clevelander proposed doing the same.
The vision, Wallack noted, is one that makes “change while incorporating the historic feel of the neighborhood but escalates it to the next level.”
So far, Wallack has informed Gelber, the Commissioners, and several community activists of the sale. In a text message, Gelber said, “I’ve spoken with them. My hope is that their goal is to support the vision of a cultural district with elevated hospitality offerings.”
Stephen Cohen, one of the activists who has discussed the idea with Wallack, acknowledged the lack of a plan and characterized it more as a high-level conversation. That said, Cohen noted, “For me I’ve always been in favor the pedestrianization of Ocean Drive and I think most residents are so that’s number one to me, if anything else, and as long as it doesn’t take away any historically significant buildings, I’m open to the idea of development. The other top concern is crime so I told them I like the idea of the upscaling” and how the plans work together with more police presence and other proposed activities for the area.
“He’s the owner and he feels that it’s time to move on,” Cohen said of 72-year-old David Wallack. “There’s a good percentage of people that don’t want nightlife anymore… If there’s a compromise between development and getting rid of nightlife, that’s a fair compromise, I guess.”
Cohen hopes a new owner will listen to residents and come up with “the best compromise for everybody.”
Mango’s has been closed since the beginning of the coronavirus pandemic and still could reopen at an appropriate time, Josh Wallack said. “We’re on dual tracks. The virus is precluding us from opening.”
When the vaccine is widely distributed and case numbers are coming down, he said, “We do expect that we can open.” With that expectation, he said Mango’s will continue to assert its rights under its Certificate of Use Permit (CUP) for entertainment and food and beverage service. At the last Commission meeting, an ordinance was passed on first reading that would restrict the music eastbound for the area known as the Cabaret District from 9th to 11th Streets to ambient only after 2 am. Mango’s would like for the change to begin at 3 am. Commissioner Michael Góngora asked City staff to consider that change when the ordinance comes back for second reading in January.
Wallack reminisced about the turn in Ocean Drive spearheaded by Tony Goldman in the 1980s. “In 1985, Tony Goldman looked down Ocean Drive and saw a vision of America’s Riviera and his vision propelled us up into the stars.”
The Great Recession, however, took a big toll, he said, along with the development of Wynwood and Brickell which took the “nightlife monopoly away from South Beach… and we lost the edge completely except for what they’re calling these ‘heritage businesses,’ Mango’s and the Clevelander and Joe’s Stone Crab. [Those businesses] existed no matter what was going on around them, but the neighborhood was suffering.”
Wallack said he doesn’t recognize the old Ocean Drive of Tony Goldman’s time. “The energy of Ocean Drive … is on pause, to be as kind as I can possibly be.”
“The recession had a big impact on the business model of Ocean Drive becoming more of a 2×1 discount kind of thing,” Wallack said. That business model is something Gelber has pointed to as working for some businesses but not the City.
Ocean Drive has now become what Duval Street is to Key West, Wallack said, with “cheesy this and cheesy that.”
“We stopped catering to the locals and really started catering to that group,” he said. The discounting and “bait and switch” activities that proliferate because the operators of those establishments “don’t care about hundred dollar fines” for violating the City’s Sidewalk Café Code of Conduct because “Their whole business [model] is to bear those kinds of risks.” Like Gelber, Wallack said, “It’s a race to the bottom.”
“Mango’s,” he said, “is my father’s legacy.” The nightclub, he believes, may be the longest running club under the same ownership group. Looking at where Miami Beach is now, with the changes that are coming in behaviors and patterns in the tourism and hospitality industry post COVID and the plans for the arts and culture district, the Wallacks are looking to what’s next.
“What we have now, the business model’s not working,” Wallack said, but he doesn’t see any real solutions being offered. “There has to be a plan to go on and do something. It can’t just be defensive measures. We have to also score touchdowns and I mean that for balance, to have balance.”
Josh Wallack and his sister grew up at 900 Ocean Drive when it was an alternate care facility for seniors. When looking at what’s next, he looked back to the past and “when it was good.” A 2014 video created by the Miami Beach Chamber of Commerce when David Wallack was awarded the Excellence in Tourism Award tells the story of the family’s history with the property.
The Wallacks began to acquire the properties on Collins Avenue to connect Ocean Drive with Collins and create good development “so that it spills out onto the side streets from Collins to Ocean” to replace “fallow stores” and “liquor stores” with “upgraded” shops and restaurants, Wallack said.
Mango’s attorney Monika Entin refers to it as “changing the dynamic” starting with “what could have the biggest impact, the biggest nightclub changing the narrative. It’s the next level. It’s the future of what could be.”
“The dynamic doesn’t change because we have more Code [Compliance officers] out there,” Entin added. “The clientele changes the minute the value of what you put out there changes.”
“We are going to be a part of this process moving forward,” Entin emphasized. “We will be doing this hand in hand with the community the entire time,” understanding that “the preservation of historic structures is necessary and part of the dialect and the language of the area.”
Wallack and Entin stress they are early in the process and will continue to meet with members of the community over the next couple of months to keep them informed of the process.
Korst said, “For us the high-profile nature of the property itself, kind of on the corner of Main and Main, if you will, Ocean and Collins, is important in itself, but representing the Wallack family and how important it is to them, their history and their legacy, makes it even more important to us.”
“David Wallack really wants to do the right thing for this property and the Ocean Drive community, in general,” McShea said.
Daniel Wigoda, CBRE Senior Vice President, and Lee Ann Korst, SE Regional Manager for CBRE, have the listing.
