The Miami City Commission has approved the sale of a portion of Watson Island for $29 million, allowing developers Merrimac Ventures and BH3 to move forward with plans for a mixed-use project that will include condominiums. The decision follows over a year since Miami voters endorsed the sale of approximately 3.2 acres at 888 MacArthur Causeway to IG Luxury, the venture formed by BH3 and Merrimac.
Residents voiced strong opposition at the commission meeting, with concerns about the value of the deal and its impact on the community. “Residents have sued the city because of the issue with Watson Island before, and have taken a vote to ensure the sale of Watson Island is of fair market value,” said Miami resident Gilbert Palacios. “We can use responsible and good development in our city like we have done in the past. … This is a bad deal for the city, a bad deal for residents, a bad deal for workers.”
Commissioner Ralph Rosado cast the only dissenting vote, expressing reservations about whether the city was receiving appropriate compensation for the land. He advocated for an independent appraisal by Cushman & Wakefield. “At this time, I would like to be confident that we’ve negotiated the best possible deal for the city, and I’m not there at the moment,” Rosado stated. “I do think that there is room to make this a better deal that’s more responsive to our residents and our taxpayers. … Not only do I think that there’s room for additional public benefits, but I have concerns about the fact that the purchaser could, in fact … turn around and flip the property, and that has major consequences.” However, his motion did not pass.
The approved transaction comes amid controversy over an appraisal cited by local media indicating that the land’s value could range from $257 million to $342 million—significantly higher than its $29 million sale price. Developers argue that existing long-term lease agreements lower its current value.
As part of their agreement with Miami, Merrimac Ventures and BH3 will contribute $9 million towards affordable housing and infrastructure projects. Additionally, Miami will negotiate with state authorities to release deed restrictions on Watson Island land at a cost of $4 million.
The new arrangement permits construction of roughly 100 condominium units instead of previously planned timeshare properties. The developers will also maintain their lease on over seven additional acres still owned by Miami.
BH3 and Merrimac formed their partnership in 2023 after acquiring Flagstone Property Group’s leasehold interest; Flagstone had struggled with delays and legal disputes since winning voter approval via referendum in 2001 but ultimately completed only part of its intended project.
During Thursday’s session, commissioners postponed final consideration on another proposal regarding increased development density in certain neighborhoods beginning with Edgewater.
