The former Biscayne Chemical Site (“the Property”) is a 2.5 acre parcel located at 690 NW 13th St, in the Allapatah neighborhood of Miami Florida, directly adjacent to Booker T. Washington High School. Allapatah is bordered by Downtown Miami to the east as well as the surging Wynwood and Miami Medical Center Districts to the north. The site is situated caddy corner to the Culmer Metrorail Station, which provides direct access to Downtown Miami. The property was operated as a chemical distribution plant from the 1940’s through the spring of 2000. Following the plant’s closure, petroleum hydrocarbon contamination was discovered on site and subsequently remediated. In 2017, the Florida Department of Environmental Protection issued a “Site Rehabilitation Completion Order”, providing specific guidelines to complete the remediation and redevelopment of the Property.
In 2019, KCP entered into a joint venture with Goldstein Brownfields Group (“the Partnership”) to analyze the acquisition of the property. Having provided legal counsel to the property owner in the past, Goldstein Brownfields Group originally identified the site and was intimately familiar with its environmental concerns and lucrative redevelopment scenarios.
Prior to acquisition, the Partnership commissioned Phase I and Phase II environmental studies to determine the extent of remaining contamination, cost of ongoing cleanup and to secure all available forms of liability protection. Pre acquisition due diligence also included the engagement of Holland & Knight (“H&K”), Miami’s premier land use attorneys. H&K coordinated with City of Miami zoning officials to address the drastic shortage of “attainable” or “work force” housing within the area. Given the site’s proximity to the public transit, it became a logical candidate to receive a density increase from 150 multifamily units per acre to 300.
After underwriting environmental cleanup costs and securing liability protection, the Partnership closed on the Property in October 2019 with assurances that the City of Miami would cooperate with efforts to change the zoning to high density residential. Since that time, the remediation and redevelopment timeline has already hit significant milestones ahead of schedule. Ground water remediation efforts from November and December of 2019 have ongoing reports indicating site remediation is ahead of schedule with completion now anticipated by as early as June 2020. The City of Miami is actively reviewing the Property’s zoning application while H & K addresses any of their ongoing requests. Zoning approvals are currently anticipated by May of 2020. Following the successful completion of environmental remediation and rezoning, the Property will be marketed for sale in July 2020.
Established in 2006, Pine Ridge Plantation Community Development District (CDD) is a 740-acre gated residential community located in Clay County, FL in the southwestern portion of the Jacksonville MSA. The community originally consisted of 736 single-family lots, which were sold to a regional homebuilder. From 2006 – 2008, 400 of these lots were improved with single-family houses and sold to end-users. However, following the housing crisis of 2008, 336 of the lots remained unimproved. The regional homebuilder eventually ceased payment of their property taxes as well as their annual CDD bond payments causing the lots to fall into default.
By 2014, KCP was actively acquiring tax certificates within functioning CDDs in large metropolitan MSAs. After analyzing the robust Duval and Clay County housing trends, the firm began to acquire tax deed eligible certificates at a significant discount to their par / redemptive value. Simultaneously, KCP negotiated the discounted purchase of numerous lots, which had been acquired by third party investors at tax deed auction. Following negotiations, KCP agreed to sell all tax-deed eligible certificates and tax deeds to the property owner resulting in a positive gain for its investors. By acquiring property tax certificates within a recently constructed CDD in the Jacksonville MSA, KPC was able to acquire significant interest income with minimal downside risk.
Established in 2000, Spring Ridge Community Development District (CDD) is a gated residential community located in Southern Hernando County. The community originally consisted of 550 single-family lots, which were sold to various homebuilders. From 2000 – 2008, 360 of these lots were improved with single-family houses and sold to end-users. However, following the housing crisis of 2008, 190 of the lots remained unimproved by the various homebuilding entities. These homebuilders eventually ceased payment of their property taxes as well as their annual CDD bond payments causing the lots to fall into default.
By 2014, the Hernando County residential housing market was in full recovery. KCP began to acquire tax deed eligible liens on unimproved lots remaining within the District at a discount to their par / redemptive value. Simultaneously, KCP negotiated the discounted purchase of corollary tax exempt, fixed-income bonds secured by the properties. KCP coordinated with the previous property owners, the District’s Board of Directors, the District Attorney, institutional bond owners, and Hernando County to secure marketable title to the properties. In November 2017, KPC successfully sold the properties to a publicly traded homebuilder, realizing a significant return to its investment fund.
