SOUTH FLORIDA BUSINESS JOURNAL: SEA-LEVEL RISE SPURS SOUTH FLORIDA DEVELOPERS TO ACTION
It’s a message environmentalists have been delivering for decades: Sea-level rise is real, and it won’t take long before South Florida structures are impacted – if nothing is done to mitigate the flooding threat.
It seems South Florida business leaders are finally responding to that message.
More real estate developers and investors are now taking a hard look at sea-level rise projections and factoring the scourge into their business plans when building or leasing properties in coastal areas. Sea-level rise experts say mitigation efforts are essential to protecting investments from costly flooding damage.
“It’s important that we start these discussions now,” said Alex Martin, South Florida regional manager for KW Property Management & Consulting in Doral. “It takes money to fix these things, so you need to start properly allocating your reserves.”
The efforts to protect homes and businesses from flooding are already creating opportunities for many South Florida companies looking to get a piece of the action.
Plantation-based Coastal Risk Consulting was hired by Frisbie Group in Palm Beach to provide sea-level rise projections before it built its retail, restaurant and condo project on Royal Poinciana Way at a higher elevation than the town required, said Cody Crowell, Frisbie’s managing director. The company reviews projections for 50 years out before green-lighting plans in coastal areas.
“Being on the water isn’t necessarily a risk if you are building to the highest standards,” Crowell said. “It’s when you are not building to the highest standards and the right elevations that there is a risk.”
U.S. coastal flooding occurred at record levels last year, according to the National Oceanic and Atmospheric Administration. It warns that sea-level rise, driven largely by global warming, will worsen flooding in coastal areas in the coming decades.
About 64,000 homes in Florida, valued at a combined $26 billion, will experience chronic flooding from high tides within 30 years – at least 26 floods a year, according to a study by the Union of Concerned Scientists using data from NOAA and Zillow. That includes 22,800 homes with a total value of $11.9 billion in South Florida ZIP codes.
The ZIP codes vulnerable to sea-level rise also have many commercial properties. But property owners, both residential and commercial, aren’t ready to pack up and move to higher ground. Instead, they’re investing in upgrades to protect their existing properties.
The business community wouldn’t be investing so much in coastal South Florida properties if the region was going to be mostly underwater in 30 years, said Irela M. Bagué, president of Miami-based communications firm Bagué Group, and vice chair of the Greater Miami Chamber of Commerce’s Resilience Committee.
“We will have to elevate properties and start looking at adaptation solutions,” she said. “All those contracts will create jobs.”
Albert Slap, president of Coastal Risk Consulting, said clients ordered about 1,000 risk assessment reports on his FloodScores.com last year. The service evaluates specific properties, instead of broad areas, as the elevation of a site and its position in relation to the water can make a big difference, he said.
One of CRC’s biggest clients was a real estate investment trust in California that ordered reports for 30 potential acquisitions, Slap said. One bidder for the Hilton Fort Lauderdale Marina, which recently sold, also ordered a report, he added.
CRC’s model considers the combination of sea-level rise and a major storm hitting during a king tide for its projections, he said. (King tides occur twice a year, when the Earth, sun and moon align to pull bodies of water to their highest levels, while the less severe high tide occurs twice a day.)
“They are using [assessment reports] on a ‘buy’ or ‘don’t buy’ basis,” Slap said. “They are also using them to negotiate price, just like if there was a bad roof and they ask for less because the buyer needs to fix it.”
In addition to evaluating a specific property, investors should consider the vulnerabilities of a surrounding area, said Brian LaMotte, senior VP and chief marketing officer with West Palm Beach-based engineering and planning firm Wantman Group.
Even if the owner of a property raises its sea wall, neighboring sites with low sea walls could result in both properties being flooded, LaMotte said. That means the property owner should also consider placing a barrier between the properties to block the water, he added.
Prospective buyers of real estate in low-lying neighborhoods should consider whether the city is likely to raise roads, because that could leave the property at a lower elevation than the street, resulting in flooding, LaMotte said. Low-lying neighborhoods with frequent high-tide flooding could experience a loss in property values, as buyers know significant mitigation work will be required, he added.
Projects mitigate flooding
Crowell said Frisbie Group’s project on Royal Poinciana Way in Palm Beach was designed to withstand the worst-case flooding scenario. That was a considerable challenge, given that the project will have an underground parking garage.
The developer created a soil mix that acts like a swimming pool in reverse – keeping the water out, instead of in, Crowell said.
Frisbie Group also buys home sites in Palm Beach to build custom mansions. Crowell said some of those homes were built too low, so it elevated them.
In addition to being constructed at a higher elevation, the Eighty-Seven Park condominium along the ocean uses open space to mitigate flooding, said David Martin, president of developer Terra. The site has a private park that contains stormwater runoff to curb flooding. A neighboring city park also absorbs water.
A member of Miami’s Sea Level Rise Committee, Martin said it’s crucial that the public and private sectors work together to make communities and businesses more resilient.
Martin said developers are placing a higher priority on reducing the impact of flooding on their projects.
“The good thing is we have time to plan and implement,” he said.
Virtually all developers of coastal condos take 40-year sea-level rise and high tide projections into account when designing projects, said Alex Martin of KW Property, which manages buildings for condo associations and builders. They are raising sea walls by at least 3 feet, building flood barriers, and adding pumps with generators so parking garages won’t flood during king tides.
“We have to be very proactive here,” Martin said. “The flooding we see in the king tides today will become the norm for every high tide in the next 25 to 30 years.”
Mount Sinai Medical Center in Miami Beach took long-range storm surge and flooding projects into consideration when it launched its $275 million expansion, President and CEO Steven Sonenreich said. It’s building a patient bed tower and new emergency department.
Although MSMC is at one of the highest elevations in the city – 13 feet above sea level – it didn’t take any chances. It raised the elevation of its new building by 10 feet, placed all treatment rooms on the second floor or higher, and relocated the mechanical systems for water and power from the basement and first floor to the third floor, Sonenreich said. In 2019, the hospital will raise its 3,000-foot-long sea wall by 5 feet.
“We are so far beyond what the experts are talking about for the next hundred years for how much water could rise,” Sonenreich said. “We wanted to be absolutely certain there would be no question our patients and employees would be safe, regardless of what the situation would be.”
Protecting existing properties
Most new development, especially in Miami Beach, is planned with protections against sea-level rise, so it’s the existing buildings at lower elevations that are at greatest risk of flooding, said attorney Neisen Kasdin, managing partner of Akerman’s Miami office and former mayor of Miami Beach.
“What do you do with the apartment building built 50 years ago that is 3 feet above sea level?” he said. “Over time, there will have to be significant redevelopment of existing properties.”
Historic preservation rules that prevent alterations of buildings can sometimes make it difficult to protect those structures from flooding, Kasdin said. Miami Beach recently designated the Tatum Waterway as a historic district, but it’s a low-lying area and many of those homes should probably be raised or redeveloped at higher elevations, he added.
Many of the city’s historic districts were established before sea-level rise was considered a major threat, Kasdin said.
“The world has changed because of sea-level rise, and government has to change their policies to adopt to it,” he said.
Many older condo buildings in the region’s coastal areas need to make major changes to guard against flooding from sea-level rise, Alex Martin said. Some already experience high-tide flooding, and that will only worsen, he said.
KW Property has recommended that some of its condo associations raise sea walls, elevate property levels, and outfit low-lying parking garages with pumps and generators, Martin said. He’s told condo associations that the government could start mandating certain flood protection enhancements. In some local cities, this is starting to happen.
Property owners in Fort Lauderdale were once forbidden from raising sea walls beyond a certain height. Several years ago, the city passed a law that requires raising sea walls on properties vulnerable to flooding.
The city’s Code Enforcement Division is citing property owners that don’t comply, said Stephen Tilbrook, a land use and environmental attorney with GrayRobinson.
Tilbrook’s client, SobelCo, initially secured approval for a lower sea wall at 321 at Water’s Edge condo, but he petitioned the city to allow for a higher sea wall.
He also represents some single-family homeowners who received code enforcement letters from Fort Lauderdale, requiring that they raise their sea walls or pay a fine. Tilbrook has identified 45 code violation cases in the city over sea walls – most in the Hendricks Isle and Riviera Isle area. This could have a negative impact on property values there, as the improvements will likely cost tens of thousands of dollars, he said.
It’s only a matter of time until Fort Lauderdale officials start citing condo associations and commercial properties for low sea walls, Tilbrook said.
“We will have to find ways to get small businesses [and residents] to stick around and protect themselves better,” Slap said. “Because if they retreat, the neighborhoods will lose their economic base.”
Read the entire cover article on the South Florida Business Journal website here: https://www.bizjournals.com/southflorida/news/2018/07/12/sea-level-rise-spurs-s-fla-developers-to-action.html