Miami Herald

For the past 12 months, Miami’s Design District has looked more like a construction site than a luxury shopping mecca.

Now, as the chrome-and-etched glass doors open at the latest boutiques from fashion powerhouses including Louis Vuitton, Tiffany & Co., Emilio Pucci and Harry Winston, developer Craig Robins says he plans to double the size of the pedestrian-friendly retail district he and his investment partners have created in a once-shabby Miami neighborhood.

A total of about 60 stores and restaurants are set to open by mid-2017, Robins said, joining the 70 shops that have already opened their doors or plan to do so by this November, before December’s annual Art Basel fair.

New brands will include Dolce & Gabbana and high-profile restaurants ABC Kitchen (from superchef Jean-Georges Vongerichten) and L'Atelier de Joël Robuchon. Existing retailers Christian Louboutin, Prada and Céline are touting new two-story, flagship stores.

And Kering — the luxury company that controls brands such as Bottega, Gucci, Balenciaga and Yves Saint Laurent — also plans to open stores in the district’s $500 million expansion, Robins said, although it hasn’t confirmed which retailers will set up shop, yet.

Meanwhile, a string of more contemporary stores including Rag & Bone, Marc Jacobs and Diane von Furstenberg will line a block on the western side of Northeast First Avenue between 39th and 40th streets. Nearby will be a 10-story hotel with 100 rooms and a 14-story condo tower with 70 units.

“The idea of the Design District is to offer a rich experience at the intersection of culture and commerce,” said Robins, CEO of Dacra Development.

Construction on the new phase has already begun as Dacra converts an area of smaller buildings and empty land into store fronts befitting designer-clad shoppers.

Cynthia Cohen, president of Miami-based retail and real estate consulting firm Strategic Mindshare, said that the latest expansion is a step in the right direction, especially the new restaurants.

“One thing the area needs is more nightlife,” Cohen said. “Both ABC and L’Atelier have strong name recognition for New Yorkers and international travelers. Fine dining is a very effective way to get more foot traffic into the area.”

Current restaurants include MC Kitchen and Oak Tavern, but only those by chef Michael Schwartz — Michael’s Genuine and the Cypress Room — have a national reputation.

ABC Kitchen, part of Jean-Georges Vongerichten’s culinary empire, and L'Atelier de Joël Robuchon will boost the area’s appeal for local foodies and tourists, Cohen said.

Strong buzz from Design District retailers helped attract the company that owns and operates Robuchon’s restaurants in the U.S. (The French chef also has locations in Las Vegas and, starting next fall, New York).

“We heard from several companies that their sales were very strong even in the midst of what was essentially a construction zone,” said Alex Gaudelet, CEO of Invest Hospitality. “The Design District allows brands to open up big, flagship stores like you’d see in New York, Paris and Milan, and that creates a natural setting for our restaurant. You can’t really do that in a traditional mall.”

As foreign money pours into Miami’s real estate boom, interest in South Florida from luxury retailers has soared.

In addition to the longstanding Bal Harbour Shops, two new developments with upscale shopping are in the works: Brickell City Centre, scheduled to open by the end of the year with Saks Fifth Avenue as its retail anchor, and Miami Worldcenter, which will open in 2017 with a Macy’s and Bloomingdale’s.

Nitin Motwani, a principal at the Worldcenter, said that expansion in the Design District wouldn’t threaten other projects.

“I think it speaks to the depth of the luxury market in Miami and the strong demand from tenants to locate here,” said Motwani, who also serves on the board of the Downtown Development Authority, a semi-autonomous city agency. “Whether it’s Wynwood, the Design District, Edgewater or Miami Worldcenter, the creation of these new districts is important to advancing the caliber of the greater Miami area.”

Surrounding developers have taken note of the Design District’s early progress, bringing residential and mixed-use projects to the district’s periphery in the hope of piggybacking on its success.

“We are actively trying to build around the Design District,” said Carlos Rosso, president of the condo division for the Related Group, a major local developer. Related has three condo projects near the Design District to the north (Baltus House), east (Paraiso Bay) and south (Hyde Midtown).

Rosso described the relationship between Robins and other developers as “complementary.”

“Craig is building top-end luxury retail for our residential buyers, and we are providing customers to walk through his stores and restaurants,” Rosso said. “He needs people to live in the area and we need exciting things to happen around our developments.”

As traditional malls become less profitable, developers are pushing open-air retail districts set on urban streets, much like New York’s Fifth Avenue.

Many of the new Design District shops will be centered on the northern end of a pedestrian walkway, called the Paseo Ponti, that connects Northeast 39th Street to 41st Street between Northeast Second and First avenues. The walkway will lead into a new art-filled plaza, anchored by a glass-fronted building designed by Johnston Marklee that will be visible from the existing Palm Court plaza on Northeast 39th Street, which houses a Buckminster Fuller geodesic dome.

“The Design District is special because there are so many opportunities for cross-block passages and courtyards, which are unusual in Miami,” said Elizabeth Plater-Zyberk, a partner at the architectural and urban planning firm Duany Plater-Zyberk, which designed Robins’ master plan for the area. “The idea is to create a town center where you can really walk around.”

The Institute of Contemporary Art also plans to open its new location, next to the de la Cruz Collection Contemporary Art Space on Northeast 41st Street, in December 2016.

The expansion will add 1,200 parking spaces, bringing Dacra’s total to 2,500. The outside of a new garage across from the ICA will be playfully decorated with murals and sculptures. One entire wall will be studded with actual cars.

Robins said that as new shops have opened, foot traffic has increased 50 percent this year compared to 2014, when about 12 stores were doing business. “We are building a sustainable destination for the long-term that is evolving organically,” Robins said.

Some locals have raised concerns about traffic. “As a homeowner, I love the fact that the district is creating new businesses and growth for our area,” said Schiller Jerome, president of the association for the Buena Vista East Historic Neighborhood, a low-rise residential area bordering the Design District.

But the idea of expanding major public transit such as the Metrorail or Metromover into the area hasn’t gotten traction with city officials, although trolley service from Brickell to the district was added in 2013.

“It’s critical that the city provide better parking and improve the roads here,” Jerome said. “We don’t want to see people parking in our yards or disturbing our neighborhood as the District grows. I wish there were better cooperation between the neighborhood on one side and the city and the big developers on the other.”

Dacra owns about 70 percent of property in the Design District, along with longstanding partner L Real Estate, a private-equity fund whose investors include the luxury company LVMH, owner of Louis Vuitton, Dior, Givenchy, Dom Pérignon and other major brands.

Last fall, two major retail and real estate investors, General Growth Properties and Ashkenazy Acquisition Corp., bought a 20 percent stake in the partnership for $280 million. That puts the valuation of Dacra and L Real Estate’s holdings at $1.4 billion.

Other major investors in the area are the New York-based developer Richard LeFrak, the Brazilian financier family the Safras, and Isaac and Raymond Gindi, who own the Century21 department stores.

Recent major transactions include the $29.95 million purchase of a two-story retail building at 1 NE 40th St. in March by a team of New York and London developers. Last summer, a Manhattan company controlled by the Gindis and a partner bought an old church a few blocks to the northwest for $12.5 million.

Farther south, the real estate broker Michael Comras, well known for his work on retail projects in Wynwood and Miami Beach, is partnering with New York-based Mack Real Estate Group to create a 19-story, mixed use tower with 195 luxury rental apartments.

The development, called District 36, straddles the area near Interstate 95 between Midtown and the Design District.

Comras said that the home furnishing and interior design companies that formed the original heart of the District have had to scatter from their traditional locations in search of cheaper rents.

District 36, which will begin construction in the next month, will offer 60,000 square feet of retail space for furnishing and design companies, as well as a restaurant.

“The influx of the luxury retailers has meant that we’re now developing the periphery of the Design District to create new spaces for the old commercial tenants and new residential buyers,” Comras said. “It helps to spread the gentrification and create a more vibrant nighttime atmosphere.”

See media coverage at Miami Herald.