Sunday, October 12, 2014

Indian Creek Village is for the uber-rich

10/11/2014 8:39 PM

Owners: Charles Johnson, retired chairman of mutual fund Franklin Resources and No. 59 on Forbes’ 2013 list of U.S. billionaires. Johnson owns the San Francisco Giants. Net worth: $5.6 billion, according to Forbes. Property: 19,941 sq-ft home with 6 bedrooms, 7 baths, 2 half-baths featuring vaulted ceilings, wine room and gym. Built in 2002. Last sale: No previous sales listed. The home is currently for sale for $35M.

As Miami Beach cements its reputation as a playground for the rich, with pied-a-terres priced in the tens of millions, one of its nearby, tony private islands is getting down to serious business.
Tucked off the shores of Surfside in Biscayne Bay, Indian Creek Island has become known as a “billionaire bunker.” Its 86 residents include four of America’s top 500 richest people, according to Forbes: activist investor Carl Icahn; hedge fund manager Eddie Lampert; car dealership owner Norman Braman. and mutual fund mogul Charles Johnson. Add to that Colombian Jaime Galinski, who has recently landed on Forbes’ world billionaires list.
No need to feel sorry for the island’s other residents, though, who include crooner Julio Iglesias, retired Dolphins coach Don Shula, Turnberry Associates co-CEOs Jackie Soffer and brother Jeffrey, who is married to supermodel Elle MacPherson. Others with Indian Creek addresses include Spanish-language TV personality “Don Francisco,” whose real name is Mario Kreutzberger; co-founder Bob Diener and industrialist Gilbert Bigio, considered one of the wealthiest people in Haiti. Even music magnates Jay-Z and Beyonce were once homeowners.
Island home sales have been selling at whopping — and often record — prices, such as the $47 million paid by a Russian billionaire in 2012 for a newly constructed, 30,000-square-foot mansion. Earlier this summer, steel tycoon Leroy Schecter sold his 22,686-square-foot house for $28 million to an undisclosed buyer.
Taken together, the village of 86 residents boasts a net worth in excess of $37 billion. That’s greater than the gross domestic product of half the the world’s nations, above oil-rich Yemen but just less than gas-rich Turkmenistan. (Without uber-investor Carl Icahn’s $20.3 billion, its rank would fall to No. 112, just below Bosnia and Herzgovina and just above Georgia.)
It’s quite a change from 2001, when Benny Klepach moved to the posh private island-village where he is now mayor.
“There wasn’t a lot to pick from,” said Klepach, CEO of the world’s largest duty-free retailer. “And what there was to pick from, you really had to knock it down.”
Where the island used to be filled mostly with vacation houses for the wealthy, now families are constructing extravagant dream homes to live in. All 35 properties have waterfront views, with an exclusive golf course and country club taking up the center of the 294-acre island.
“There has been incredible appreciation in Indian Creek,” said Jill Eber, one-half of The Jills, the Coldwell Banker team that sold seven of the island properties over the years.
With the economy improving and adjacent neighborhood Surfside adding entertainment and dining options, potential buyers are warming up to Indian Creek, said Klepach, who also serves as mayor of the incorporated Indian Creek Village. The island is protected by a 10-officer police force, including 24-hour marine patrol. That has led to property taxes that are among the highest in Miami-Dade County, at a 8.3782 millage rate for city taxes, alone.
Indian Creek Village was established in 1939, and a few of the properties still date back to the ’50s and ’60s. But for the most part, the smaller houses of that era are making way for sprawling mansions.
In 2012, 3 Indian Creek Island Rd. set a county record when Eber and Jill Hertzberg sold the 30,000-foot resort-style home to a Russian billionaire for $47 million. The mostly glass home included 13 bedrooms, 14 bathrooms, a 3D theater, 100-foot swimming pool and a recording studio.
“That really for me was the catalyst of the recent boom not only for Indian Creek, but for all of Miami,” said Oren Alexander, who represented the buyer in the sale. Alexander’s father, Miami Beach developer Shlomy Alexander, built the mansion on spec.
Shlomy Alexander said his team just broke ground on a second project at 30 Indian Creek Dr., designed by architect Chad Oppenheim. The 22,000-square-foot house is one of the largest being built in the county, he said.
Like the record-setting glass house, the new project will incorporate the outdoors and the indoors as much as possible, Oren Alexander said. The property sold in May 2014 to a buyer attracted to contemporary design’s vast spaces.
“If you define what luxury is today, to me it’s volume: big rooms, high ceilings,” he said. “You’re almost selling cubic feet instead of square feet.”
Every lot on Indian Creek Island is at least an acre and a quarter, Eber said, and today’s buyers want to use much more of that space than they used to.
“A lot of people are looking at the older properties as tear-downs ... The [house] that was 30 Indian Creek was a little over 4,000 square feet, probably about 4,400 square feet,” she said.
Klepach not only knocked down a 1940s house on his property when he bought it, he also bought his neighbor’s house to double his lot space to 160,000 square feet. Like many of his neighbors, he said, he was looking for a more contemporary style.
“The house was old; I was buying it for lot value,” Klepach said. With three children in school when the new house was finished in 2006, he and his wife “wanted to build our dream house.”
Families with children are becoming more common on the island as houses shift from winter residences to year-round homes, residents said.
“We moved there in 1991, and there weren’t any small children ... The average age [now] is half of what it was,” said Irma Braman, whose husband is billionaire car dealership owner Braman.
As a result, the village council is planning to construct the island’s first sidewalks, Klepach said. Residents have pushed for sidewalks and accompanying streetlights so their children can ride bikes and play outside — a rare sight even a decade ago.
The 300-member Indian Creek Country Club, one of the most exclusive country clubs in America, has added kids’ golf and tennis lessons to adjust to the demographic change, club president Wayne Schuchts said.
Club members, who pay $150,000 to join and $16,000 a year after that, are still an average of 65 years old, he said.
But “a significant number” have young children or grandchildren, and so the club has shifted its social calendar from black-tie, orchestral galas. A new event is “Havana Nights,” an outdoor costume soirée that aims to be more kid-friendly — albeit still with a focus on Cuban cigars.
The golf crowd might see an even larger dip in age in the coming years, Schuchts said.
The resurgence of entertainment options in Surfside plays a role in drawing young people to Indian Creek, Alexander said. For example, the new Four Seasons Private Residences now under construction on the site of the nearby Surf Club will give Indian Creek residents an opportunity to buy a beach apartment for guests, he said.
“That was the one downside to Indian Creek,” he said. “People always said, ‘Hey, it’s in Surfside.’”
As Indian Creek Island becomes known for its space, security and location, home prices will continue to skyrocket, Klepach predicted. He thinks prices will increase 20 to 25 percent in the next few years.
Currently, four pricey properties are listed for sale: 17 Indian Creek, listed by Nelson Gonzalez of EWM Realty International, for $35 million; 9 Indian Creek, a vacant lot listed by Beachfront Realty for $27.9 million; 2 Indian Creek, a vacant lot listed by the Jills for $26 million; and 36 Indian Creek, listed by the Jills for $19.8 million.
“I don’t think we’re even close to seeing what the real values are, when you compare it to L.A. and other cosmopolitan cities,” Klepach said.
Alexander said he would be surprised to see more than four sales on the island in the next decade. Homeowners there won’t part with their homes till death or divorce, he said.
“These people that own [houses on] Indian Creek, these are some of the wealthiest people in the world,” he said.
“For them, no matter if their property value increases 200 percent, it’s irrelevant” because nothing can replace the island’s security and views of Biscayne Bay. “The question is, how much money are you going to pay a billionaire like Carl Icahn to leave his house?”
Miami Herald staff writer Ina Paiva Cordle contributed to this report.
Billionaire bunker
Tucked off the shores of Surfside in Biscayne Bay, Indian Creek Island has become known as a “billionaire bunker.” Its 86 residents include four of America’s top 500 richest people, according to Forbes. Island home sales have been selling at whopping — and often record — prices, such as the $47 million paid by a Russian billionaire in 2012 for a newly constructed, 30,000-square-foot mansion. 

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