How the Art Deco District, Once a Vision of Dreamers, Was Transformed into a Billion-Dollar South Beach Juggernaut

 
Diane Camber holds a microphone as Barbara Capitman leads a trolley tour of Mimai Beach in the late 1970s.  Photo provided by Estate of Barbara Baer Capitman.  

By Randy Abraham
Contributing Writer 

In the past two decades, the Art Deco District has transformed itself from a crumbling retiree haven to one of the most visible tourist destinations in the world.

Today, high-rolling tourists and celebrities enjoy $30 lunches in the same spots where retired garment workers sat on rocking chairs and slept in $30-a-night hotel rooms. Boarded up buildings now boast an upscale clientele of affluent hipsters seeking the funky, neon-tinged urban village ambiance that is South Beach.

Espanola Way in the late 1970s.  Photo provided by Nancy Liebman

However, when a small group of activists a quarter-century ago pushed to have the Art Deco District and its assortment of 800-odd buildings to become the first 20^th century location named to the National Registry of Historic Places, the business establishment at the time was hostile to the idea of granting protection to the decaying buildings.

“In the early days the city could not have been more difficult,” said Andrew Capitman, a businessman and son of the late Art Deco enthusiast Barbara Baer Capitman, who successfully led an international campaign for recognition and protection of the district. Capitman, with partners Mark Shantiz, acquired seven hotels, including the Cardozo, Tide and Carlyle, and operated the group as Art Deco Hotels, Ltd.

“In the fall of 1978, I was living in New York doing economic consulting and working on my Ph.D. in economics at the New School for Social Research,” Andrew Capitman said. “I came down to Miami for Art Deco Week, and the first Moon Over Miami Ball at the Edwards Hotel, featuring Bill Wade’s Swing Classics Orchestra, created a very romantic mood.  We were optimistic the District would get placed on the National Register, but no one had stepped forward so far to create a pilot project. The Cardozo was intended as a pilot project to show that it would work: that if you fixed up the Art Deco buildings young people would come. I resolved that evening to bite the bullet and do it myself. I was aiming to bring back the neighborhood as a lively, successful district. We needed to enlighten developers about potential profits to be had in the District.”

In December 1978, Andrew Capitman signed a contract to buy the Cardozo Hotel for $800,000.  “My plan was to move back to the Beach and raise the money to buy the hotel,” he said. “My plan was to approach everyone I knew or could get introduced to invest in the project. It turned out to be an enormous struggle, but I finally raised the money I needed to close and completed the deal on June 25, 1979. By the time the deal closed, I was down to my last $700.”

But early on, Andrew Capitman discovered that his mother’s vision of sensitively renovating Art Deco hotels and marketing them to a progressive, sophisticated market, was not shared by the city fathers.  

“The city and the chamber of commerce were both opposed to the creation of the Art Deco District. The people who opposed it had no idea what a resource it would be, and were not aware of the success of other historic districts in other areas,” he said. “Apart from active opposition to creation of a national historic district, or the fact that the county basically had to threaten legal action against the city to get a local ordinance passed in the mid-1980s, the most tangible memory I have is the fight we had to get authorization to open the Cafe Cardozo, the first food and beverage operation on Ocean Drive.”

The Cordozo opened in 1981. A few years later, Capitman was out of the hotel business, having unloaded his holdings to the Royale Group from Pennsylvania. Despite rumors that executives of the firm had ties to organized crime, they managed to borrow $25 million to complete Capitman’s planned renovations before winding up in bankruptcy court by 1990.

The late 1970s and early 1980s were not hospitable to such a forward-looking vision: the national economy was struggling with a recession, interest rates soared to 20 percent, drugs and criminal activity plagued older urban areas. Public school enrollment in Miami Beach was falling, the influx of senior retirees to Miami Beach was slowing to a trickle, and the region had yet to absorb the ranks of Marielitos, some of whom were dislodged from Castro’s prisons. A building moratorium south of the Art Deco District was disastrous, failing to revive the “redevelopment” area south of Fifth Street. 

“In the late 1970’s you had a city that was collapsing all around itself,” said Bruce Singer, head of the Miami Beach Chamber of Commerce and a city commissioner from 1981 to 1991.

“The area was redlined because banks wouldn’t lend money to projects in the Art Deco District, and it was no longer the same tourist destination or convention destination that it had been. And the developers didn’t pay attention to or support Barbara Capitman’s preservation movement; she didn’t even have the support of the property owners. They were afraid of the restrictions that would come from the historic designation. When the area was added to the National Register, buildings did not enjoy protection from demolition. When I was elected, a preservation ethic started to take hold on the city commission, and the first ordinance to provide protection was passed. But it was a very weak ordinance,” Singer recalled.

Michael Kinerk became a founding member of the Miami Design Preservation League in 1977 and is currently chairman emeritus of the group’s board. He echoed Singer’s assessment of the daunting struggle of preservationists. “It was like David and Goliath, and preservationists had to fight every step of the way. Most of the early money was from outside interests from New York, Boston, or Philadelphia – they knew what preservation could do. But locally, Dade County had to threaten to sue the city over non-compliance of its historic preservation ordinance.” By the late 1980s, the city had finally strengthened its laws designed to protect the fledgling district, noted Kinerk, but by then the New Yorker and the Senator – considered among the finest examples of Art Deco architecture – were demolished. “The New Yorker was a tragic loss, and in a sense the Senator was the martyr of the district,” Kinerk said.

The national designation, however, did provide tax incentives to developers willing to refurbish the Art Deco hotels in a manner that was architecturally and historically consistent. Those perks brought in early visionaries such as Jerry Sanchez, who acquired the Edison, Clevelander, and Amsterdam among other holdings. Sanchez, however, sold the properties within a few years after making an abortive attempt to acquire the Mediterranean-style Biscaya Hotel located south of Fifth Street.

And with the cheapest beachfront property in a major metropolitan area in America, South Beach attracted a fledgling art and culture crowd. Younger artists, whose careers had been stunned by the recession, found cheaper studios and apartments and an affluent, educated and art-conscious audience. 

Ocean Drive, circa 1977. Photo provided by Estate of Barbara Baer Capitman.

A few years later, developer Tony Goldman, who transformed an aging strip of warehouses in New York into the stylish SoHo district, made his way south, initially to advise a colleague on a local investment. “I made a left turn at Fifth and Ocean Drive, and it changed my life. I started buying properties that same day,” recalled Goldman, who purchased 18 properties in as many months in the mid-1980s. “Generally, the city at that time was not enlightened to the value of historic preservation. It took a handful of activists and community leaders to articulate that vision. We were redlined by the banks, so we established a base value, and the banks finally came around when we showed them life. The city commission at that time was also unenlightened as to the opportunities, and so we became politically involved.”

To illustrate the area’s subsequent success, Goldman, the immediate past chairman of the Greater Miami Convention and Visitors Bureau, cited the increase in the area’s contribution to the county bed tax (charged to hotel rooms) and resort tax (charged to meals and beverages served in bars and restaurants). “In 1986, Ocean Drive properties from Fifth to 15^th Street paid about $1.5 million in resort taxes. Last year, they paid close to $120 million,” Goldman said.

Among Goldman’s original South Florida staff was Director of Operations Mark Soyka. Soyka, who grew up helping his family run delicatessens in his native Israel, had an itch to break out on his own. In 1988, he opened the News Café on Ocean Drive, which became an immediate hit, and a few years later he opened the Van Dyke, now a Lincoln Road institution. Soyka describes a different mood in City Hall by that time. “There was good cooperation between the city and developers. Buildings were empty and landlords wanted tenants, so various factors had the same interests. In the beginning we all realized we were restoring a historic community and all of its charm, and I knew that people would want this – it’s a destination and a landmark.”

 Elderly watch the ships go by near Ocean Drive, 1977. Photo provided by Estate of Barbara Baer Capitman. 

The boom isn’t over: since 1995, there have been 30,000 new units of housing either built, now under construction or in the planning stages in Miami Beach. Schools whose attendance was once slumping are now being expanded to accommodate an influx of families with children. A building boom has attracted the young and youthful professionals seeking to live close to the nightlife.

The return of younger year-round residents has created additional challenges such as school overcrowding and the delicate balance between the needs of nightclubs and residents. Jane Dee Gross, a Beach activist who married Commissioner Saul Gross in 1989, said she hopes South Beach will mature into an elegant, sophisticated resort area like St. Tropez. “It started out very bohemian with artists, but it’s become more like Coney Island. A lot of the early tenants who moved in and helped make the area a success were priced out of the market. Hopefully the city won’t make the same mistakes in North Beach,” said Gross.

Goldman recalls the lean years before the buzz returned to South Beach. “It was a tough time and not for the faint for heart. But, looking back, it’s probably the most rewarding thing I’ve ever done in my career. It’s great to know I did the right thing and helped this community survive and flourish.”