Lawsuit: Miami Beach Failed to Seek Voter Approval of Land Transfer to Bulgari Hotel Project

A Miami Beach resident is claiming the city failed to hold a required public vote before giving up beachfront land rights in a $7.4 million deal tied to the Bulgari Hotel redevelopment project.

Mitchell Scott Novick is asking the Miami-Dade County court to nullify the deal, under which BHI Miami Limited Corp. agreed to pay Miami Beach $7.4 million in exchange for the city handing over a sliver of beachfront land and part of the city's 21st Street right-of-way between Collins Avenue and the Atlantic Ocean, according to the court documents.

BHI Miami bought the abutting property, the Seagull Hotel, in early 2020 for $120 million. The company is planning to convert it into a high-end Bulgari Hotel.

Novick says the city's beachfront land is set to be "unified with the adjacent Seagull Hotel property to create a single development site."

In approving the deal, Novick claims, Miami Beach violated a city charter that requires a public vote for transfers of city-owned waterfront properties and beach access land rights. Miami Beach held public proceedings over the transfer, but city officials "did not disclose that the 'right of way' to be vacated was beach access" and therefore required a referendum, Novick says.

City records show that the Miami Beach commission approved a measure authorizing the transfer of the  6,700-square-foot right-of-way to BHI Miami in May 2021. The resolution states that the city will retain a "perpetual easement" to allow for continued public use of the land for pedestrian-and-vehicle travel and utility maintenance.

The measure also says that a pedestrian beachwalk is to remain in place after construction is complete.

Though the resolution does not mention a citywide referendum, it states that appraisal, advance public notice of the land transfer, and an internal city review are required, all of which the city claims it completed.

A waiver of competitive bidding, which needed an affirmative vote from five of the seven city commissioners, was passed in the resolution as well.

The hotel redevelopment project is led in part by Nabil Kobeissi, head of Blue Horizon group, a firm that invests in public and private markets, venture capital, and real estate. The group's Blue Horizon Advisors arm includes "leading investment professionals in London and the UAE [United Arab Emirates]," the group's profile states.

The Seagull Hotel, built in 1950, was designed by Albert Anis. At the time of BHI’s 2020 acquisition of the hotel from Lionheart Capital and Actium Development, it had 178 rooms.

In December 2020, Bulgari and Kobeissi announced plans to renovate the hotel and build a new pool, spa, fitness center, and restaurant, while reducing the amount of rooms to 100.

"We are particularly proud to have secured such an extraordinary location for the new Bulgari Hotel in Miami,” said Bulgari Hotels and Resorts chief executive Jean-Christophe Babin in a press release.

Novick is a Miami Beach resident who owns the nearby Sherbrooke Hotel on Collins Avenue. He is a regular speaker at city meetings, during which he has criticized South Beach for what he perceives as a lack of crowd control and late night crime prevention. A former member of the city's historic preservation board, he has been a vocal advocate on land-planning issues in Miami Beach.

Novick says he regularly uses the right-of-way in dispute, on the south side of 21st Street, to walk to the beach and ocean.

He wants the court to void the land transfer resolution, as well as a historic preservation board decision approving the Bulgari Hotel development plans.

Attorneys for BHI Miami have not responded to a request for comment.

In related litigation, Setai Hotel Acquisition, owner of the Dempsey Vanderbilt hotel, is suing Miami Beach over the right-of-way transfer and other actions the city took that allowed the Bulgari Hotel project to move forward.

Setai says that when it acquired the Dempsey Vanderbilt property in 2015, it secured a longstanding easement for ocean corridor views, which dates back to the 1930s. The Setai complaint claims the city allowed the Bulgari Hotel project to move forward, without regard for Setai's rights and the economic impact Setai will suffer if the new hotel blocks Dempsey Vanderbilt guests' ocean views.