A Solution Is Found For The BrickellHouse Parking Saga
April 7, 2017 by Lucas Lechuga
At last! Two years after opening and more than 1 year without a functioning parking garage, the owners at BrickellHouse have found a solution to their motorized parking problem. For those who didn't hear, the "state-of-the-art" automatic parking system that was touted as an amazing feature of the building turned out to be not-so-state-of-the-art. It didn't even work. People were having to wait up to 45 minutes for their car to be delivered each morning! The association started a free coffee bar to make people feel better, but adding 45 minutes to your morning commute because your robo-valet doesn't work is still annoying.
To complicate matters further, the company that designed and installed the system filed for bankruptcy and disappeared, leaving the 374 buyers in the building with lots of questions about where to put their cars. Lawsuits were going everywhere as the owners and association scrambled for a solution. Sales values took a huge hit, with values falling from $600/square foot down to $400/square foot the last time we published a market update. Typically when buildings go through issues like this, I say it is a great opportunity to buy. With no answer in sight, the BrickellHouse situation was still too scary for me to advise investors to buy. Now that there is a solution, I would feel better about recommending a purchase in the troubled building.
So, what is the building going to do???
The association and condo board have been hard at work interviewing motorized parking companies and have ultimately come to an agreement with Unitronics Automation Solutions, a fully bonded and insured company that has been around for almost 30 years. Hallelujah! We have a savior!
Unitronics is going to test their software system on the first two floors of parking. If all goes well, they will complete the remaining floors. If the solution does not work, they will part ways amicably and not charge the BrickellHouse owners. The downside is that the full repair could take 2-4 years to complete, they don't really know yet. It is also super expensive, I don't see how the repair can take place without a special assessment, but we don't have any solid verification of that amount just yet. Once we find out, I will be sure to let everyone know. The good news is that buildings typically win their 558 claims against developers for structural defects, so the developer's insurance policy will likely be the one to ultimately foot the bill, just someone has to pay for the solution and lawyers in the interim.
Once the repair is complete, Unitronics will continue to manage the garage.
What is going on with the sales and rental values?
The sales values are still pretty scary, but at least they've stopped the free fall. There were 4 closed sales in the first quarter of 2017 with an average price per square foot of $427 for finished and non-furnished sales. There was one that sold for $219,000, but that one was a decorator-ready studio. An upgraded and fully furnished 2 bedroom sold for $550,000. There are 3 deals pending, which we are anxious to see what they settle for. The alarming part is also that there are 62 active listings. This rate gives us 46 months of sales inventory. The available sales range from $230,000 for a studio up to the $6.9 million penthouse.
The rental market is still really healthy. The first quarter brought 37 new tenants and we currently see 41 active listings. The prices are holding firm also. Studios start at $1,750/month, one bedrooms for $1,900/month and up, and two bedrooms start at $3,000/month.
Hopefully the new solution will bring more life back to the sales market in the building! I'm sure it at least brings peace of mind to those affected.
So what are residents doing now with their cars?
Residents need to valet their cars. There’s a vacant lot nearby and the valet company parks the cars there.
How much is the new system going to cost? Is the financing in place yet?
From what I have heard, the financing is not yet in place. They are still calculating exactly how much it will cost and also whether to wait and make the repair after the litigation against the developer settles, or to go ahead with it and have the owners pay via special assessment.
If they decide to wait, the parking will remain valet-only for the next couple of years. If they decide to go ahead with the repair, the special assessment will probably be a record amount. As soon as we find out what they decide, I will make a follow-up post.
if special assessment, any idea how much it could range ?
The latest I heard, they are leaning more toward delaying the repair and relying on valet service until after their litigation against the developer is complete. I did not receive a solid figure on the anticipated assessment, but heard that they may not go that route because it would be cost prohibitive for many owners… almost like a second mortgage.
sounds right, but then who is going to pay for it, for sure someone, if not owners ?, insurance to the extend they are liable to pay for it, may take years..with a huge potential exposure on owners, probably reason of existing listing
Since I’m not an attorney or directly involved in the case, I can’t really say for sure. My best guess would be that the developer has an insurance policy that will pick it up, since they can’t go back to Boomerang.
How is the current valet service? Does it still take up to 45 mins to get your car?
They have cut it down to 12-15 minutes.
How many parking spaces will be available at the conclusion of the Unitronix implementation?
After the repair there will be 405-410 spaces.
Have they now closed a deal with Unitronix?
Not yet. The proposal was voted down by the board and they are currently looking for a less expensive solution. From what we’ve heard, the case will go to court next year.
What’s the latest on any new proposals? Rumor has it there might be a new COA board soon that might be more focused on keeping the current technology.
I heard there is now a new COA board of directors. Can you confirm this? Do you know the names of the new board members?
Stay tuned…
We looked at a 1BR unit and would like to purchase it. I am curious about how this lawsuit will affect the completion of the sale if we decide to purchases.
Are you looking to pay cash or obtain financing? If you’re looking to pay cash, the lawsuit wouldn’t affect the sale at all. However, if you are looking to obtain financing, most lenders will not underwrite a loan for a condo in a building with pending litigation. That being said, I do know of a lender who has no issue with the litigation.
Thank you. What are the future risks of purchasing a unit with ligitations? Do you recommend any other buildings with similar amenities in the Brickell area? We are also open to precondstructions projects.
So how is the situation today? Is repair working?
Has a solution been found for this ‘problem’? We’ve been involved in automated car parking since 2009, over the years we’ve bumped heads with City officials and traffic engineers due to the slow parking/retrieval times offered by current technology. This prompted us to develop technology to address their concerns, it would also solve the BrickellHouse issue. Who does one contact to offer this solution and start negotiations?
anyupdate, surely would love know how they are doing now