Sim City Miami: From Clicks to
Bricks
Written By: Rochelle Broder-Singer, South Florida CEO May
2003
And they like everyone
else think Uptown Miami is the perfect place to build
them.
The streets of the Miami Design District are literally
alive with pedestrian traffic on a Thursday night in April, Floors
& Closets and the Raul Carrasco showroom are holding openings,
the FIU School of Architecture is unveiling its senior projects,
Editopia has a trade show and the AIGA Fashion Show fundraiser is
underway.
Many of the people end up at the hot event of the
night, a cocktail party for Blue, a new condominium scheduled to
rise a few blocks away on a sliver of land where the Julia Tuttle
Causeway hits the Miami side of Biscayne Bay. The party is replete
with chic urban types, dressed in black and gray, sipping martinis
and nibbling on sushi. Mingling among them are a bevy of nearly
totally naked women (they are wearing only bikini bottoms) who are
painted blue from head to foot.
The A-list guests include the
likes of developer Marty Margulies, Arquitectonica principals
Bernardo Fort-Brescia and Laurinda Spear, advertising mavens Elaine
Silverstein and Rick Barrow, condo sales gurus Craig Studnicky and
Phil Spiegel-man, BridgeHouse CEO Amy Turkel and the master of the
Design District, Craig Robins. But the guests of honor are two lanky
gentlemen who names are legendary in the world of computing and the
Internet: Jim Clark and Tom "T.J." Jermoluk.
Clark is the
founder of Silicon Graphics, the company that launched the 3-D
animation revolution (think all those Dinosaurs on Jurassic Park)
way back in the 1980s; Jermoluk ran the company. Thirteen years
later Clark helped found Netscape Communications, which
commercialized the browser system that helped create the modern
World Wide Web (Netscape was sold to AOL in 1999 for $10
billion).
Clark and Jermoluk are here to tout Blue, the
sinewy Arquitectonica-designed building that will rise between the
two legs -eastbound and westbound - of I-195 as it turns into the
Tuttle. Call it coming down to earth, or the ultimate
clicks-to-bricks: Blue is the opening salvo in what Clark and
Jermoluk promise will be a long campaign to create a new city in the
urban "palette" of Miami, as their mission statement
reads.
The two men, slender and tanned, have the rugged look
of southern California surfers. They mingle easily with Miami's
design and building elite, surprisingly laid-back and affable
considering their enormous wealth and importance vis-a-vis the
history of modern computers and the Internet. After a brief
introduction, Jermoluk takes the microphone and begins to joke. "Jim
Clark and I have been in business for 20 years, which is amazing
since I'm only 28," he says, to which Clark chimes in "And I'm his
younger brother." Well, even billionaires can't help being swayed by
the culture of youth, especially with naked blue women parading
through the crowd.
Jermoluk tells everybody that Blue will be
their first project here, but that four or five more projects are
coming right behind it. He then hands the microphone to
Arquitectonica's Fort-Brescia, who tells the audience how excited
his firm is with the design of the project, especially in such a
landmark location. "Seldom do I have a site like this, which is a
gateway between two cities!" he says. Then the boys from California
pose with Fort-Brescia and the brick-and-mortar brains of their
operation - local builder Paul Murphy; Jermoluk, clearly enjoying
himself, hams it up. These two former Silicon Valley legends are now
celebrities of sorts, and enjoying every minute of
it.
From Silicon Valley to South Florida So how did
two Internet giants end up in South Florida, partnering with a quiet
local builder? Actually, Jermoluk, having moved on from Silicon
Graphics and a later stint running broadband Internet
service/content provider Excite@Home, has been in New York for a
couple of years now, working as a general partner of venture capital
firm Kleiner Perkins Caulfield & Byers. Like a lot of New
Yorkers, he feels at home here, maybe more so. "Miami to me is very
reminiscent of where I grew up, in Hawaii," he says. "It's very
multicultural. Also, Hawaii is the gateway to the Pacific," in much
the same way Miami is the gateway to Latin America.
And
Clark, though still an investor in a number of tech-related
startups, has been spending most of his time lately on philanthropic
and other pursuits. "I have plenty to do that's not about work," he
says. With homes in several cities, he established his main base in
Palm Beach a few years ago. He's happy to be doing something
different somewhere else than California. "Silicon Valley is
depressing right now," he says. "Miami is really one of the most
dynamic places in the country."
In fact, it was Clark's move
out of California that brought him together with Jermoluk and Murphy
to form Hyperion Development Group, the company developing Blue.
Murphy, the builder for Clark's gigantic Palm Beach spread (still in
progress), approached Clark as a potential investor in a real estate
project on the edgy Tuttle-hits-Miami site. An experienced South
Florida builder, general contractor and real estate dealmaker with
25 years in the business here (including work with companies such as
Lennar and The Related Group of Florida), Murphy had been eyeing the
spot for more than four years. In fact, he helped the site's
original owners assemble it and go through the permitting
process.
Clark liked what he saw, and asked
Jermoluk to
check it out, and possibly invest as well. Jermoluk's assessment:
"It actually looks really good. If I'm going to do it, let's do a
lot of it." Ever since Silicon Graphics, the two men have been
frequent investment partners. "He puts money in, and I end up
watching it," says Jermoluk. The three felt that with Clark's cash
(and to a lesser extent Jermoluk's), Murphy's South Florida building
expertise, and Jermoluk's business, marketing and money-raising
savvy, they could have a successful company, not just a successful
project. Jermoluk found himself buying a condo in Miami Beach and
preparing to move to South Florida full-time.
"Originally, it
was supposed to be just Blue," Clark says with a sheepish grin.
"Once T.J. got involved ... I wanted to do more." While Clark did
appear at the sales kickoff party, he plans to remain in the
background, saying "all throughout my life, I've been the kind of
guy who doesn't like to actively manage because I'm not really good
at it."
Jermoluk, though still responsible for four companies
in which he was a founding investor, is spending most of his time
running the business end of Hyperion. Murphy's only other project is
to finish Clark's Palm Beach complex; after that, he'll be
concentrating on Hyperion full-time. Both will need to focus to keep
things on Clark's timetable. "Jim brings a sense of impatiency and
urgency that moves things along," says Jermoluk. "You've got to be
able to hold your own to keep up."
Design; From Clicks to
Bricks Jermoluk and Clark are the first to admit that they
know little about real estate development or construction - "We're
really backing Paul here as the builder," says Jermoluk - but they
do know design. After all, the computer science majors' first
company was Silicon Graphics, the maker of high-powered computer
workstations - and a pioneer in the fields of 3-D rendering,
animation and virtual reality. "Look at Silicon Graphics - the
computer systems were all about design," Jermoluk says. As computer
engineers, both are accustomed to constantly thinking about how
their creations look to the user. "Even though our background is in
the engineering disciplines, there are a lot of things where they
cross over," he adds.
In fact, Clark has long designed
sailboats as a hobby. For Jermoluk - who began running companies
when Clark asked him to move from head of Silicon Graphics'
engineering department to its CEO - developing Blue lets him return
to his engineering roots, as he watches Murphy and the architects
work out the details of making a functional building. "I love that
part of it," he says. "You know, seeing how you get in there and lay
out a floor ... or how you determine where all the pilings go, or
how you decide how to hang the glass." But all three partner's
favorite part of the building is probably the architecture. It's no
coincidence that Blue was officially unveiled at a party in the
Design District. The building is all about design. It will be
visually stunning, constructed entirely of blue glass and curving in
a crescent shape. From the air, the site should resemble Juan Miro's
painting "Blue 2." The building forms the crescent shape in the
painting; 12 recessed balconies on the structure will give it 12
black dots, and a red sculpture, either on the site or on the
Department of Transportation-owned park next to it, will look just
like the painting's red form. (The semi-naked blue models at the
opening also had dabs of black and red to recapitulate "Blue
2").
"When we were designing the project, we were trying to
think of a cool name for it, and we came up with Blue," Murphy
explains. An Internet search for paintings with blue in their names
turned up Miro's work (a series of three paintings). "Blue 2"
vaguely resembled the site plan that Murphy, Jermoluk and Clark were
kicking around. The inspiration to make the site look like the
painting took hold, and Arquitectonica's Fort-Brescia got on board;
it took just 90 days to complete the architectural plans.
The
eye-catching modern design will be the first thing people see when
entering Miami from Miami Beach via the Tuttle Causeway, giving the
city the striking entrance it has long wished for. Jermoluk, Clark
and Murphy hope it will give Miami-based Hyperion a grand entrance
to the region's real estate scene, and a quick sell-out as well. "We
felt that if we did something dramatic in terms of architecture, it
would increase our price point and allow us to sell out quickly,"
Murphy says. So far, it has worked. Although that part of Miami
remains unproven, 30 percent of the 330 units were under reservation
before the official kick-off party. Prices topped $308 per square
foot, "Which we needed, quite frankly, to justify the design,"
Murphy admits. (Hyperion is keeping unit prices in the $300,000 to
$500,000 range by building units that average 1,100 square
feet.)
The project's biggest challenge may be that its
Biscayne Corridor location is still in the process of
transformation. Craig Studnicky, executive vice president of ISG,
Blue's exclusive sales company, says the main selling pitch is its
cutting edge design and its unobstructed, panoramic views of
Biscayne Bay. And, investors feel they're getting in on the ground
floor. "This area of Miami is going through a major
regentrification, attracting residents, particularly young
residents, including some from Miami Beach," he says. "Brickell
Avenue is getting a bit crowded, professionals are considering
locating to this part of town to ease their commutes." The easy
proximity to Miami International Airport, I-95 and the beach via
I-195 is also crucial.
In For The Long Haul Besides
the splashy debut that Blue represents, Jermoluk, Clark and Murphy
have something else in mind, too - the long-term future of Hyperion.
"You could make a tremendous amount of profit on your first
endeavor," Jermoluk says. "But if you set that tone ... people
aren't going to be very loyal." Loyalty will be key for these
newcomers to the South Florida market; they hope to be developing
four to five projects by year-end. Although Hyperion will build
elsewhere in the tri-county area, the partners are currently looking
at several sites in the same Biscayne neighborhood as
Blue.
What Hyperion and its high-tech execs plan to do is
remake an area of Miami that their chief marketing quarterback, Rick
Barrow, intends to re-brand as "Uptown." While they put on a
serious, this-is-strictly-business, face for Hyperion, one gets the
sense that this is a larger-than-life exercise for them, a sort of
real world "Sim City," the popular computer game that lets users
create and set into motion entire communities.
"There is a
creativity to this. Miami is such a wonderful space right now, it's
fun to do these kinds of projects," says Jermoluk. "I think it's
going to move the center of Miami northward, for
sure."
Indeed, few other developers in the area bring quite
the same vision to the area, with the exception of developer Robins,
and his remake of the nearby Miami Design District. There are also
several loft projects in the area, such as Majestic Properties' Ice
- on the bay a few blocks south of Blue - that are infused with a
similarly futuristic, cutting-edge design.
Of course, Blue is
just getting started, with groundbreaking planned for late this
summer. No one can predict the success of a new real estate
developer in town. But Hyperion has plenty going for it, not the
least of which is funding. Clark and Jermoluk purchased the Blue
land with their own cash, and the equity the two bring to the table
- combined with their multiple business successes - means that
lenders should be plenty eager to fund this project and others. "Jim
and I obviously have long relationships with these banks from other
projects, so we have some advantages in that," says Jermoluk.
That strong financial foundation, attractive to
buyers, sellers and banks alike, already sets the company apart from
the pack, says Barrow. "Nine out of 10 developers in the Miami
market are trying to hang on from project to project [financially].
Hyperion will not be," he says, Plus, with marketing by Barrow,
design by Arquitectonica, sales by ISG and building by Murphy, Clark
and Jermoluk have basically assembled a dream team.
Still,
there's no denying that the current venture is something very
different for Clark and Jermoluk - even if they remain undaunted.
"Every time I've made a major change in my life, whether moving from
one field to another in academics or leaving one company and
starting a new one, it has always been productive," says Clark.
"Business is business, and you've got to have the fundamental things
to be a good business. They all relate to general management, good
financial structures, marketing, sales, and manufacturing or
building. ... T.J. brings to the picture the ability to bring it all
together ... and Paul is the expertise in the manufacturing side ...
I'm not sure what I offer, actually."
We'll think of
something.
|