A FLORIDA REAL ESTATE SOAP OPERA
BY SCOTT HIAASEN
Like a phantom limb, it dangles from the shoreline off Gables-by-the-Sea: a winding six-acre strip of turtle grass and mud four feet below the surface of Biscayne Bay.
Fifty years ago, planners drew a wishful frame of home lots over the bay bottom and called this deceptively pricey patch of real estate Coral Bay.
It also has a mordant nickname: ``Gables Under the Sea.''
After 20 years in the plat books, the 18 underwater lots were corraled in a state preserve and shielded from development. The longtime owners wrote them off as worthless.
But a pair of would-be developers and a clever lawyer saw fortune in the mushy marl. They bought the fanciful lots and sold them last summer -- at a $6.7 million profit.
The buyers? Florida taxpayers.
How the state came to spend millions for this chunk of bay -- 70 years after surrendering it to begin with -- is a Florida real estate soap opera.
There's the woman scorned: an 81-year-old Georgia widow who says she was ''hoodwinked'' when she sold her submerged property for $445,000.
There's the millionaire with a dark past: a developer once convicted of stock fraud who trolls the Gulf Stream in his 50-foot yacht. His team sold the watery lots back to the state for $7.2 million.
There's an audacious lawsuit and tricky Tallahassee politics. Jousting lawyers, big-name lobbyists, a county-biologist-turned-land-speculator and a cameo from a former governor.
It's the old swampland-for-sale story turned inside out -- and a new lesson in how to get rich in real estate: Don't build a thing.
Biscayne Bay was once regarded not as something to be protected, but as something to be peddled and paved. Decades ago, the state sold huge swaths of it to developers with fantastic plans to dredge up islands and causeways all the way down to Key Largo.
That's how the Coral Bay property went into private ownership -- part of it sold in 1936, the rest in 1957.
But, though platted and zoned -- and therefore vested with development rights -- the 18 lots were still underwater, and the state eventually grew protective of the bay. In 1968, then-Gov. Claude Kirk refused to issue new dredge or fill permits.
Two years later, a Hialeah businessman named Edward Santa Maria took over the lots from his sister. The price: ''Love & Affection Between Sister & Brother & No Cash,'' according to the 1970 deed.
He hoped to build waterfront homes -- but it soon became clear that the state wouldn't allow it. ''My husband was a dreamer. I loved him dearly, but he was a dreamer,'' said his widow, Laura Santa Maria, 81.
By 1974, Edward's dream was snuffed out for good. The state created the Biscayne Bay Aquatic Preserve, preventing development in the area.
Still, Edward didn't give up. He dutifully paid the meager taxes on his underwater acreage. (The lots were valued for tax purposes at about $1,600 apiece in 2003, with a total tax bill that year of $806.44.) He once offered Coral Gables half of his property if he could build on the rest, but the city didn't bite.
In his final years, cancer tethered Edward to an oxygen tank. Convinced that the lots would someday pay off for his wife, he placed them in a trust benefiting her, said Tom Flood, the Santa Marias' son-in-law.
Laura Santa Maria never shared her husband's optimism. ''I didn't think we could sell it at all, to tell you the truth,'' she said. ``Why would anybody want it?''
But just before her husband died on Aug. 27, 2001, two people called, asking about the property: Warren Sands and Bob Robinson.
`OUT OF HEAVEN'
They agreed to buy the lots for $445,000, with a modest $5,000 deposit.
''Out of heaven falls $400,000,'' said Flood, who was a trustee overseeing the property. ``We're thinking, OK, that's a good deal.''
The contract they signed in May 2002 gave Sands and Robinson two years to obtain permits to fill in the bay and build. The developers submitted their plans to the Florida Department of Environmental Protection in August 2002.
Calling the area a prime manatee habitat and citing the decades-old protections enacted by the Legislature, the DEP rejected their permits in May 2003. But the deal didn't die; Sands and Robinson bought the underwater property anyway. The sale closed in July 2004.
The Santa Maria family's lawyer, Ed Livingston, said the developers' lawyer told him they were going to file a lawsuit to overturn the DEP ruling after buying the lots.
Instead, Sands and Robinson filed a different kind of suit. In a ''takings'' claim, they argued that the state's environmental rules wrongly erased their property rights. By refusing to allow homes on the submerged lots, they argued, the state had effectively condemned the property.
The suit aimed to force the state to buy the 18 bay-bottom lots -- and Sands and Robinson wanted them priced as though they had already been turned into waterfront mansions: $21 million in all, records show.
Sands, Robinson and their lawyer declined to comment for this report.
A SURPRISE
Laura Santa Maria and her family never heard about the lawsuit. Suing the state had never occurred to them. Nine years earlier, a lawyer told Edward Santa Maria that such a claim would probably fail, because he took over the property after the state's building limits were in place.
In short, they were told, they should have known better than to buy the bottom of the bay.
''No one recommended suing the state. No one ever thought about that,'' said Flood, a Palmetto Bay mortgage company executive.
There was more that the family didn't know:
Months before buying the lots, Sands and Robinson had already begun to negotiate their resale to the state.
And by the time the Santa Marias sold their underwater property, a state appraisal had already determined that it was worth $7.2 million.
''Somebody found an angle,'' Flood said. ``Somebody saw an angle that we didn't see.''
BY SCOTT HIAASEN
Like a phantom limb, it dangles from the shoreline off Gables-by-the-Sea: a winding six-acre strip of turtle grass and mud four feet below the surface of Biscayne Bay.
Fifty years ago, planners drew a wishful frame of home lots over the bay bottom and called this deceptively pricey patch of real estate Coral Bay.
It also has a mordant nickname: ``Gables Under the Sea.''
After 20 years in the plat books, the 18 underwater lots were corraled in a state preserve and shielded from development. The longtime owners wrote them off as worthless.
But a pair of would-be developers and a clever lawyer saw fortune in the mushy marl. They bought the fanciful lots and sold them last summer -- at a $6.7 million profit.
The buyers? Florida taxpayers.
How the state came to spend millions for this chunk of bay -- 70 years after surrendering it to begin with -- is a Florida real estate soap opera.
There's the woman scorned: an 81-year-old Georgia widow who says she was ''hoodwinked'' when she sold her submerged property for $445,000.
There's the millionaire with a dark past: a developer once convicted of stock fraud who trolls the Gulf Stream in his 50-foot yacht. His team sold the watery lots back to the state for $7.2 million.
There's an audacious lawsuit and tricky Tallahassee politics. Jousting lawyers, big-name lobbyists, a county-biologist-turned-land-speculator and a cameo from a former governor.
It's the old swampland-for-sale story turned inside out -- and a new lesson in how to get rich in real estate: Don't build a thing.
Biscayne Bay was once regarded not as something to be protected, but as something to be peddled and paved. Decades ago, the state sold huge swaths of it to developers with fantastic plans to dredge up islands and causeways all the way down to Key Largo.
That's how the Coral Bay property went into private ownership -- part of it sold in 1936, the rest in 1957.
But, though platted and zoned -- and therefore vested with development rights -- the 18 lots were still underwater, and the state eventually grew protective of the bay. In 1968, then-Gov. Claude Kirk refused to issue new dredge or fill permits.
Two years later, a Hialeah businessman named Edward Santa Maria took over the lots from his sister. The price: ''Love & Affection Between Sister & Brother & No Cash,'' according to the 1970 deed.
He hoped to build waterfront homes -- but it soon became clear that the state wouldn't allow it. ''My husband was a dreamer. I loved him dearly, but he was a dreamer,'' said his widow, Laura Santa Maria, 81.
By 1974, Edward's dream was snuffed out for good. The state created the Biscayne Bay Aquatic Preserve, preventing development in the area.
Still, Edward didn't give up. He dutifully paid the meager taxes on his underwater acreage. (The lots were valued for tax purposes at about $1,600 apiece in 2003, with a total tax bill that year of $806.44.) He once offered Coral Gables half of his property if he could build on the rest, but the city didn't bite.
In his final years, cancer tethered Edward to an oxygen tank. Convinced that the lots would someday pay off for his wife, he placed them in a trust benefiting her, said Tom Flood, the Santa Marias' son-in-law.
Laura Santa Maria never shared her husband's optimism. ''I didn't think we could sell it at all, to tell you the truth,'' she said. ``Why would anybody want it?''
But just before her husband died on Aug. 27, 2001, two people called, asking about the property: Warren Sands and Bob Robinson.
`OUT OF HEAVEN'
They agreed to buy the lots for $445,000, with a modest $5,000 deposit.
''Out of heaven falls $400,000,'' said Flood, who was a trustee overseeing the property. ``We're thinking, OK, that's a good deal.''
The contract they signed in May 2002 gave Sands and Robinson two years to obtain permits to fill in the bay and build. The developers submitted their plans to the Florida Department of Environmental Protection in August 2002.
Calling the area a prime manatee habitat and citing the decades-old protections enacted by the Legislature, the DEP rejected their permits in May 2003. But the deal didn't die; Sands and Robinson bought the underwater property anyway. The sale closed in July 2004.
The Santa Maria family's lawyer, Ed Livingston, said the developers' lawyer told him they were going to file a lawsuit to overturn the DEP ruling after buying the lots.
Instead, Sands and Robinson filed a different kind of suit. In a ''takings'' claim, they argued that the state's environmental rules wrongly erased their property rights. By refusing to allow homes on the submerged lots, they argued, the state had effectively condemned the property.
The suit aimed to force the state to buy the 18 bay-bottom lots -- and Sands and Robinson wanted them priced as though they had already been turned into waterfront mansions: $21 million in all, records show.
Sands, Robinson and their lawyer declined to comment for this report.
A SURPRISE
Laura Santa Maria and her family never heard about the lawsuit. Suing the state had never occurred to them. Nine years earlier, a lawyer told Edward Santa Maria that such a claim would probably fail, because he took over the property after the state's building limits were in place.
In short, they were told, they should have known better than to buy the bottom of the bay.
''No one recommended suing the state. No one ever thought about that,'' said Flood, a Palmetto Bay mortgage company executive.
There was more that the family didn't know:
Months before buying the lots, Sands and Robinson had already begun to negotiate their resale to the state.
And by the time the Santa Marias sold their underwater property, a state appraisal had already determined that it was worth $7.2 million.
''Somebody found an angle,'' Flood said. ``Somebody saw an angle that we didn't see.''
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