Watson Island Land Sale Approved in $29M Miami Vote

Miami’s City Commission voted 4–1 to approve the $29 million sale of a 3.2-acre waterfront parcel on Watson Island to a joint venture between BH3 and Merrimac Ventures. The December 11, 2025 vote followed a voter referendum. However, it also reignited debate over land valuation, public benefit, and Miami’s long-term waterfront strategy.

A Waterfront Vote That Divides City Hall

The approval transfers ownership of the southwest portion of Watson Island, at 888 MacArthur Causeway, to the BH3–Merrimac joint venture operating as IG Luxury. Supporters framed the deal as a practical solution to decades of stalled development. Critics, meanwhile, argued the city sold a prime asset at a deep discount.

Deal Breakdown

Under the agreement, the developers will purchase the 3.2-acre parcel outright for $29 million. At the same time, they will continue leasing the city’s remaining 7-plus acres on Watson Island. The land has been tied up by a long-term lease since 2001, when it was first awarded to Flagstone Property Group.

After years of delays and litigation, BH3 and Merrimac assumed the lease in 2023. As a result, the joint venture reopened negotiations with the city to reset the site’s future.

In addition, the deal includes $9 million for affordable housing and infrastructure. Another $4 million is tied to lifting deed restrictions. Notably, those changes allow a shift from timeshare use to condominium development.

Project Vision and Potential

With approvals in place, the developers can pursue a mixed-use redevelopment featuring about 100 luxury condominium units. The Intracoastal waterfront location strengthens the site’s appeal. Moreover, its proximity to Miami Beach and Downtown adds long-term value.

Supporters say the revised plan aligns with Miami’s changing development trends. Ultimately, it unlocks a site that sat largely dormant for more than two decades.

Controversy Over Valuation

Opposition focused on the gap between the sale price and recent appraisals. Those appraisals valued the land between $257 million and $342 million. City officials countered that the existing long-term lease significantly reduced market value.

Commissioner Ralph Rosado cast the lone dissenting vote. He called for an independent review by Cushman & Wakefield. Additionally, he warned of flip risk and questioned whether the public benefits were sufficient.

Residents echoed those concerns during public comment. In particular, they cited Miami’s history of controversial waterfront deals and rushed approvals.

Why It Matters for Investors and Landlords

For investors, the Watson Island vote highlights how lease structures can suppress acquisition pricing on marquee assets. At the same time, zoning changes can unlock substantial upside. The condo conversion could perform well in Miami’s supply-constrained luxury market.

However, the controversy also signals risk. Political scrutiny, legal challenges, and community opposition may extend timelines and affect returns.

A Broader Bet on Miami’s Waterfront Future

Despite the backlash, the approval shows Miami’s willingness to resolve stalled projects through negotiated deals. For developers with patience and capital, Watson Island offers a playbook for accessing prime waterfront land below headline valuations.

As density debates continue across Miami’s coastline, Watson Island may serve as a key precedent. In turn, its outcome could influence future public-private waterfront deals throughout South Florida.

Unlock the Finest in Miami Real Estate:

Find New Developments in Miami
Explore Miami’s most prestigious new developments — hand-selected for their design, exclusivity, and investment potential.

Explore Miami Neighborhoods
Navigate the city like a local. Discover the communities we know best — from oceanfront enclaves to cultural hotspots.

Sell Your Property with BRG
Your property deserves more than a listing. Discover how our bespoke marketing strategy delivers superior results.

→ Live Better. Live Beyond.