“On World Famous Miracle Mile…”
Despite its ups and downs, Miracle Mile continues to shine
By Sally Baumgartner
One of the most important components of any city, of almost any size, is a thriving downtown central business district. Coral Gables is no exception. But it didn’t happen by accident, and it was a long time coming.
Development in Coral Gables halted after the hurricane of 1926, followed by the Great Depression. When Merrick lost everything in 1932, he sold for 10 cents on the dollar. In that kind of market, the people who bought did so because it was real estate in the sunshine. They didn’t even live here year-round.
It wasn’t until after World War II that development resumed. By that time, there were 60 individual property owners holding title to the land along either side of Coral Way between Douglas and LeJeune Roads. One man who purchased more than a few parcels from Merrick was another vision- ary (though blind), George K. Zain, and his tireless and determined wife Rebyl. A friend of Merrick, Zain felt strongly that to build Coral Gables into a world-class city it needed a world-class shopping district, but downtown Coral Gables had never had a cohesive plan. And so, in 1946, Zain unveiled his “Miracle Mile.” One of the keys to the future success of the street was the Zain Plan for Off-Street Parking. Considered revolutionary at the time, the Plan put the bulk of the parking behind the stores, with most stores also having dual access, and some street-front parking. The plan was patented and quickly adopted by Miami Beach for the development of their Lincoln Road shopping area (before the mall).
Early Miracle Mile was elegant and high end, catering to the area’s winter residents. Like Worth Avenue in Palm Beach, many of the stores closed all summer and opened only after Labor Day. By 1960, the street boasted the likes of Elizabeth Arden, Lily Dache, Adrian ThaI, Hart Schaffner & Marx, Lillie Rubin, and 3 Sisters, along with department stores like Belk’s and Byron’s. The beautiful Wometco Miracle Theater opened, along with 110 fabulous stores beginning at Douglas Road and ending at the ever pricey 300 block abutting LeJeune.
The Zain’s determination built the street and brought quality merchants from New York, Chicago, and L.A. Under their guid- ance the street flourished, as did the rents and the property values. It became “World Famous Miracle Mile,” with musical jingles and unified advertising. Rents soared to $10 per front foot by 1960. That’s right, a front foot. If you had 16-feet of frontage on Miracle Mile, your rent was $160 a month. Triple net leases didn’t exist. That rent included everything except your electric bill and your telephone. Property owners paid the taxes out of the income from the rent. If you could buy it, land on the Mile sold for upwards of $150 an acre.
Then in the mid-’60s, malls began to spring up in the suburbs. Dadeland happened. The complexion of shopping changed forever, altering the future of Miracle Mile. By 1970, it was hard to recognize the street that Zain had so carefully developed. Elegant shops were replaced by mom-and-pop stores and cheap chains. Vacancies were up and rents were down. Absentee property owners, weary of the ever-increasing taxes, started passing the costs back to the merchant. By the end of the decade, rents on Miracle Mile had increased to $15 a square foot, forcing many longtime shop owners to move off the street to stay in business. Miracle Mile had lost its luster; it was just another suburban shopping street, hardly a thriving downtown at all.
The real estate bubble of the late 1970s shattered what was left of the once elegant street. Close to 30 percent of the stores were vacant. By 1985, Miracle Mile needed to be reinvented; it needed a hook to stimulate retail business. Enter the bridal store. The brainchild of the city’s then new Economic Development Director Cathy Swanson, the bridal and new home market brought the Mile out of the doldrums. It became the cornerstone for the rebirth of the downtown. Today, young women the world over know Miracle Mile is where you come to outfit for your wedding. And they do!
In the mid 1990s, the street was again in need of a new identity. Rents had been stagnating, hovering at the $20 mark. There were nearly two dozen thriving bridal stores, but other options needed to be defined and marketed. Big developers like Starwood Group, Rouse, and General Growth looked south and saw the opportunity to revitalize a downtown with the added benefit of grabbing a lot of good, valuable retail real estate for very little money. It was those same big developers who convinced the new generation of retailers to open in the City Beautiful. It was a perfect opportunity for Starbuck’s, Einstein’s, and Barnes & Noble to secure locations in what would soon become a hot market.
What goes up has to come down. So it was with the retail market at the start of the new millennium. National chains pushed the rental rates on Miracle Mile to a new level. Many of the bridal stores disappeared and were replaced by restaurant chains such as Houston’s, California Pizza Kitchen, Seasons 52, and Benihana. The Mile became a dining destination, a pedestrian-friendly place to stroll and eat. Rents soared to a high of $70 a square foot net of expenses. Once again, small merchants feared they might have to move off the street to stay in business. All the stores on Miracle Mile were now rented triple net, a further indication of the metropolitan mindset of this new generation of property owners: the major corporation.
Then, in 2016, the city undertook the Streetscape remodeling project. At that time, business along Miracle Mile was chugging along nicely despite a narrow, increasingly ragged sidewalk. There were some vacancies but not enough to really impact the 650,000-square-feet of retail space that runs from Douglas (SW 37th Avenue) to Le-Jeune Roads (SW 42nd Avenue). But the two years of construction and disruption the project caused took its toll on many long-time tenants. Rental rates dropped significantly when the project continued past its expected completion date. A number of merchants were unable to hang on and vacancies were not being filled for the two-plus years of renovations. Some landlords/owners realized that holding the tenant was more important than raising the rent and so retained tenants by working with them, often at a loss. The restaurants kept the street going. Yet when the Mile reopened with its new look, more than a quarter of the stores were vacant. However, after the completion of the multi-million-dollar facelift, there was a resurgence in the businesses along the street; in 2019, Miracle Mile welcomed 21 new tenants.
When COVID hit in 2020, all bets were off again. The costs to “sanitize” retail establishments and keep social distancing in practice placed an additional burden on retailers – more than a third of which were restaurants. From installing plexiglass screens, to the removal of 50 percent of their seats, and/or having specific “seating times” to keep the crowds and wait times lower, all had to revise their business plans. They were forced to raise their prices or reduce their overhead. Many added home deliveries in order to retain their skilled staff.
To keep the properties rented, owners got creative. Some reduced rents in the short-term and back-end-loaded the leases, extending the term to recoup their losses. Others renegotiated leases, doing percentage deals so that, as the business came back, so did the rental rates. There were as many permutations of deals as there were classes of tenants. Restaurants are not like fitness facilities, and bridal shops are not like electronics stores. Every tenant’s needs were unique and the landlords’ willingness to work through this difficult situation was the biggest factor in the success of the street.
In 2022, a new challenger appeared: The Plaza Coral Gables. With 2.25 million- square-feet, including 447,000-square-feet of Class A office space and 161,000-square- feet of retail, they played off the catchphrase, “just steps from the famed Miracle Mile, a new downtown Coral Gables is dawning.” Most were convinced that development would certainly impact Miracle Mile, its merchants, and its popularity. And it did so, but not necessarily in a negative way.
It was anticipated that the stores located at The Plaza would be high-end retailers, more in line with those found in the Shops at Merrick Park and the Design District. However, in the post-COVID world, major retail chains are in trouble. Rather, the mix of tenants is now skewed towards restaurants, health and wellness boutiques and fitness salons. And the rents are “pricey,” well beyond what owners on Miracle Mile are asking for rent and what small, independent retailers are able to pay.
According to Co-Star’s 2024 Market Report, downtown Coral Gables now boasts 5.5 million-square-feet of retail. By the end of 2024, the city had an enviable vacancy rate of only 0.6 percent, with an average rental rate of $53 per square foot. There are still 650,000-square-feet of retail space on the street, with less than a dozen stores vacant and for rent. Property sales, which climbed as high as $500 per square foot pre-COVID, have dropped back to an average of $385 psf.
Despite the fact that the small merchant has become a victim of the rise of Amazon and prime delivery, offering instant product gratification without driving downtown and “shopping” to get what you need, Miracle Mile continues to develop into the next iteration for retail. There’s a Polestar auto dealership in the space that once housed Elizabeth Arden. The former EWM headquarters office at 375 Miracle Mile has become the trendy new hotspot for Mexican cuisine, Maiz y Agave. There is even a jazz night club that entertains well into the night. While the global future of retail may be in doubt, the future again looks bright for Miracle Mile.