On a sunny Saturday in March, two men with French accents sipped cappuccinos outside Miami’s Orange Café & Art. Down the street, a German photo crew wrapped up a catalog shoot. Waiters folded napkins at a courtyard restaurant with white couches surrounding a large banyan tree.

You might call it South Beach Two. But not yet.

In the past several years, a handful of Miami developers have spent hundreds of millions of dollars in an effort to create the next hipster hotspots. Craig Robins and father-son team Tony and Joey Goldman, developers largely credited with the revitalization of South Beach in the late 1980s, are leading the transformation, focusing on the Design District and Wynwood, respectively.

A 10-minute drive north of downtown, these once-dangerous areas are easy to reach from Interstate 95. They’re not on the water. They’re not lushly planted. But each has an urban vibe that the developers believe can be cultivated into the quintessence of cool.  

“South Beach was a transformation of what Miami was all about, a movement toward a more European, pedestrian-friendly, aesthetically oriented neighborhood,” Robins says. “After Lincoln Road, there was no place for the movement part of South Beach to grow. This is the logical extension.”

As they did in South Beach, the developers are buying buildings and restoring historic properties. An equally—perhaps even more—important part of the plan is a strategy that has been used elsewhere: offering free space to attract artists and art organizations. Both Robins and the Goldmans are collectors and patrons whose interest in the arts dovetails with their belief that creative types can lay the foundations of a vibrant new community.

The hitch: timing. The residential real estate bubble has burst in South Florida, with prices down about 20 percent since December 2006, according to the S&P Case-Shiller home-price index. The number of condo and single-family home sales fell by 40 percent last year, and owners are scrambling to rent condos they can’t unload. Local papers carry lawyers’ ads for buyers eager to break preconstruction contracts. Vacancy rates for warehouse and office space are rising too, says Chris Lafakis, an associate economist covering Florida at Moody’s Economy.com.

Robins began turning his attention to the Design District in 2000. He and his company, Dacra, have worked with architects to restore ’20s- and ’30s-era buildings, attract upscale stores such as Fendi and Ligne Roset, and provide free studio space to a dozen artists, the alternative nonprofit gallery Moore Space, and the Haitian Heritage Museum. Robins launched an international design fair called Design Miami in 2005 and recently announced plans to invest another $250 million in the district.

Adjoining the neighborhood to the south, Wynwood is a sprawling area of cement-block warehouses and former manufacturing plants with hand-stenciled signs reading SHOES, SNEAKERS, SANDALS. The desolate, bleak setting is hardly the place you’d expect to find spaces housing works by artists such as Richard Serra, Dan Flavin, Claes Oldenburg, and Andy Warhol—but you do. Starting in the late 1990s, several of the city’s biggest private collectors opened public galleries in the massive spaces here, including the Rubell family in 1996 and Martin Margulies in 1999.

In 2003, Tony Goldman and his son, Joey, began buying more than 20 properties in Wynwood and attracting restaurants, galleries, and retailers—part of their plan to turn the area into a 24-hour live-work neighborhood. They’re even more explicit about their belief that art adds bankable value to a neighborhood under development. In 2005, they donated to Miami’s Museum of Contemporary Art a 12,000-square-foot warehouse that they had completely renovated, creating a world-class turnkey exhibition space.  
 
Still, for these neighborhoods to flourish, there must be shoppers in the stores, patrons of the arts, diners in the restaurants, and tenants in the buildings. Just east of Wynwood, a half-dozen cranes rise above the condos under construction on Biscayne Bay. The Goldmans and Robins are counting on future residents of those buildings to support the new district.

“The housing cycle will have a higher peak and a lower trough than in the early ’90s, when speculation wasn’t as prevalent,” says Lafakis. “In 2006, Miami had the highest percentage of subprime loans of anywhere in the nation. That exerts extra pressure on the way up in terms of home prices and exacerbates the trough on the way down.”

The developers say that they aren’t concerned. Goldman isn’t interested in selling buildings yet but buying them. “In a marketplace like this, there are always opportunities to buy,” he says. “Hopefully even our competitors can come in and buy.”

“If you have a neighborhood that has a unique and special character, the current economy will slow its growth. But that doesn’t mean the neighborhood will fail to prosper,” Robins says. “During the late ’80s and early ’90s, one of the worst economic times since the Depression in real estate, South Beach managed to appreciate at 20 percent a year. The Design District is one of the most exciting areas in Miami. It will keep going, only slower.”

On a recent Saturday afternoon in the Design District, only a handful of shoppers wandered among the galleries and showrooms, and nearly every third building had a FOR LEASE sign in the window. Later that night, however, scenesters and art lovers of all ages crowded into the galleries here and in Wynwood for the all-night art party known as Second Saturday. Diners waited an hour for a table at the courtyard hotspot Michael’s Genuine Food & Drink, and D.J.’s spun records on the crowded sidewalks. But if you build it, will they come to live—and not just to visit?

For now, Miami’s artists may be the biggest beneficiaries of the developers’ dreams. Wendy Wischer, a sculptor who shares a 4,000-square-foot studio provided by Robins, says the free space had a huge impact on her work.

“I was able to start working a lot bigger. It allowed me to work on multiple things at one time and bring in an assistant,” she says. “It’s easier to do studio visits because we’re more centrally located. Being able to get messy is very important. There were also opportunities that happened—such as studio tours as part of Art Basel. Before, my living room was my studio. Sometimes I’d lay stuff on my stove and couldn’t cook for a couple of weeks.”