Paradise for Sale

by Nick Wynne

  Although some of the major developers believed that 1926 would see new heights in real estate purchases, some did not. D.P. “Doc” Davis was a believer. In January 1926, he was going full steam ahead in the creation of his latest project, Davis Shores in St. Augustine. By March, the project was dead in the water. He anticipated receiving more than $4 million in payments for property sold at his Tampa Davis Islands development, but he collected a measly $30,000. It looked as if Davis Shores would never get built. Desperate for cash, Davis sold the controlling interest in Davis Islands to a Boston syndicate in August 1926 for $2.5 million and its agreement to complete the project. Not much money, but he needed every penny.

  Carl Fisher left Miami during the summer of 1925, right at the very height of the land boom, to create the “Miami Beach of the North” on ten thousand acres he had purchased on Montauk Point on Long Island. Wary of the baseless rise in real estate prices and skeptical about the future profits to be made, he consolidated his holdings on Miami Beach, took some property off the market altogether, upped the required down payments for lots and shortened the time to pay off the remainder. He took his fortune (now estimated at $50 million) and headed north, although he retained considerable properties—including hotels—on Miami Beach.

  George Merrick was a believer. Despite the cracks in the real estate market that had first appeared with the transportation embargo, he plunged ahead promoting a new development that would turn a chain of islands in Biscayne Bay into the South Sea Isles of Coral Gables. With a projected price tag of $250 million, his new scheme far outstripped the $150 million in sales he had gotten for his Coral Gables property. He was certainly optimistic.

  Outside Miami and Boca Raton, other developers proceeded to build their dreams. Although the frenetic boom atmosphere that had smothered South Florida in 1924 and 1925 was slowly fading, the central and southwestern regions still hummed with activity. In part, this was because many of the developments in these areas focused more on attracting golfers instead of speculators. By hyping the advantages of having a home where the game could be played year-round, developers appealed to a smaller, although more financially stable, clientele.

  However, even the most optimistic developers were about to be challenged beyond belief—and the most apprehensive naysayers would have their most negative pronouncements confirmed.

  CHAPTER 13

  It Is Over!

  Florida hurricanes are much like Chicago bandit outbreaks. Their occasional occurrences do limited damage over a highly restricted area and occasion no concern to the great mass of residents who go about their business as usual without giving them a thought. They are news, when they do happen, just as a snow-storm that breaks up the Rose Bowl festival in Southern California is news. News is the record of the unusual event, and the more unusual the greater its news value. Yet there are some folk who…are afraid to go to Florida because they once read news of a hurricane.

  —Frank Parker Stockbridge and John Holliday Perry,

  So This Is Florida, 1938

  Faced with failing banks, declining real estate sales, inclement weather during the 1925–26 winter season, negative publicity, the failure of many buyers to honor their sales contracts and the Palm Beach/Boca Raton Mizner scandals, it was difficult to believe that things could get worse in Florida. Difficult to believe, but on September 17, 1926, this difficulty was resolved when a devastating hurricane hit Miami and South Florida in the early morning hours. Miami residents had been warned, although not forcefully, as early as September 15 that three tropical storms were churning in the Atlantic. When one of the storms passing between Nassau and the Florida coast brought heavy rains to the area on the sixteenth, the Miami Daily News warned that the city might suffer further damages from the storms. At noon on the seventeenth, the Miami Weather Bureau posted warnings of an imminent major storm, but it was not until eleven o’clock that evening that actual hurricane warnings were posted. By that time, most of Miami’s residents were in bed, so the warnings were for naught.

  There had been no major hurricanes in the state since 1910, and few residents, new or native, were prepared for the storm that hit. When the howling winds struck in the early morning hours, the winds reached 125 miles per hour and produced a fifteen-foot storm surge in Miami and the barrier islands. The city of Miami experienced severe flooding as water swept from Biscayne Bay into the town. The majority of the coastal inhabitants of the area, unfamiliar with the dangers of a hurricane and ignorant of the impending strike, remained in their homes.

  The storm left behind a wide path of death and destruction. Many new residents, inexperienced in the way that hurricanes operate, braved the first onslaught of the storm inside shelters, but as the calm eye of the storm came overhead, they rushed out to see what damage had been done. Richard Gray, who headed the Miami Weather Bureau, reported, “The lull lasted 35 minutes, and during that time the streets of the city became crowded with people. As a result, many lives were lost during the second phase of the storm.” The backside of the storm then struck, and many were caught in the maelstrom that followed. In Miami and Miami Beach, the damage was estimated at $100 million, or roughly $2 billion in 2005 dollars. Scarcely a single building escaped damage.

  Miami and Miami Beach were not the only cities to feel the force of this Category 4 storm. Slowly, the hurricane made its way across the Florida peninsula and into the Gulf. In the center of the state, the winds generated a significant storm surge on Lake Okeechobee, which broke a portion of the muck dikes that surrounded it and flooded the small town of Moore Haven, another boom-era town developed by James A. Moore. After clearing the state on the eighteenth, the hurricane entered the Gulf of Mexico, pivoted and headed for Mobile, Alabama. When it struck land again, it devastated large areas of the Florida Panhandle.

  Almost four hundred hundred persons lost their lives in the storm and another sixty-five hundred were injured. Some fifty thousand families had some damage to their homes, and those houses built since the embargo on building materials suffered the most. Virtually none of the municipalities struck had enacted building codes to ensure that houses could withstand potential hurricane damage. Fewer still had enough code enforcement personnel to ensure that minimum standards were met. Total property damage (in 2005 dollars) was more than $157 billion, which makes it the most destructive hurricane on record in the United States.

  The devastating Category 4 storm that struck Miami in September 1926 left a path of destruction across South Florida. Here, workmen repair telegraph and telephone lines to reconnect the city with the rest of the United States. Courtesy of the Historical Association of Southern Florida.

  The hurricane caught everyone by surprise, and they all reacted differently. Mayor Edward C. Romfh of Miami denied press reports that the damage was excessive and informed the American Red Cross and other relief agencies that no assistance was needed from them. In Tampa, Peter O. Knight, the most prominent man in the city, joined him and warned that calling for outside assistance would do more damage to the image of Florida and the boom than any relief funds could do good. Hotel operators, worried about the upcoming winter season, also downplayed the damage done; however, there was no denying the pictures of destruction that flooded the nation’s media outlets. What had been a trickle of criticism of the Florida boom became a torrent, and northern bankers and civic leaders took every opportunity to point out the dangers of living in the Sunshine State.

  For Florida promoters, explaining the storm became the job of public relations agents who immediately dubbed it a “once in a lifetime storm,” unlikely to be repeated for another century. In an interesting twist of logic, some promoters and civic leaders pronounced the storm a good thing to have happened, since it cleared undesirable elements from the scene. Although water and wind damaged thousands of homes, the basic infrastructure—roads, sidewalks, sewage systems, water systems and power lines—remained largely intact. Even the man-made islands of Miami Beach, Davis Islands and Fort Lauderdale s
urvived with little damage, resisting the forces of nature that tried to sweep them back into the ocean. The hurricane, so the argument ran, had simply removed structures that were poorly designed or built with inferior materials. In response to the widespread destruction of buildings, John J. Farrey was appointed the chief building inspector for Miami Beach, and he initiated the first building code in the United States. The standards he created were adopted by more than five thousand cities in the United States. Even today, building codes in Florida are governed by the “Miami Standard.” Florida was back on track and ready to resume its building boom.

  The Roney Plaza Hotel, newly opened, suffered great damage to its adjacent casino and swimming pool. Florida promoters labeled it a “once in a lifetime storm,” but another Category 4 storm hit just two years later. Courtesy of the Florida Historical Society.

  The same month that his op-ed piece defending Florida banks and the state’s failing banking system appeared in the American Motorist magazine, Edward C. Romfh, mayor of Miami, joined Edward E. “Doc” Dammers, mayor of Coral Gables, along with developer George E. Merrick and the presidents of the two cities’ chambers of commerce, in announcing, “Business as usual in Florida…The sun is shining. Our people are cheerful and are putting their shoulders to the work of reconstruction. I predict that Miami will make a world record in coming back.” Certainly, Miami’s hoteliers were keeping their fingers crossed.

  George Merrick and Dammers, who was the head salesman for Coral Gables in addition to serving as mayor, assured prospective buyers that the development was “lightly hit by the West Indian hurricane…The total damage to homes, hotels, public buildings and shrubbery did not exceed $1,500,000, which is only one per cent of the money actually invested in buildings in Coral Gables.” Everything was under control, they went on to write, and “the organized work of reconditioning started within two hours after the storm subsided.”

  Ernest N. Smith, editor of the American Motorist, added his support:

  Miami is more than a city. It is an American institution. And it may be expected that the people who have built it into a thriving metropolis in a comparatively few years and have made it one of the outstanding resort cities of a continent will not only stage a speedy come-back, but will reconstruct on a firmer foundation than ever.

  Of course, the fact that businesses in Miami had purchased an entire section of the magazine, which was “in the hands of the printer prior to the disastrous hurricane,” certainly had no impact on Smith’s willingness to endorse the idea that the boom would continue stronger than before.

  Although some promoters continued to build and a few (mainly golf) communities opened, the “everybody wins with Florida land” syndrome was no longer controlling the state’s economy. Still, it was difficult to abandon the idea overnight. George E. Merrick was sure that his new South Sea Islands of Coral Gables development would reignite the nation’s fervor for Florida, but he was wrong. A year later, he was broke and reduced to operating a fish camp in the keys until another hurricane demolished it in 1935. He eventually went back into real estate as a broker and managed to do quite well. In 1940, he was appointed postmaster of Miami. He died in 1942.

  Within a month of the September hurricane, D.P. “Doc” Davis, with tremendous resources committed to Davis Shores, abandoned the state entirely. Davis Shores, his projected exclusive development in St. Augustine, was left to languish in the unforgiving Florida sun. By mid-1927, it was described as “treeless and devoid of top soil; and the white sand tends to drift badly in a high wind…a serious drawback to the comfort and beauty of the property for home purposes.” It went into receivership. Davis, however, was spared the ignominy of seeing Davis Shores and his Davis Islands development deteriorate. On October 9, he set sail for Europe on the Majestic with his paramour and youngest son. What happened next is still unresolved.

  Mrs. A.O. Weeks of Dania shows the fickle nature of hurricane winds in this 1926 photograph. The winds removed one entire wall of her bathroom but left the fixtures intact. Courtesy of the Historical Association of Southern Florida.

  Davis disappeared. On October 13, A.Y. Milam, the vice-president of Davis Properties, received a wireless message from the ship that informed him that “Doc” was lost at sea. What really happened, no one knows. The ship’s captain ruled his disappearance a suicide, claiming that he had taken his own life by climbing through a porthole in his cabin and jumping into the ocean. Friends insisted that Davis, who delighted in playing jokes on his friends, had been entertaining them by balancing his small body in the porthole when a wave hit the ship and tossed him out. That was the explanation Sumter E. Lowry’s insurance company bought, and it paid out a $300,000 settlement. Nevertheless, rumors persisted that his disappearance could be laid elsewhere. One rumor circulated that Davis, who carried a large amount of cash on his person, was robbed and his body thrown overboard. Another insisted that “Doc” had salted away millions and sought to protect them from lawsuits that were bound to follow his failures to complete Davis Islands and Davis Shores. He had arranged, the rumormongers stated with conviction, for a motorboat to meet him mid-ocean and take him to Latin America, where he lived out the rest of his life in well-heeled anonymity. Take your pick; the fact was, Davis was gone.

  In Boca Raton, Addison Mizner was drowning in a sea of lawsuits, debts and charges of fraud. He refused to show remorse. The Mizner Development Corporation was purchased by the Dawes brothers—Charles, Rufus and Henry—but Addison continued to try to make money off the Boca project. Through a number of complicated intercompany transactions, he transferred assets and made loans in the name of Mizner Industries, Inc., and Addison Mizner, Inc., two companies he retained. Even though the world was aware of his unscrupulous prior dealings, he was able to borrow hundreds of thousands of dollars in loans, all of which he defaulted on. With his sagging fortunes bolstered by additional loans from wealthy friends, he held court in the Via Mizner Building on Worth Avenue in Palm Beach until his death in 1933.

  Wilson Mizner, whose once mega-million-dollar fortune disappeared in the bust, made his way to Hollywood, California, where he went to work for Warner Brothers as a screenwriter and a partner in the Brown Derby restaurant. Like his brother Addison, he held court nightly, surrounded by a coterie of celebrities, underworld cronies and hangers-on. He, too, died in 1933, completely unrepentant for whatever misdeeds he had committed during the Boca Raton craze.

  Glenn Curtiss, whose fortune included much more than paper promises on Florida land, continued to be a believer in the return of the halcyon days of the mid-1920s. He held on to much of the acreage he and Bright had bought earlier and, up until his death in 1930, continued to make plans for more development. Joseph Young, whose Hollywood-by-the-Sea development was touted as the “Enduring City,” suffered tremendous losses from the hurricane. Over one thousand homes were destroyed completely and another two thousand suffered extensive damage. Young, who had been in New York seeking additional financial support, was wiped out. No additional financing was to be had from anyone, and the Hollywood development went into receivership.

  Carl Fisher suffered along with the other Florida promoters. By 1927, his once mighty fortune had been halved as tourism numbers decreased significantly for his hotels in Miami Beach; many of the supposedly “gold-clad” investors in his properties defaulted on the commitments; and the Montauk Point project demanded more and more of his resources. Topping the list of drains on his fortune were the hundreds of thousands of dollars he had to spend to repair the damage inflicted by the hurricane. Still solvent, he was optimistic that stability would return to the marketplace and that he would be able to regain much of the money he had lost. All he needed were a few good years.

  No one could deny that the real estate boom in Florida was teetering on its last legs. Every attempt to resuscitate it seemed to be checkmated by another natural disaster. The destruction wrought by the 1926 hurricane was followed by one of the coldest winters on record. Even
when warm weather returned in 1927, the economy remained depressed, and real estate sales did not even reach the level of sales for 1924, the first strong year of the boom. To add insult to injury, on September 16, 1928, a Category 5 hurricane swept through South Florida. Although the eye of the storm came ashore near Palm Beach, and although the total estimate of physical damages was significantly lower than the total for the 1926 hurricane ($1 billion in 2008 dollars), the toll of human lives was much higher. The dikes surrounding Lake Okeechobee burst and flooded the low-lying farm areas for fifty square miles, drowning thousands of African American migrant farm workers. Although the exact number of deaths is still unknown, official estimates go as high as forty-one hundred. Bodies, according to one survivor, “were stacked like cordwood” to be buried in mass graves or large funeral pyres. Few caskets were available, and those few were used for white victims. Even today, the controversy surrounding the recovery and burial of bodies continues in South Florida, and African Americans point out that the one mass grave site with a memorial contains only white bodies. Such was the system of segregation that ruled in the South.

  The hurricane of 1926 seriously weakened the Florida economy, but the hurricane of 1928 drove a stake into its heart. The land boom was absolutely over. With the end of the boom, the rest of the state’s economy went into a deep depression. Although it took a few more months for tourism to decline substantially, decline it did. On September 28, 1929, another, though less destructive, hurricane struck the Miami area and produced additional damage. Three people were killed. It was the coup de grâce.

  Not even the collapse of the stock market a month later in October 1929 had much of an impact on Florida, simply because there was little left to have an impact on. It was over.