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Sturm und Drang, South Beach-style
Even in a town not noted for shrinking violets, 39-year-old Thomas Kramer consistently has found ways to grab attention: He tore down one mansion on ultra-rich Indian Creek Island; he bought air conditioning for the back yard of another palace on ultra-rich Star Island; he trawled nightclubs and tossed lavish parties; and he blitz-bought more than 30 acres in a blighted neighborhood on Miami Beach's southernmost tip as part of a grandiose scheme to turn the area into a replica of Portofino, the Italian Riviera resort town.
Along the way, he has landed more than once in the justice system. First a divorce. Then, a Zeppelin of a lawsuit filed by his ex-wife's stepfather, a German industrialist, demanding that Kramer repay $145 million that the man says he "entrusted" to Kramer.
Whatever its merits, the lawsuit has reintroduced questions about Kramer's wealth, and whether he can sustain both his redevelopment project and his persona. Will he, in an ongoing Miami Beach soap opera, re-emerge with a leading role? Or will he fade into the ranks of bit players who achieved excess rather than success?
When he arrived in Miami, Kramer portrayed himself as a savvy currency trader whose cunning helped him spring back from a failed attempt to sell interests in East German real estate. His flamboyant lifestyle and marriage to Cathrine Burda, a member of a prominent German publishing family, already had made him a regular in the European press.
In Miami, he cultivated a profile calculated to draw attention to himself in his new habitat. Not long after arriving, he staged a spectacular party - replete with fireworks display - to impress his new neighbors. He was a regular on the party circuit, frequently trailing an entourage, and opened a club called Hell in one of Miami Beach's oldest hotels.
He also stunned residents of ritzy Indian Creek by tearing down a well-maintained mansion and then failing to follow through on plans to replace it with an elaborate, temple-like home. Then, last spring, Kramer shocked energy conservationists when he ordered an enormous mist-cooling system designed to chill the back yard - outdoors - of the 17,000-square-foot, $1.8 million ?ber-mansion he's building on Star Island.
No less extravagant
His business activities are no less extravagant. After buying a condo in South Pointe, a decrepit neighborhood on the tip of Miami Beach, Kramer had a vision of, as he described it to the Miami Herald in 1993, a "Master Plan" for the neighborhood beyond his balcony. Kramer's chosen canvas is a rabble of crumbling, bug-infested tenements where crack cocaine was sold openly in the streets and derelicts slept in trash-filled alleys.
In five years, Kramer has dropped $42 million on real estate in the neighborhood, assembling 35 acres and waging a campaign to win the hearts and minds of Miami Beach. In 1992 he threw a huge Halloween bash at his club Hell, inviting jet-setters, celebrities and select journalists to mingle with a hand-picked crop of the city's movers and shakers.
Though the party was packed, the audacious Kramer managed to make enemies as well as friends when, according to newspaper accounts, he ordered his doormen to turn away anyone who appeared to be gay. He followed the party with hefty gifts to the city. Then, following a highly publicized 1993 planning session, Kramer dumped his vision for a low-rise village in South Pointe and announced an aggressive new concept - a plan to ring the neighborhood's waterfront with enormous high-rises.
He sent his lawyers and corporate officers into negotiations with the city of Miami Beach, emerging last year with a highly complex deal that consolidated his holdings in a series of land swaps and gave him the right to erect some of the tallest residential buildings south of Manhattan. As part of the deal, he'll also receive an $11.4 million payout from the city.
The land deal irked a coalition of South Pointe residents, who fought unsuccessfully to stop it and accused the city of caving in to Kramer. "I don't blame Thomas Kramer. He's just one more egomaniacal speculator trying to get the best deal he can," says Mark Needle, leader of the South Pointe Coalition. "What I don't understand is why the city bent over backwards to give him what he wanted." Today, Kramer's scheme is still more concept than reality. His company, the Portofino Group, which had a high turnover rate at times, so far has only two structures to show for his efforts.
One, a four-story office building, is mostly empty, save for the popular China Grill restaurant and Kramer's own corporate offices. Kramer's other building, the $100 million Portofino Tower, soars 44 stories over the entrance to the Port of Miami. The massive luxury condominium is nearly completed and nearly sold out - though Kramer had to rely on a partnership with two seasoned developers to get the job done. One of them, the Related Companies of Florida, obtained the construction loan and took control as the general partner.
Higher Hopes
Kramer had higher hopes. A couple of years ago, he helped to bankroll a multimillion-dollar campaign to legalize casino gambling in Florida and planned to build a casino hotel in partnership with Mirage Resorts, a Las Vegas-based casino operator, on some of his land in South Pointe. Kramer and Mirage were among the largest contributors to the pro-casino war chest of more than $12 million. But Floridians rejected casino gambling in November 1994 in a statewide referendum, and the Mirage project never materialized.
The following year, Kramer and his wife divorced. And in the wake of their split, his ex-wife's stepfather, Siegfried Otto, stepped forward with his claims on Kramer's South Pointe holdings.
The 82-year-old Otto, a wealthy former currency publisher, claims that he began giving Kramer money in 1991 - the same year Kramer began buying Miami Beach real estate. According to a lawsuit filed last summer in Dade County Circuit Court, the cash eventually totaled $145 million. According to the suit, Kramer agreed to begin returning that money to Otto in 1995, but only made one payment of $13 million. Kramer also has failed to keep Otto apprised of how Kramer plans to meet the 1997 deadline for returning the money, according to Otto's suit.
Otto's lawsuit portrays Kramer quite differently than the self-made financial wizard image Kramer cut in public, alleging that the chief source of Kramer's cash is not his own financial acumen but Otto. The suit lists 50 properties, mostly in South Pointe, that Kramer bought, allegedly with the money that Otto "entrusted" to Kramer.
Miami or Switzerland
This year, Kramer filed his own suit in Zurich, Switzerland, seeking to have the agreement set aside. The two sides are now wrangling over both the money and where the dispute should be settled - Miami or Switzerland. "We're asking for a return of our money, period," says William M. Barron, the New York lawyer who filed Otto's suit. The other side? "In our opinion, this Miami lawsuit is ridiculous," says Parker Thomson, Kramer's attorney.
At this point, it's unclear where the dispute will lead, and what effect it might have on the Portofino Group. According to the Daily Business Review, a South Florida financial publication, Kramer paid $71.8 million for his South Florida real estate holdings in the early '90s, and has subsequently sold $24 million of it.
Based on tax roll information, the Review estimates the remaining property to be worth about $53.5 million - considerably less than the amount Otto is demanding from Kramer. How many other assets Kramer owns or controls is anyone's guess.
The uncertainty doesn't seem to have affected Kramer's relationship with the Related Companies, however. It's planning to move ahead with another joint venture with the flashy German investor - a 360-unit luxury rental tower called the Yacht Club at Portofino in Miami Beach.
Kramer's image may be another project in development. For the time being, he seems to have dimmed the wattage on his 6-foot 4-inch profile. He can't be reached for comment and his lawyers say he's out of the country.
