UPDATED, Feb. 10, 3:30 p.m.: Development opportunities persist in downtown West Palm Beach as plans unfold for a Wynwood-style redevelopment of an urban warehouse district and a University of Florida campus just north of the Kravis Center for the Performing Arts.
At the same time, the need is growing for housing, including condos and affordable rentals, as the city courts financial and tech firms to downtown’s office market.
(L-R) Related’s Jon Paul Perez, Brand Atlantic Real Estate Partners LLP ‘s Andrew Dance, BGI Financial’s Kenneth Baboun, and Douglas Elliman’s Jay Parker
“Especially in the condominium market, there’s more demand than supply,” said Jon Paul Pérez, president of Miami-based Related Group, who was a panelist this week at a conference presented by the West Palm Beach Downtown Development Authority and the Urban Land Institute.
“There’s a huge imbalance between [condo] demand and supply, and I don’t think you’re going to see that change in the next few years,” Pérez told an audience of more than 200 at the 2022 West Palm Beach Development & Investment Forum. “We are aggressively looking for [development] sites.”
He said residential developers have seen greater promise in West Palm Beach since the 2019 completion of The Bristol condominium, a 25-story, 69-unit waterfront development on South Flagler Drive where some units have sold at eight-figure prices. “There were no condominiums built for 10 years until the Bristol opened,” Pérez said. “That really changed people’s mentality.”
“The thing that I’m really drawn to in West Palm Beach is, it’s such a walkable downtown,” said Andrew Dance, managing partner of Brand Atlantic Real Estate Partners, who spoke on the same panel as Pérez. Clematis Street, in particular, “is the most walkable street in the country,” he said.
Dance said hedge funds and private equity funds are part of a commercial migration of investment firms to downtown West Palm Beach from the Northeast and other parts of the nation. These firms tend to open branch offices with 40,000 square feet to 60,000 square feet rather than relocate their headquarters to West Palm, he said.
The city is trying to increase the downtown supply of affordable housing by allowing residential developers to reduce property taxes on their projects, and to build taller, denser projects if they set aside some rent-controlled units for people earning less than the area’s median income.
Near the Brightline train station in downtown West Palm Beach, for example, Miami-based Linéaire Group is developing a 20-story mixed-use development with a 130-key Tribute hotel, 180 residential units on floors eight through 19, and a rooftop bar. The city agreed to reduce property taxes on the development because its residential component includes 35 workforce housing units, said Diego Bonet, managing partner of Linéaire Group. “The workforce units are spread throughout the building, and everyone has access to the same amenities,” he said.
West Palm Beach established a downtown master plan 25 years ago, initially to encourage more residential development downtown, and more recently to spur office development, city planning official Ana Maria Aponte said in a panel discussion of affordable housing. “Now our big challenge is how to provide housing for everyone downtown,” she said.
High land costs impede development of affordable housing, said panel member Jason Larson, senior vice president of development at Coconut Grove-based Housing Trust Group. He cited a half-acre site the company analyzed. It was listed for $12 million. “That definitely doesn’t work for us,” Larson said.
Housing for the working class is expected to be a major part of the pending redevelopment of a warehouse district in the North Railroad Avenue area, or Nora, just north of downtown West Palm Beach.
Miami-based Place Projects and West Palm Beach-based NDT Development plan to redevelop a 120,000-square-foot assemblage of industrial buildings and surroundings in a style resembling Miami’s artsy, mural-filled Wynwood. The long-term, mixed-use Nora project also would encompass retail and residential development.
“This project will create more affordable housing in the downtown than all of the projects combined to date,” said panel member Joseph Furst, founder and managing principal of Place Projects.
Furst said his firm and NDT Development control 14 acres in the 40-acre Nora area, and the owners of the rest of the area are uninvolved in their project. The West Palm Beach City Commission voted Monday night to amend the city’s downtown master plan to include the Nora District.
Affordable housing also may be part of a larger master plan to develop a satellite campus for the University of Florida on a two-block section of downtown West Palm Beach.
The city commission on Monday night took preliminary action to donate about 2.5 acres of surplus city land within a 12.5-acre site for the graduate studies campus. The University of Florida is negotiating to acquire the other 10 acres. The future campus site just north of the Kravis Center is bisected by Evernia Street and bordered by Datura Street on the north, Fern Street on the south, Sapodilla Avenue on the east, and Tamarind Avenue on the west.
State funds totaling $100 million and as much as $100 million in gifts to UF would fund the establishment of the Gainesville-based university’s satellite campus in West Palm Beach, Kent Fuchs, president of the University of Florida, said at the ULI event Monday afternoon in a side-by-side presentation with West Palm Beach Mayor Keith James.
“My No. 1 objective this year is to get this thing done,” Fuchs said. The UF president also said IBM will work with the university to develop and teach curricula centered on artificial intelligence at the West Palm Beach campus.
“This is a once-in-a-century opportunity,” said Mayor James. “It’s a game changer that will affect generations to come.”