West Palm Beach’s North Flagler Drive corridor is starting to look like a real estate boom all over again.
Undeveloped parcels of land in the Northwood area suddenly are being scooped up by developers. Plans are being weighed for new leased apartments or for-sale condos or townhomes.
And one group is trying to bundle all these properties into one grand master plan.
If several hundred residential units could be built in conjunction with one other, “it would change the north end,” said Mark Pateman, a Cushman & Wakefield brokerage director. “Most urban planners dream of having this.”
The effort is being led by a development team from Miami, which has a contract to purchase the Palladio Terrace property at 2200 North Flagler Drive, previously owned by Merco Development. The property, which fell into foreclosure, once was zoned for up a 338-unit, 18-story condo, although the site’s zoning entitlements since have expired, said Rick Greene, the city’s director of development services.
Edgar Jones, of Edgar Jones & Co. in Miami, acknowledged his investor group has the former Palladio Terrace property under contract for an undisclosed price.
Jones confirmed he is talking to nearby property owners to try to develop an overarching master plan for the area. Most of the area’s properties are zoned for properties of between four and six stories. Only one is slated to rise eight stories.
Jones said his group is trying to see if they can fashion the North Flagler Drive area “into a new world of development….under one planning model.” He added: “We want a world-class project that will stand the test of time. I think we’re pioneering, to a certain extent. We feel good and we like the location.”
Money doesn’t seem to be a problem. Jones said his group has “sources of capital ready, willing and able to move forward.”
But putting together a disparate group of developers who own property in the Currie Park corridor is like herding cats, and Jones knows it.
It could take months to cajole nearby property owners to consent to one master development plan, not to mention the work needed to get the city’s OK. At this point, the city’s Greene seems amenable to working with the group.
“We like the concept of assembling (the parcels) in a comprehensive fashion,” Greene said. “There are advantages in planning them holistically rather than their being developed on their own.”
Greene said the Palladio Terrace group would get back to the city once it has made progress.
In addition to Jones, another of the Palladio Terrace group’s partners is Robert Gorlow of RMGA LLC in Miami Lakes. He believes that homes should be of mixed sizes and styles but not overly large. Golub likes home communities connected by pedestrian and biking paths, according to his website, gorlow.com. But “conspicuous consumption” is not a goal, according to an essay written by Golub and posted on the website. (The other developer in the group is Southstar Development Partners of Coral Gables, led by Larry Rutherford.)
Brad Capas, a senior director with Cushman & Wakefield, said the area’s property owners recognize it is a potentially good idea to work together, “but they have to look out for their individual interests as well…..Owners will do it if they feel it makes economic sense.”
Neil Kozokoff, whose Parkland Companies owns two properties in the area, called the master plan notion “a great idea.”
However, he’s still planning to move forward with his own plans to build apartments on his two sites. One property will be a 102-unit apartment and another will be a 104-unit apartment. Both will be four stories high.
A key developer the Palladio Terrace group is hoping to attract is Jeff Greene, the billionaire Palm Beach real estate investor. He is buying vacant land next to the Palladio site, a 1.5-acre property just south of Palladio Terrace on North Flagler Drive. It is owned by WCI Communities Inc. and a closing is set for 2014, Greene confirmed in a recent interview.
Greene also owns the former Barcelona Square development, north of 23rd Street between North Flagler Drive and Dixie Highway. A prior owner had planned to build one, eight-story building featuring condos and townhouses, and a second, six-story building consisting of lofts. Greene said he is finalizing the design a project for 275 apartments, which could become cobeen approached many times about doing something with Palladio Terrace group, but he said he’s not interested.
“You have streets running between the properties,” Greene said. “You have four or five big properties. To make one big property, I don’t see that that’s better. And I don’t see the benefit in joining them. I’m ready to go” with his own project.
The Barcelona Square property already has its zoning approvals in place, but the Palladio Terrace does not.
Although Greene noted that he was “very bullish on West Palm Beach,” he’s not sure he wants to acquire more land in the north end, even as more sites go on the market. “I have enough property in the neighborhood,” he said.
During the past year, Greene has been busy buying all over West Palm Beach. He recently paid $28.5 million for 166 units in The Strand, a high-rise at the corner of Evernia Street and Narcissus Avenue. Last year, he paid $34 million for 165 units at City Palms at the corner of Quadrille Boulevard and Hibiscus Street. Greene also owns several Palm Beach properties, including the Omphoy Ocean Resort.
Kevin McCarthy, a Colliers senior vice president who handled the Palladio Terrace deal, said interest in building apartments is heating up in the northern part of the city. “It’s much more active. There are a lot more deals chasing multi-family than a year ago,” McCarthy said.
Capas agreed that developers are starting to believe the North Flagler Drive area is the next place to build. He noted, however, that construction might not happen right away, as developers wait to see the housing market improve even more.
More deal-making could be afoot for buyers who want a toehold in this market.
Now up for sale: The former Gramercy Court condominium site, a 2.7-acre parcel once slated for 156 units at 2501 North Flagler Drive. The property is being offered for $6 million, according to a Cushman & Wakefield advertisement.
In addition, nearby sites could go on the sales block, at some point. They include the property once slated for a condominium known as the Prism, at 2617 North Flagler Drive, plus a neighboring site that was going to be a housing project called Poinsettia, at 2609 Poinsettia Avenue.
Pateman, who is marketing the former Gramercy Court site with Capas, said there is “significant interest” in the property.
Not every owner of land in along North Flagler Drive is ready to pull the trigger on development.
T-Rex Capital Partners, owner of land for the proposed Eighty Points West condo at 5700 North Flagler Drive , isn’t ready to come out of the ground now, chairman Tom Mulroy said. The 175-unit Eighty Points West condo was announced during the boom in 2006 but was tabled during the recession and still is on hold.
“We’re waiting for the condo market to heat up,” Mulroy said.
Meanwhile, still up in the air is a proposal by the Related Group to build a 397-unit condo at 4308 and 4416 North Flagler Drive. The proposal has been postponed before the West Palm Beach city commission several times.
Alexandra Clough writes about the economy, real estate and the law. Contact her at email@example.com.