Huge Transit Village project on hold; developer frustrated with city


Highlights

West Palm Beach passes on tax increment financing for major Transit Village proposal at Tri-Rail station

Fifteen years coming down the tracks, the West Palm Beach Tri-Rail station project promised bells and whistles that city, county and regional officials said they wanted.

Developer Michael Masanoff’s Transit Village would bring sorely needed offices downtown, hotel rooms and hundreds of residences, some with rents low enough that working class people such as teachers and city workers could afford to live downtown, the developer told city commissioners. The project, which would link Tri-Rail, bus and trolley lines and not only would create 1,300 non-construction jobs but would provide education incentives for employees, hiring priority for local businesses and home ownership help to residents of the abutting Historic Northwest, one of the city’s poorest areas.

But the wrench in the gearbox was how to pay for it all.

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Masanoff and the city staff agreed the complex, transit-oriented development would increase the land value, giving the city tens of millions of dollars in property tax revenues for about 25 years.

The city staff said they could recommend no more than $25 million, already far more than any city project ever received. So Masanoff said he could rework the project and live with that.

But when it came to voting, that number wasn’t low enough to gain even a second for a motion.

“We all support the project. The only question before us today is how much we support it,” Mayor Jeri Muoio said. “Twenty-five million dollars is not peanuts.”

READ: Why is so hard to develop West Palm Beach’s most visible site?

City staffers noted that the $25 million in tax increment financing would be 12 times more than the previous highest amount given a developer. Masanoff countered that his transit-oriented project would create community benefits others do not.

With the project stopped short of the station, Masanoff was left to try renegotiating a deal for city staff to again present to the board. Or, the disappointed developer noted afterward, because the land is owned by the county, he could just work out a development deal with the county and leave the city out of the loop.

The developer clearly was frustrated that, after another six months of retooling the deal and lowering the tax subsidy to address concerns the mayor and commissioners expressed in January, a hurried mayor sharply limited his time to explain the proposal and the numbers.

Commissioner Keith James said Masanoff should try to hammer out a deal with city staff, rather than try to negotiate with the commission, which was headed into another scheduled meeting.

Paula Ryan, the sole commissioner to speak for the project, said Tuesday the city missed a chance. She noted that the commissioners in January voted to support the project but were vetoed by the mayor, who opposed the developer’s original request for up to $114 million in tax-increment financing.

There was no risk to West Palm Beach in approving this new deal, because the money the developer sought, and the tax money the city would gain, would be generated only if the project got developed, said Ryan, who is a developer.

“This is all wrapped up in politics and it’s a shame for the city and I’m sorry we didn’t get the bigger picture and understand there are things we need to do to make real significant change that’s going to benefit the entire city,” she said.

The project fits in with regional transportation plans and would create housing for workers, she added. “We draw how many workers and we don’t have housing? You want to make real significant change and investment in that Northwest neighborhood? This will do it…. It’s a public-private project with a public purpose.”



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