Five years ago, the vacant, damaged 1515 Tower condominium in West Palm Beach crumbled to the ground in a planned implosion. As people in boats and buildings watched the 30-story tower shudder and fall, nearby residents braced for The Modern, a large, bulky condo planned for the 1515 Tower site.
The Modern could not survive the region’s historic downturns, however, and the condo plan died with the recession. In 2011, a Texas investor group plucked the property from foreclosure, with plans to build apartments. Now, after failing last year to win the city’s OK to build nearly 200 apartments on the site, the investor group has decided to sell the land.
Brokers expect the 2.66-acre property at 1515 S. Flagler Drive will be a hot commodity, coming as it does when investors are eager to own prime property along the water.
“It’s a large, turn-key development opportunity right there on the water, with direct views of the Intracoastal, Palm Beach and the ocean,” said Jaret N. Turkell, managing director with HFF, the Miami-based brokerage handling the property’s sale.
“There hasn’t been an upscale brand new luxury apartment in West Palm Beach for a long time,” Turkell said. And, with only 84 units in the 24-story plan, “it should be easy and attractive for a developer,” he said.
A bonus: The project comes with The Modern’s architectural drawings, which are about 30 percent completed.
Residents may not remember the tall, skinny 1515 Tower condo, badly damaged during Hurricanes Jeanne and Francis in 2004. But they may recall the implosion that took the tower down in 30 seconds.
The 1515 condo was destroyed to make way for The Modern, a luxury condo that was opposed by some nearby residents because it had three times the mass of the 1515 Tower. When the recession led to the property’s foreclosure, a bank sold the land in 2011 to Frank Trabold’s Texas-based Terrace Mountain Investors. The price paid: $5.5 million, a fraction of the $36 million loan.
Terrace Mountain got busy buying nearby parcels to boost the site’s size and access. For example, the group paid $1.8 million for McCranels Orthodontics on Arkona Court, on the north side of the property. It also purchased land on Olive Avenue from First Baptist Church for $455,000.
In late 1014, Terrace Mountain went before a city committee, seeking to more than double the site’s density to 187 apartments. The answer was no.
So it’s back to the condo idea for the property.
The land sale comes on the heels of the announced Bristol condo, at the former Chapel by the Lake location. Peter Reed, managing partner with Commercial Florida Realty Services in Boca Raton, said having another similarly luxurious project creates synergy for new high-end condos in West Palm Beach.
Despite concerns from some real estate observers that the market could be getting overheated, Turkell said there’s still plenty of demand for new luxury condos from buyers in New York, and from South America and Canada, too.
Stay the course?
A buyer who keeps to The Modern’s approved plan would be able to build without fear that nearby residents could thwart development.
But if a buyer wanted to change the design of the building, perhaps to reflect the additional land purchase, it could open the door to community input or dissent.
Neighborhood opposition to big condos downtown is a growing challenge for downtown developers. Lawsuits launched by a neighborhood group, Citizens for Thoughtful Growth (CTG), stymied development of The Bristol, even after the project was approved by the city. Last week, The Bristol’s developer settled litigation with CTG after agreeing to pay the group $1.1 million.
A portion of that money will go toward attorneys fees, of course. But the rest is available for future civic activism, according to the group’s West Palm Beach attorney, Robert Critton.
Comeau on the block
With the real estate market hot for deals, the historic Comeau Building in West Palm Beach property is for sale.
The offering comes five years after a lender, Five Mile Capital Partners of Stamford, Conn., took title to the 10-story office building, known for its signature interior arcade and Art Deco touches.
Five Mile had loaned $4.5 million to a previous group to convert the property to a hotel. But the plan didn’t succeed and the property went into foreclosure.
In 2011, Five Mile and joint venture partner AW Property Co. of Palm Beach Gardens launched a renovation of the 1925 building. The building was cleaned and the floors redone. A restaurant, The Wine Dive, was brought in to the first floor.
Also added: A shower, bike rack and free Wi-Fi.
Today the 86,300-square-foot property is roughly 85 percent leased, up from only 11 percent occupied in 2011, when office tenants were cleared out for the failed hotel project.
AW Property co-founder Peter Applefield said the market is performing well and Five Mile decided it’s a good time to sell. He referred additional comment to the property’s broker, who did not return phone calls.
Alexandra Clough writes about the economy, real estate and the law. Contact her at firstname.lastname@example.org.