He’s finally going to do it.
Palm Beach billionaire Jeff Greene said he’s moving forward with One West Palm, a twin-tower office, hotel and apartment complex planned for West Palm Beach.
The project, at 550 Quadrille Blvd., was approved more than two years ago, but it has not started construction. Greene has blamed various issues for the delay, including possible competition from an office tower proposed on the waterfront by The Related Cos., and the need to obtain permission from the Federal Aviation Administration for One West Palm’s 30-story towers.
But Related’s waterfront tower plan is dead, for now, and the FAA recently said it has no problem with Greene’s plans to build tall towers.
So there’s nothing stopping Greene from moving forward, especially now that he has an added incentive: a rival tower.
Related just proposed an office tower in a different part of the city, and this one is likely to gain city approval because it does not exceed existing height limits.
The 18-story office tower, dubbed 360 Rosemary, is slated for Rosemary Avenue, next to Related’s CityPlace development. 360 Rosemary could take a year for the city to complete all necessary review.
But Greene said he’s not about to be beaten by the competition. In fact, Greene said he’s about to sign a contract with a major general contractor to construct the tower, a move confirmed by real estate sources.
“We’ll have a brand-new tower, and everybody wants new,” Greene said.
While most developers need to obtain pre-leasing in order to satisfy banks making construction loans, Greene said he can finance and build the tower without lining up any tenants ahead of construction.
“I don’t even believe in pre-leasing in this market. You’re just setting yourself up for failure,” Greene said.
Greene said prospects want to see a building under construction before they will commit to it. He cited The Bristol condominium, which did some pre-sales but really started selling out its expensive condominium units when buyers saw the 1112 S. Flagler Drive tower started coming out of the ground. The Bristol is set for completion by December or January.
Greene said the One West Palm office tower, at 200,000 square feet, is less space to fill than Related’s proposed 360 Rosemary, which will feature 285,000 square feet.
And while real estate brokers expect rents to start at around $35 a square foot at 360 Rosemary, Greene said he’s willing to drop One West Palm’s rental rates to $30 a square foot, “if that’s all the market will pay.”
“I could make a big profit, or I could make a tiny profit,” Greene said. “My view on this is, I’m in this long-term. I’m building it for my kids.”
Having said that, Greene said he’s confident his building will attract tenants seeking new space with water views and lots of amenities, including tennis courts and a swimming pool in a fitness center that’s planned for the project. The twin-tower project also will feature apartments and a hotel.
If built, One West Palm would be the first new Class A office tower since 2008, when Related of New York and Crocker Partners of Boca Raton built the CityPlace Tower office building at 525 Okeechobee Blvd.
Size matters in a city that most real estate brokers say is primarily a move-around market. Brokers say new offices typically poach tenants from nearby older buildings because there aren’t a lot of out-of-area office tenants seeking large spaces downtown.
Therefore some brokers question whether 360 Rosemary is too big for the city. Four years ago, Related killed a plan to build the Gateway Tower office building in the Okeechobee Boulevard median after Related executive Ken Himmel said the company could not lock in tenants in advance of the tower’s construction.
Instead, Related built the Restoration Hardware furniture gallery on the site.
A Related official recently told The Palm Beach Post that the company is optimistic about its pre-leasing prospects for 360 Rosemary and is “committed to building this office tower.”
In any event, if two towers go up at the same time, it could take five or six years to fill both of them, said Neil Merin, chairman of NAI/Merin Hunter Codman in West Palm Beach.
One tower, on the other hand, would take two to three years, Merin said.
Wanted: NPB clubhouse eatery
Last year, the village of North Palm Beach thought it had lined up a winner for a planned new clubhouse when it selected Carl Von Luger Steak & Seafood, a Scranton, Pa.-based restaurant.
As part of its presentation to the village, Carl Von Luger extolled its connection to famous Peter Luger Steak House, of New York.
But then Peter Luger sued in federal court for trademark infringement. The lawsuit settled in August, with Carl Von Luger agreeing to change its name.
The village of North Palm Beach terminated its clubhouse agreement with Carl Von Luger’s operator, Robert Dickert, based in part on the name issue, Town Manager Andrew Lukasik said.
So it was back to the drawing board for the village, except that it didn’t have much success attracting restaurants willing to make a play for the clubhouse’s restaurant operations, Lukasik said.
After review, the village realized its requirements may have been too restrictive for some prospects, so it redid the request for proposals, Lukasik said.
Lukasik said the village also has contacted restaurant brokers to try to attract more interested restaurants.
The restaurant fiasco, plus construction changes, have delayed construction of the clubhouse, at 951 U.S. 1.
The village was supposed to tear down the existing building last July, with the new building ready by Dec. 1.
But in addition to ending its deal with Dickert, the village also decided to redo the whole project to bring down costs.
Construction now is expected to cost about $18 million, down from an estimated $22 million last year, Lukasik said. Lukasik said it will take about 14 months to build the clubhouse, so expect an opening in July or August of 2019.