Editor’s Note: The following story was published in the Palm Beach Post Business section on Oct. 28, 2007
Trump Tower Palm Beach was supposed to be the toast of the town when it comes to luxury condos.
Now it looks like Trump Tower could be toast.
Real estate mogul Donald Trump confirmed he is close to shelving the 23-story condominium planned for North Flagler Drive in West Palm Beach. “We won’t go forward unless we see a robust market,” Trump said in an interview. “We’ll make a decision over the next month or so. We could delay it a little while. … I don’t like going against the market.”
What happened to the Midas touch of Trump?
It ran smack into the worst real estate market in more than a decade, that’s what.
Only nine months ago, Trump pooh-poohed concerns Palm Beach County’s flailing home sales would affect this ultra-luxe venture. Developer Jorge Perez of the Related Group in Miami had already started sales on the property, formerly Icon Palm Beach, but then switched the name to Trump Tower after realizing the Trump name could attract international buyers.
Looks like the hype didn’t help, however. Not even The Donald could surmount the relentless downward slide in real estate. “The market in West Palm Beach is not exactly great-looking,” Trump said.
It’s not great-looking in Fort Lauderdale, either. Earlier this month, Trump suspended a condo hotel known as Trump Las Olas Beach Resort, citing a weak condo market. (Related has canceled a condo project, too, in Las Vegas.)
The bottom line for Trump Tower: Sales have not hit the mark set by Trump and Perez.
In June, Related exec Barbara Salk said less than half the project’s 150 units had sold (prices range from $900,000 to $2.4 million for the over-amenitized condo.) Developers were shooting for at least 60 percent, or about 90 units, before starting construction.
Trump wouldn’t admit saggy sales are the culprit, of course. “We’ve done very well with presales. We’ve had substantial sales,” he said. But he refused to provide details: “There’s no reason to be specific.”
If Trump Tower is halted, it’s not clear if, or when, it would resume.
Losing Trump Tower would be a blow to West Palm Beach’s efforts to be seen as an upscale address. “They should build it. The community needs modern, luxury condos with waterfront views, and it’s not being delivered,” said Burt Minkoff of the Corcoran Group in Palm Beach.
Trump may be iffy on Trump Tower, but he’s not down on Palm Beach County. Trump said he’s looking to buy distressed properties — preferably waterfront.
King’s Gourmet Market is once again expanding its empire: The Boca Raton grocery plans to open a store in downtown Delray Beach.
The 10,000-square-foot market will be on the ground floor of the Old School Square parking garage, a new city-owned garage at the corner of Northeast Second Avenue and First Street. The Delray Beach City Commission earlier this month gave the go-ahead to negotiate the $2.4 million sale of ground-floor space to King’s Gourmet.
The deal is a bright spot in an otherwise difficult few months for the longtime Boca grocer. King’s flagship store on Military Trail was shut down in August because of roof damage.
King’s owner Jeff Sussman at first pledged to reopen the store once the roof was repaired. But Sussman said he since has learned the structure needs so many upgrades, it is not worth repairing. Sussman said he plans to tear down the Military Trail building, which has stood on the property for 30 years. An office or bank branch may take its place.
Loyal King’s shoppers are waiting for the local retail icon to open its new location in suburban Boca Raton, at the Shops at Boca Grove on Powerline Road. That store was supposed to open in mid-2008 but now could open sooner, maybe January.
Both the Delray store and the new Boca store will play up prepared food. Sussman is even hiring an in-house chef to whip up gourmet meals. Also planned: A cafe and gourmet produce, meat and baked goods. The goal is to make King’s stand out from the bigger Whole Foods Market and Publix: “We have to create our own niche,” Sussman said.
Yet another King’s store in Palm Beach County, plus an off-site prep kitchen, also are in the works.
While some real estate developers are dumping deals, Tony Wilson is plowing ahead with his Seagate ventures in Delray Beach.
A lukewarm economy and crumbling bank financing might have tripped up some builders. But not Wilson. He started building the $80 million Seagate Residences along State Road A1A even before his construction loan with Canadian Imperial Bank of Commerce came through this month. “We have deep pockets,” Wilson said.
Maybe it takes one to know one.
Wilson said wealthy buyers have snapped up more than 50 percent of the 29-unit project, where condos cost between $1.75 million to $5 million each.
By December 2008, residents will be lounging in their luxury homes, contemplating another fabulous meal in the soon-to-be redone Seagate Beach Club across A1A, on the beach. That $10 million redo will see a new casual eatery, fine dining restaurant and all the amenities you would expect for a $25,000 initial fee, plus $2,750 annual dues.
And if the relatives come to town? They can retire to the Seagate Hotel around the corner on Atlantic Avenue. The 162-room hotel will start construction during the next 60 days, with completion set for mid-2009. The upscale hotel, and 8,000-square foot spa, will push room prices to a rich rate for Delray: Wilson plans to charge about $400 a night during high season.
Alexandra Clough writes about business and the law. Contact her at The Palm Beach Post, 2915 Congress Ave., Delray Beach, FL 33445; 561-820-3469 or 561-279-3469; e-mail: email@example.com.