Greene said after months of work to gain city approvals and have a big-name architect draw up plans, he has determined that rents in the market are too low to support the cost of building such a project.
“I jumped the gun,” he said Friday. “I should have done a lot more research before I went through the entire entitlement process and spent a lot of people’s time on it.”
The decision is sure to feed the belief that Greene, who in recent years has become the city’s biggest private property owner, is more inclined to sit on his land than develop it.
But while the micro apartment project at Banyan Boulevard and Rosemary Avenue is off the table, he said he is moving forward with his One West Palm office/hotel/condo towers at 550 Quadrille Boulevard, a two-building, 30-story project that would include the city’s biggest Class A office tower.
That project has city approval but is stalled awaiting approval by the Federal Aviation Administration, because of its height and proximity to Palm Beach International Airport air lanes.
The micro apartment project called for a 12-story building with 348 apartments that range in living area from 340 to 560 square feet. Greene said he hoped to rent at least some of the units for under $1,000 a month, well below the going rate for full-sized apartments in a downtown where many feel squeezed by rising rents.
In line with city efforts to encourage alternative transit downtown, the project was allowed fewer than the normally required number of parking spaces, in exchange for a contribution to defray the city’s cost of operating trolleys.
The Arquitectonica-designed project was to include an extra plus for downtown residents: opening a pedestrian passageway on its east side, connecting Banyan to Clematis Street through the courtyard of popular Subculture Coffee. That 20-foot-wide strip of land is an alley that dead-ends in the middle, preventing any connection between the boulevard and street.
Construction costs doomed the project, Greene said.
“I figured it would just make sense,” he said.
It didn’t, when he realized that, to get people to rent such small units would require putting in high quality community amenities, as well as upscale kitchens, bathrooms, washers and dryers.
“At end of the day, I ran numbers” and determined that in the current rental market, the building would be worth less when completed than what it would cost to build it.
“If you have a choice of a small room with no view, or a 30-story building with views of everything, can’t compete,” he said, referring to other nearby projects about to be completed near the downtown Brightline station.
“I’m stepping back now, to see how they all do.”