Delray poised to sell downtown land worth $15M to developer for $1.2M

DELRAY BEACH — The city’s Community Redevelopment Agency is poised to sell downtown land valued at $15 million to a developer for just $1.2 million, with the promise that the builders will revitalize the blighted area quickly.

Not all of the city’s CRA members are in favor of the deal to sell three city blocks on West Atlantic Avenue. Some argue that the price is too low and the city should venture into a bidding process for more money and a better design.

The city aims to sell the space  between Southwest Sixth Avenue and Southwest Ninth Avenue to a developer who will incorporate a grocery store, local shops and affordable housing into its plans. The idea has been discussed for nearly a decade.

On Thursday, the CRA will consider negotiating with Uptown Atlantic — a business formerly known as Equity Delray and headed by John Flynn, an Irish developer — to sell the six acres of land for $1.2 million. 

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Six other developers have sent letters to the city expressing interest in buying the land. Uptown Delray’s offer is the lowest. One developer, BH3 Management, offered the highest bid of $6 million.

The land was appraised at $15 million earlier this year. Six years ago, it was appraised at about $6 million.

“That’s a lot of money to be leaving on the table,” Commissioner Bill Bathurst said. 

But some board members would rather take a hit on the price in order to break ground on the West Atlantic Avenue project more quickly. The CRA is already in negotiation with Uptown Atlantic, and can come to a deal within a month, officials said.

“The community has waited long enough for development,” Mayor Shelly Petrolia said.

The developer, then known as Equity Delray, was once on the line to develop the same land a year ago, with plans to put a Publix Supermarket on West Atlantic Avenue. After months of negotiation, the plan fell through.

Equity wanted until 2022 to break ground. Delray Beach’s CRA, which owns the land, refused to wait that long.

At the time, the agency was run by an independent board. The Delray Beach City Commission took over the board in April. The new board, made up of the five city commissioners and two volunteer appointees, took up the development of the three West Atlantic blocks shortly after the board takeover. 

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Putting the process out to bid could delay construction for at least a year, CRA director Jeff Costello said.

One reason for the major discrepancy between the appraised value of the land and Uptown Atlantic’s offer could be the city’s demands, Costello said. The land value shrinks when the city demands certain elements, like the grocery store and affordable housing.

A majority of the seven board members supported selling to Uptown Atlantic, which suggests the deal will move forward during a formal vote Thursday.

But the discrepancy in the appraised value and Uptown Atlantic’s offer didn’t sit well with at least two commissioners. 

“I’m not about holding things up, but I am about getting things right,” Bathurst said.

Commissioner Ryan Boylston agreed, adding that Uptown Delray’s design wasn’t on par with what the city wants for West Atlantic Avenue, a largely blighted area between Interstate 95 and Swinton Avenue that connects to the prosperous strip of boutiques and restaurants on East Atlantic Avenue. 

“I think we can set the bar higher for this project,” Boylston said. “We can set it higher than any project in Delray Beach’s, in Palm Beach County’s, history.”

Most of the board members, however, want to move quickly.

“The fact is, since 2009, I’ve heard one thing: ‘Build on West Atlantic,’ ” Commissioner Adam Frankel said. “You’ve got a group that’s ready to go.”

These are the developers who have made offers for the land, from highest to lowest price:

  • BH3 Management – Pitched a grocery store, housing complex. Offered $6 million for the land with a promise to break ground within three years of acquisition. 

  • Jones New Urban Delray – An African-American-run business that pitched a retail, office, restaurant and grocery store complex. Offered $4 million.

  • Altman Development Corp – Pitched a mixed-use space with residential, retail, office and public civic space. Offered $3 million.

  • Prime Investors and Developers — Pitched an office, retail and supermarket complex, with a hotel and apartments. Offered $3 million.

  • Keller Williams Preferred Partners – Pitched a complex with a grocery store, pharmacy, health and fitness facility, bank, social/entertainment business and affordable housing. Offered $2.85 million.

  • KAREP Acquisitions – Pitched a complex with between 110 and 150 units of housing, office space, co-working/incubator space, grocery store, retail, restaurants, and outdoor space. Offered $2 million.

  • Uptown Atlantic (formerly Equity Delray) — Pitched three mixed-use buildings with office space, a grocery store, retail space and more than 100 units of housing (20 percent of which will be affordable). Offered $1.2 million.

Follow Delray Beach reporter Lulu Ramadan on Twitter at @luluramadan 

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