By Andrew Abramson, Courtesy of The Palm Beach Post, Fla./McClatchy-Tribune Regional News
WEST PALM BEACH, Fla.
To encourage tourism and a thriving downtown, city officials are preparing to sell the old city hall site, with its prime location near the waterfront, for a hotel.
Some want to maximize the space with a tall building that will incorporate a hotel, apartment or condo units and retail space -- a concept that would require a zoning change.
Others say West Palm Beach would be more realistic to focus solely on a hotel.
After an open bid competition, city staff have picked three offers for the commission to consider:
-- $2 million from Navarro Lowery Properties of West Palm Beach, Hyatt Hotels and Concord Hospitality to build a five-story hotel. -- $12 million from the Kolter Group, a condominium developer, to build a 15-story building with a minimum of 120 hotel rooms, 260 condo units and ground-floor retail. -- Up to $15 million from the Crocker Group, Song + Associates and the Carlton Fields law firm, for a 12-story building with 200 hotel rooms, upscale apartment rentals and lobby retail space.
The Navarro Lowery proposal would follow the current zoning guidelines, but the other two would require an exemption to the five-story height limit for buildings east of Olive Avenue between Okeechobee Boulevard and Seventh Street.
Included in all three deals will be negotiations for the former Helen Wilkes hotel site, east of the city hall site. The city also owns this parcel and wants it turned into a park, preferably at the winning bidder's expense.
City commissioners could approve the height exemption on their own, but they have said they will let voters decide. The commission would have to give final approval to a referendum question by Feb. 4 to get it on the March 12 ballot.
Commissioner Shanon Materio said removing the height restriction "definitely gives the city a much better package financially" but she wants to hear from residents, who were able to first review the competing plans last week.
Going to a referendum, however, could be risky.
In 2010, then-Mayor Lois Frankel urged voters to approve a height exemption for a hotel on the city hall site, and she lost. Fifty-four percent of voters chose to keep the height limit, first approved by voters in 1996.
But voters didn't have any specific plan to consider then. This time, voters would have three to look at, since commissioners have said they will not select one before voters decide whether they are willing to go above five stories.
Alan Durham, the city's economic development director, said that a larger mixed-use project could generate $1.3 million a year in real property taxes while a five-story hotel would generate $427,000 a year.
"This difference is the equivalent of seven new police officers on the street, or 10 new firefighters and code enforcement officers," Durham said.
But city finance director Jeff Green said the five-story hotel said is the most likely to receive financing and could be built the quickest.
Rick Gonzalez, chief executive of REG Architects in West Palm Beach, which is not connected to any of the projects, also touted the advantages of the smallest project. He said there is a "desperate need" for a hotel downtown, while there's not a current market for more high-end apartments or condos there. He also noted the Hyatt project is the only one of the three that already has a hotelier lined up.
"We need a hotel on the main street or a block off main street," Gonzalez said. "To me, it's embarrassing. Delray Beach has five hotels in their downtown. The obvious decision is to work with the five-story design and work a way to get more units out of it, some commercial use out of it so that the developer can offer them a little bit more money. Maybe work a shared profit where they'll give you 2 to 5 percent of net profits if the city is concerned about money."
Frank Navarro, president of Navarro Lowery, similarly touted his project as the most realistic, plus he said his team might be willing to increase its financial offer if the project could include tax increment financing.
"I'd like to have any of those people saying (our offer is small) to try to get a full-service hotel out of the ground," Navarro said. "It's not an easy feat. The market is not fully recovered. I can tell you some of the primary markets in the country can do this a lot easier than a place like West Palm Beach."
Tom Crocker, managing partner of The Crocker Group, said that while his project doesn't have a hotelier yet, he believes that the city is more interested in picking the right team, and his team, with Song + Associates and Carlton Fields, has already been involved in various projects for the city.
"I think it would be a waste of city resources and specifically this land and what it represents, limiting construction to five stories," Crocker said. "The reality is there are lots of tall buildings along Flagler and I don't think they're disturbing anyone's views. If you want a vibrant urban community you need density."
Crocker said more upscale apartments are a necessity for the downtown to thrive.
"Rentals are better than condos in the first stage," he said. "Renters typically work in the downtown, spend money in the downtown, eat there and use the gym and other shops and retailers. They are there 365 days a year."
Regarding the Kolter proposal, which has more condo units than it does hotel rooms, Kolter Vice President Bob Vail said he believed that the recently approved 400-room Hilton convention center hotel on Okeechobee Boulevard could eat up much of the market.
"We think this will really be a boutique hotel for weddings and events," Vail said of his proposal. "It's at the waterfront and people will stay there over the convention center hotel. But when push comes to shove, the convention center hotel is a little bit scary."
Gonzalez said he's concerned that a tall hotel would be out of place at the site.
"We only have two small historic districts in the downtown," Gonzalez said. "One of them is at the 500 block of Clematis Street, and the other is a block away (from old city hall) at the St. Ann's campus. The St. Ann's campus is very small with one building that's 2½ stories and another two that are one story. I'd be concerned about a 15-story building next to a one-story building."
But Durham, the city's recently hired economic development director, said a taller project would benefit residents.
"Ultimately, the voters will be asked to decide which is more important," he said, "a five-story project, or additional tax revenue from a taller project that would allow the city to hire a greater number of new uniformed public servants without the need to raise taxes in the future"
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