Vote Delayed On Related Group's Controversial Condo Project
At the end of a meeting that lasted from 5 p.m. Wednesday to 3 a.m. Thursday, city commissioners in Hollywood, Florida, delayed a vote on whether to allow Florida's most prominent condo developer to build a 30-story condominium on part of a taxpayer-owned, beachfront site that now includes a public park.
Commissioners are now scheduled to vote on March 16 whether to authorize city officials to execute a comprehensive agreement, a ground lease and easements between the city and PRH 1301 S Ocean Drive LLC, a subsidiary of The Related Group.
With a 99-year lease of public land, the firm would build a 347-foot-high tower with 190 condos on one of the last undeveloped oceanfront sites in South Florida. Related Group's project would be on about 1 acre of the 4-acre site.
The deal has been controversial. More than 100 people signed up to speak at Wednesday’s meeting.
The saga began in 2020 when city leaders met to discuss upgrading a community center that currently exists on the site. Related Group, under a state law governing public-private partnerships, submitted an unsolicited proposal to tear down the existing center and build a new one and the condo project.
According to a city website, under the current terms of the proposal, Related Group would make $10M in improvements to the site and pay the city $5M upfront, including about $1M of that owed to CBRE for representing the city, and $400K in rent annually. The city would get 14% of condo sales, plus a 0.25% fee when units resell.
That means the city would get a minimum guarantee of $35M on the front end, including initial rent, funding for improvements and closing rent. With the annual rent payments, plus projected property taxes paid by condo residents, total projected yearly revenue to the city is $3M to $3.5M.
The Sun-Sentinel reported that Many residents initially believed the Related Group would develop the community center for free, but in fact, Hollywood would foot the bill — up to $20M — using proceeds from the condo sales.
On a website detailing opposition to the project, attorney Richard Grosso alleged that the project does not qualify as a public-private partnership under Florida law. Per the city charter, Grosso notes, the public should be allowed to vote on the disposal of the land; changes to Harry Berry Park require approval from the federal government; and a deed restriction should not allow private residences on the public property.
At last night’s meeting, city attorneys countered those points, insisting the project did meet all the legal requirements and Related Group would seek the necessary approvals for the park or design a workaround.
Of the deed restriction, City Attorney Doug Gonzales said the “conveyance is for open space, park, recreational and other public municipal purposes … When you take a piece of public property that does not generate tax income, and put it to a use that will in fact generate tax revenues for the city, that's a valid public purpose.”
Some residents spoke in favor of the project, saying it would bring a well-designed luxury project and much-needed tax revenues.
"We're getting about a billion dollars over the 99-year term," said Shiv Newaldass, Hollywood's director of development services.
"That's a net estimate of how much revenue that's going to be generated to the city. We believe that it's going to be over $1.4B cumulatively," he added, referring to an economic analysis report commissioned by the developer.
Related Group founder, Chairman and CEO Jorge Perez also spoke at the meeting, indicating the project is a "very, very good deal for the city of Hollywood."
"I looked at our average price of land versus the selling prices and our average is 11%. Not only are we giving the city 14% in this one, but we're giving the city additionally from the condominium association $400K a year and 25 basis points every time there's a transaction that somebody sells to this," he said.
Related offered to pay the city’s legal fees if the deal is challenged in court.
"We don't build buildings, we build communities," Perez said. "We've been here for 42 years. We [are] now getting close to 120,000 units that we built mostly in South Florida. We have a deep, deep commitment to the South Florida community.”
Cat Uden, a resident who led grassroots opposition to the project — and made national news when she dressed up like the proposed condo for Halloween and was threatened with arrest on the grounds that could spark an unlawful protest — called the condo tower “a monument to greed.”
“He talks about how he's a philanthropist," Uden said of Perez. "He is so generous. He's going to give you all the lawyers that you need to force this skyscraper on us ... Why not build a skyscraper on every public park that we have in the city? You know why we shouldn't? Because it's wrong. It's morally wrong.”
Other concerns raised by opponents include long shadows, disturbance of sea-turtle habitat, and fears that future taxpayers could have to pay for mitigation of the site after 99 years.