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Related Faces Environmentalist Opposition Over Hollywood Public-Private Partnership

The city of Hollywood, Florida, owns a 4-acre beachfront parcel at 1301 South Ocean Drive that now includes a one-story community center, surface parking, a small park and mature sand dunes.

According to a mapping tool from the University of Florida GeoPlan Center and shared by the South Florida Sun-Sentinel, roads around it are predicted to be largely underwater by 2060.

Despite flooding concerns and opposition from environmentalists, the city and leading developer Related Group have been moving forward with a public-private partnership to replace the community center and add a 30-story luxury condominium tower to the site.

Related Group has been chosen to redevelop a site in Hollywood, Florida

Richard Grosso, an attorney representing the Broward County chapter of the Sierra Club, told Bisnow it was "unreal" that Hollywood is considering a project of this scale on public land when other coastal cities are preparing for managed retreat.

Related Group Senior Vice President Eric Fordin, who is spearheading the development, countered that "new construction is not the enemy here."

"On the beach, where you're worried about sea-level rise and you're worried about resiliency, you accomplish [it] with new construction, not with older buildings that are sitting below the flood plain and are waiting for a disaster to happen," he said.

Hollywood chose Related Group last year to redevelop the site of the Hollywood Beach Culture and Community Center for a project that has alternately been dubbed Hollywood Arts and Icon Residences Hollywood. The firm proposed building a bigger and more modern two-story, 20K SF community center, refashioning public parking with dozens more spaces than currently exist and extending a beachfront boardwalk. It would take over the existing Harry Berry Park but create a new park closer to the ocean. Its private tower would potentially include a 5K SF restaurant. Related Group is requesting a 99-year lease of the city land. 

Some residents and environmentalists fear the development will destroy the dune ecosystem and sea turtle habitat and say it fails to account for potential future environmental risks and costs. They also argue the proposal is at odds with a deed restriction and state law.

A petition started by the Broward County chapter of the Surfrider Foundation opposing the project has garnered more than 2,000 signatures. Facebook posts called for residents to attend a city commission meeting Wednesday where, according to the agenda, there will be an update on the completed term sheet and ongoing negotiations. The city commission will vote on a ground lease and comprehensive agreement in the coming months.  

"The 99-year lease, that's a runaround," said Sierra Club member Sue Caruso, who co-chairs the organization's Florida Growth Management Team.

Renderings suggest a plaza could be built where the dunes now exist and that a paved boardwalk would be extended, inviting pedestrians there. 

"This is a sea turtle nesting beach which is supposed to be dark, clean and quiet from May through October so that hatchlings have greater chance at survival," the petition says.

Part of a site plan for Related Group's P3 project in Hollywood, Florida

Broward County is prime habitat for threatened and endangered sea turtle populations. A Nova Southeastern University study counted 195 loggerhead turtle nests, four green turtle nests and six leatherback turtle nests in the Hollywood zone of the beach in 2020. 

Hollywood resident Catherine Uden said the site is "the most beautiful green, quiet place on the south end."

"It's not that we don't want change; we don't want Vegas on top of our dunes," Uden said. "There are smart places to develop, like streets that aren't predicted to be underwater."

Fordin said Related would follow the advice of a coastal engineer. It could keep the sand dunes as is, restore them or build footbridges over them if suggested. It would comply with lighting requirements designed to protect sea turtles if required, he said.

In its original proposal, Related Group emphasized that the project, designed by Arquitectonica, would be elevated to protect against storm surge and that facilities will have Florida Green Building Coalition certifications. Illustrations show that the project would be set back on the western portion of the parcel so shadows wouldn't impact neighbors' properties. Existing buildings in Hollywood are much closer to the water, Fordin said. 

"Everyone has something here. Even the turtles have something to gain here," he said.

Hollywood didn't provide a copy of the term sheet by press time, but other documentation pertaining to the P3 project is available on a city website. Related Group's initial proposal estimated construction costs at $140M.

A rendering of the Hollywood Arts project proposed by Related Group

According to a best and final offer presented by Related Group in March, the city would get $35M in consideration upfront: $5M upon lease signing, $10M worth of park improvements, and $20M (12.5% of an estimated $280M in condo sales) upon issuance of a temporary certificate of occupancy and condo closings.

Related would also pay $400K in annual guaranteed rent, or $40M over the lease term. Fordin said this figure would be earmarked for maintaining the public facilities and adjusted to increase over time. The city would also get 30% of rent from the retail/restaurant (an estimated $44M total) and 100% of revenue from 158 public parking spaces ($243M over time).

Assuming annual increases of 3% to 4%, Related Group estimated the project would generate $18M to $36M in sales taxes and $1.02B to $2.06B in property taxes, its offer says. The beach is part of a Tax Increment Financing, or TIF, district that funds a Community Redevelopment Agency through 2027.

Fordin said units would sell for about $750 per SF. In a June meeting, he said they'd sell for $1.5M to $3M.

Grosso wrote to the city, questioning whether the plan would meet the definition of a qualifying project under Florida’s Public-Private Partnership Act, arguing the act's purpose is to facilitate the upfront financing of public-use facilities and projects.

"Nothing in the statute suggests that the law contemplates its use for the construction of a market-rate, private, residential condominium on publicly-owned land," Grosso wrote.

Grosso also pointed to a 1974 deed restriction limiting the property's use to “open space, park, recreational and other public and municipal purposes,” which he argued should preclude its lease for private uses. A 1974 article in the Fort Lauderdale News indicates Mailman Development donated the land, plus sites for three other parks and a fire station, in exchange for permission to build 3,900 units in Hollywood. 

Grosso told Bisnow the city didn't seem to be factoring in potential future costs like protecting the site from rising seas or associated cleanup or liability costs.

"You would think that the fiduciary responsibility that city commissioners have would have made this just a nonstarter," he said. "It's amazing that it's gone this far. So at this point, the fundamental legal decisions about whether they can even do this need to become paramount to this discussion."

Fordin said Related Group has already consulted with city staff and met with neighboring constituents. Notes from a community meeting in June show that some attendees supported the project and asked for Jet Skis, a card room, a pet area and to use the condo's fitness center.

"We are very confident that our submission was fully in compliance with the P3 statute," Fordin told Bisnow. "Our primary focus is to deliver the best possible public-private project and in doing so, we feel confident that this first-class facility for the residents of the city of Hollywood will be the envy of South Florida."