In West Palm Beach, Jeff Greene Will Go Forward Where Related Cannot
For a year, Related Group had been urging the city of West Palm Beach to greenlight its proposal: a 25-story signature office tower near the scenic Flagler Drive waterfront. The holdup: local residents, in a 1996 referendum, had voted to restrict building heights to five stories in that area.
In late September, the project's fate came down to a nail-biting vote on whether to permit a zoning change. The zoning commission voted 3-2 against it, killing the development. But Related's loss is Jeff Greene's gain.
Now, the billionaire will move ahead with more certainty on his two-tower project, One West Palm, planned for two blocks over.
“I was always going to go forward, but the fact that the commission did the right thing and maintained the current zoning gives me a little better feeling about it," Greene told Bisnow in a phone interview. "If the city hands out these 500% height variances, as a developer, you wonder: What's next? I could build a 30-story building and they could give 60 to the guy in front of me.”
It is important, Greene said, that cities stick to master plans so that developers have predictability. No developer wants to spend hundreds of millions of dollars to build a project with wonderful views, only to have it obstructed by the next project.
Minor modifications, such as allowing builders to go 10 feet closer to the setback line, or be allowed one extra story, would be understandable, but much beyond that would scare off future investors, he said.
One West Palm is a $250M project that Greene has planned for 550 Quadrille St. The Arquitectonica-designed project will consist of two towers. The first will have 275K SF of luxury rentals, plus 30 stores. The second will have 200K SF of Class-A office space on the lower floors, with a hotel on the upper floors made up of 200 all-suite hotel rooms. Planned amenities include two indoor tennis courts, an indoor pool, a 10K SF gym, a spa and a restaurant.
“Every room will have a kitchen and washer/dryer,” Greene said. “People can stay for a week, a month, a season. The hotel rooms don't even start until the 15th floor, so the views are going to be insane.”
Greene said that he is waiting for clearance from the Federal Aviation Administration in order to begin construction, a claim he also made in May.
Greene grew up in Worcester, Massachusetts. His parents moved to Flagler Drive when he was a teenager, and he worked as a busboy at the Breakers Resort when he was home from college. He began building his fortune by buying homes in western Massachusetts in his 20s. But he became a billionaire when he copied John Paulson and bet against the housing market, becoming one of the few to profit off the subprime mortgage crisis.
After 20-plus years in California, he settled in Palm Beach with his wife to raise three children, and began a local buying spree. On the barrier island of Palm Beach, he acquired a mansion, the town's old post office (which he now uses as an office), and an oceanfront hotel, now called Tideline. Across the bridge on the mainland, in West Palm Beach, he purchased other major downtown parcels and proposed a series of projects. Some have been slow to come to fruition, though, leading some critics to question whether Greene was just banking land.
Greene has insisted his intentions were true, but acknowledges that he has since adjusted some of his plans. For instance he had gotten approval to build 12 stories with 348 microunits on Rosemary Avenue, but has decided to change course.
“The microunits aren't working out. It costs too much to build them," he said. "The way the numbers worked out, they'd be worth less than they cost to build. Whether an apartment is 200 SF or 40 SF, you've got to have a kitchen, appliances, bathrooms, front door locks. Sure, you get more money doing more units, but the price per foot is much higher ... and you only get so much rent in this market.”
Clematis Place, another of his proposed project, is likewise on hold, because the city has several luxury rental buildings currently being built, such as The Alexander at 333 Fern St., Broadstone at Clematis and a Marriott apartment/hotel project on the old City Hall site.
“I'm going to see how the market absorbs those,” Greene said.
As for Opera Place, a 3.2-acre site near the Kravis Center that is zoned for two towers, Greene said he has the Cook Fox architecture firm working on designs. The company designed a 25-story tower in Manhattan for him.
And in Currie Park, where Greene has about 25 acres including a half-mile of waterfront, he has flirted with a number of mixed-use ideas, including one futuristic plan that would leave out a grocery store and have a shopping plaza that floats on the Intracoastal Waterway.
“I'm back to talking to a big grocer,” Greene said. “It's a major Florida grocer, so let your imagination run wild.”
Greene's multifamily apartment complex, Cameron Estates, near the Palm Beach Outlets mall, is not 100% leased after two years and lots of incentives, Greene said. He had intended to build a second phase of the community and call it Clearlake, but that, also, is on hold.
“We need a spurt of demand for me to turn the supply spigot back on,” he said.
In the meantime, he also has his hands full growing The Greene School, now serving 83 kids in grades pre-K to 6. He is currently building an addition that will accommodate middle schoolers.
He said the idea “should copied and leveraged, so we can get some great human capital and attract companies and jobs we so desperately need.”
With a better educated populace, West Palm Beach could eventually be like Boston or Pittsburgh, he said, before walking back his statement a tad.
“Not that big, but it definitely could be like a Greenwich,” he said.
Hear more about Greene's projects next week, when he speaks on a panel during Bisnow's Oct. 25 event, West Palm Beach State of the Market.