The controversial Archstone Palmetto Park project in Boca Raton may not wind up being called Archstone, but it also probably won’t change under new ownership.
Last week, the 6-acre Archstone site between Fifth Avenue and Mizner Boulevard was sold by Equity Residential of Chicago—the majority partner—and Boca’s Mark Guzzetta –—the minority partner. I am told that the buyer is Charleston, S.C.-based Greystar. It is the nation’s largest apartment management company, and this year got even bigger when it bought Riverstone, Greystar’s largest competitor.
In March 2013, after a five-hour meeting, the Boca Raton City Council approved Archstone Palmetto Park, a complex of 378 rental apartments and about 12,000 square feet of retail space. Actually, it was the second approval. The current plan is a bit smaller and more set back from the street than the one the council approved in 2012.
Residents to the north in the Golden Triangle (the neighborhood north of Palmetto Park Road and east of Mizner Park) protested that the project would overwhelm their neighborhood. Council members—with the exception of Anthony Majhess, one of those residents—responded that Archstone would bring needed business to merchants on East Palmetto Park Road.
Though Archstone has remained the name throughout city consideration of the project, the company hasn’t owned the site for more than two years. Colorado-based Archstone, Guzzetta’s original partner when the property sold in March 2012 for $20.1 million, was sold to Equity Residential and another company in November 2012. I’m told that Equity Residential didn’t want to develop Archstone. Thus the sale to Greystar.
A source tells me, however, that Greystar does want to build Archstone—or whatever it might be called—and soon will submit plans that follow what the city approved. That would make sense. Any proposed change would trigger a new review by the city. The last review led to a lawsuit challenging the city’s approval. A trial court judge ruled that Boca Raton had to put the issue to voters in a referendum, but the Fourth District Court of Appeal disagreed. That ruling last January cleared the way for construction, which then was delayed because of the sale to Greystar.
Even now, longtime Boca Raton residents might wonder if work on the project will start anytime soon. There has been talk of redevelopment on that land for two decades, starting with the late Greg Talbott’s plan for what he called Palmetto Promenade. The property went into foreclosure during the recession, and Fifth Third Bank bought it for $6 million in December 2010.
Post-recession, financing has been easier for rental housing than homes and condos, and plans for the property turned from Talbott’s office-retail project to one including apartments. That came as Boca Raton began betting big on housing to energize the downtown. Archstone was just one of several residential projects to go before the council, but it was the biggest and generated the most emotion, with then-Mayor Susan Whelchel claiming during the climactic meeting that opponents just didn’t want renters nearby.
Though I am told that the cost of Archstone as approved could top $100 million, the project sounds more like a rounding error in the Greystar portfolio. The merged company manages almost 400,000 apartments, and Riverstone alone had $17 billion in assets. In Boca Raton, however, Archstone—or whatever it may be—is a big deal. The city will be eager to hear Greystar’s plans.
Delray police contract talks
With the end of the city budget year and the end of the city’s contract with the police union coming on Sept. 30, Delray Beach is close to finally making a contract offer.
I have written extensively about the long-term financial problems both cities face because of police and fire pensions. Those problems will become harder to hide starting next year, when cities must report the unfunded liabilities on their balance sheets.
Discussions about labor issues can take place outside of Florida’s Open Meetings Law, so we don’t know which approach Delray intends to take. The options, though, are easy to identify.
1) Most cities try to change elements of the pension arrangement. This is Boca Raton’s approach. The city, which held a bargaining session last week, has proposed— among other things—lowering the “multiplier” used to calculate benefits, lowering the annual cost-of-living adjustment and eliminating the use of overtime in calculating benefits. Other cities have tried, sometimes successfully, to cap lifetime payouts.
2) Delray Beach also could get out of the pension business by shifting all employees into the state retirement system. Most employees in the Florida Retirement System work for school districts, counties and the state, but the option for cities has become more appealing as those pension obligations have grown. First, however, Delray Beach would have to see if the switch made long-term financial sense. The city backed away this year from a look at contracting with Palm Beach County Fire-Rescue because the numbers were iffy.
3) The nuclear option. Palm Beach stopped taking money from a state-imposed fee on insurance policies that goes to cities with police and fire pensions. (The Legislature created the fee to encourage cities to keep employees out of the state system.) Freed from state constraints that go with that money, Palm Beach then created its own hybrid retirement system that is less like the traditional defined-benefit (set payout) plan and more like a 401(k)-style defined contribution plan. It was nasty, and many police officers and firefighters quit. This seems unlikely for Delray.
Still, with so little time left, the chance of an impasse is greater than it was a month ago. Perfect timing for new Police Chief Jeffrey Goldberg, who took over on Monday.
Boca Del Mar still fighting back
Last week, the Palm Beach County Commission rejected a request to block construction of homes on the former Mizner Trail Golf Course while residents of Boca Del Mar appeal the commission’s June approval of the project.
The result was expected. By the same 5-2 vote that allowed 252 homes on the property, the commission allowed the developer to proceed. Robert Banks, the county’s land-use attorney, had recommended rejection, saying in a memo that state law provides “no automatic stay when a zoning approval is challenged in court.” Banks said he knew of no such stay that a local government in Florida ever had granted.
Don’t be surprised, though, if the developer waits anyway. In his memo, Banks noted, “A developer or property owners who builds while zoning litigation is pending proceeds at their own risk.” Indeed.
The Boca Del Mar Improvement Association, which the group’s attorney says represents 10,000 homeowners in the community just west of the city, contends that the county commission illegally permitted homes on what was open space under Boca Del Mar’s plan—open space that was necessary for approval by the county. In 2002, the Florida Supreme Court upheld a ruling by the Fourth District Court of Appeal that Martin County had allowed construction of apartments too near single-family homes, thus violating the county’s growth plan.
The developer had ignored the lawsuit and built the apartments, which he then had to tear down. Andre Parke, whose firm represents the plaintiffs in the Mizner Trail case, confirmed in an email that if the developer starts work and his clients prevail, they would ask for the county to “uphold the codes” and “facilitate the removal of any construction.” Expect to hear from lawyers before the residents hear bulldozers.
You can email Randy Schultz at email@example.com
For more City Watch blogs, click here.About the Author
Randy Schultz was born in Hartford, Conn., and graduated from the University of Tennessee in 1974. He has lived in South Florida since then, and in Boca Raton since 1985. Schultz spent nearly 40 years in daily journalism at the Miami Herald and Palm Beach Post, most recently as editorial page editor at the Post. His wife, Shelley, is director of The Learning Network at Pine Crest School. His son, an attorney, and daughter-in-law and three grandchildren also live in Boca Raton. His daughter is a veterinarian who lives in Baltimore.
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