Boca National Status Report, the Real Estate Round-Up and Where Is BocaWatch?

Boca Raton’s new golf course could be ready for play in September of next year.

At this afternoon’s meeting, the Greater Boca Raton Beach and Park District board is expected to approve the plan for what will be Boca Raton National on the site of the former Ocean Breeze course. According to Art Koski, the district’s executive director, the first phase will include construction of the 18-hole main course, the driving range and the Par 3 course.

That initial phase, Koski said, will cost $14 million. He declined to give a price for the second phase, which will include the clubhouse and any other structures, because he promises “a big surprise” that will “significantly reduce the cost of the clubhouse.”

Boca Raton City Council members and city administrators have waited for months from the district for the final cost estimate for Ocean Breeze. That’s because the city expects the district to ask at least for more bond underwriting—the city underwrote bonds for purchase of the land—and perhaps to pay a portion of the construction.

After today’s meeting, Koski said, he will send Deputy City Manager George Brown an “overview” of the plans and the cost “in anticipation” of another meeting between the council and the district board. The two sides need to schedule that meeting, because things likely will start happening soon with the course.

Koski said the district would seek, over the next 30 days, to qualify golf course construction companies and choose one. The district has applied only for demolition permits, to tear down the old hotel where the clubhouse will stand. City review of the construction and design plan, Koski said, could take five months. He bases that on what Brown has told him, adding that Brown said the staff would try to shorten the time.

Golfers playing the 18-hole course would get there from the clubhouse through a tunnel under Second Avenue. Koski said the district had considered a bridge, but then came the collapse of a pedestrian overpass near Florida International University in Miami. The tunnel will be about 100 yards south of where Clint Moore Road crosses Second Avenue. Golf carts will be stored under the clubhouse. A maintenance building will be farther west, near Interstate 95, to keep it away from residents of the Boca Teeca development that will surround the course.

Koski said, “We are very anxious to begin construction.” The district and the city must coordinate schedules to provide golfers a smooth transition from the existing, western municipal course on Glades Road to Boca National. Current city employees at the golf course will become district employees at Ocean Breeze.

“This will be a beautiful course,” Koski said. He hopes it can open in 19 months.

New Director

Also on today’s beach and park district meeting is a contract for Briann Harms to become the agency’s first full-time executive director in nearly seven years.

Koski got the title on an interim basis in 2012 after Robert Langford resigned, and things just stayed that way. But Koski maintained his private law practice. At one time, he also was the district’s attorney and project manager.

Different people now fill those two jobs. Koski will stay on as a contractor, though, to oversee construction of Boca National. That makes sense, since he’s overseen every aspect of the project to this point.

“I either bring it in on time and under budget,” Koski said, “or I move to Delray Beach.”

Still waiting though…

During Monday’s workshop meeting, Boca Raton City Council members expressed frustration over not having those Ocean Breeze/Boca National numbers that Koski told me the district would provide to the city this week.

The frustration came during discussion of a wrinkle in the $65 million sale of the existing golf course to GL Homes. Negotiations among the city, GL and the county over a cell tower have caused the city to extend the inspection period several times. The county is involved because the course is outside the city limits, north of Glades Road and just west of the Florida Turnpike.

According to a staff memo, all parties are near agreement for the city and county to share the tower. Now, though, GL wants to extend the closing from May of this year to October of 2020. Resolution of the tower issue required an amendment to GL’s site plan, which the county commission had approved in October. GL also would like the cell tower to be operating when it starts work.

GL Vice President Larry Portnoy said that closing schedule would align with the beach and park district’s plan to have Boca National open one month earlier. The comment further irritated council members because they were getting information from Portnoy, not the district.

The council took no vote on the closing. But the staff memo recommends an extension only to Oct. 31, 2019, even though Portnoy said the company would raise its hard deposit from $2 million to $7.5 million for the extra year.

City Manager Leif Ahnell argued strongly against a prolonged delay. The beach and park district would be asking for money, which is not in the city’s budget. Delaying the closing that long then would cost the city a year’s worth of interest on the $65 million. “We’re getting hit on all fronts. We need to close.”

Office Depot update

Office Depot issued a dividend last week. It wasn’t much—.25 cents per share—but it made news because not that long ago some analysts didn’t think that the Boca Raton-based company had a pulse.

In early 2015, Office Depot—the No. 2 office supply retailer—and Staples—No. 1 in the category—tried to merge. Office Depot previously had bought No. 3 Office Max. With Staples, Office Depot argued that only further consolidation would protect the combined company from online competitors, mainly Amazon.

Fifteen months later, however, a federal judge blocked the $6.3 billion merger on the grounds that it would reduce competition for business customers. For Boca Raton, the news meant that the headquarters wouldn’t shift to Staples’ home in Massachusetts. But to keep the headquarters in Boca—and with it the estimated 2,000 employees who work there—Office Depot still had to survive.

In addition to the dividend, there’s reason for cautious optimism. Most recent analyses of Office Depot stock have issued a Hold recommendation. November earnings beat expectations. That same month, the Office Depot bought back $100 million in stock. Analysts consider the company fiscally sound, with manageable debt.

CEO Gerry Smith arrived in January 2017. He stated that Office Depot would seek focus more on business-to-business transactions, not store sales. To that end, the company last year spent $1 billion to acquire CompuCom Systems. It provides information technology services to clients that, according to a news release, include seven of the top 10 retailers in North America.

Office Depot recruited Smith from Lenovo, itself a tech company. He described the acquisition as the beginning of “a longer-term journey to transform Office Depot from a traditional provider of primarily office products into a broader product and business services platform.” Smith wants to create a unique “omnichannel platform that offers services, products and solutions focused on businesses of all sizes.”

Indeed, the only down note in that November earnings report was a 6 percent drop in store sales. The company has about 1,400 retail locations. One reason could have been that Office Depot has been closing what the company considers underperforming stores.

Other aspects of Smith’s plan include BizBox and Workonomy, both aimed at easing purchases for businesses. Office Depot has placed Workonomy Tech Services kiosks in about 150 stores.

That November report caused a temporary 26 percent increase in Office Depot’s share price. The next earnings report should come at the end of the month.

Commercial real estate round-up

Renderings of the former Office Depot site project

The deal for Office Depot’s old headquarters site in Delray Beach was Palm Beach County’s largest commercial land deal for the fourth quarter of 2018, according to Avison Young.

The land on South Congress Avenue will become a mixed-use—heavily residential—project after city commission approval in December. Four entities paid $33 million for the 42 acres.

Right behind was the $31 million that Menin Development recently paid for the ONE 10 Plaza on Atlantic Avenue. According a news release, ONE 10 Investment spend more than two years renovating the building, whose tenants include restaurants Rocco’s Tacos and L’Aquafina. And in November, Breakers Capital Partners and ABR Partners bought The Atrium at Broken Sound for $21 million. Coincidentally, it’s a neighbor of Office Depot’s Boca Raton headquarters.

Boca Raton’s commercial leasing market also was very active at the end of 2018. The biggest deal was Modernizing Medicine’s move to its larger, 94,000-square foot headquarters on the Boca Raton Innovation Campus (BRIC), south of Yamato Road and west of Interstate 95.

In 2017, Modernizing Medicine announced an expansion that the company said would add 838 jobs by 2022 and bring the company an incentives package from the city, county and state. According to a company spokeswoman, Modernizing Medicine already has added 200 employees and envisions a headquarters nearly double its current space.

Two other deals brought Vitacost—35,000 square feet —and National Holdings Corp.—18,500 square feet—to BRIC. TherapeuticsMD and J.G. Wentworth Home Lending went to the nearby 951 Yamato Road office building. For all the focus on downtown, the Avison Young report is a reminder that the northwest sector is Boca Raton’s economic engine.

And what happened to BocaWatch?

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Al Zucaro

The BocaWatch website remains on the “sabbatical” that publisher Al Zucaro announced last September, after his 30-point loss in the mayor’s race to Scott Singer. I had heard that Zucaro considered selling BocaWatch, and the aforementioned Art Koski said Monday that he had been approached “by some of some of the workers” to provide money for a sale.

Koski added, however, “I was told that the owner was not selling the publication. No details were discussed.”

Roger Stone at Tiger Bay

Republican dirty trickster Roger Stone faces multiple federal charges related to Special Prosecutor Robert Mueller’s investigation of Russian involvement in 2016 election. Yet he will be welcome Wednesday at the Gold Coast Tiger Bay Club, which meets at City Fish Market on Glades Road near the Florida Turnpike.

This would be the same Tiger Bay club that in 2016 welcomed then-candidate Donald Trump’s butler at Mar-a-Lago who had written on Facebook that the military should hang President Barack Obama for treason. Now, as then, a Tiger Bay representative claimed that the appearance is all about having a wide-ranging political discussion.

But the first response the representative gave to my question about why the club invited Stone was more telling. The event, he said, “is sold out.”

Congratulations in order

Boca Raton City Councilman Andy Thomson is a father for the fourth time.

Charlotte Grace Thomson arrived two weeks ago. The councilman reports that Charlotte and her mother, Joanna, are “home and doing great.” Thomson has matched his colleague Councilman Jeremy Rodgers, also a father of four.

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