“Escape From New York” was a movie in 1997. These days, it’s reality—and the escape is to Boca Raton, Delray Beach and the rest of South Florida.
In Hollywood’s version, Manhattan became a maximum security prison. Because of the COVID-19 pandemic, that’s how some Manhattanites and others see New York as the city mostly has been shut down for more than two months.
I spoke Wednesday with Jared Ringel and Chris Franciosa. They are principal agents with the Atlas Team in the Boca Raton office of Compass Real Estate. They have a combined two decades of experience and specialize in South Florida. However the pandemic has affected other parts of the regional economy, home sales in this area, Franciosa said, are “on fire.”
The sparks first began coming a couple of years ago from New York/New Jersey/Connecticut market. The 2017 tax law, which set a limit on deductions of state and local taxes, already had compelled wealthy people in high-tax states to move to Florida, which has no state income tax. The pandemic, however, has led to what Ringel called “a massive number of phone calls” from people seeking to flee the Northeast.
COVID-19, Ringel said, has become “the new buzzword.” Franciosa said the pandemic has caused people who for years had talked about heading south to start looking. Where the tax law had motivated those with incomes of more than $500,000 a year, Franciosa said, COVID-19 restrictions and the uncertain future of the New York area have spurred many others.
Other factors over many years made this exodus possible. Boca Raton and Delray Beach added jobs and became more than seasonal cities. Technology that now allows some people to work from home means that they can work from anywhere, no matter where their employer is based. Facebook announced this week that the company will make remote work permanent for some employees, to recruit from a wider geographic area.
Meanwhile, the natural amenities remained. Franciosa said that for wealthier Northeasterners wanting a tax haven, the waterfront home in the $2.5 million range “was the sweet spot.” Less affluent COVID-19 immigrants are happy to live farther inland as long as the address is Boca Raton or Delray Beach.
High-rise living has lost some of its allure with virus lockdowns. Florida’s openness thus becomes more appealing. But Franciosa said that they’re also hearing from Californians, with the Los Angeles area still weeks away from reopening. California recently raised taxes on the wealthy.
Half a century ago, South Florida began turning into “the sixth borough” of New York City with construction of Century Village and other projects—such as Huntington Lakes and Kings Point in West Delray—marketed to the middle class. This wave is more affluent and younger, drawn to Boca Raton in part by the reputation of the city’s public schools.
Some of these new buyers make clear that they intend to work from home. A wish for four bedrooms, Franciosa said, expands to five bedrooms or four bedrooms with an office. Low interest rates make the extra cost manageable.
Ringel and Franciosa said the COVID crush has caused bidding wars for homes. The new residents even are willing to pay the full price on rentals while they wait for the right property or build. In addition, the exodus is boosting sales at high-end multi-family projects such as Alina in downtown Boca Raton and Akoya West Boca.
Everyone agrees that the virus will reshape demographics and the economy. In Boca Raton and Delray Beach, that reshaping has begun.
Home sales rise
Coincidentally, Wells Fargo reported this week that sales of new homes pleasantly surprised in April.
After a 13.7 percent drop in March, as COVID-19 restrictions kicked in and layoffs began, sales increased 0.6 percent last month. That’s not much, but compared to other industries, it looks impressive. Wells Fargo analysts said home sales might be a bright spot amid the pandemic.
Can Boca afford Wildflower Park?
Then there was the unpleasant surprise the Boca Raton City Council received during its Tuesday workshop meeting.
The budget for Wildflower/Silver Palm Park is $8.25 million, but council members heard that their version would cost $11 million. Potentially worse, the city is financing the project with money from the one-cent sales tax surcharge. Voters approved it in 2016, with the idea that it would raise roughly $2.7 billion over 10 years.
Though county officials made conservative projections, no one could have envisioned the COVID-19 pandemic and the restrictions that have caused sales to drop dramatically. City Manager Leif Ahnell said there now are questions about “the full amount and timing” of when Boca Raton might get the money allocated for Wildflower/Silver Palm.
And if the council wanted to spring for that “significant increase” of nearly $3 million, there would be “reductions elsewhere” of that amount. Perhaps, Ahnell said, the council could build the project in phases.
Appropriately, the first comment from the seemingly stunned council came from Andrea O’Rourke. Before her election in March 2017, O’Rourke championed the voter-approved ordinance that passed five months earlier. It prevented construction of a restaurant on the Wildflower property at Palmetto Park Road and the Intracoastal Waterway.
The council bought the site in 2009, with the idea of leasing it to generate revenue. When negotiations with Hillstone Restaurant Group stalled, a few homeowners organized a petition drive to get the ordinance on the ballot. The homeowners live across the Intracoastal from the Wildflower property and opposed the restaurant.
Once on the council, O’Rourke led the push for a park that combined Wildflower with an upgraded Silver Palm Park—home to Boca Raton’s public boat ramp—on the south side of Palmetto Park Road. A consultant prepared drawings. The city filed for permits. The consultant came back to the council, which made more changes and requests.
Yet nothing happened. O’Rourke already had complained about the lack of progress, and she pronounced herself “sad, disappointed and blindsided” by the new numbers. A year ago, a sign had gone up, promoting the coming park.
But there was no enthusiasm for an $11 million park, even if the council caused that inflation by asking for more and more pricey features. If you add the purchase cost, the total jumps to $18.5 million on roughly six acres. Despite O’Rourke’s contention that it would a “flagship park,” supporters regularly have oversold the site’s potential.
So the council asked Ahnell to work with the consultant and create something on budget. For that amount, Ahnell said, the city could get a “very, very nice project.” No one bothered to mention that the Wildflower/Silver Palm debacle is happening as playgrounds remained closed.
Many of the players who created this debacle through the deceptive ordinance no longer are active in Boca Raton civic life. Some remain. Their damage continues.
Soccer in Boca
With Gov. DeSantis having lifted the ban on youth sports, the president of the Soccer Association of Boca Raton asked the city council to allow play to resume.
That wouldn’t happen at first, Earl Starkoff said. Teams only would practice for two weeks. If games resume, attendance would be limited and players would social distance even when sitting on the bench. The council took no action.
Boca Council relaxes
Boca Raton City Council members have decided that the COVID-19 crisis no longer compels them to meet each week.
Because so many issues were coming at the city, council members scheduled weekly workshop meetings to discuss how Boca Raton should respond. Council members only can discuss policy in public meetings.
At this point, however, beaches have reopened and the city—like others in Palm Beach County—is evaluating how the Phase 1 reopening is progressing. So council members decided Tuesday that they would resume the usual twice-per-month schedule. The council also will observe the usual summer schedule and meet just once in July and August. If events warrant, the council could hold a special meeting.