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Hollywood, sandwiched between Miami and Fort Lauderdale, has seemed quaint and sleepy compared to its big-city neighbors, despite impressive community assets.

The 30-square-mile municipality’s amenities include an airport, a walkable downtown, 7 miles of oceanfront and a beachfront pedestrian walkway called the Broadwalk that’s lined with independent restaurants and hotels. Inland are golf courses, residential neighborhoods and the Seminole Hard Rock Resort & Casino. Port Everglades is partly within the city limits.

“Soon, a new wave of development is poised to transform Hollywood. The city currently has $1.2B in real estate development planned or under construction,” City Manager Wazir Ishmael said during a Bisnow webinar last week.

Ishmael outlined some of the major projects around Young Circle, the downtown city center with a 9-acre outdoor amphitheater and arts park, where Hollywood’s main east-west corridor meets north-south artery US 1.

On the southwest quadrant of Young Circle, the $60M Block 40 project is planned from GCF Development. It will have 166 residential units and 103 hotel rooms. On the southeast quadrant, a mixed-use project by BTI Partners will bring 366 luxury rental units and ground-floor retail. The east side of Young Circle is slated for matching towers with two levels of restaurants and retail, also by BTI. South of Young Circle, Hudson Village, a 108-unit mixed-income affordable project by Housing Trust Group, broke ground last year, and Pinnacle at Peacefield, a senior housing community, was recently completed.

Further east, on Hollywood Beach, Related Group last year completed the 41-story Hyde Beach House on the Intracoastal Waterway. In 2019, voters approved a $165M general obligation bond to finance more than 30 projects.

 “Beachfront properties farther south in Miami-Dade County are bloody expensive,” said Continuum Co. Chairman Ian Bruce Eichner, who has been looking to develop a 4-acre beachfront site in Hollywood. “But in Broward County, there’s still an opportunity in Hollywood for a beach that is certainly as beautiful as anything south, at a different price.”

Webinar moderator Raelin Storey, Hollywood’s director of the Office of Communications, Marketing and Economic Development, said the city has two opportunity zones — one downtown and one between Sheridan Street and Stirling Road near I-95. Storey said that over the past few years, the city adjusted its zoning to encourage development along its commercial corridors.

Keith Poliakoff, partner at law firm Saul Ewing Arnstein & Lehr, said that his client, BTI, is about to break ground on Block 58, formerly known as The Hollywood Bread Building in the downtown opportunity zone. It’s planned to include approximately 366 apartment units with 15K SF of retail.

“Construction prices had risen about 10% since the project got underway, but the opportunity zone designation was helping them draw investment to offset the increased costs,” Poliakoff said. “If you do it right, that savings, that potential tax savings in the future, can actually offset the higher construction price.”

Inigo Ardid, co-president of Key International, which owns the Eden Roc and Marriott hotels in Miami Beach, has been exploring possibilities in Hollywood and said he was very bullish on leisure hospitality.

“What we’re seeing is in places that people can get to, mostly drive markets, the hotel markets have come back stronger than ever… Our average stay has gone up well in excess of 60% from where it was before,”  said Ardid.

Related Group Managing Director Eric Fordin said that the once-stunning but long-neglected Hollywood Beach Resort might be redeveloped in time.

“We had the majority of the unit owners under contract to redevelop that property,” Fordin said. “But the ownership structure is complicated. Not only is there a condo-hotel but an estate owns the land and the parking garage. A tentative deal he’d made with it fell through at the last minute.

That’s not all that makes it complicated.

“There’s a separate owner who owns the commercial unit on the first floor and a separate owner that owns the commercial unit on the second floor, plus 360 unit owners and 36 timeshares,” Fordin said.

But that’s not to say the project won’t happen.

“It’s a site that I am laser-focused on,” Fordin said.

Fordin lives in Hollywood himself. He said some residents love Hollywood’s slow vibe, independent stores and two-story motels that cater to Canadian snowbirds. They don’t want Hollywood to be like Sunny Isles, lined with tall towers that create a canyon-like feel. But the quaintness comes with blight.

“Hollywood is always going to be more of a boutique-friendly development opportunity experience,” Fordin said. “I believe once we’re able to assemble some properties along the Broadwalk, you’ll see some great development impacts for the city, but it’s a matter of really aligning all the stars for those things to take place.”

The panelists called for more public-private partnerships, but that hasn’t always worked out great for Hollywood’s taxpayers. For a Margaritaville Resort developed in 2015 by developer Lon Tabatchnick’s Lojeta Realty and Starwood Capital Group, the city invested $23M in the development and left the city potentially liable for $84.3M in bond payments for a connected parking garage, the Sun-Sentinel reported.

 

Source: Bisnow

shipping containers

West Palm Beach’s next apartment complex will be made of shipping containers, piled three stories high.

Arts on Broadway rendering

The $9 million project, Arts on Broadway, promises 52 apartments, 27 of them workforce housing, for people near or below the area’s median income. Rents are expected to range from about $900 to $1,400.

At Broadway and 28th Street, the apartments will be a couple of blocks from trendy Northwood Road.

“The project includes artists among its target market and will offer shared studio space.” said developer Craig Vanderlaan, executive director and co-founder of nonprofit Crisis Housing Solutions. “Singles and young families also are potential tenants. We want to help the artist community here in Northwood. We also want to help the workers in that area, if they work in shops or restaurants or local hospitals, or if they’re teachers or in law enforcement. One problem is that folks that live there can’t afford to live there in decent housing. If we can create affordable housing in that community, we can really improve the lives of a lot of people.”

Vanderlaan said his firm got wind of the shipping container concept from family friends in The Netherlands. They’re common there, in Britain and elsewhere. But housing made of insulated, reconfigured containers has been gaining currency in the U.S. in recent years, as well.

“Using metal containers as dwellings in hot South Florida won’t be a problem,” Vanderlaan said. “The concept is employed for U.S. military in Afghanistan, where temperatures soar to 125 degrees. Arts on Broadway is believed to be the first multifamily container project in Palm Beach County.”

The project will include one- and two-bedroom units, ranging from 640 to 960 square feet.

“It’s basically the same size that a standard apartment would be,” Vanderlaan said.

The project is taking advantage of the fact that it is located in a designated Opportunity Zone, which allows investors tax advantages. The city is assisting with financing. On Monday, November 18, the city commission is scheduled to vote on an additional $300,000 in gap financing. The city owned part of the North End site.

“We’ve been wanting to do something with that property,” said Assistant City Administrator Armando Fana, formerly West Palm’s housing director. “That Broadway corridor is a target area for us and there has hardly been any redevelopment in the Broadway Corridor. If all goes well, construction should begin in summer 2020 and would be completed a year later.”

What if someone mistakes your home for a real shipping container and you wake up at sea? Fana, as ever, was upbeat.

“Then you get a free cruise,” Fana said.

 

Source: Palm Beach Post

cash

When the Treasury Department released its most recent guidance on opportunity zones in April, investors were relieved: The rules left a lot of leeway for taking advantage of the program’s tax breaks.

In Fort Lauderdale, that’s been translating into deals this spring.

The rest of the year should be busy as well, because program rules require people who harvested gains from hedge funds and partnerships in 2018 to reinvest them in opportunity zones by the end of June. And to reap the maximum benefit from the program — a 15% reduction on taxes — money has to be invested in opportunity zone funds by the end of 2019.

“The new proposed rules have been a catalyst for deals in emerging neighborhoods all year,” said Native Realty CEO Jaime Sturgis. “Native Realty is working on developments and property assemblages in zones in Flagler Village and the 13th Street and Sistrunk corridors. The latest IRS guidance made some significant clarifications and helped the local market become more comfortable, and even more bullish, about the program.”

Sturgis will be a featured speaker at Bisnow‘s upcoming Opportunity Zones event in Fort Lauderdale June 20. Other speakers include BH3 co-founder Daniel Lebensohn, Merrimac Ventures Senior Vice President Dale Reed, Affiliated Development President Nick Rojo and Jorge Gomez-Moller, general counsel for Driftwood Acquisition & Development.

Miami-based Driftwood, a private firm specializing in hotel assets, this month launched its initial qualified opportunity zone fund, Driftwood QOF, with a target raise of $50M. The firm is already invested in two opportunity zone projects: a joint venture to develop a 218-room, dual-branded hotel called Home 2/Tru by Hilton in Fort Lauderdale, and the redevelopment of a 10-story office building into a hotel in Wilmington, Delaware.

“People are out there looking for deals,” Rojo said. But he is wary that “land sellers are unrealistic as to the actual benefit of the program.”

Rojo said Affiliated Development had a deal in the works for years to build a workforce housing apartment building in the Sistrunk neighborhood; it just so happened that it fell into an opportunity zone when the program was announced.

Affiliated closed in April without waiting for the latest round of regulations. Its 220K SF building is beginning construction and should open in late 2020.  Rojo said his deal was complicated because it involved Community Redevelopment Authority grant money, but that some of the things he learned as they hit speed bumps in the development process was that “most investors from sophisticated family offices aren’t going to invest money in a blind pool.” He said his investors each set up their own LLCs, which functioned as individual funds, and then collectively invested in the opportunity zone business.

In FATVillage, a few well-known Fort Lauderdale names announced this month that they consolidated 5.2 acres in downtown to capitalize on a parcel that is in an opportunity zone. Alan Hooper and Tim Petrillo, who are co-founders of Urban Street Development (behind FATVillage projects Avenue Lofts, Foundry and Mill Lofts) and partners in The Restaurant People (Yolo, Boatyard and more), announced they forged a strategic partnership with Doug McCraw and Lutz Hofbauer, who are credited with creating the FATVillage brand and its art walk.

Without disclosing many specifics, Hooper said in a statement that they have retained consultants and architects, and will “combine food with art and technology (FAT) and develop a neighborhood where people and businesses of all sizes can find a place to create and collaborate, to live and socialize.”

The Bisnow Opportunity Zones event will be held at Sistrunk Marketplace & Brewery, a long-awaited, 40K SF food hall/brewery/meeting space with a DJ academy, cooking classes, and art and music events.

 

Source: Bisnow

The Delray Beach Community Redevelopment Agency approved plans for AltaWest, a $100 million mixed-use project on West Atlantic Avenue.

The CRA board OK’d the sale agreement with BH3 Management for 7.4 acres at 600 to 800 West Atlantic Avenue. The developer has 30 days from the date of obtaining a construction permit to close on the land, according to the South Florida Business Journal.

Aventura-based BH3, led by Dan Lebensohn and Greg Freedman, was the winning bidder of six groups for the public-private partnership project. The development will include 43,000 square feet of ground floor retail, 21,600 square feet of professional office space, a 33,000-square-foot grocery store, 165 residential units totaling 272,242 square feet, 744 parking spaces, about 45,000 square feet of public space called “Frog Alley” and up to 30 workforce housing units, the latter of which includes 18 affordable housing units being built on an adjacent site.

The site is in an Opportunity Zone, which means the developer can qualify for a major federal tax incentive for developing the project. The federal program allows developers and property owners to defer and possibly forgo paying some of their capital gains taxes, or taxes resulting from the sale of certain assets.

While BH3 was the only bidder to not offer money in exchange for the land, the company said it plans to spend the most on development.

BH3 has to put $250,000 into escrow. The city commission still needs to grant the project final site plan approval.

 

Source: The Real Deal

Interstate Industrial Park

A three-building portfolio of industrial property within an Opportunity Zone in Riviera Beach sold for $11.7 million, or $73 per square foot.

When the sale closed, the buildings were 98 percent leased to tenants including the City of Riviera Beach, Saf-Glas and Palm Beach Laundry. Interstate Industrial Park Holdings, LLC, led by Harry Spitzer, bought the three-building portfolio from The Silverman Group of Palm Beach.

The 160,302-square-foot portfolio includes buildings at 6555 and 6557 Garden Road and 3541 M.L.K. Jr. Boulevard in Riviera Beach. The one-story building at 6555 Garden Road was developed in 1987 on a three-acre site. Two one-story buildings at 6557 Garden Road and 3541 M.L.K. Jr. were developed in 1968 on a two-acre site.

Located equidistant to the Interstate 95 interchanges at 45th Street and West Blue Heron Boulevard, the industrial buildings are within the Census Tract 13.02 Opportunity Zone. Investors in Opportunity Zones can defer payment of federal taxes on capital gains.

“The fact that the assets are located in an Opportunity Zone, potentially affording tax advantages, drove further interest from potential buyers,” Scott O’Donnell of brokerage firm Cushman & Wakefield said in a prepared statement.

Cushman & Wakefield’s Capital Markets Team, along with Robert Smith and Kirk Nelson, negotiated the sale of the three buildings on behalf of The Silverman Group. Adam Robbins of ARC Equities, LLC, represented Interstate Industrial Park Holdings, LLC.

 

Source: The Real Deal