A 400,000-square-foot office building could be developed in downtown West Palm Beach if New York-based Cohen Brothers Realty obtains approval to lease a municipal site.
On April 20, the city’s Community Redevelopment Agency will consider approving a lease with the developer, led by Charles S. Cohen, for the 2.4-acre property at 801 S. Dixie Highway. It’s often called the “tent site” because the CRA has set up tents there for special events.
The process began May 2019 when the CRA accepted a letter of intent from Cohen Brothers Realty to start negotiations. The terms of the deal are now hammered out.
The proposed contract says the developer would build at least 400,000 square feet of Class A office space, up to 1,800 parking spaces, and retail space. The project must obtain at least silver-level LEED certification for green building practices and have double-sized sidewalks.
Allison Justice, interim director of the CRA, said no preliminary site plans or renderings have been submitted. It would be up to the city commission to approve the development at a later date.
Under the proposed contract, Cohen Brothers Realty would pay $1.03 million in base rent, with payments commencing when the building obtains its certificate of occupancy. The 49-year lease would have two extension options of 25 years each. The rent would be adjusted annually based on the Consumer Price Index. In addition, the rent would be recalculated every 25 years based on a new appraisal.
For the first 10 years of the lease, the developer would have the exclusive right to buy the property from the CRA.
While the cost of the project wasn’t included in the contract, it was written to provide a significant amount of business to local and diverse firms. The development costs must be allocated to small businesses (15%), the local workforce (10%), minority/women-owned business enterprises (5%), and service-disabled veterans businesses (5%).
Charles Cohen couldn’t immediately be reached for comment. He’s working with Pelli Clarke Pelli Architects and attorney Brian M. Seymour.
After a decade of no activity, the office construction market in downtown West Palm Beach is booming. According to the first quarter report from CBRE, there was 683,095 square feet of office space under construction in the city. The bulk of that is in two projects by the Related Cos. and Palm Beach billionaire Jeff Greene. The city had a 14.6% office vacancy rate, with negative absorption of 19,040 square feet in the first quarter.
The timeline submitted with the proposed agreement says approvals would take 18 to 24 months. The developer would have 60 days within obtaining building permit approval to start site work, 90 days after completing site work to start vertical construction, and 36 months to finish construction.
Source: SFBJ
