The Grand, an apartment complex planned for West Palm Beach, was awarded grants, loans and tax refunds from the city of West Palm Beach and its CRA. The Grand will feature apartments for people who live just below and above the average median income, providing badly needed workforce housing.
Workforce housing is coming to West Palm Beach’s Northwest Historic District.
On Monday, the city of West Palm Beach and the city’s Community Redevelopment Agency agreed to provide a package consisting of a loan, a grant, and tax rebates for The Grand, a planned eight-story apartment complex.
The Grand, by Fort Lauderdale-based Affiliated Development, will be built on a 2.5-acre property bounded by Rosemary and Sapodilla avenues, on the east and west, and Third and Second streets, on the north and south. In June, Affiliated Development paid $4.3 million for the site, which featured 20 parcels of land in the northwest section of downtown West Palm Beach.
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Affiliated plans to build 289 apartments for residents of mixed incomes, including people who earn just below or above the area’s median income.
Units will start at around $1,100 per month.
At a time when apartment rental rates are becoming too expensive for the average working resident, “this is a major victory for housing,” said Jeff Burns, Affiliated’s chief executive, in an interview on Tuesday.
In addition, the deal’s structure serves as a framework for future projects. “This could be a model moving forward,” Burns said. “A lot of people are going to be looking at this.”
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Affiliated will restrict one-third of the apartments to people making no more than 100 percent of the area’s median income. Another one-third of units will be for people making no more than 140 percent of the area’s median income. The rest will have no income restrictions.
Affiliated’s decision to include mixed incomes in The Grand is deliberate.
“We don’t want to segregate people based on one income,” Burns said. “We want this to be for people of various income levels, to have the same amenities and same finishes, and nobody knows who makes what.”
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The Grand will feature luxury amenities such as a resort-style pool with cabanas, plus a dog park, movie theater, fitness facility and concierge service.
People who work as teachers and first responders will get a first look at the units when The Grand is completed sometime in 2022, Burns said. Construction is slated to start late next year.
Affiliated’s interest in building workforce housing comes at a time when rents on newly opened apartment buildings downtown are sky-high. Rents at new buildings such as Park-Line, The Alexander and Broadstone City Center are at $2,000, $3,000 and more per month, putting these luxury residences out of reach for many would-be renters.
Burns said he was able to assemble 86 percent of the project’s $71 million estimated cost through private sources.
But the company’s expertise in tapping government, community and non-profit sources of money played a role in helping complete financing.
“The reason we wanted the city and the CRA for the gap funding is because we have a gap,” Burns said, “and in order for us to offer these restricted rents, we have to fund the gap.”
On Monday, the West Palm Beach CRA agreed to provide a $9 million grant to The Grand. For 13 years, it also will return 50 percent of taxes it collects on the property, an amount that cannot exceed $5 million. In addition, the city commission approved a $1 million loan for the project.
At the Monday meeting, 14 members of the public spoke, including two former National Football League players and a former city commissioner.
Several people who live in the area were skeptical about the project and urged the commission to defer voting on it.
Some worried about gentrification and their property taxes increasing. “We get all the promises, and then we get pushed out,” one man said.
Others, however, praised Affiliated for taking a financial risk and provided much-needed workforce housing. Former NFL player and Palm Beach County native Darren Studstill was among them.
“Let’s move forward,” said Studstill, who owns property north of the project. “You’re the new team in town. Shoot the shot. Right now. Yes, now. Not tomorrow.”
Former Dolphins football player Anthony Fasano also attended the meeting. Fasano, of Whitaker Realty, represented Rosemary WPB LLC, the Affiliated entity that purchased the properties.
Burns said The Grand’s location was attractive because it is near the Brightline passenger rail station and employment centers such as the police station and courthouse complex.
Nearby Clematis Street, and the revitalization of the historic Sunset Lounge jazz venue, also attracted Burns to the area, he said. He predicted The Grand would further galvanize development in the Northwest section of the city.
The Grand’s name was inspired by the Grand Theatre, which operated as an African-American theater from 1930 to 1955 on a nearby property.
The Grand will be Affiliated’s second Palm Beach County development. In Lake Worth Beach, Affiliated is building the MID, a 230-unit luxury apartment complex planned for 1601 N. Dixie Highway.
Larry Keller, special to the Palm Beach Post, contributed to this report.