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September 2, 2010 |
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| June 25, 2004 |
By: Review staff |
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Barbara Salk is vice president of Related Group in Palm Beach County
Photo by
Philippe Jenney
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esidential infill projects can be chancy, especially for the first developer to break ground. Related Group of Florida took a risk two years ago when it announced the Slade condominium project on North Flagler Drive in West Palm Beach. The neighborhood had seen only two major residential projects in the previous two decades and was largely walled off from the rest of the city by Good Samaritan Hospital to the south and the heavily commercial Dixie Highway to the west.
The bet appears to be paying off. All 200 units in the 17-story project are under contract. In addition to Slade, Related is also building Prado, which will have 304 units priced at $125,000 to $500,000. Both Prado and Slade should be completed in the first quarter of next year.
This year, four more developers have purchased parcels further north on Flagler with plans to build condos and townhouses over the next several years.
The Daily Business Review sat down with Barbara Salk, vice president of Related Group in Palm Beach County, to talk about how the Miami-based company examines opportunities and weighs risks for urban infill projects. This is an edited transcript of that conversion.
What attracted Related to the Slade site? It’s next to a medical building in an area that has few services and an impoverished neighborhood just to the west.
There wasn’t any available land near CityPlace, so we had to look north. We saw this as a waterfront opportunity and we wanted to capture that while land prices were still decent. To build the Slade today versus two years ago would be very hard, with land prices having gone up so much. One site just north of the site sold recently for $30 million [to Mercogroup International of Miami Beach], and we remember when it was $10 million.
So you were looking to get in first.
Yes. If you get in first, you can offer attainable prices, and that’s always been our trademark. We needed to develop a product that was more medium priced. We were one of the first in Sunny Isles Beach and also south of Fifth Street in Miami Beach.
How do you mitigate the risk of being the only developer in an area?
A lot of it is value. We offered units in the $200,000 to $600,000 range, and that market niche at the time had not been tapped.
But when you’re first in an area, there’s little to recommend it. Along North Flagler Drive, there are no shops and the only recreation is a pedestrian path along the Intracoastal Waterway.
We try to establish a neighborhood. For that, you need enough land to build on and to come up with a retail component based on who would support it.
We look for a retail mix that serves the tenant base and will draw people to the area. Beside E.R. Bradley’s on Clematis Street, where else on Flagler Drive can you can sit and look at the water? We think that Good Samaritan Hospital will feed off of our cafe, as will the Villa Del Lago condominium building next door and Flagler Pointe [a condo conversion] two blocks away.
Does that leave Slade and the other planned waterfront projects isolated? How does North Flagler connect with the rest of West Palm Beach?
This is an extension of downtown, two miles from CityPlace and one mile from Clematis Street. And it’s just over the bridge from Palm Beach.
It’s just more commercial, so it is dead at night. The neighborhood needs a 24-hour feel. Who wants to live next door to a dark commercial building unless you have other condo complexes and they all feed off each other from a traffic and lifestyle aspect?
So who would buy into this type of project? Would people want to live next door to a hospital and doctors’ offices?
For Slade, I thought there might be a lot of young doctors buying, but that really hasn’t happened. They may a year or two from now. A lot of buyers are second-home buyers from New York and a lot of young lawyers who work downtown who wanted a place on the waterfront but couldn’t afford it.
Besides an opportunity to be first in an overlooked neighborhood, what else does Related look for in a site?
We love marinas. At the Moorings at Lantana and Marina Village in Boynton Beach, there hadn’t been a lot of development in a long time. Those projects are a mix of townhouses, retail, high-rise condos and dock spaces. There’s a whole waterfront aspect. Those projects service boaters who want to dock where they live, eat on the waterfront and have their friends visit by boat.
Does Related try to do it all itself, or is there a role for the public sector?
It depends on each community. With the Slade, the free trolley that now runs between Clematis Street and CityPlace could play an important part here. If the route were extended to North Flagler, you could hop on the trolley to CityPlace and come back home here. That would be fun, and it brings neighborhoods together. If it happens, that’s great.
Just to the north and west of Slade, you have the Northwood neighborhood, which is undergoing gentrification. Its business district has yet to take off. How do waterfront projects like Slade connect with that area?
Northwood will help anchor this area. The people of Northwood looked at Slade as an advantage because this infill project will connect residential to commercial. The commercial development around here cuts off people from Northwood, so we are providing a necessary residential link.
You can’t always be on the water, as you’ve found with the Prado project. How do you approach that development?
As land prices go up, you may have to go off the waterfront to do a comparably priced project. With the Prado, you’re one block off the water and one block from CityPlace in an area that’s becoming an arts district again. We’re going to create an artwork walk between the Prado and CityPlace. As a result, you’ve got more of a village location, like south Miami Beach.
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