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July 29, 2010 |
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| September 27, 2007 |
By: Thomas Bird |
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Northwest Southern Boulevard and Military Trail
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irport managers are counting on higher demand for warehouses than homes west of Palm Beach International Airport as they wrap up a property buyout program that started more than eight years ago.
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Palm Beach County has purchased all but about 20 of 327 targeted properties in a 109-acre swath in a venture that is part noise abatement and part economic development.
The county is pursuing land use and zoning changes for the buyout area bounded by Southern Boulevard on the south, Military Trail next to the airport, Haverhill Road on the west and a canal on the north.
The parcels are primarily zoned for low- and medium-density residential uses. The county has hired consultant Kilday & Associates to draft a site concept plan for the area to be rezoned for transportation and utilities, which would allow industrial uses.
County commissioners are tentatively scheduled to vote on the land-use changes in November. The state Department of Community Affairs and the Treasure Coast Regional Planning Council already have reviewed the proposal.
An ideal result for the county would be for the land to serve as an industrial hub with flex office and warehouse space, said Jerry Allen, the county’s airport planning director.
The county plans to take bids to lease the land to a master developer, who would sublet individual parcels.
“The decision we will make is how far we will take this as a department and at what point do we turn it over to a master developer,” Allen said. “One thing we found on other parcels is, if we are trying to lease the property out, people interested in leasing would like to be taken as far through the process as possible. It eliminates risk.”
The county Airports Department plans to issue a letter in the next few months seeking a show of interest from developers. The construction timetable and phases would be determined by the master developer, he said.
The biggest demand for development in the airport’s flight path is “far and away” industrial, Allen said. “It makes sense to use the land in close proximity to the airport for that.”
Most of the remaining properties the county is trying to buy are quarter-acre single-family lots totaling less than five acres. A few vacant lots are included in the mix.
Reasons for owner reticence range from wanting to wait for the region’s housing prices to pick up to holding off for personal reasons.
“Some of the [property owners] want to be bought out maybe a couple of years from now,” Allen said. Others might “have a child still in high school or want to retire in a year or so. There are different situations in each case.”
The county could choose to develop around the holdout properties. Allen said most of the remaining parcels have road frontage and “could reasonably stay put.”
But county project manager John Rupertus acknowledged eminent domain could be used to secure the remaining properties.
“If push comes to shove, we’ll go to a condemnation hearing,” Rupertus said.
Purchase prices have been “all over the place” because the department has been buying parcels since 1999, Allen said.
For instance, one parcel was bought in 1999 for $100,000, while a similar-sized parcel cost twice as much in 2006, reflecting appreciation during the region’s housing boom.
Most of the properties are “on the low end” for Palm Beach County in the $180,000 to $220,000 range, Allen said. The department’s latest significant purchase was a 2.39-acre vacant lot with frontage on Wallace Road for $675,000, or $6.50 per square foot.
A seven-acre parcel owned by the county within the buyout zone at 531 N. Military Trail is worth $3.01 million, or about $429,988 an acre and $9.87 per square foot, according to the county appraiser’s office.
A single-family home west of the airport but outside of the buyout area on one-third of an acre at 4925 Club Road sold in September for $249,900.
The value of the targeted properties is clearly diminished by proximity to the airport, said residential broker and appraiser Nicolas Massimini.
“I would consider residential land that close to the airport less valuable because of the flight pattern,” he said. “The planes can rattle the shoulders of people living on the eastern border [of the buyout area]. It borders on unbearable.”
Southern Boulevard is in the midst of a $29 million widening project taking it to eight lanes. Lining it with industrial users would put Palm Beach more in line with the area west of Miami International Airport, Massimini said. Industrial complexes and a few retail centers filled the acreage west of the Miami airport as the area grew, while older homes sit to the north and east.
If the Palm Beach County Commission approves the land-use changes as expected, commercial broker Neil Merin expects the properties to increase in value as industrial land.
“I would value property in the neighborhood of the land area at $7 to $10 per square foot,” the chairman of NAI/Merin Hunter Codman said. “Let’s say after the county does what it wants to do with it they net 75 acres. They could have land worth in the range of $30 million if they want to sell it or do long-term ground leases.”
But he said, “A conceivable fly in the ointment could come from concurrency” requirements, notably state mandates to build infrastructure like roads, water lines and drainage before buildings can go up.
Merin also cautioned the county has a history of asking for more than fair market value in requests for proposals.
“They once put an RFP out for 19 acres across from [JFK Medical Center], and the minimum starting bid was too much for anyone to bid on. Forty-two people submitted bid packages, but nobody bid,” he said. “Hopefully they learned from that.”
Northwest Southern Boulevard and Military Trail photo by Melanie Bell
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