The Related Cos. eyes K-12 school as sweetener as deals dominate downtown West Palm growth

The lead developer in West Palm Beach said the city’s dizzying growth will continue with corporate pot sweeteners he is crafting such as the creation of a new K-12 school catering to executives and the up to 15,000 employees expected to move to the county over the next five years.

Related Cos. President Ken Himmel touted his group’s already imposing portfolio of Class A office space and residential buildings in downtown West Palm Beach and teased new tenants including First Republic Bank and Miso Japanese Restaurant at a Thursday luncheon hosted by the Business Development Board of Palm Beach County.

The iconic New York restaurant Harry’s is expected to open this year in Related’s new building, 360 Rosemary, where Goldman Sachs will also reside.

Himmel, whose New York-based development company owns and manages The Square (formerly CityPlace), called the makeover of downtown “transformative,” “magical”, and a “renaissance.”

“In the next 24 months you are going to see a sea change in terms of the quality of what’s going on,” he told more than 200 business leaders who gathered at the Palm Beach County Convention Center for the luncheon. “Our effort right now is to do far more than just attract financial companies. When we announce the next 500,000 square-foot lease you will be surprised who is coming.”

Beyond financial and retail opportunities, Himmel hinted that an announcement about a new hospital or medical facility in West Palm Beach is imminent.

“Everyone we are talking to is all over us now to do business here where three, four, five years ago we would have to drag them here,” Himmel said. “Today we don’t have to drag anyone here.”

New construction and plans for new buildings and entertainment venues in West Palm Beach have been on a swift pace for the past few years as corporations and workers — fleeing taxes, pandemic restrictions and foul weather — relocate to Palm Beach County.

Development is pushing north of The Square with Miami-based Estate Companies paying $15.8 million for 2.5 acres along North Rosemary Avenue and the weighty $520 million makeover planned north of downtown that will transform a blighted area of the city into a trendy hot spot of restaurants, shops and apartments called Nora.

“That whole area is so ripe because the location is so powerful because of the proximity to Palm Beach, Jupiter and the Gardens,” said Jeff Lichtenstein, owner and broker for Echo Fine Properties about properties in the Old Northwood neighborhood to Blue Heron Boulevard.

The evolution of West Palm Beach

West Palm Beach has been amenable to the evolution.

Just this week, developers won a boon from West Palm Beach city commissioners who unanimously approved changes that would allow builders to design structures that exceed current zoning restrictions.

Notably, the Related Cos. had asked for waivers to lift restrictions on one building from five stories to 25. Also, developers of a 55-unit multi-family complex on North Flagler Drive won permission to go from 5 stories to 21.

In a 2021 buying spree, The Related Cos. snapped up a 50% share in the Esperante Corporate Center in downtown West Palm Beach and bought the CityPlace Tower office building for $175 million. Also, a Related affiliate paid $282 million for the signature pink Phillips Point office complex on the Intracoastal waterway in West Palm Beach.

Related’s 360 Rosemary Office Tower, a 20-story building just north of The Square, also opened in 2021. And construction is underway on Related’s One Flagler, a 25-story, 270,000-square-foot office tower going up at Flagler Drive and Okeechobee Boulevard.

While the pandemic sent workers home — where many would prefer to stay — Himmel said employers want them back in the office, which is one reason demand for office space is high.

“You can’t continue to thrive in a business when you don’t have people working together, and, ironically enough, they want more space, they want more common areas, they want more amenities,” he said.

Thursday’s luncheon was dubbed “The New Model American City.”

“We believe in supporting job creation by supporting job creators,” said West Palm Beach Mayor Keith James.

Himmel touched on the rocketing rental and housing prices in Palm Beach County and the demand for both high-end country club homes and more modest apartments.

He said a top question of the private equity hedge fund CEOs is “how can I get into golf.”

To accommodate them, Related bought 1,200 acres in Martin County last year for three golf courses, clubhouses and residences. There will be 100 housing units built for employees of that development, and Himmel said Related will work to create housing for retail and restaurant employees also.

“If you are willing to drive 25 to 30 minutes, which most people are, there are so many housing opportunities, it’s incredible,” Himmel said, noting that developers are building new homes and apartments that will help relax the current price hikes. “Supply and demand are going to work their way through this in a very positive way.”

Kmiller@pbpost.com

@Kmillerweather