Related Group’s Jorge Pérez and Jon Paul Pérez (Related Group, iStock)
Related Group won city approval to rebuild a beachfront community center and develop a downsized condominium tower on about 4 acres of city-owned land in Hollywood.
Miami-based Related won approval to rebuild the outdated Hollywood Beach Culture and Community Center at 1301 South Ocean Drive and to develop a 26-story condo building on the west side of the city-owned beachfront property.
City commissioners on Wednesday voted 5-2 to approve a development agreement and ground lease with Related for its planned redevelopment of the 4.2-acre community center site.
Related, led by Jorge Pérez and his son Jon Paul Pérez, in recent weeks cut the planned height of the condominium from 30 stories to 26 stories. The developer also reduced the minimum number of units from 155 to 135, city staff told commissioners.
A new 26-story design of the condo building has a smaller footprint and is surrounded by more open space than the 30-story design that Related presented at a Feb. 2 commission meeting. They voted to defer their decision on the project until March.
The smaller footprint expands open space on the property from 18,235 square feet to 43,065 square feet, said Raelin Storey, the city’s director of communications, marketing, and economic development.
Green space on the community center site, confined mainly to tiny Harry Berry Park, now accounts for 7 percent of the site and would expand to at least 40 percent under Related’s redevelopment plan, she said.
Related also agreed to double from $5 million to $10 million the amount of its “initial rent,” an up-front payment to the city as part of its 99-year ground lease for the condo development next to the community center.
Among other business terms that changed in recent weeks, Related raised the city’s share of the project’s condo sales revenue from 12.5 percent to 14 percent. Related would pay Hollywood 14 percent of the gross proceeds from condo sales, or a minimum of $35 million.
These revenue-sharing payments would start after proceeds from condo sales covered the estimated $20 million cost to Related to build a new community center and other public facilities. City revenue from condo sales, property taxes, rent payments, and other sources of income from the redevelopment project could exceed $1 billion over the 99-year term of the ground lease, according to city staff.
“The [condo sale] proceeds to the city are speculative … We’re never getting $35 million,” said Hollywood Vice Mayor Caryl Shuham, who voted against the development deal with Related.
Shuham also said Related will build a 30-story condo because it has not committed in writing to the 26-story height. The building height and the number of units are pending the city’s review of a detailed site plan for the redevelopment project.
Related made an unsolicited proposal in June 2020 to redevelop the site of the aging community center. The city government then issued a public request for proposals from other bidders with alternative development proposals. CBRE marketed the RFP on behalf of the city.
A municipal selection committee ranked the proposal by Related as the best, followed by Key International/13th Floor Investments, Continuum Company, and Chateau Group, each of which proposed both a new community center and a new residential development.
About one year ago, Hollywood city commissioners certified Related as the top-ranked bidder and directed city staff to negotiate a development agreement and ground lease with the company.
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March 18, 2022 at 08:45PM
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Related to build condo tower on city-owned beachfront site in Hollywood - The Real Deal
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