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Palm Beach Gardens will spend $5 million on a workforce housing program and $5 million on renovating the Burns Road Recreation Center.

By Sarah Peters
Posted Dec. 10, 2018 at 6:09 PM
Updated Dec. 10, 2018 at 6:30 PM

PALM BEACH GARDENS — The Avenir builders will pay the city $10 million for a pass on the commitment to include 250 homes priced for working-class families.

It’s a move the city says will allow Palm Beach Gardens to get workforce housing faster in a better location, but a housing advocate and a resident both are questioning who’s getting the better deal.

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When the city council approved the project in 2016, developers Avenir Development and Avenir Holdings LLC promised the project on western Northlake Boulevard would include 250 townhouses that teachers, nurses and service workers could afford.

At the time, the promise inspired Suzanne Cabrera, head of the Housing Leadership Council of Palm Beach County, who prefers new housing over cash.

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“You don’t know how hard that is to get,” she said.

But then the developers made a case that Avenir wasn’t the right spot for workforce housing. There’s no public transportation, jobs or services nearby, and Avenir was under no obligation to build anytime soon.

Overall, Avenir will have 3,900 homes, 1.8 million square feet of offices, 200,000 square feet of medical offices, 400,000 square feet of commercial space and a 300-room hotel, plus 20 acres of agriculture, a public park and civic/recreation space and a city annex. The build-out is 30 years.

Under current conditions, a one-bedroom workforce townhouse in Avenir would rent for $866 to $1,444 per month. A four-bedroom workforce townhouse would rent for $1,339 to $2,679.

The developers and the city struck a deal that city council approved 5-0 Thursday night. Under the agreement, Avenir will pay Palm Beach Gardens $10 million. The city will spend $5 million to develop a workforce housing program and $5 million to renovate the Burns Road Recreation Center.

The payment is due in three years or earlier, depending on when the developer sells lots to builders.

It’s not uncommon for developers to give a local government money in lieu of actually building workforce housing. The objections in this case came in how much.

The county, for example, gets $50,000 per townhouse. But is Palm Beach Gardens getting more or less? It depends on who you ask.

Avenir arrived at the $10 million sum by multiplying the $40,000 difference in value of a market-rate townhouse and a workforce townhouse by the 250 townhouses the developers plan to build, principal Rosa Schechter said.

The city says the buyout amounts to $59,000 per unit. It is also factoring in the difference in the $7.8 million appraised value of 130 acres Avenir dedicated for a park and city annex and the $3 million credit Avenir is getting on fees, Palm Beach Gardens Planning & Zoning Director Natalie Crowley said.

Add the $4.8 million difference to the $10 million sum, divide by the 250 townhouses, and you arrive at $59,000 per unit.

The city negotiated the buyout, Crowley said. Any higher buyout wouldn’t have been financially feasible for the developers. Instead, they would have built the homes themselves in Avenir 20 years from now.

“We would have been waiting and waiting and waiting for those homes to come,” she said. “We looked at this proposal in its totality, and we saw this as a win-win.”

Opponents, including Cabrera, say Avenir’s payment is not enough. By her calculation, the $5 million going directly to workforce housing amounts to about $20,000 per townhouse. Typically, a municipality will require a developer to pay a buyout fee that will actually produce housing or build their workforce housing in a more suitable location, Cabrera said.

Resident Joan Altwater said workforce housing was a selling point of Avenir.

“Unfortunately there was no time limit,” she said. “I do think it’s undervalued. I think we need to go back to the drawing board before any acceptance is made and question the numbers here.”

Amy Pettway, a Legal Aid Society attorney, said the pro bono legal service group was concerned about the buyout.

“We are leaders in the community in advocating for fair housing and for affordable housing. It concerns me not only as an attorney, as a person who works for Legal Aid, but as a person who lives in Palm Beach Gardens,” Pettway said, noting she, her husband and daughter are active in the community. “We are members who believe that every person that takes care of us at Publix, at Burns Road, at any facility, they need to be able to live here. If they can’t live here, it doesn’t make sense.”

City Manager Ron Ferris said the lack of opportunity to live in the city is cause for the agreement, which will give Palm Beach Gardens money to engage the public and find out what workforce housing will work.

“This is a golden opportunity for us to get something on the books to get started so we can stop talking about it and do something in the essential housing area and provide some homes, opportunity for people to have homes and/or apartments,” he said.

“I just implore you, don’t miss out on this opportunity. It may be the only one you have.”

As for the rec center, Palm Beach Gardens views the improvements as part of its workforce housing strategy because the center and provides social services, senior programs and classes for residents who don’t live in a gated community. It is already at capacity.

Councilwoman Rachelle Litt and Councilman Mark Marciano said they’d like to consider paying for the improvements with private contributions that would allow the city to put more money toward workforce housing.