The Real Deal Miami

Key West to negotiate purchase of affordable housing complex

Peary Court was acquired by White Street Partners for $35M in 2013

June 18, 2015 12:45PM
By Robert Silk

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Key West

Key West

Seeking to address the need for an estimated 3,000 affordable housing units in Key West, city officials will begin negotiating for the purchase of an affordable housing complex in the pricey Old Town area, The Real Deal has learned.

Negotiations for the Peary Court complex, a 160-unit property, were authorized unanimously by the Key West City Commission on Tuesday.

Peary Court

Peary Court

Peary Court, formerly U.S. Navy-owned housing, was acquired by developer White Street Partners for $35 million in 2013. In April however, White Street scrapped a plan to demolish all 160 homes and replace them with upscale housing in the face of strong community opposition. The company still has an application in with the the city to build 48 additional affordable homes.

During Tuesday’s meeting, Key West Commissioner Jimmy Weekley, who sponsored the resolution to negotiate for Peary Court, raised the specter of White Street renewing its broader redevelopment push.

“We could either not do anything and let them turn it into $1 million condos and displace 160 families, or we can attempt to negotiate to purchase the property,” he said.

Jim Hendrick, whose Critical Concern Consultants is doing White Street’s planning work, told TRD that the developer is open to negotiating.

“As Ross Perot said, ‘we’re all ears,’” Hendrick said. “There have been some exploratory discussions with city staff, who are very pragmatic about the whole process.”

A city purchase of the 24.5-acre site, which is located in the northeast portion of Old Town between Palm Avenue, White Street and Angela Street, would be accomplished through a bond issuance, Weekley said. The purchase price would need to be low enough for the city to make its monthly payments with rent collected from Peary Court residents. The Key West Housing Authority has agreed that it would manage the housing complex for the city, Weekley said.

Under the Key West charter, city residents would have to approve an acquisition of Peary Court in a referendum. Tuesday’s resolution directs city staff to make a recommendation about the potential purchase to the commission within 90 days. Weekley said he hopes the report comes sooner to allow for a referendum in October if a purchase is feasible.

Fifty-one percent of households in the Keys are cost-burdened, according to a study released recently by Florida State University, meaning that they pay more than 30 percent of their income on rent or mortgage.

  • Neil Hartnell

    As someone with a lot of affordable housing experience I am familiar with the affordable development niche but this takes the cake so far. The percentage of the senior population that this type of development is targeting is a rounding error compared to the overall need for senior affordable housing, and with there being a limited amount of tax credits available each year that force us to use those perfect loans online till payday for short term use. I don’t think highly specialized developments are the way to go.