The Real Deal Miami

Boca Raton juggles five homebuilders’ bids for golf course

Bidders are Kenco Communities, Lennar Homes, Toll Brothers, CC Residential and Compson Associates

August 09, 2016 12:45PM
By Mike Seemuth

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Boca Municipal Golf Course (Inset: Stuart Miller, Ken Endelson, Armando Codina, James Comparato and Robert Toll

The Boca Raton City Council on Monday directed its city manager to analyze the viability of offers from five homebuilders to buy a public golf course from the city and build hundreds of homes there.
The five-member city council discussed the offers at a workshop meeting Monday afternoon, including a $40 million offer that Boca Raton-based Kenco Communities submitted about an hour before the meeting started.

Among other policy considerations, city council members need to decide whether “we want to be in the golf business,” Mayor Susan Haynie said following a public comment period, during which several citizens urged the city to continue to provide an affordable public golf course.

In addition to Kenco Communities, CC Residential, Compson Associates, Lennar Homes and Toll Brothers have proposed buying the Boca Raton Municipal Golf Course from the city for residential development.

The bidding began about a year ago when Pennsylvania-based Toll Brothers offered to pay $2.1 million for 30 acres of the 194-acre municipal golf course for residential construction. Toll also proposed reconfiguring the rest of the property and operating it as golf course on behalf of the city.

After four other homebuilders subsequently offered to buy and build on the entire golf course, Toll Brothers last Friday submitted an alternative to its original proposal: to buy the entire golf course for $38.5 million for 400 single-family homes and a 200-unit multifamily development there.

The other four homebuilders have made offers to buy the Boca Raton Municipal Golf Course since May. No offer commanded more discussion at the Boca Raton City Council’s workshop Monday than Lennar’s, which has a land-swap component.

Lennar initially offered May 12 to purchase the entire golf course for $28 million for the development of 400 home sites.
Lennar revised its offer after agreeing to buy another Boca Raton golf course called Ocean Breeze from Wells Fargo Bank, which owns the property as a result of a foreclosure.

The $37.5 million purchase price in Lennar’s revised July 26 offer for the Boca Raton Municipal Golf Course would be offset by the value of Ocean Breeze, which the Miami-based homebuilder would convey to the city.

The value of Ocean Breeze is unclear. Lennar’s revised offer to buy Boca Raton Municipal Golf Course did not include a purchase price or an appraisal for Ocean Breeze, which is now closed. It spans more than 200 acres in the Boca Teeca subdivision of Boca Raton.

The Boca Raton Municipal Golf Course is located outside Boca’s city limits, so any residential development there would require approvals from Palm Beach County.

City council members directed Boca Raton city manager Lief Ahnell to try to determine the regulatory viability of the development plans of the five homebuilders bidding for the Boca Raton Municipal Golf Course.

For example, city council member Robert Weinroth questioned the June 15 offer by Coral Gables-based CC Residential to buy the golf course for $42 million for construction of 1,000 residential units.

“That seems to me to be little denser than what would be allowed by the county,” Weinroth said.

One day after CC Residential made its offer to the city, Boca Raton-based Compson Associates made a competing $31.2 million offer June 16 for the development of 384 single-family homes and 150 senior housing units.