The three-story, boarded-up white building near the train tracks in downtown West Palm Beach harkens back to old South Florida.
Its ceilings and floors are made from Dade County Pine, a sturdy wood protected from commercial logging for decades. The back of the building at 905 Railroad Avenue has an out-of-order Otis elevator, with a plank to step on and a wooden gate that opens upward. And when the owners had a first-floor, indoor wall removed, they uncovered a massive arched window.
That and other features of the 1925 building previously had little aesthetic importance for the industrial site, used most recently for paper storage.
But now this changes with a new vision for adaptive reuse.
Joe Furst’s Place Projects and Ned Grace’s NDT Development plan a roughly $10 million retrofit of the property into restaurants, boutique offices and retailers. It’s part of their plan for the Nora District, a northern downtown area from Palm Beach Lakes Boulevard south to Quadrille Boulevard and from Dixie Highway west to the FEC Railway tracks.
“We will likely pull back a portion of the building,” Grace said, referring to knocking down part of the front wall, “and it will likely have a large courtyard space.”
Much like 905 North Railroad, the Nora District had been long overlooked until Furst and Grace saw 40 acres poised for mixed-use redevelopment.
Just look at Nora from an aerial view, said Furst, founder and managing principal of Miami-based Place Projects. The vacant lots in the north and south are where mid-rise and high-rise apartments, offices and a hotel would rise. The single-family homes and townhouses in the middle will be preserved. And the row of warehouses along North Railroad Avenue will be repurposed with shopping, dining and offices to form a main street.
“From a 30,000-foot view, it’s very clear what type of zoning treatments each of these pockets should be getting, if you are trying to do something deliberate that has the balance of conservation and redevelopment,” Furst said.
Furst and Grace have spent $40 million to draw up redevelopment plans and purchase 75 properties across 13 acres in Nora, including in the residential midsection.
Yet, the viability of their vision for Nora is being put under a microscope, with some skeptics raising questions and pointing to other ambitious South Florida redevelopment plans that were boondoggles for a while before they became boons.
Second time a charm?
In 2009, West Palm Beach tried to revitalize Nora by rezoning it to allow for light industrial and new projects, but to no avail. Almost 39 percent of the properties remain vacant, according to the city.
So when Place Projects and NDT Development approached the city in 2019 with an idea of how to breathe life into the area, officials listened. On Feb. 7, the city gave final approval to new development regulations.
Up to 20-story buildings, or the tallest allowed in Nora, are slated for the northwest corner, scaling down to 15 stories to the east toward Dixie Highway and 10 stories in the south section. These maximum heights can only be achieved through transferable development rights, or the unused development capacity from historic buildings throughout downtown, or from Nora’s residential mid-section and redeveloped warehouses.
At the residential high-rises, affordable housing is required that’s 20 percent of the amount of TDRs used.
Frank Schnidman, a retired urban-planning professor at Florida Atlantic University in Boca Raton, who has headed several South Florida growth-and-development authorities, raises questions about the lack of a Nora market study.
Without the study, “you just have fancy drawings. How do they know what they are proposing will be financially viable?” Schnidman said, after reviewing a Nora PowerPoint presented to commissioners, at The Real Deal’s request.
If history is an example, then there could be challenges. In its initial years, Related Companies’ downtown West Palm retail district — originally called CityPlace but most recently christened The Square — “was not really spectacular,” Schnidman said.
Even Miami’s Wynwood, once a gritty warehouse district that has been transformed into a hot, booming neighborhood, was not an overnight success, he added.
Although West Palm and its downtown are experiencing robust growth, it’s not enough to look at only the city, he said.
“What is West Palm competing with as far as other development centers, whether it’s Boca Raton or Fort Lauderdale?” Schnidman said. “Does the market study say West Palm Beach has arrived because Miami, North Miami, Aventura, Hallandale have all been redeveloped and now it’s West Palm Beach’s turn?”
Furst and Grace counter that a market study is not needed to know it is, in fact, downtown West Palm Beach’s turn, and Nora is poised to thrive.
When Wynwood redevelopment started, there was “no great market study,” said Furst, who founded and chaired the Wynwood Business Improvement District and also has been highly involved in that neighborhood, as he worked for Wynwood pioneer investor Goldman Properties and also partnered on new projects.
The Square — the former CityPlace — originally was built as a regional power center with big box stores, not an urban, walkable district, although the recent revamp has helped change its image, Furst said.
“Our view has always been a little bit, ‘If you build it they will come,’” he said. “But if you build it right, and you build it compellingly, and in a way that people are attracted to it, then that will be the recipe for success.”
At 150,000 square feet, Nora’s warehouse district is “the right size,” said Grace, co-founder and managing partner at West Palm Beach–based NDT.
A rendering of low-rise retail, restaurants and high-rise apartment buildings at the Nora District
The developers are betting that Palm Beach Lakes Boulevard, which has I-95 ramps, will become the exit of choice, as Okeechobee Boulevard already is congested, which would allow Nora to become a draw for visitors from throughout Florida. The nearby Flagler Memorial Bridge leads to Palm Beach.
And West Palm in recent years became a magnet for out-of-state company expansions and relocations, prompting new residential and commercial development that would feed Nora demand. The University of Florida wants to bring a graduate school campus to downtown that would offer degrees in financial services and fintech fields, both growing area industries.
“Chance to do this right”
To Neil Merin, chairman of NAI Merin Hunter Codman, the Nora plan is reminiscent of the redevelopment north of Fort Lauderdale’s downtown. These areas also started out with a city rezoning, prompting a flurry of investment of developable parcels. But plans halted once the Great Recession hit, Merin said.
“That is something that could happen with Nora as well,” he said. “It is inevitable we would have a down part of the cycle. We are at the seven-year high mark, and it’s usually somewhere between seven or 10 years either being down or up. A down comes after some event happens in the world. That could be as soon as next week. We don’t know.”
He cautioned that a 10-year to 15-year timeline for the entire project really could be 20 years to 25 years if there are unforeseen market events. And although he supports the plan, the area immediately to the north of Nora still is blighted, potentially impacting Nora, Merin said.
Jeff Greene, among the biggest downtown property owners, whose projects include the pair of 30-story One West Palm towers under construction directly south of Nora, retorted that the possibility of a market crash is just part of the real estate game.
“Of course that can happen. When you are a real estate developer, you take those risks,” said Greene, who supports the Nora project, and whose One West Palm will bring roughly 220 luxury rentals, 200 hotel keys and 200,000 square feet of offices. “There’s no question in my mind that the momentum in this town is extraordinary.”
Schnidman, the former FAU professor, said that Place Projects and NDT ultimately are doing what real estate developers do. They identify a property, take a risk and get the entitlements for more real estate construction.
But once a large area gets up-zoned, its value immediately increases, meaning West Palm Beach ultimately gave the development duo a “gift,” he said.
Historically, developers who obtained development entitlements have then turned around to sell the land, instead of pursuing their initial plans, Schnidman said.
In the early 2000s, developer Michael Swerdlow sold his Biscayne Landing assemblage in North Miami, scrapping his $1 billion plan for a mixed-use project on 190 acres. The property now is SoLé Mia, a project spearheaded by Jackie Soffer’s Turnberry Associates and the LeFrak Organization.
But selling is not Place Projects and NDT’s plan. “We will partner on everything. We are not going to straight sell anything to anyone,” Grace said. “We know we are adding a ton of value here. So you want to make sure you have an investment in the complete neighborhood.”
Construction on the first phase, a $150 million infrastructure upgrade and adaptive reuse of the Railroad Avenue warehouses, will start in May. It is expected to be completed in the fourth quarter of 2023. Wheelock Street Capital is a capital partner on the first and subsequent phases.
The developers also are planning their first apartment project, an eight-story building between 10th and 11th streets. Future construction is expected to move fast once they hammer out project details, Furst said.
Prospective tenants and development partners have expressed interest, but the goal is not to rush to sign lessees and investors, he added. It is to curate the transformation of the district holistically.
“It’s really our job to ensure that everything that we do is very deliberate and speaks to everything else we are doing within the district, and really build a complete neighborhood,” Furst said. “This is our chance to do this right.”