Could WP implosion lift property values?

Developer plans 24-story glass tower to replace it

Feb.February 19, 2010 12:35 PM

Neighbors were delighted to finally see the dilapidated 30-story condominium tower along South Flagler Drive in West Palm Beach come crumbling down on Valentine’s Day.

But real estate analysts and property appraisers say they shouldn’t expect the implosion at 1515 S. Flagler Drive to immediately boost their property values.

Donald Sarley, president of the Appraisal Institute’s South Florida chapter, said: “My best guess is there will be no effect on area properties.”

Sarley, a 30-year residential property appraiser and real estate agent in Florida, said because the building was vacant for five years “any effect probably is already absorbed in the marketplace.’’

Trinity Development Group, the Boston-based developer of the collapsed tower, wants to replace it with a $150 million condo building called the Modern. Plans call for a new 24-story glass tower with 84 luxury condo units, according to Trinity’s Web site. Trinity couldn’t immediately be reached for comment.

Lewis Goodkin, a real estate analyst and president of Goodkin Consulting in Miami, said to try to redevelop the West Palm Beach property now would be a “very risky proposition’’ with the glut of vacant condos along South Florida’s east coast.

Pam Lamb, manager of the condo department for the Palm Beach County Property Appraiser’s Office, said residents living near the former hurricane-ravaged tower are surely glad this blighted property was removed. West Palm Beach officials ordered the demolition more than a year ago, but it was delayed for months because asbestos was found in the building’s stucco.

In the end, it took 2,000 sticks of dynamite about 10 seconds to bring down a building that stood for 36 years. City officials set a May 30 deadline for the demolition contractor to clean up the site.

“It remains to be seen in the data the next few years’’ what, if any, effect the implosion has on nearby properties along the Intracoastal Waterway, Lamb said.

Real estate analysts say what could eventually boost the area’s property values is redeveloping the land — but not until South Florida’s overbuilt, depressed condo sector recovers in the next couple of years.

“It was a terrible carbuncle on the skyline,’’ said Brad Hunter, chief economist with Metrostudy, a housing consulting firm in Palm Beach Gardens. “Certainly, eliminating the eyesore is an improvement. Subsequent redevelopment would be a further positive.’’

It will be at least 2012 until the region’s condo market will rebound enough to handle new condo construction, Goodkin said.

Hunter said the scope and type of eventual redevelopment on South Flagler Drive will determine the effect on area property values. A luxury-style tower could boost values, but that would be diminished if it obstructs the water views of adjacent homeowners, he said.

Although condo prices have fallen steeply in South Florida, condo mortgages are hard to secure and many of the sales are foreclosed units sold to investors, Goodkin said.

“No matter how you paint it, the condominium market is not a pretty picture,’’ he said.

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