Delray Beach’s Atlantic Crossing project locked in litigation

Delray Beach’s real estate community is all abuzz about the mixed-use Atlantic Crossing project planned for 9 acres in the area bounded by Atlantic Avenue, Northeast First Street, the Intracoastal Waterway and South Federal Highway.

There’s one little problem, though: the project is in litigation. The Delray Beach City Commission gave initial approval for the plan in January 2014, but has withheld final approval that would be needed to break ground. So the joint venture partners in Atlantic Crossing are suing the city. The partners are developer Edwards Cos. of Columbus, Ohio, and private equity firm CDS International of Boca Raton, founded by famed entrepreneur Carl DeSantis.

As for the project, it includes 82 luxury condos, 261 apartments, 83,000 square feet of Class A office space and 76,000 square feet of shops and restaurants. The property is slated to hold six buildings with mostly three or four stories.

Some real estate professionals — both those involved with the project and outsiders — express enthusiasm about it. “This area has been a dead zone in an otherwise vibrant downtown,” Don DeVere, vice president of Edwards Cos. told The Real Deal.

“Atlantic Crossing’s plan brings the east end of Atlantic Avenue to life, replacing an outdated retail center and vacant sites with a mixed-use destination that’s pedestrian-focused, with public open space, varied architecture, and buildings in scale with surrounding uses,” he said.

Don Ginsburg, CEO of Realty Masters Advisors in Fort Lauderdale, said Atlanta Crossing offers an opportunity “to create a place,” he told TRD. “It’s a live-work-play environment that can manifest itself beautifully. Everyone knows Atlantic Avenue is hot, but it’s hot in fits and starts. This has the potential to be one of the most impressive developments in South Florida this generation.”

But obviously the developers and city officials need to mend fences before the project can become a reality. CDS Edwards’ lawsuit, which is now in federal court, accuses the city of “obstruct[ing]” Atlantic Crossing’s development.

“Plaintiffs obtained approval of the project following almost a decade of discussion, planning, and a series of formal development approvals,” according to the suit.

“Subsequent to the recent election of a new majority to the city commission, however, the city has sought to effectively rescind its prior approvals by, among other things, improperly delaying review of a final plat for the subject property, reinterpreting its previous actions, and improperly claiming an ownership interest in certain lands (former platted alleys) within the project area which had lawfully reverted to CDS Delray as the abutting landowner,” the suit said. It specifically complains about Mayor Cary Glickstein and two city commissioners. Delray officials declined to comment to TRD.

CDS Edwards is seeking damages up to $40 million. The case has a May 2016 trial date. The developers hope an amicable settlement can be reached before then. “We just want to move forward with the project, which will be a tremendous asset to the city,” DeVere said. “We hope the city commission will work with us … so we can finally get underway.”