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BH3 wins city site for major mixed-use project in Delray Beach
Company won't pay for property, which is in an Opportunity Zone, but will fund development
BH3 won the city site for a major mixed-use project on West Atlantic Avenue in Delray Beach.
Aventura-based BH3, led by Dan Lebensohn and Greg Freedman, was one of six groups bidding on the public-private partnership to redevelop 6.17 acres on the 600 to 800 block from the city, aiming to transform the downtown area. BH3 was the only developer to not offer money in exchange for the land, but it will spend the most on development, which it values at $100 million. It will also build workforce housing and will give the city 206 parking spaces.
Residents had opposed a previous offer from developer John Flynn for $1.2 million for the land, which was valued at about $15 million.
Rendering of AltaWest
The site is in an Opportunity Zone, which means the developer can qualify for a major federal tax incentive for developing the project. The federal program allows developers and property owners to defer and possibly forgo paying some of their capital gains taxes, or taxes resulting from the sale of certain assets.
BH3’s proposal, called AltaWest, calls for 43,000 square feet of ground floor retail, 21,600 square feet of professional office space, a 33,000-square-foot grocery store, 165 residential units totaling 272,242 square feet, 744 parking spaces, about 45,000 square feet of public space called “Frog Alley” and up to 30 workforce housing units, the latter of which includes 18 affordable housing units being built on an adjacent site.
Rendering of AltaWest
The Delray Beach Community Redevelopment Agency released its request for proposals in August with an early October deadline. Bidders included Kayne Anderson Real Estate and Uptown Delray, led by controversial developer Harold “Sonny” Van Arnem.
The city has been trying to redevelop the area for about two decades. In its RFP, the CRA cited challenges in the area, including a “severe lack of affordable housing,” scattered vacant lots, and a lack of tourist attractions and jobs.
A portion of the office component will have smaller spaces at more affordable rents for local businesses, BH3’s Lebensohn said.
BH3, which developed Privé at Island Estates in Aventura, recently closed on the site of FATCity in downtown Fort Lauderdale for $23.1 million, a property that’s entitled for 1.35 million square feet of development.