Affiliated Development won approval for The Pierce, a mixed-use development in downtown Boynton Beach with 236 apartments, half of them rent-controlled workforce units.
Fort Lauderdale-based Affiliated outbid four other developers — including the Related Companies — for a mixed-use project at 115 North Federal Highway, which is owned by the city’s community redevelopment agency.
The development site is on a block bordered by Boynton Beach Boulevard on the north, Ocean Avenue on the south, Federal Highway on the east, and the Florida East Coast railroad on the west.
In their role as the CRA board of directors, Boynton Beach city commissioners on Tuesday approved Affiliated as the winning bidder in a request for proposal process to select a developer for the site, which is now a parking lot.
The four companies that competed against Affiliated in the RFP process were Related Urban Development Group LLC, U.S.A. Construction, E2L Real Estate Solutions LLC, and Hyperion Group LLC.
The CRA bought the 4.5-acre property from the Boynton Beach Congregational Church of Christ in 2018 for $3 million, according to property records.
The development site of The Pierce will be larger, though. The CRA has a contract to acquire three small properties — at 511, 517 and 529 Ocean Avenue — covering 0.4 acres on the south side of the same block. The CRA is planning to buy those properties by the end of this month and resell them to Affiliated Development, Jeff Burns, CEO of Affiliated, told The Real Deal.
“Part of the RFP was, if you want, you can include that [land] as part of your proposal,” Burns said. “So, we included it. Some people didn’t.”
Affiliated itself has a contract to acquire another property on the same block, the Ocean Food Mart at 101 North Federal Highway. Rajas Family Investments owns the retail property on the northwest corner of Ocean Avenue and Federal Highway, a busy intersection that Burns referred to as “Main and Main.”
In the RFP process, “the key component that we had and nobody else had was the Ocean Food Mart,” Burns said. Rajas Family Investments agreed to sell the property after more than a year of negotiations, he said. The deal includes payment of a lease-termination fee to the operator of the Ocean Food Mart.
Affiliated expects the cost of developing the eight-story Pierce project to total $73 million, including land costs. The company expects to pay $1 million for the site at 115 North Federal Highway, nearly $3.3 million for 101 North Federal Highway, and $3.6 million for 511, 517 and 529 Ocean Avenue.
The Pierce will blend 118 market-rate apartments and 118 workforce apartments that have lower monthly rents, and are reserved for tenants who earn as little as 60 percent and as much as 120 percent of area median income.
Designed by MSA Architects, the mixed-use development also will encompass 16,800 square feet of restaurant, retail, and office space. Seventy-nine percent of the site will be open to public use, including 150 public parking spaces.
Affiliated plans to sign a property purchase and development agreement with the Boynton Beach CRA by February 2022, complete the design and permitting phase of the Pierce project by November 2022, start construction in January 2023, and finish in July 2024.
Led by Burns and his partner Nick Roho, Affiliated Development specializes in residential redevelopment projects with a workforce housing component. For example, Affiliated won Hollywood approval in May for a subsidized plan to build The Tropic, a 208-unit rental development in downtown Hollywood where half of the apartments will be rent-controlled workforce housing units.
Last year, Affiliated finished raising $125 million in equity capital, mainly from public pension funds, to finance developments that include workforce housing.