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Pérez family’s Related, partners sue Palm Beach County over Transit Village project
Developers say county wants to hike site’s purchase price nearly tenfold
From left: BH Group’s Liat Toledano; Related Group’s Jorge Pérez (top left); Michael Masanoff (top right); BH Group’s Isaac Toledano (bottom left); Teddy Sagi (bottom right); and a rendering of the Transit Village project (Getty, BH Group, Related Group, LinkedIn, Arquitectonica)
The Pérez family’s Related Group and its partners in the Transit Village mixed-use project are suing Palm Beach County, alleging it’s trying to strong-arm the developers into paying nearly 10 times more for the site.
The 1.3 million-square-foot Transit Village would consist of four 25-story buildings with 986 residential units, including 42 workforce-priced rentals and 165 micro-units; 180,000 square feet of offices; a 108-key hotel; and 49,000 square feet of retail on 6.6 county-owned acres at 150 Clearwater Drive in downtown West Palm Beach.
Related is co-developing the project with Michael Masanoff and Isaac and Liat Toledano’s BH Group, with investment from Israeli billionaire Teddy Sagi.
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Transit Village LLC, the development entity, filed suit against Palm Beach County on Thursday, saying it’s refusing to close the sale of the site at the previously agreed upon price of $3.6 million, unless it’s increased to $35 million, according to the complaint filed in Palm Beach County Circuit Court.
Despite “rigorous” negotiations with county officials, “the project has reached an impasse with the county and its staff, stalling progress toward groundbreaking and construction,” a Related spokesperson said in a statement.
The suit marks the latest chapter in the 12-year-long Transit Village saga. In 2010, Masanoff won a county request for proposals to develop the site and entered the purchase-and-sale agreement in 2012. The project stalled over the next decade due to numerous renegotiations of agreements with governmental agencies, a source previously told The Real Deal.
Transit Village picked up speed in 2021, about the time it was announced that Related, BH and Sagi invested in the project. The developers tweaked the plans and shepherded Transit VIllage through city approvals in 2022.
The site is home to the Intermodal Transit Center, a hub for Tri-Rail and Amtrak trains, city trolleys and Greyhound buses, as well as parking for Tri-Rail passengers. The development team is buying part of the site and the air rights from other portions of the site, meaning the Intermodal Transit Center will remain.
The transit hub necessitates Federal Transit Administration and Florida Department of Transportation approvals, as well as city and county approvals. Over the past 12 years, Transit Village LLC has spent more than $6 million to meet government conditions, according to the complaint.
The developers plan to spend $25 million for public benefits and improvements at the Intermodal Center. The final plan is for three of the towers to consist of the residential units, and the fourth tower will consist of the offices and hotel. The buildings will connect to a nine-story podium, elevated to almost 100 feet.
By now, the team has building permits for the first phase, all approvals and it has paid impact fees to the county. All that’s pending is the closing of the site purchase, according to the complaint.
The suit alleges that the county’s higher price request is based on a provision in the purchase-and-sale agreement that says the buyers have to pay back FTA funds the county used to build the Intermodal Center if the FTA funding exceeds the purchase price. The developers allege that no explicit demand for the repayment of FTA funds has been made, as is required in the purchase-and-sale agreement.
“In the FTA’s most recent letter (dated September 1, 2023) concurring with the county’s request to disposition [of] the property, there is no mention of or demand for repayment,” the complaint says. “The county has also conceded in its October 13, 2023 letter in which the county
declines to close unless it can ‘recoup’ for itself additional money from the sale of the property
but fails to claim (because it cannot) that a demand for repayment has ever been made.”
The project is among several Related and BH are partnering on in South Florida. Sagi also is a partner in some of the ventures, though he has long-maintained he is merely an investor and not involved with the management and details.
Masanoff and Isaac Toledano didn’t immediately return a request for comment.
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Nor did Palm Beach County staff members, Mayor Maria Sachs and Vice Mayor Maria Marino, whose district includes the site.
The developers held mediation with the county but failed to reach a resolution, according to the complaint. Related’s spokesperson said the developers are open to resolving the issue out of court.
“The Transit Village project has been in development for over a decade, facing numerous setbacks,” the spokesperson said. “We believe now is the critical time for this project to advance and [we] want to execute an agreement that is currently in place to finally get this shovel-ready project started.”