On a windswept waterfront lot in West Palm Beach last April, billionaire real estate developer Stephen Ross stood behind a lectern to tout his company’s new South Flagler House, a high-end, luxury condominium project with 108 units housed in two 28-story towers.
He gave props to City of West Palm Beach officials who helped clear the way for the project’s approval.
“I can say the leadership here in West Palm Beach really shares the vision in making this a model city,” he told guests assembled for coffee and breakfast beneath a tent. “Are there any buyers here to share in making that possible?”
He then proceeded to outline a vision for development that went far beyond South Flagler Drive, a thoroughfare that borders the west bank of the Intracoastal Waterway, across from Ross’ own home in Palm Beach.
“I talk about the fact about how important the city is and how lucky we are to be here today,” Ross said to applause. “I really believe this is the best place in the United States.”
Since that blustery day on a dirt lot, Ross, now 84, has activated what national and local financial media characterize as a “second act” for one of the most prolific real estate developers in the United States, and who, through his Related Companies, amassed billions in assets highlighted by the vast Hudson Yards mixed-use project on the west side of New York City.
Among Ross’ leading local acts:
- He formed Related Ross, a company whose mission is to foster development in South Florida, but mainly in Palm Beach County. While he remains non-executive chairman and a major shareholder in Related Companies, other executives run the firm he founded as an affordable housing builder in 1972.
- With the aid of private sector donors, he helped trigger an initiative to bring Vanderbilt University’s Owen School of Management to downtown West Palm Beach, where a $520 million campus mirroring the school’s facilities in Nashville, Tenn., is expected to house 1,000 students who would focus on computing and innovation. Both the city and county contributed land, and the project is scheduled for completion in 2027.
- More recently, Related Ross is working with the prominent equestrian Village of Wellington to bring a charter school to town along with retail and residential components.
- Last week, Ross led an entourage of roughly 20 Related Ross staffers and executives into a Boca Raton City Council workshop to compete for a new mixed-use government campus the city wants to build just west of the Brightline train station and Dixie Highway at 201 W. Palmetto Park Road.
Combined, the initiatives and commitments seem to carry a rising level of risk given a slowdown of heavy migration to Florida from out of state since the COVID-19 pandemic. In recent months, moving companies such as U-Haul and Atlas have found an equilibrium between inbound and outbound residents over the past year amid rising insurance costs and interest rates, limited affordable housing, and more frequent hurricanes.
But in an interview last Monday after the workshop presentation before Boca Raton’s elected leaders, Ross told the South Florida Sun Sentinel he is looking for projects that have “impact” because of Florida’s continued status as a preferred state for business relocations, driven largely by low taxes and a state government with a penchant for deregulation.
Technology a growth driver
“As a real estate developer you want to grow things,” he said. “What I want to do at this stage of life is impactful projects. The world is changing in every single area. Growth that has been occurring has been financial services so far. We really see it in Palm Beach County. I believe that a lot of growth is going to come from technology.”
“That’s why we went out and got a great university like Vanderbilt,” he added.
“We’re about to announce a major technology company is coming to West Palm Beach,” he said. “I see Boca Raton as being able to get on that bandwagon and be a very, very attractive place for technology firms to locate here.”
Ross asserts he was ahead of the pack in recognizing the potential of West Palm Beach with the construction of City Place more than two decades ago. And it was during the pandemic that he recognized Florida’s growing attraction among out-of-state residents and businesses that were seeking better tax treatment from state government and, of course, superior year-round weather.
It was an easy trend to spot: His office buildings were filling up with out-of-towners. But the area needs a stronger supporting infrastructure, he argued.
“We’re concentrating in West Palm,” he said. “We just went to Wellington. I see right now bringing the schools, the hospitals, because anybody who runs a company wants to know their kids are going to get into great colleges.”
“You can’t grow a community unless you have a great education,” he said.
Along that vein in Wellington, Related Ross is working to build out a mixed-use section that includes a charter school.
According to a company spokesperson, Related Ross has been working with ElevateED to open a not-for-profit K-12 private school on a 70-acre lot that was public land owned by the village. A purchase and sales agreement, approved by the Village of Wellington in January, saw Related Ross buy 35 acres while the school bought the other 35 acres. The village approved the project in a unanimous 5-0 vote.
Next up are approvals and discussions with the village on a Related Ross mixed-use proposal including dining, retail, a boutique hotel with up to 150 rooms, and residential. Overall, the project took into account Wellington’s demand for more K-12 education options, and the residents’ strong desire for local dining and retail so they wouldn’t have to leave the village.
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At the Boca Raton workshop last week, Ross told the City Council that Related Ross, which owns large amounts of commercial space in the county, is now concentrating all of its development efforts there.
“We are strictly focusing all of our attention in Palm Beach County,” he said.
In the meantime, Related Ross, which was participating in a supertall office tower project with Hong Kong-based Swire in Miami’s Brickell Avenue section, is no longer involved as Swire elected to sell the land. The latter company determined that the office market has slowed to the extent that it could not expedite the project, according to a person familiar with the situation.
A national slowdown in the office market has caused concern among various local governments considering mixed-use projects. But Greg Martin of the commercial real estate firm Avison Young said there is little doubt in-migration will continue to propel demand in Florida.
“We’re going to continue to see people moving here, and that’s going to impact all sectors,” he said, adding the market has “taken a breath” from the surge during COVID.
“There’s going to be continued need for new offices; people are making a flight towards quality,” he said.
Rising competition
But Ross is seeing more competition from other developers, some of whom are looking north from Miami-Dade County and from out-of-state.
The Boca Center LLC, led by Terra of Miami, is teaming with the Frisbie Group of West Palm Beach for the Boca Raton government project. Out-of-state firms RocPoint of Atlanta and Namdar Group of Great Neck, N.Y., are also competing for the prize.
Jorge Perez, of the Related Group, a partner of Ross until the two had an amicable split several years ago, is building multiple projects around the county including a Ritz-Carlton Residences in West Palm Beach.
Ross declined to rate or discuss his rivals’ proposals in Boca Raton.
David Martin, founder and CEO of Terra, said competition is good for the industry.
“It really provides for developers an opportunity to establish a point of view and be creative and innovative,” he told the Sun Sentinel, asserting his firm is South Florida’s most active developer.
“We welcome the competition and we think it’s proper, prudent and part of capitalism and the American way,” he said. “We welcome and enjoy the competition and the ideas of placemaking.”
But City Council members warned the applicants they were not in the market for a “city within a city.”
That means all of the contenders will need to balance what they believe is in the best interest of Boca Raton with what the elected officials are hearing from the constituents. The size, scope and diversity of some proposals have resulted in some citizen pushback.
All the applicants said they are mindful of the city’s needs.
“I think that it’s really a meeting of the minds to decide the mix of retail, residential, and office density,” said Kelly Smallridge, president and CEO of the county’s Business Development Board, who attended the Monday workshop.
It is the role of the elected officials, she told the South Florida Sun Sentinel, “to ensure that future developments are comfortable with their goals and the needs and desires of the residents.”
“And if the city wants a successful developer to deliver a quality project, they often times have to negotiate so it is a happy medium or win-win for all,” she said.
Smallridge noted that Ross personally has gone out of his way to help her agency recruit businesses considering moves to Palm Beach County. Once, he made his Hudson Yards office in New York available to her and a group of school headmasters who were on a recruiting trip so she didn’t have to rent space.
“They really take a tremendous amount of time to dive deep and listen to the community,” she said of Ross’ firm. “It’s unbelievable the targeted approach they take when it comes to developing a new project in an area. They do a lot of listening tours.”
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West Palm Beach Mayor Keith James had favorable comments for both Terra and Related Ross — offering a testimonial in a video shown at the workshop on Terra’s behalf.
“It’s not a one-sided ask,” James told the Sun Sentinel of proposals from Ross. “I think he gets it that the rising tide raises all boats. We can’t have a tale of two cities here.”
He cited a Related project called The Laurel, which is south of Ross’ 360 Rosemary office building in West Palm Beach.
“It’s market-rate rental apartments,” James said.
In exchange for additional height, the mayor recalled, “we incorporated in the building a number of workforce housing units. It was the first time we had any construction of workforce housing in our downtown.”
To the south in Broward County, a place Ross has called “mature” for its heavily developed spaces, Bob Swindell, president and CEO of the Greater Fort Lauderdale Alliance, said this: “I wish I had a Stephen Ross, to be honest with you.”
Ross’ community presence, he said, evokes memories of another area billionaire, the late H. Wayne Huizenga, who built and expanded local companies and preceded Ross as owner of the Miami Dolphins, and brought Major League Baseball’s Marlins and the National Hockey League’s Florida Panthers to the region.
Swindell acknowledged how Ross regards Broward. Its raw land supply is limited and most development is an exercise in in-fill — demolishing the old to make way for new construction in places such as Flagler Village.
“I’d like to take Mr. Ross myself and show him a little of what’s available there,” Swindell said. “I know there are a lot of cities that would like to do a public-private partnership.”