Because of the housing bust, half-built projects and idle building sites were not uncommon in Florida nearly seven years ago when Gulfstream Gardens LLC reluctantly shut down a plan for a luxury condo community.
That would have been the end of the story for the Meehan Boynton Beach project, had it not been for visionary thinking by the city of Boynton Beach, its Community Redevelopment Agency (CRA), and its Green Coalition, as well as enthusiasm from the three developers who make up Gulfsteam Gardens—Rick Lococo, Charles Funk and Jeff Meehan.
The developers’ original plan was to replace a declining corridor of vacant lots, underperforming small retail shops and strip centers with high-quality condominium housing that would help revitalize the entire area. But the troubled economy put all that on hold.
At about the same time the developers were beginning their planning for the condo community, the city of Boynton Beach was hatching plans for a green initiative to differentiate itself from other Florida cities by reinventing itself into “ground zero of sustainable living and development in Florida, and possibly the nation,” as the developers characterize it.
When the market began to suffer, the developers approached the city and described a plan to continue the project, but as a rental community that would incorporate cutting-edge green features. He explained that lenders were not willing to consider the eventual operational cost savings of a green project as a factor in their loan applications and asked what the city might be able to do to help.
All parties worked together to transform the condo project into Seabourn Cove, a community of 46 buildings of market-rate luxury rental apartments and townhomes. The project was to be what the Palm Beach Post described as “a poster project…to brand Boynton Beach as a leader in sustainable energy and development.”
The CRA devised a tax increment financing plan to make up the difference between what banks would lend and what the project would need through a structured tax rebate. Brooks said the first part of the agreement called for performance monitoring of the project for 10 years to generate data showing that green building features can save money on the operation of a community, thus providing enhanced return on investment.
If the project delivers as promised, the city will give the developers 50percent of the difference between the assessed pre-redevelopment value of the parcel of land and the current value (or tax increment, estimated to be about $2 million over the 10-year period) every year.
In addition to evaluating endless product specs, the developers conducted on-site research of their own to see if product choices worked the way the manufacturers said they would. To test the noise levels in the community’s proposed highway-side units, they built a mini-sized version of a unit using the same door, windows and insulation planned for the project. They enlisted a professor from a nearby college to come and measure the audible noise and found that the system worked better than anyone had expected.
Lococo acknowledges that building green carried a higher price tag—the entire 456-unit project will cost nearly $3 million more than it would have if built to the code that applies to the company’s Coral Springs community. He noted that lenders aren’t exactly lining up to put money into the hands of residential developers these days, especially for green projects, and that very little data is readily available to support a higher value for energy-efficient communities. However, Lococo suggests that even if builders don’t have the types of data available to his firm, many options exist for builders that don’t cost much but add much value for residents. For example, “By using high-quality windows we were able to cut at least 200 tons of air conditioning capacity from the 800 tons that would have been needed otherwise,” he explains. That savings goes right into residents’ pockets, a great benefit that the community’s marketing highlights.