Friday, November 8, 2019
|Midtown Delray Poised for Fruition After Developer Buys Site for $40 Million|
|Published Tuesday, October 29, 2019|
Family owned Pebb Capital, which spun off in 2014 from Pebb Enterprises, bought the nearly 7-acre site from an affiliate of Marshall Florida Investments, a Raleigh, North Carolina, investor that was part of the team that assembled the acreage. The deal closed on Oct. 18.
The project, which Pebb rechristened to Sundy Village, will span roughly from Southwest First Avenue east to Swinton Avenue and from West Atlantic Avenue south to Southwest First Street.
There will be 50,000 square feet of dining and shopping, as well as 70,000 square feet of offices interspersed among the historic properties on site, which include the Sundy House boutique inn, tropical garden and restaurant.
The project has been in the works for about eight years, including seven years to get city approval.
Marshall Florida originally assembled and owned the site with Hudson Holdings, a Delray Beach-based construction firm. They ended up having to make multiple design tweaks as the project was controversial in part because of its impact on historic homes.
At least part of the site is in the city-designated Old School Square Historic District, which also is listed in the National Register of Historic Places.
The Delray Beach City Commission approved the project in May 2018.
Pebb Capital, which has vowed to keep and maintain the historic properties, was supposed to close the purchase of the development site last February but failed because of a dispute between Hudson and Marshall Florida, real estate publication The Real Deal reported.
The issue was over the split of the sale proceeds and was settled this summer with Marshall Florida buying out Hudson’s ownership stake, a Pebb Capital official told The Real Deal.
The booming Delray Beach retail, entertainment and dining market for years has been largely focused along Atlantic Avenue, although it’s stayed mainly on the eastern portion of the street from the Intracoastal Waterway to Swinton Avenue.
Now development is poised to continue westward along Atlantic Avenue with Sundy Village. Also, Pebb Capital owns property across Atlantic Avenue from Sundy Village where it could build 100,000 square feet of residential space or a hotel.
This western portion of the avenue also is in an opportunity zone, or state-designated areas deemed as economically struggling.
The opportunity zone legislation created by the 2017 Tax Cuts and Jobs Act encourages investors to put their funds into redeveloping the areas by giving them income tax breaks in return. The amount of a tax break depends on how long the investor keeps his funds in the opportunity zone project.
This is good news for developer Pebb Capital, as it can use the opportunity zone location to secure investor financing for Sundy Village.
Pebb Capital, founded by brothers-in-law Todd Rosenberg and Ian Horowitz, was split from the much older Pebb Enterprises, as a way to pursue different types of real estate investment and development from Pebb Enterprises, which traditionally focused in South Florida.
Pebb Capital is eyeing projects in New York, Kansas and Georgia, Rosenberg previously told the Daily Business Review.
Pebb Enterprises was started in 1972 by the Rosenberg and Weiner families. Ian Weiner, whose father, Bruce, was one of the Pebb Enterprises founders, remains with that company as president and CEO.
Pebb Capital will start Sundy Village construction within a year.
There is no estimated date of completion.
“After nearly a year of working on this project—from contract to close—we are looking forward to breaking ground and moving forward on building this transformational lifestyle destination,” Rosenberg said, “that will boost the city’s business and tourism sectors with its retail and office components.”
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