Retail Portion of $550 Mil CityPlace Complex Has Grand Opening

WEST PALM BEACH, FL–A 55-acre redevelopment tract along the major Okeechobee Boulevard traffic artery into this city’s Downtown continues to be transformed into a multiblock hub of retail, office, housing, hotel and entertainment uses serviced by some 3,000 free parking spaces.

A 110,000-sf Macy’s department store had a soft opening earlier in the month, but Oct. 27 was the official debut for Palladium at CityPlace.

About half the tenants met the grand-opening deadline for the retail component of Downtown’s new $550 million mixed-use CityPlace development. By the time a 20-screen Muvico multiplex opens in December, the rest of the 70 pre-leased stores and restaurants are expected to be operating.

Development partners are Stephen M. Ross, chairman, and Kenneth A. Himmel, president and CEO, of The Palladium Company in New York City; Jorge M. Perez, chairman of The Related Group of Florida in Miami; and Jeremiah W. O’Connor, Jr., chairman of The O’Connor Group in New York City. Participating in ownership is the Ohio State Teachers Retirement System.

The city of West Palm Beach is a financial partner as owner of the land leased to CityPlace Partners and as a guarantor of $55 million in tax-exempt bonds to pay for project infrastructure and four parking decks.

The developers are expecting an 11% return on their $250 million investment, according to published reports. If they achieve that, it would rank Palladium at CityPlace among the top 10%-15% in profitability for shopping centers in this country, say industry sources.

Ground-floor retail, with live/work lofts above are housed in Disney theme park-like groupings of mid-rise buildings. These line new and existing streets, linking the city’s older shopping/restaurant/entertainment section centered on Clematis Street with the concert hall/legitimate theater venue at Kravis Center.

Centerpiece of Palladium is the 1920s former First Methodist Church that has emerged as a performance center after a $5 million developer-sponsored restoration. Another project showpiece is a $3 million fountain whose computer-controlled water jets are illuminated at night.

In addition to the Macy’s, key tenants of the 600,000-sf retail space include a 30,000-sf Barnes & Noble, a 27,000-sf Wild Oats Gourmet Market and a 16,000-sf FAO Schwartz. Retail rents range from $40 per sf to $80 per sf, although some may be paying as much as $100 per sf.