Public Land Is Driving West Palm Beach's Next Wave of Development. Here Is How Ground Leases Shape These Deals

Several of West Palm Beach’s highest-profile new projects are being built on land owned by the county or the city, and the deal structures behind them show how public ground leases are shaping development in Palm Beach County. Traded has reported on each of the three projects below.

Three public land deals

Related Ross won final approval on August 31 for an 18-story, 400-room Curio Collection by Hilton at 900 S. Rosemary Avenue, valued at about $310 million, with roughly 21,000 square feet of meeting space and about 7,300 square feet of ground-floor restaurant space beside the Palm Beach County Convention Center. Palm Beach County is buying the 1.8-acre site, now a parking lot, for $26 million and leasing it back for the hotel, with an initial 33-year term and renewal options totaling 97 years.

The Norton Museum of Art received approval to lease about two acres of city-owned waterfront land behind the museum for a $25 million cultural park designed by Foster + Partners. The lease runs 50 years with a 20-year renewal option, at $100 a year for the first decade before moving to rent tied to annual revenue. And the Trump Organization has proposed turning Trump International Golf Club, on county-owned land at 3505 Summit Boulevard near Palm Beach International Airport, into a presidential golf retreat. County staff have been directed to explore the idea, but no agreement has been approved.

Why ground leases matter

A ground lease lets a public owner keep the land, earn long-term income and shape what gets built, while the developer avoids a large land purchase. For the developer, financing depends heavily on the lease term remaining when the building is complete, which is why long terms and renewal options matter. For tenants and buyers of buildings on leased land, the ground rent, its escalations and the remaining term all affect value.

Public land also tends to sit in strategic locations, near convention centers, airports and waterfronts. As more of it is put to work, private property around it often gains value from the activity it brings.

What this means for you

If you are buying or leasing a building on ground-leased land, review the remaining term, rent escalations and renewal terms before you commit. If you own property near public redevelopment sites, track what is planned, because it can change your property’s value. If you are a developer, public land partnerships can unlock sites that would otherwise be out of reach.

AXCESS Commercial helps clients understand complex deal structures, and leases space, lists properties for sale and manages buildings across Palm Beach County.

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