The city agreed to sell the vacant lot on North Australian Avenue to the hotel for $300,000 below its average appraised value.
West Palm Beach commissioners agreed to give The Breakers hotel a cut-rate deal on city-owned land to build an apartment complex for its workers, calling the project an example they hope other area businesses follow.
The unanimous Sept. 15 decision gave preliminary approval to the sale of 1.2 vacabt acres on North Australian Avenue for use in the workforce housing community. The city agreed to sell for $660,000, $300,000 below its average appraised value.
The lot will be combined with two adjacent properties to build an eight-story, 155-apartment complex that the hotel says will house about 270 temporary workers north of Palm Beach Lakes Boulevard and Gaines Park.
City officials have called The Breakers' project the first employer housing development of its kind in Palm Beach County. It comes at a time of heightened concern about housing affordability across South Florida.
The apartments are intended not for the company's permanent employees but for the hundreds of temporary workers the Palm Beach hotel brings from overseas each year to work in its iconic hotel.
Breakers CEO Paul Leone told commissioners that the company has long subsidized rents for temporary workers, but that doing so "is not good enough."
Now the company aims to build its own high-quality housing for those employees, he said.
The facility will include a pool, sports field and a shuttle service that transports workers to the hotel and back, as well as to local shopping venues.
"It will be completely occupied by people paying lower rent for higher quality," Leone said. "They'll have their own bedroom and their own bath. That's the standard."
Leone called the undertaking "the largest single project I've brought before my board" and suggested the hotel has other development plans in the city.
"Hopefully I'll be back here with another, even more significant project," he said.
Breakers housing deal: Will other companies take notice?
The property's value was initially appraised at $1.2 million, but a second appraisal conducted in August valued it at $660,000 after taking into consideration that the land includes an easement that prohibits construction on part of it, city officials said.
City rules call for the property, at 2410 N. Australian Ave., to be sold at no less than 85% of the average of the two appraisals, meaning $816,000. But commissioners agreed to waive that rule and sell at a lower price because of the high number of workforce residences being built and the fact that the company is contributing $200,000 toward odor-control improvements for a neighboring lift station.
"When we're working on a project like this that includes nearly double the workforce units that would be required, I think this is the time that the city steps in and takes steps like this," Commissioner Christina Lambert said.
Commissioners also gave initial approval to a rezoning of the combined 2.5-acre property to allow the apartment complex to be built. A final vote is scheduled for Sept. 29.
Commissioner Joe Peduzzi praised The Breakers for "taking the lead" in finding housing solutions for the area's workers.
"I'm hoping that other larger companies take notice of what can be done here, especially in the city of West Palm Beach and elsewhere," he said. "You're taking the lead, and I appreciate that."
The hotel's parent company, Flagler System, employs about 2,400 employees, making it one of Palm Beach County's largest employers.
To staff its iconic hotel, it relies extensively on temporary foreign workers. Federal records showed last year that the company was approved to hire 249 workers from overseas on temporary H-2B visas, the second-highest total in the state.
Andrew Marra is a reporter at The Palm Beach Post. Reach him at [email protected].