Neighbors Sue to Void County's $26M Related Ross Hotel Deal

Two West Palm Beach neighborhood groups sued Palm Beach County on Oct. 14, asking a judge to void the $26 million sale-leaseback that clears the way for Related Ross’s second convention center hotel, arguing commissioners rushed the Sept. 29 approval without giving residents a real chance to object.

Why it matters

The deal lets the county buy Related Ross’s planned 18-story, 400-room Curio hotel on Rosemary Avenue and lease it back, a structure we first reported that strips the project off the tax roll. See our earlier coverage of the sale-leaseback approval. If a judge voids the vote, every developer in South Florida eyeing a similar county-owned-adjacency structure loses the template overnight.

Plaintiffs Grandview Heights Neighborhood Association and the newly formed West Palm Beach Neighborhood Alliance, led by president Margaret Frazzini, filed in the 15th Judicial Circuit. Defendants include Palm Beach County, Related Ross affiliates CityPlace South Tower II LLC, CityPlace Hotel LLC, The Related Companies LP and CityPlace Retail LLC, the CityPlace Community Development District, and the city of West Palm Beach and its redevelopment agency.

The numbers

The complaint says the county placed the deal on an “add-on” agenda item, a procedure reserved for emergencies, with six days’ notice and a 715-page file released 90 minutes before the meeting. Commissioners approved the package 6-1, Gregg Weiss dissenting. The county would advance $26 million from reserves as construction deposits, then lease the finished hotel back to Related Ross for an initial 33-year term with renewals up to 97 years, at base rent of $1,117,000 a year rising 3 percent annually. Two independent appraisals valued the land near $42.7 million and $43 million, against an $8.8 million Property Appraiser value.

What’s next

The suit seeks a declaration that the Sept. 29 approval is void and an injunction barring the county from executing, recording or funding the deal until it holds a properly noticed vote with documents published in advance. Lead counsel William A. Brewer III called the notice process “not an obscure procedural matter.” Related Ross said in a statement that “a thriving city is one that everyone has an opportunity to share in its success.” The same plaintiffs already have a separate zoning challenge pending against the city over the project, so Related Ross is now fighting on two fronts before it can break ground.