Related Ross Hotel Lease on Rosemary Ave Skips Property Taxes

Palm Beach County has approved a sale-leaseback that lets Related Ross build a 400-room Curio by Hilton hotel on Rosemary Avenue in downtown West Palm Beach without paying property taxes, The Real Deal reported Sept. 29.

Why it matters

The county buys the 1.8-acre site and the finished hotel for $26 million, then leases it back to Related Ross. Because a county owns the property, it is exempt from property tax. The developer builds with its own debt and equity, so the public sector takes on ownership, not construction cost.

Reported figures put the county vote at 6-1. The Palm Beach Post reported in August that West Palm Beach commissioners approved their part of the arrangement 3-2, with the city giving up more than $1 million a year in tax revenue.

For other developers, the structure is a template. Any project next to publicly owned convention space may now ask for the same treatment. See our earlier coverage of Related Ross in West Palm Beach.

The numbers

• The hotel is planned at 18 stories and 400 rooms, roughly 204 feet tall, at 900 S. Rosemary Ave., across from the Palm Beach County Convention Center.
• The Post reported the $26 million is paid once the hotel is built.
• The Real Deal put project cost near $290 million. Other outlets have used figures above $300 million.
• Reported rent is about $1.1 million a year, rising 3 percent annually. A county consultant estimated the tax bill would have started near $2.5 million without the exemption.

Terms have shifted between votes, so the final lease language matters more than any single headline number.

What’s next

Related Ross still has to finish the lease documents and start vertical construction. Watch whether the rent formula holds and whether school and city budgets absorb the lost taxable value.

Peers eyeing county-owned adjacencies elsewhere in South Florida will read this as a precedent. The question is who pays: a foregone tax roll is a cost that other taxpayers carry.