Palm Beach County commissioners have approved a long-term agreement with Related Ross to build an 18-story, 400-room hotel beside the county convention center in West Palm Beach. The 6-1 vote advances a project officials say could draw larger conventions, while raising questions about the public-private deal, tax exemption and the county’s financial return.
Key takeaways
The agreement gives the county ownership of the hotel and land while Related Ross develops and operates the property under a 97-year lease. Supporters point to tourism and business benefits; opponents have challenged the tax treatment and the process used to bring the deal forward.
- Commissioners approved the agreement Sept. 29, with Gregg Weiss opposed.
- Related Ross will pay $1.1 million in initial annual base rent, increasing 3% each year.
- The county will acquire the hotel site for $26 million and receive a share of revenue above a set threshold.
- The hotel is expected to be exempt from property taxes.
A second hotel for the convention center
The proposed hotel, planned as a Curio property, would be across the street from the Palm Beach County Convention Center and the existing Hilton West Palm Beach. Convention center General Manager Dave Anderson told commissioners that the added rooms could help the venue accommodate events of up to 2,500 attendees—about twice its current capacity.
The convention center opened in 2004 and was expanded in 2012. County Administrator Joe Abruzzo said renderings for a further expansion, potentially growing the facility from 350,000 to 750,000 square feet, are expected to be presented by next summer. Commissioner Maria Marino said the additional hotel capacity would help support that expansion.
How the agreement is structured
The county will buy about 1.8 acres at 940 S. Rosemary Ave. for $26 million, funded from county reserves, with a $5 million initial deposit from Related Ross. The county will own the land and, ultimately, the completed hotel, then lease the property to the developer for 97 years. Initial base rent is set at $1.1 million annually, with a 3% yearly increase; the agreement projects more than $600 million in rent over the term, before any additional payments tied to hotel performance.
Related Ross will also lease 335 spaces in the convention center garage for $402,000 a year. The Hilton operator will lease 255 spaces for $306,000 annually. Those parking payments also rise 3% each year, bringing the first-year hotel and parking payments to about $1.8 million.
Tax questions and competing views
The arrangement would exempt the hotel from property taxes, a provision that drew sharp criticism from the Grandview Heights Historic District Association. Its president argued that the exemption would give the developer a public tax benefit while residents and other businesses pay property taxes. The association also objected to the deal being added to the agenda with limited time for public input.
Estimates of the tax trade-off differ. A county consultant estimated an initial tax bill of $2.5 million if the property were taxable, while independent appraisals put the hotel’s prospective value around $350 million—a valuation that could imply a substantially higher bill. Abruzzo disputed the consultant’s estimate, and county officials said other convention-center hotel projects have received public subsidies or tax exemptions.
The county’s $26 million land purchase also makes it a partner in hotel revenue above $77 million, a threshold that rises 3% annually. A consultant said strong revenue growth could yield a much larger return, but Weiss questioned whether the most optimistic assumptions were realistic. Supporters emphasized that the project could bring conventions, jobs and spending to local businesses even though the county’s ultimate financial return is uncertain.