Palm Beach County was the reason for the increase in the sales price

Is Palm Beach County trying to derail the sale of valuable land in downtown West Palm Beach to the Transit Village group? Or is the group trying to underprice the site?

A legal dispute between a private group of investors and Palm Beach County is escalating into a showdown over big names, big plans and millions of dollars for a high-profile transit and housing complex in West Palm Beach.

Issue: Should 6 acres of county-owned property downtown be sold to Transit Village LLC for $3.6 million, the price established years ago for this key downtown project? Or should the land be sold for $35.53 million, an amount consistent with today’s sky-high land values?

And is Palm Beach County really just trying to get out of this deal?

The county’s new higher land price, 10 times the original 2012 contract price, prompted the Transit Village development group to sue the county in February.

Transit Village’s lawsuit filed in Palm Beach County Superior Court says the county recently increased the price of the land simply because it has “seller’s remorse” and does not want to sell the property now.

In court filings, the district denied the allegations. He says it’s necessary to get a higher price, closer to current market value, for the downtown property, which is next to the Tri-Rail station on Tamarind Avenue

Since the initial lawsuit was filed in February, the legal dispute between the development group and Palm Beach County has escalated, including a lawsuit filed by the county and increasingly severe charges.

Transit problems: PBC filed a lawsuit in connection with blocking the sale of land for a key transport hub

Some of South Florida’s top political and business figures may also soon be involved in the high-profile legal proceedings.

Court records show that the county wants to interview the owners of Transit Village, which attracted new investors in 2021.

That 2021 transaction included the sale of 99% of Transit Village to BH Palm Beach Real Estate Acquisitions, an affiliate of BH Group of Miami, court records show. BH Group is a Miami-based private equity and real estate investment firm.

More: Transit Village’s $500 million West Palm Beach development is attracting new investors

Other investors include Miami-based Associated Group, a prolific developer; and Globe Invest Limited. Related Group is not affiliated with Related Ross, a major West Palm Beach developer led by Miami Dolphins owner and Palm Beach resident Stephen Ross, or its predecessor entity, Associated Cos. of New York.

In a lawsuit filed Sept. 19 in court, Palm Beach County said it wanted Yizhak Toledano, manager of BH Palm Beach Real Estate Acquisitions, to testify; Jorge Pérez, chairman of the affiliated group; his son, Jon Paul Pérez, president of Related Group; and other members of the related Group’s management staff.

What is the Transit Village project?

The billion-dollar Transit Village project has been underway since 2009. That’s when the county issued a request for proposals for a mixed-use, “transit-oriented” development on county land south of Banyan Boulevard, between Clearwater Drive and the CSX rail line that runs parallel to Tamarind Avenue.

Even then, the goal was to increase the use of public transport and build rental housing that was affordable for the workforce.

However, the project has taken on additional importance with the surge in development in West Palm Beach over the past few years, especially as businesses and residents relocate to the city during and after the Covid-19 pandemic.

The extra growth means more cars on the road, which means frequent traffic jams.

The agreement between the county and Transit Village LLC was codified in 2012 when Transit Village, led by investor Michael Masanoff, agreed to pay $3.6 million for six acres of county-owned land in West Palm Beach.

The county would still own the land where the Intermodal Transportation Center would be built. The center would be a transportation hub for people boarding trains in downtown West Palm Beach and transferring from various bus routes or between buses and Tri-Rail, Greyhound or Amtrak lines.

Transit Village also agreed to spend $25 million to make improvements to the site so it can be used as a transportation facility.

The project gained major momentum in 2021 when Associated Group and high-net-worth financial partners BH Group and Globe Invest Limited joined the Transit Village team.

A key city commission then approved 2022 plans for four 25-story towers on the site.

The plan includes three residential towers with 986 units, including 40 reserved for employees and 165 micro-apartments, the rent of which is usually cheaper. The fourth tower would have 108 hotel rooms and 182,720 square feet of office space. There would also be 2,000 spaces in the garage. parking spaces, commercial space and 606 bicycle parking spaces.

The project was designed for easy access to I-95, Tri-Rail, Amtrak, Palm Tran, taxis and downtown.

More: Transit Village in West Palm Beach will have almost 1,000 apartments

Masanoff said at the time that construction of the Transit Village parking garage should take about three years and that the apartments should be built within nine to 18 months. The price of the project was expected to exceed $1 billion.

Site plan approvals were obtained in January 2023, and construction on Transit Village was expected to begin last year.

Then came the county’s demand for more money, prompting Transit Village’s February lawsuit against the county.

County says feds must get refund for downtown land, but private investors object

Transit Village’s lawsuit says that at issue in the deal is the repayment of $2.98 million in Federal Transit Administration grants awarded to the county when it purchased land in West Palm Beach in 1992.

Not only does the county want Transit Village to repay that amount, it also said the free trade agreement requires repayment to be based on the property’s current market value.

That value is now $50 million, and the free trade agreement portion is worth $35.5 million, the county claims in a counterclaim. The county said the money should be returned to federal taxpayers. “This is not the county’s money,” it said in its Aug. 2 counterclaim against Transit Village.

But Transit Village said in court documents that the county’s contract did not provide for an obligation to repay the FTA, which never requested repayment of the money anyway. Transit Village’s original court filings called the county’s insistence on repaying the FTA a “misinterpretation.”

However, Transit Village recently claimed that not only did the county know the money did not need to be repaid, but county officials also contacted the FTA Office and “requested payment of $35.53 million under the FTA.”

Documents in the case show that Isami County Deputy Administrator C. Ayala-Collazo emailed an FTA official requesting permission to pay for the FTA ANDin August 2023. Court records show she did it again in June 2024, four months after Transit Village filed a lawsuit against the county.

Transit Village said the county’s unusual offer to pay the FTA is an attempt to come up with a reason to increase the sales price.

Transit Village says it was never notified by the county of this “stunning action” but only discovered it after the county provided documents, including emails from the free trade agreement.

“The county acted in bad faith and with dirty hands in attempting to impose an obligation to repay the FTA and prevent the closure,” Transit Village said in a Sept. 9 filing.

County Attorney L. Denise Coffman said in a Sept. 26 email that the county does not comment on pending litigation.

Transit Village’s lawsuit asked a judge to order the property to be sold at the original contract price, while the county’s counterclaim asked a judge to order Transit Village to pay the higher price.

The former county commissioner could be interviewed in October about the deal

Court records show district hearings for high-profile players are scheduled for October.

They include Masanoff, as well as Steve Abrams, a former Palm Beach County commissioner. Abrams later served as president and then executive director of the South Florida Regional Transportation Authority, which operates the Tri-Rail system.

County officials recently asked a judge for additional time to prepare for an upcoming hearing. Court records show the county said it had to interview other witnesses, including Transit Village executives, and review nearly 134,000 pages of documents obtained from Transit Village.

The legal quagmire surrounding the transit project is a far cry from the momentum that emerged just two years ago, when Masanoff expressed delight at the September 2022 approval of a massive apartment, hotel, retail and parking complex in West Palm Beach.

“There is no downside to it,” Masanoff said at the time. “This is a huge, huge, huge victory for society, for neighborhoods, for transportation and for everyone.”

Staff writer Kimberly Miller contributed to this report.

Alexandra Clough is a business writer at The Palm Beach Post. You can contact her at [email protected]. X: @acloughpbp. Help support our journalism. Sign up today.