By Jane Smith
Boynton Beach held its own version of the Shark Tank television show in March when its Community Redevelopment Agency board listened to ideas pitched for its two historic homes — Little House and the Oscar Magnuson house.
Most presenters bubbled with excitement about their plans for a music school with space for the local ukulele club to play, a bed and breakfast with an event center, a craft brewery serving light bites, a pizza place with a wood-fired oven, a Mediterranean restaurant and a brew pub that specializes in fermented tea.
Then a potential buyer, Bruce Kaplan of the Local Development Co. in Philadelphia, stepped forward and talked in general terms about the development firm where he is chief financial officer. His firm recently purchased a 3.3-acre vacant parcel at 1314 N. Federal Highway in Delray Beach.
Prakas & Co., a real estate brokerage that specializes in restaurants, received the exclusive listing for the two homes in November. The Prakas firm is based in Boca Raton and run by Tom Prakas.
Vivian Brooks, the CRA’s executive director, contacted Prakas. “He is often mentioned in the media as the go-to person for restaurants,” she said last year.
Broker Steve Mossini said the firm sent an email blast to its client list about the Boynton Beach homes when asked how Kaplan found out about the properties. They were not listed on Loop.net or other commercial real estate websites.
The Prakas firm will receive a commission equal to 5 percent of the base lease rental amount for the full lease term or $5,000, whichever is greater, for the Little House at 480 E. Ocean Ave. and for the Magnuson House at 211 E. Ocean Ave. If the firm finds a buyer, it would receive a 5 percent commission, or at least $10,000.
For the Magnuson house, the CRA is offering $200,000 to the buyer/renter to build it out, plus other grants available from the CRA, Brooks said.
Kaplan’s firm offered to pay $250,000 for the Little House and $300,000 for the Magnuson house, the oldest structure in Boynton Beach.
The prices would translate into losses for the CRA. The agency had paid $850,000 in 2007 for the 1,736-square-foot house built about 1910 by Swedish immigrant and farmer Oscar Sten Magnuson. His wife, Eunice Benson Magnuson, was one of the first town clerks.
The CRA had spent nearly $800,000 to buy, move, renovate and outfit the 786-square-foot cottage, known as the Little House.
Its board members received just a spreadsheet listing the potential buyer and tenants, even though most of the potential tenants had submitted plans. Kaplan’s firm did not submit material, just gave a $2,500 deposit held by Prakas & Co.
Board members eventually decided to review the proposals before voting, but they let the businesspeople make their pitches.
Chris Montague, who lives in Boynton Beach, talked about moving his music school, SoFlo Music School, from Delray Beach into the Magnuson house. He submitted a proposal, but it was not listed as a viable option because he learned after the fact that the CRA was only interested in restaurants. No one mentioned that to him during the process, he said. The CRA materials also listed other uses for the building.
His music school offers piano lessons to 150 students a week. “That’s about 600 people a month, dropping off kids or loved ones for 30 minutes to an hour with time on their hands,” he said. They would bring extra traffic to Ocean Avenue, he said.
He thinks the backyard space would be a great place for the Boynton Delray Ukulele Society to meet. “Right now, they practice in a private home,” he said.
Events coordinator Tara Sinclair brought an entourage to support her idea of turning the 211 house into a bed and breakfast. Her inn would feature a wrap-around porch where beer and wine would be served, four luxury suites and an event space in the backyard, and her living quarters and office upstairs.
She hired an architect to develop renderings and restaurant and business consultants to guide her. She also had a building inspector review the condition of the house. Her proposal includes this financial breakdown: $400,000 loan secured to cover the cost of the luxury suites and event space, $250,000 from the CRA to create the wrap-around bar, $200,000 from the CRA to bring the structure up to code and the property would be given to her.
“Boynton Beach is charming,” she said. “It has character and can become a coastal destination.”
Jason Facarra of Three Horns Brewing Co. said his business was formed two years ago by three friends who started it as a hobby. The company has a chef who trained with Michelle Bernstein in Miami. It plans to brew craft beers onsite by building a small structure that can support the tanks.
“Our goal is to be a hub for the kind of people the CRA is trying to attract,” he said. Three Horns plans to bring beer tourism to Ocean Avenue with beer tastings and the like.
Three Horns offered to enter into a 10-year lease at the Little House at $2,000 per month with the first four months free. It also wants an option to buy in the first year. “Whatever makes the most sense from the financials,” he said.
Sal Campanile introduces himself as the “Pizza Guy” and told the board, “I see Boynton Beach as even better than Delray Beach.” He owns the 250-seat Mastino Wood-Fired Pizza Kitchen in Delray Beach.
For the Little House, he plans to open the Little Pizza Shack and offer wood-fired pizzas, free-range rotisserie chickens, handmade gelatos and cappuccinos. “We will do wine pairings, craft beer pairings, wood-fired pizza school for aspiring chefs,” he said.
At the Magnuson house, he wants to run La Piazzetta Market & Grille and offer Mediterranean cuisine with an open kitchen.
At the Little House, he is willing to pay $1,500 a month for a five-year lease with three five-year extensions and an option to buy within the first five years for $275,000. Lease payments would go toward the purchase price. He is asking for six months rent free.
At the Magnuson house, he would pay $2,500 a month for a five-year lease with three five-year extensions and an option to buy. Lease payments would go toward the purchase price, not specified. He wants first 12 months rent free.
“What kind of financial help are you looking for?” Mayor Jerry Taylor asked.
“I’ll take whatever you guys have,” Campanile said. “We don’t need it. But if it’s available, we will take it.”
Chris Montellius, who works at Brown Distributing Co. in West Palm Beach, wants to open a Kombuchery. “Kombucha is a fermented tea, similar to the process of brewing beer,” he said. “But it is more of a health and probiotic beverage.”
He plans to offer a restaurant/brew pub at the Little House and pay $2,500 monthly rent. His chef, Alex Bustamente, cooks at The Breakers’ HMF restaurant in Palm Beach. Bustamante said the time is right to strike out on his own and that the Little House is the perfect place to start.
For dinner, Bustamante wants to create an intimate, cozy atmosphere with a wood-fired oven. “It’s a really special spot that Boynton is lacking,” he said.
Kaplan, of the Local Development Co., said his company has a branch office nearby. It acquires large properties, with its most recent acquisition at 1314 N. Federal Highway in Delray Beach. That acquisition closed in early March for $2 million, without a mortgage, he said.
His company currently maintains over 20 properties and has developed in excess of 100 properties. It has bought and sold 234 properties in the last two years, he said.
“We like the (Boynton Beach) properties. We believe we could acquire them, develop them,” Kaplan said.
At the end of the more than two hours of presentations, Taylor said, “This could be the biggest thing we do on Ocean Avenue.” He asked his fellow board members to review the proposals and make a decision at the April 14 meeting. They agreed — unanimously.
By Jane Smith