By Dan Moffett
The South Palm Beach Town Council sent a clear response to a developer’s request to fast-track a condominium project on the site of the beleaguered Palm Beach Oceanfront Inn.
Not so fast, council members told the Paragon Acquisition Group.
Mayor Donald Clayman exposed the town’s reluctance to move quickly when he made a motion early during the Feb. 25 council meeting to give Paragon everything it wanted — a charter change amendement on the August ballot that would allow construction of an eight-story building where the old Hawaiian hotel now stands.
Clayman’s motion died for lack of a second, as he knew it would, to a round of applause from a large turnout of townspeople.
“A vote in July or August is much too soon,” said Councilman Robert Gottlieb. “I don’t have enough information.”
The current height limits in the charter “were overwhelmingly approved” with a 78 percent majority in 2011, said Councilwoman Stella Jordan, who opposes having another referendum to change the rules for Paragon.
“The feedback I’m getting is this is too quick,” said Vice Mayor Joseph Flagello. “We don’t have all the details, and you’re going to see residents are gun-shy.”
Council members told Paragon to come back for a work session with residents in March and bring more details and try to win the support of the project’s neighbors.
Since buying the property for $8.25 million in November 2012, Paragon CEO Gary Cohen has promised to “restore the neighborly feel” of the troubled property.
During a Feb. 18 workshop on the proposed project with the Town Council, townspeople got the chance to see what Cohen meant by “neighborly.” His plan replaces the aging hotel and restaurant with a 36-unit, eight-story condominium building with a “wedding cake” design that narrows as it rises.
The property’s nonconforming commercial use would change to residential like that of all its neighbors.
“The last group that owned this property caused you a great deal of angst,” said Mitch Kirschner, an attorney representing Paragon. “I can tell you that we won’t do that. We know that the town is exclusively zoned for residential. We are very aware of that. We are not commercial developers. We are residential developers.”
The property’s previous owner, the Paloka family and their Kosova Realty, paid $3.3 million for the motel and restaurant in 2002, then touched off a political firestorm in 2006 with a proposal to build a 14-story, $250 million condo-hotel building. That idea went nowhere, and the town also rejected the Palokas’ scaled-down 10-story version three years later.
The Paloka proposals were “tantamount to landing a spaceship on that property,” Kirschner said. “Plans to turn it into a commercial property show a lack of sensitivity, a lack of understanding of what this town is all about.”
Kirschner said Paragon will not ask for zoning variances and will comply with all open-space requirements. What the developer does need, however, is for South Palm Beach to change its charter and its land development regulations.
In 2010, town voters were so annoyed by the Palokas’ proposals that they passed a requirement that zoning changes go to a referendum, not through the Town Council. Paragon can’t build its condominiums higher than 60 feet now unless it gets voters’ approval to change the zoning and allow another three stories.
Kirschner says the developer just wants to go as high as its neighbor, Concordia East.
“We would ask that the charter be amended and the LDRs be amended simply to go back to where it was prior to Paloka,” he said. “We’ve got the Paloka albatross on our necks, and we want to get it off.”
Paragon specializes in distressed properties and, according to Cohen, has bought more than $100 million worth of them since 2012. Last year, the developer won the approval of Highland Beach’s Town Commission for a 22-unit, seven-story condominium project.
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