Article Courtesy of The Palm Beach Post
By Tony Doris
Published May 31, 2018
WEST PALM BEACH — The value of West Palm Beach real estate plummeted from
its peak of $12.7 billion in 2007 to $8.1 billion in 2012, sending city
property tax collections tumbling and forcing cuts in payroll and in such
necessities as police car replacements, computer systems and road repairs.
But Finance Director Mark Parks said Tuesday that thanks
to economic improvement nationwide and a construction surge
in West Palm, property values have returned to $12.7
billion, putting the city in strong financial position. The
trend is likely to continue, he said, at least in part
thanks to the approaching completion of one building in
particular — the Bristol waterfront condominium — which
promises to add $659 million to the property tax base.
So it bodes well for the budget that property values have
risen, enabling the mayor and city commission to collect
more revenues — and spend more — without increasing the tax
rate. City revenues and spending have risen to $184 million
this fiscal year, from $153 million in 2014.
The tax roll also is rising because of new real estate
projects. About $80 million worth of projects were completed
recently, another $1 million are under construction. Add in
the projects that have been approved but not yet built, and
other projects under discussion, and the city estimates it
has $2 billion worth of new construction in the pipeline.
Construction continues on The Bristol, the most
expensive condominium ever built in Palm Beach County.
A big part of that is the Bristol, a 25-story condominium rising at 1112 S.
Flagler Drive just south of downtown, on the former site of the Chapel by
the Lake. The luxurious tower’s 69 condos sell for millions of dollars. One
recent purchase, of an entire floor, went for a reported $40 million.
The condo owners will contribute an estimated total of $5.2 million a year
in property taxes to the city’s general fund, the city estimates.
Bristol developer Al Adelson said the county and school district will make
millions more. At the same time, the city, county and schools have few costs
associated with the building because it will have no school children,
requires no road construction and since it will have its own security force,
it will require little police service, he said. Basically, he said of the
city, “they’re going to get $5 million a year with no cost against it.
Pretty good, huh?”
As the building is expected to be completed early next year, that money
would start pouring in the following year, in 2020, Parks said.
Parks said the city’s finances are benefiting from favorable national
trends, smart planning and a strengthening local economy. Among the high
Countywide unemployment is down to 3.6 percent as of
March, below the 4.1 percent national average and well below the 11.5
percent during the depths of recession, in 2009, he said.
West Palm population growth looks steady from an
estimated 110,200 now to a projected 133,500 in 2035, according to the
The city has “admirable” reserves of 25 percent of
its general fund revenues, and strong bond ratings of AA and AA+,
reflecting its fiscal stability, Parks said.
A decision a few years ago to use low-interest bonds
to pay down pension fund obligations has strengthened the funds while
enabling the city to earn high returns on its investments.
While the good news on real estate values could in
part reflect a high point in a market cycle, the real estate market now
is more based on growth and construction than on the market
manipulations that helped spark the last recession, Parks said. “There
may be a dip but I don’t see it being as precipitous as in Fiscal Year
Asked whether, given its increased revenues and healthy
finances the city might lower its tax rate, Mayor Jeri Muoio said it’s a
matter of priorities. West Palm’s property tax rate for general operating
purposes is 8.3465 mills, or about $8.35 per $1,000 of the taxable value of
“If appropriate, I would love to be able to lower the millage rate,” she
said. “We have to look at what’s being requested and how important it is to
make sure things get done in the city. Part of the reason property values
are up is because we’ve spent money, on more code enforcement officers, more
police officers. We’ve spent money beefing up other things…. I’m just not
prepared at this point to say, one way or the other.”