Surfside law forces sale of Jupiter beachfront condo but it will need zoning change first

Owners of the Beach Sound Condominium on Jupiter Island , fearful of multi-million dollar repair bills, have agreed to sell their four-story, 12-unit building to a partnership affiliated with Kolter Group, according to documents filed with Palm Beach County. But for the sale to take place, the builder wants the county to change the zoning code to allow a bigger building to be built without the developer having to seek a variance. The issue will be addressed today at a county commission meeting that begins at 9:30 a.m.

The transaction could be the first forced sale resulting from the new state law adopted in response to the deadly collapse of the Champlain Towers South condominium in Surfside on June 24, 2021. The law requires, in part, that older condos along the state's coast undertake detailed inspections to determine if repairs are needed to ensure their safety. Some of these repairs can cost in the millions of dollars.

Beach Sound owners have decided that that it makes more sense for them to sell to a partnership created by Kolter Group and Jupiter Island developer Phil Perko. Kolter Group s a diversified real estate development and investment firm that has invested in projects with expected value in excess of $30 billion. It is headquartered in Palm Beach County.

Confidentiality agreements bar discussion of the details of the sales agreement but people close to the agreement have reported that each owner would receive about $2 million if the sale goes through, nearly double fair market value. Condo owners have already received from more than $200,000 that is theirs to keep regardless of whether the building is bought.

The problem for the partnership, PK Beach Sound LLC, is that neighboring condos, concerned about the negative impact a taller building would have on their views, are strongly opposed to any zoning change. At issue is whether the county should approve a "Type 2 waiver" process that would allow builders looking to replace older coastal condos with new ones to do so without going through the sometimes arduous process of acquiring a variance.

Under current zoning, the setbacks, or space between condo buildings, must be reduced by one foot for every foot that a building exceeds 35 feet in height. The partnership says the rule makes it economically unfeasible to build. The Type 2 waiver would allow each application to be judged individually; the ultimate decision would rest with the county commission. The waiver process would only apply to the seven condos on Jupiter Island that fall under the jurisdiction of the county government.

Views blocked: Neighboring condo in Jupiter is prepared to go to court, if necessary

The nine-story Claridge, to the north of Beach Sound, is prepared to go to court, if necessary, to keep the existing zoning in place. Its treasurer, Ed O’Sullivan, said more than $100,000 has already been set aside for possible litigation.

County planners support the zoning change, noting it will allow for the construction of new and safer buildings to replace much older ones. The Zoning Commission, acting on the recommendation of staff, voted July 2 to endorse the request from the partnership. County commissioners are expected act on it on Wednesday, July 17.

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County Zoning Commissioner Sam Caliendo said condo owners who cannot afford to repair their buildings need help. Michelle Silvester, an owner of one of the condos at Beach Sound, agrees.

"This is all about the other condos maybe losing some of their views," she told The Post. "I don't understand. Right now, they are looking down at a decrepit 40-year-old building with rusting air conditioning units on a roof. What is being proposed would be a great improvement — a modern, state-of-the art building that could withstand weather events," Silvester said, accusing the neighboring condos of being selfish.

"I'm not sure what happens if we cannot sell out," she added. "It makes no sense to put millions of dollars into our building."

Claridge lawyer Seth Behn, though, said the change would set a dangerous precedent, destroying the property values of condo buildings like the Claridge. He noted that the existing code is designed to ensure that condos do not encroach upon one another.

“The sky is the limit,” said Behn of the Type 2 waiver being pushed by the partnership. "This is an infinite height allowance, that will allow an applicant to propose wildly out-of-scale development and the standards set for approving the waiver are practically non-existent."

Claridge treasurer O’Sullivan testified at the Zoning Commission hearing that other condos on Jupiter Island have all invested millions of dollars to comply with the new state law. Beach Sound, he said, is the only one that has not.

Under the proposed change, the density of any building could not be increased, which means a new Beach Sound could have no more than 12 units but each of those units are expected to be much bigger than the existing ones that average about 1,300 square feet. Area realtors say the new, larger units at Beach Sound could fetch as much as $8 million.

County commission will set precedent about future rebuilds

Even with the zoning change, there is no guarantee that plans for a bigger Beach Sound would follow. Approval would merely allow a developer to then file an application for the Type 2 waiver. Detailed plans would then need to be submitted and reviewed by county planners.

Beach Sound is located on Beach Road just south of the Martin County property line. The area contains, in addition to Beach Sound, the Passages, built in 1982; the Seawatch, built in 1984; the Landfall and Ocean Sound, both built in 1984 and the Carlyle, built in 1988.

Developer: 40-year-old condo should be torn down and replaced

The partnership emailed the following statement to The Post: "The existing building referenced in the code change requires significant repairs, and in light of the recent changes to the Florida Condo Safety Act, the developers are assisting residents who are facing challenging circumstances. The requested changes to the code are crucial for designing and constructing more resilient and improved structures."

Brian Seymour, an attorney representing the partnership, explained at a Zoning Commission meeting on July 2nd that his clients do not want to spend six figures putting together detailed plans without a zoning change. He said if, and when, the change is approved, the partnership would work with the buildings to the north and south "to figure out what makes sense."

O’Sullivan said his concern is that one of the options presented to the Claridge was a massive nine-story building that would “block us out of any sunshine” and cause a dangerous wind tunnel to develop in case of a hurricane. Also included is a three-story parking garage with the two lower stories below sea level. O’Sullivan questioned how a garage could safely be built below sea level.

In a letter to the county, Behn said the partnership is seeking to do one thing: Eliminate height restrictions for properties redeveloped along the beach through the removal of side setback requirements. These side-setbackrequirements have long served as a means of ensuring compatibility between adjacent properties, he said.

“We told them we could live with a five-story building but we have a problem with anything taller than that,” O’Sullivan told The Post. “We are concerned about a massive building on a very small lot. Part of the problem is they offered too much money and now need to change plans to make the project work.”

Mike Diamond is a journalist at The Palm Beach Post , part of the USA TODAY Florida Network. He covers Palm Beach County government. You can reach him at mdiamond@pbpost.com . Help support local journalism. Subscribe today.

This article originally appeared on Palm Beach Post: Surfside law forces sale of Jupiter beachfront condo but it will need zoning change first