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The Palm Beach Post, Fla., The Source column
(Palm Beach Post, The (FL) (KRT) Via Acquire Media NewsEdge) Jul. 6--Now that the cat's out of the bag on plans to turn the 683-acre Briger tract into than 4 million square feet of biotech space, one wonders just who is going to take all that room.
Some 1.6 million is envisioned for the second phase of Scripps Florida, on 70 acres at the Briger parcel in Palm Beach Gardens (the land is across Donald Ross Road from Scripps' existing presence at Florida Atlantic University in Jupiter.) Palm Beach County will not buy the land or build the buildings, but it is helping the Lester family, which owns the land, pay for the cost of getting the land approved for development.
Their plan so far includes 1.6 million square feet on 70 acres for Scripps, plus another 2.4 million square feet on a separate 100 acres for biotech and office space, as well as a hotel with conference center. Another 500,000 square feet is set aside elsewhere for retail.
That's a lot of space. And it begs the question: Is there already a biotech company out there angling for a large chunk of real estate?
"No," said Karen Marcus, a Palm Beach County commissioner.
That's not to say a company might not come calling in the future, especially since Marcus estimates it could be 18 months before all regulatory approvals are obtained to develop the property into a mixture of offices, shops and yes, even houses (2,700, to be exact.) The idea, Marcus said, is to prepare the Briger tract for future use by companies who will want to be near Scripps.
Meanwhile, immediate demand for biotech space remains, shall we say, thin.
"I don't think I've done one deal directly related to Scripps," said Rebel Cook, a commercial real estate broker. Cook said she's received a few phone calls, but mostly for small, incubator companies needing 1,000 to 2,000 square feet of space -- not millions of square feet as envisioned by Briger.
Indeed, some observers think the Briger plan is just way too big. But others, including Cook, thinks the timing might just work out -- in the long run.
"Nothing happens overnight," said Cook, president of Rebel Cook Real Estate in Jupiter. "We're years away from it coming out of the ground. By that time, we all hope housing will be built up around there, existing commercial space will be absorbed and there will be a need for more space." A plan for public transportation to the Briger tract would be great, too, Cook said.
In the interim, lots of work needs to be done before the design plan can be approved by state and local government entities. That includes evaluating the property's wetlands, some of which are in poor shape because of invasive melaleuca trees, said Joanne Davis, a local environmentalist.
Drainage on the property is said to be a problem, too. Traffic will have to be considered.
But if the plan is approved, the Lester family could find itself sitting on a nice piece of real estate.
Prescott Lester, a family representative, did not return a phone call for comment. But sources say the family had been trying to shop the land for a price said to be in the neighborhood of $200 million. Once the development entitlements are in place, however, the land's value will increase exponentially -- up to $185 million for the 170 acres set aside for office and biotech, assuming a land value of about $25 a square foot. And that's not counting the land dedicated to retail or residential.
Of course, the highly dense project is not escaping the notice of other developers in the area. At least one hopes to get the same density numbers, an indication the Briger plan could open the floodgates to massive development in northern Palm Beach County.
"Since they're setting a precedent for Briger, we would hope they would extend that level of generosity to other landowners," said the developer, who asked not to be named.
REPORT SEES DARKNESS AT HOUSING TUNNEL'S END: A glimmer of hope for the housing market? Not likely, experts say.
It's the doom-and-gloom report from Seeking Alpha, a Web site that tracks stock market opinion and analysis from blogs, money managers and investment newsletters. A new analysis predicts the housing industry will continue to choke through 2010 (seekingalpha.com/article/83216-u-s-housing-market-forecast-2008-2010). Complicating a housing recovery: The dearth of credit-worthy buyers in the near term.
Real estate and credit experts say the large number of borrowers in foreclosure, or those just behind on mortgage payments, will have a lasting impact on the housing industry. And more foreclosures are on the way, thanks to the resetting of adjustable-rate mortgages between now and the end of the year.
"We're talking about the potential for 2 to 3 million foreclosures nationwide by the end of 2008, and that's 2 to 3 million buyers that are removed from the buying pool for a period of years. It's going to make a dent," said Jack McCabe, of McCabe Research & Consulting in Deerfield Beach.
Why will foreclosed borrowers be unable to buy a home in the future?
A foreclosure, or late or missed mortgage payments, can stain a person's credit for seven years. That hurts an individual's ability to get a loan, or even a job, in the future, according to Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, the nation's largest and longest-serving nonprofit credit counseling organization, based in Silver Spring, Md.
Things are so bad that some lenders can't get around to foreclosing on all defaulted borrowers, or else are choosing to hold off on foreclosure filings in order to avoid dumping even more homes on an already saturated housing market.
"There are people who should have been foreclosed on who are living in their house for a year and they haven't made a house payment, and they haven't been foreclosed on, either," McCabe said.
While the temptation to squat in one's home might be great, credit experts say homeowners should do everything they can to avoid foreclosure. "If they didn't use good judgment getting into a home," Cunningham said, "let's learn that from that and apply good judgment getting out." On the other hand, Cunningham says homeowners should consider relinquishing their home under two conditions: One is if homeowners are taking extreme measures to make their mortgage payments, such as taking out payday loans or loans from their retirement accounts. The other condition is if they are becoming emotionally overwhelmed by the strain.
The rise in foreclosures comes as lenders tighten standards for loans. Because of the foreclosure crisis, lenders already are much more rigid in credit and down payment requirements.
"Many lenders are not even going to make a loan on a condo," McCabe said. And that's bad news for the thousands of new condo units that will soon be dumped on the market in South Florida, especially in Miami-Dade County.
Ah, the irony. Home prices finally are plummeting, just as borrowers are having a harder time getting a loan. Feels like just the opposite of a couple of years ago, when home prices were escalating and the money was flowing freely to practically all buyers.
Cunningham said she thinks lenders may have to adjust standards to accommodate future borrowers with a slightly blemished -- or even greatly blemished -- credit history. "What will tomorrow's lending standards look like?" Cunningham wondered.
"The reality is we're going to have a whole bucket of people who got caught up in this," she said. "Yet maybe they learned something from this, and are back on their feet and need to get back into a home."
The Source is a weekly online column about business and real estate in Palm Beach County and the Treasure Coast.
To see more of The Palm Beach Post -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.palmbeachpost.com.
Copyright (c) 2008, The Palm Beach Post, Fla.
Distributed by McClatchy-Tribune Information Services.
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