NEWS

As economy shifts toward slowdown, Related Cos. is bullish on The Square, West Palm Beach

The Related Cos. is moving forward with massive projects that will change the face of West Palm and its residents.

Alexandra Clough
Palm Beach Post
Ken Himmel, chief executive officer of Related Urban, is seen in a west-facing office overlooking West Palm Beach at 360 Rosemary, Related's new office tower.
  • In 2023: Three restaurants and bars at 360 Rosemary
  • In 2023: Construction of luxury apartment on old Macy's site
  • In 2023: Building 25-story One Flagler office tower

It was four days before Christmas, but there was no holiday slowdown at Related Cos.' office in West Palm Beach.

Construction executives huddled in a corner conference room to go over plans for new downtown office towers. Golf course experts gathered to review the construction of a golf course and clubhouse in Martin County.

A top company executive wasn't slowing down, either. Kenneth Himmel strode from one end of the office to the other, coolly reeling off company headcounts and construction stats and pausing only to admire a glowing piece of quartz.

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Pictured is a rendering of proposed developments in downtown West Palm Beach, seen on a screen at 360 Rosemary in West Palm Beach last month. Properties currently in development are colored in gray.

"Ross picks out all the marble and stone," Himmel said of his partner, Related Cos. Chairman and Miami Dolphins football team owner Stephen Ross.

As the Earth enters a new year, the nation's economy is shifting toward a slowdown. But Related Cos. remains focused on its growth plans, said Himmel, chief executive of Related Urban, Related's mixed-use arm.

Himmel acknowledged the belt-tightening some companies are starting to make nationally, including a recent report that investment banking firm Goldman Sachs will lay off 4,000 people. "You're going to see a lot of it in the next couple of years," Himmel said.

"But if there's a bright spot anywhere, it's in the southeast United States," Himmel added.

During a recent interview, Himmel sketched out the company's grand plans for West Palm Beach. They include more offices, shops and restaurants. And big-name companies still are moving into the city, in all categories, he said.

Himmel shared a few details.

The recently opened 360 Rosemary office tower will get three new restaurants in 2023.

In early 2023, three restaurants and bars will open on the ground floor of 360 Rosemary, the company's new 20-story office tower. The eateries not only will serve up meals for residents and tourists. Power lunches, business dinners and after-work happy hour gatherings also are the goal.

Restaurants include Felice, an Italian restaurant by Saint Ambroeus, opening in January.  And in the spring, the iconic New York City dining institution Harry’s and sister pizzeria, Adrienne’s Pizzabar, also will open.

Related Cos. plans to build a luxury apartment tower on the site of the former Macy's department store site at The Square. It's expected to be completed in the spring of 2024.

Meanwhile, construction of a 364-unit luxury apartment tower being built on the former Macy's department store site at The Square will be completed in the spring of 2024.

The 25-story One Flagler office high-rise being built along Flagler Drive at Lakeview Avenue also will be finished at that time. The ground floor restaurant will be Milos, a Greek seafood restaurant that is a sister eatery to the Miami hotspot.

The 25-story One Flagler office tower being built along Flagler Drive is expected to be finished in the spring of 2024.

During the next couple of years, Related plans to build at least three more office towers at The Square as well.

One will be at 515 Fern, next to the Brightline passenger train station. The other two are twin towers set for Hibiscus Street, in place of the AMC West Palm Beach 12 movie theater now on the site.

A rendering of 515 Fern, a proposed office tower that would be next to the Brightline passenger rail station in downtown West Palm Beach.

Big name tenants plan to move in. One is a top health care provider from the Northeast that will establish a large medical office complex at The Square, Himmel said. Himmel wouldn't disclose the provider's identity, but he said the hospital company will lease 100,000 square feet in the east tower of the twin-tower Hibiscus Street site.

Il Bellagio at The Square in downtown West Palm Beach will be moving locations.

In the center of the complex, Il Bellagio Italian restaurant in the base of the Harriet Himmel Theater will move to the space now occupied by Anthropologie. An unnamed high-end restaurant operator will take over the Bellagio space with plans to add a food hall-like market in the space, Himmel said.

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The pool area at the Hilton West Palm Beach on Okeechobee Boulevard.

There's more.

During the summer of 2023, plans are afoot to renovate the Hilton West Palm Beach hotel adjacent to the Palm Beach County Convention Center. The 400-room hotel is across from The Square on Okeechobee Boulevard.

Himmel said the Hilton is 75% occupied year-round, and sold out during the winter tourist season. But he said there's increasing demand for a more upscale hotel, and he joked the property should be "somewhere between an airport hotel and The Breakers."

Meyer Davis, a New York City-based design boutique firm, will handle the renovation, which will include a redo of public spaces such as the pool area, restaurants and lobby, Himmel said.

The Hilton West Palm Beach will get a big renovation soon.

Other projects also are on the horizon.

They include an eight-story hotel that could be built above the Cheesecake Factory restaurant space. In addition, luxury retailers, including a top men's clothing store, are eying a location in The Square. And a Publix grocery store might still move to a larger lot just north of its existing location on Rosemary Avenue.

CityPlace has evolved into The Square

The Square is being transformed into what Related Cos. had always intended when it built CityPlace more than two decades ago: A chic enclave of upscale shops and restaurants, akin to Worth Avenue or any fine fashion and dining district.

But since CityPlace opened in 2000, the mixed-use center, now known as The Square, has had a rocky history and uneven consumer interest. This led to retailers cycling in and out of the complex.

With the surge of office tenants recently moving to Palm Beach County, Related finally has cracked the code needed to create enough daytime traffic and support The Square's shops and eateries, Himmel said.

"The big difference is the office for retail and restaurants," Himmel said. "You can’t make it work if you rely only on tourism."

Further boosting fortunes: Plans by the University of Florida to create a graduate school campus on downtown land, Himmel said. UF, he said, will be a "game-changer" for the city, graduating students in law, business, construction and other fields.

More:UF wants to build a first-of-its-kind campus in West Palm: Here are facts about the plan

Ken Himmel is the chief executive of Related Urban.

If Related Cos. completes construction on all of its office high-rise projects, the company will create space for another 10,000 to 15,000 people working downtown, Himmel said.

The 360 Rosemary tower already is filled with an A-list of financial firms, from Goldman Sachs to hedge fund Elliot Management, which moved its New York headquarters to the building. Himmel said the tower's upscale finishes, including touchless high-speed elevators, an indoor gym and a lushly landscaped outdoor deck, are akin to the type of construction quality and amenities seen in Manhattan.

Some companies that leased small space to dip their toe in the market already want larger offices and might move to new planned towers, Himmel said.

This includes Related Cos. itself. The company built an office at 360 Rosemary in space intended for the garage, and it needs more room to fit all the executives hired or brought from New York, Himmel said.

Alexandra Clough is a business writer and columnist at the Palm Beach Post. You can reach her at aclough@pbpost.com. Twitter: @acloughpbpHelp support our journalism. Subscribe today.