Completion of a sewage lift station arose last month as the main obstacle behind the delayed opening of Nautilus 220, a $300 million waterfront condo building in Lake Park, and town commissioners are worried that it could keep the building off the tax rolls for another year.
“I was promised we were going to have a grand opening and people were going to be able to flush their toilets,” Commissioner Judith Thomas told officials from Forest Development at an Oct. 22 commission meeting. “I urge you to please get that done. Give us, give yourself, give the community a win.”
Commissioners worried that if the lift station problems persist, the already delayed opening of the twin 24-story waterfront towers could be delayed past Jan. 1, when properties go on the tax rolls for the 2026-27 budget year.
But the lift station also figures prominently in complaints about the developer’s plans for public access at the foot of the condo tower. The town has agreed to allow Forest to build a hotel, boat storage facility and restaurant and put the developer in charge of the town’s marina.
Commissioners, counting on the bulge in tax revenues promised by 330 condos, expressed worry Oct. 22 that Nautilus might not open before year’s end.
“You say a month’s time,” Mayor Roger Michaud told developer Peter Baytarian of Forest Development on Oct. 22. “But for me that month’s time is one thing, but Dec. 31 is a whole different thing for this town. It means revenue coming here.
“That is what I’m asking Santa Claus this year,” he said. “Because my wife won’t let me get a new car or a new truck. … But a certificate of occupancy from Nautilus 220 (is a) win-win for everybody.”
Confident will open in 30 days
Baytarian assured commissioners that the lift station problems would be resolved in time for an opening before Dec. 31. “I am told they are punch list items,” he said.
Since that Town Commission meeting, the lift station issues have been resolved, he said Monday in an interview with Stet News.
“We’re all excited to have Nautilus complete in the next 30 days,” he said.
Forest partnered on the project with Royal Palm Cos., headed by Miami developer Daniel Kodsi. They obtained a $269 million construction loan in June 2022 from New York’s Fortress Investment Group. Construction began shortly thereafter.
Forest took out a $25 million second mortgage in March to buy out his partners’ positions in the condo building’s restaurant, retail, office and guest suite spaces.
Baytarian acknowledged the building’s delays. Past reports called for the condo building to open last year and an active Interstate 95 billboard proclaims it would be open by summer 2025.
While he said the project is 90% pre-sold, sales began to close in September and October, with 49 condos bringing in $76 million, property records reveal.
While that makes the average price $1.5 million, 38 units have sold for more than $1 million, and four topped $3 million.
Unsolved lift station issues
Forest has made strides in overcoming the complex issues that beset the lift station, Seacoast Utility Authority Executive Director Rim Bishop said Monday.
One outstanding item centered on the main line that carries sewage away. In an Oct. 22 memo to the town, Bishop wrote that “pipe sections and joints may be unacceptably deflected — that is, that the line was not installed to the approved grade.”
“If this is correct, the pipe and its joints are subject to unacceptable stress, the consequences of which could include premature failure (leaks) or trapped air pockets that could adversely affect lift station pump performance,” he wrote.
The lift station, which is in a chamber 20 feet deep designed to pump sewage from the property to Seacoast’s sewage treatment plant, also didn’t yet have electricity, Bishop wrote, although he said Florida Power & Light has scheduled a time to make the connections.
Seacoast won’t sign off on a faulty lift station because, once it does, it becomes the utility’s property — and problem.
Once the lift station is operating, the sewage system must pass final reviews and the project’s water system must undergo line-flushing, pressure-testing, disinfection and bacteriological tests before the buildings can get a certificate of occupancy, Bishop said.
99-year waterfront lease for $4.2 million
But even if the lift station drama is resolved, its location is causing headaches for Forest as it tries to move forward with the second stage of development at the site at Silver Beach Road and U.S. Route 1, just north of the Riviera Beach line.
Forest has leases to take over the town’s marina and build a 260-room Marriott Autograph Collection hotel, a 30,000-square-foot stand-alone restaurant and a 280-boat storage facility on 2.5 acres of town-owned land at the base of the twin towers.
Forest also is pursuing other area projects, including the right to develop city-owned land along Blue Heron Boulevard in Riviera Beach, the Oculina towers next to Nautilus on the south side of Silver Beach Road and 10th & Park, a 16-story, 595-unit rental building in downtown Lake Park.
But the developer built Nautilus without setting aside space for a lift station. Instead, the lift station has been built on town-owned waterfront property where Forest plans to build the hotel and boat storage facility.
Baytarian explained that the public site is justified because the Nautilus property is compact and the lift station also serves the marina and 80 homes besides Nautilus.
Residents are concerned that the developer is not paying the town enough for the marina and is failing to deliver on promises of public access to the site. They point to the lift station as an example of mismanagement.
“People are waking up to the idea that this is a pretty bad contract,” resident Michael Steinhauer, an officer of the nonprofit Lake Park Society for the Advancement of Civic Engagement, said. “The lift station isn’t helping the developer’s position.”
The town agreed to four 99-year leases of the waterfront land to Forest in 2024. The terms call for Forest to pay $75,000 a year for 10 years for each of four components: the hotel, the restaurant, the boat storage facility and the marina.
Forest also would pay $1.2 million upfront, bringing the total to $4.2 million, all due in the first 10 years.
For the remaining 89 years, the developer would make no lease payments, angering residents who believe Forest is taking advantage of the town of 9,000 people.
“The developer’s plans for the marina do not include public parking or public gathering spaces. That means residents and families will have little to no access to enjoy the marina,” the society posted on its webpage. “For the next 99 years, our own community could be shut out of the waterfront we already own.”
Countered Baytarian: The marina had been losing money, he will invest millions into rebuilding it, and it will begin generating tax revenue for the town.
“Look at the growth provided to the community,” he said. “It’s going to be a huge swing for (the town).”
Questions about public waterfront access
The society’s concerns were validated in an Oct. 3 memo to town planners from Town Attorney Tom Baird and his partner at the Jones Foster law firm, Peter Henn.
“Inexplicably, the developer planned and constructed its Nautilus 220 project without planning in advance for the location of a lift station on the developer’s property, or on other private lands in proximity to Nautilus 220 to accommodate its development,” the memo says.
“As a result, after the Nautilus 220 project was constructed, the developer sought to place a lift station on public property in the marina. … The town essentially had little choice but to provide an easement on public land in the marina so that buyers of Nautilus 220 could move in.”
But the lift station, which should get a 100-foot buffer around it, eats into land that is supposed to be set aside for public access, crowding out a proposed event lawn and leaving less space for a public plaza, Baird wrote.
“The lack of planning for this utility infrastructure by Nautilus 220 essentially renders the ‘event lawn’ useless as adequate and accessible open space for the public,” they wrote.
The memo also questioned the size and location of the developer’s proposed marina plaza.
“It seems obvious that this ‘open space’ is not large enough to function as an entertainment venue that can accommodate ‘street festivals’ and ‘special events,’” Baird and Henn wrote.
“This area is basically the extension of the sidewalk and most of the ‘plaza’ is in the public (right of way). A public (right of way) cannot be counted toward an open-space requirement.”
They faulted the developer for ignoring staff comments about plans for a public space atop the boat storage building.
“The developer apparently continues to insist that it is open space available for the public, but the developer, and more likely the hotel operator, will control any public access to this space,” they wrote.
At the Oct. 22 meeting, Forest representative Larry Zabik told commissioners the public would not have to go through the hotel to get to the roof as there would be an outdoor staircase.
All components will be open to the public, Baytarian said Monday.
To questions about his lack of marina experience, he said he would be working with an experienced locally based operator, Ray Graziotto of Seven Kings Holdings, to run the marina.
“We want to get back on track with the town and resolve this,” he said.
Converting the boat trailer land
Additionally, the town may have to limit private development on the land because of the way the town bought the land.
The town paid the county $2.4 million for a portion of the waterfront land in 2013 to provide boat trailer parking. The county had bought it three years earlier with public bond money pledged to assure public access.
While the restrictions tied to the county money may no longer apply, “we are hesitant to conclude that this property may be developed for an exclusively private use (hotel),” Baird and Henn wrote. They suggested the town get an opinion from the county inspector general.
The lack of space in the developer’s plan for public access can be traced to the lift station, Baird and Henn wrote.
“The developer’s failure to plan in advance for a lift station … should not constrain the (planning) department, and ultimately the Town Commission, from doing the right thing and designing a (development) and site plan that preserves the public’s access to the waterfront and public spaces within the property,” they wrote.
“It may be that the right thing is to reduce the (size) of the hotel and or boat storage uses or to eliminate one of the hotel uses altogether (given that boat storage is a more appropriate use for the marina).”
The $600,000 reverter clause
In August, resident complaints dealt a blow to the developers when the commission voted 4-1 to postpone a crucial step needed to begin development of the marina.
The leases call for the town to go before the governor and Cabinet to remove a public-use requirement on a half-acre of underwater land the state gave to the town in the 1960s.
The developer needs those slivers of submerged land for its restaurant and boat storage.
If the town violates the state’s terms, the land reverts to the state. To remove the public space requirement, the town would have to pay the state $600,000, money that would later be covered by the developer’s $1.2 million initial marina lease payment.
Without the state’s approval, plans for the hotel, restaurant and marina cannot move forward. But after resident outcry, the Town Commission postponed a Cabinet appearance set for September and moved it to next year.
The town also paused all marina permits, writing in a memo to commissioners that they did it “to enable staff and the town attorney to work with the developer on amending the (agreement), including the critical path (timeline) that is significantly delayed.”
This story was originally published by Stet News Palm Beach, a WLRN News partner.
