Billionaire developer Steve Ross and his company, Related Ross, have proposed building a 400-room West Palm Beach convention center hotel for $290 million. The catch? They want to buy the land from Palm Beach County for just $1, then lease it back for 99 years. It sounds shocking, but this is not Ross's first time using this structure. His earlier Hilton West Palm Beach hotel used the same strategy and transformed the city's convention business.
This new proposal for 900 South Rosemary Avenue, currently a parking lot, could add much-needed hotel space near the convention center. But it also raises questions about how land, taxes, and public benefits intersect in large real estate deals.
Why West Palm Beach Needs Another Convention Center Hotel
The Hilton West Palm Beach fills quickly during major events. Convention organizers say they need 700 to 800 rooms within walking distance to secure national conferences. Right now, the city can’t offer that without another large hotel directly connected to the convention center.
A second convention center hotel would make West Palm more competitive with cities like Orlando and Miami, where multiple hotels cluster near large venues.
Breaking Down the West Palm Beach Convention Hotel Proposal
At first glance, the $1 sale price for the hotel site may seem unusual, but it’s a calculated move. Steve Ross and Related Ross are proposing to transfer the 1.8-acre property to Palm Beach County for just one dollar, only to lease it back for 99 years. This transfer shifts the land into public ownership, unlocking several financial advantages. By eliminating property taxes for nearly a century, reducing annual operating costs by as much as 30%, and improving access to lower-risk financing through life insurance lenders and CMBS markets, the deal becomes more financially efficient.
Meanwhile, Related Ross retains full operational control of the hotel, including management, revenue, and profit rights. The county, in return, secures land ownership and long-term participation in future gains.
The Financing Strategy Behind the Proposal
The tax-exempt structure significantly boosts the project's financial feasibility. Without property taxes, the hotel could save an estimated $4 million to $6 million annually. Over the 99-year lease term, that adds up to approximately $150 million to $200 million in total savings. These reduced costs also improve the project's borrowing capacity.
In today’s lending environment, that means an extra $60 million to $70 million in financing potential, all without requiring public subsidies. Because the land would be owned by the county, lenders treat the leasehold interest similarly to municipal debt. This perception of lower risk makes the project more attractive to institutional lenders and enhances the likelihood of securing competitive loan terms.
Strategic Location and Land History
Though currently a surface parking lot, the site at 900 South Rosemary Avenue has deep roots in West Palm Beach’s redevelopment history. In the early 2000s, Steve Ross purchased 72 acres of downtown property as part of the CityPlace master plan, paying just $100 to $150 per buildable square foot at a time when the area was struggling. Today, that same land is valued at $500 to $700 per square foot, with the parcel now worth an estimated $60 million to $80 million.
This appreciation allows Ross to use a financial strategy known as basis arbitrage. He effectively bought low, held during a period of explosive growth, then transferred the land to the county for $1, regaining full control through a 99-year lease. This move helps avoid capital gains and transfer taxes, removes property tax obligations, resets depreciation, and improves financing. It's a private-sector strategy with long-term public benefits.
What Palm Beach County Gets in Return
While Related Ross would maintain operational control, Palm Beach County still benefits significantly from the deal. If approved, the county would receive fee ownership of a property now valued at $20 million for just $1. It would also collect lease payments of up to $2 million per year and share in 50% of profits above a 10% investor return. Importantly, the county would make no upfront investment.
The hotel is projected to create 766 construction jobs and 255 permanent hospitality jobs, as well as generate an estimated $123 million in visitor spending annually. Most importantly, the county finally gains the extra hotel rooms it has needed for years to grow its convention business. While other cities often rely on taxpayer-funded subsidies to attract hotel development, West Palm Beach may achieve the same goal at no public cost.
Steve Ross’ Influence on West Palm Beach Development
Steve Ross is not just a developer , he’s the force behind Related Companies, the Miami Dolphins, and CityPlace. He’s also behind the push to make West Palm Beach a hub for finance and tech.
Related Ross owns nine office buildings in the area and continues to attract major tenants from New York. That growth supports the county’s "Wall Street South" strategy and adds to the demand for business travel and conference hotels.
This proposal is more than a hotel. It’s a piece of a larger plan to shape West Palm’s future.
FAQs About the West Palm Beach Convention Center Hotel Proposal
Why is the West Palm Beach convention center hotel being built on land sold for $1?
The $1 sale shifts ownership to the county, allowing the developer to lease the land tax-free. This structure saves $150–200 million over 99 years and makes the project financially viable.
Who pays for the $290 million construction?
Related Ross funds the entire project privately. No taxpayer money is used.
What does the 99-year lease mean for the county?
The county owns the land and earns lease payments and future profits, while the developer runs the hotel.
How does this hotel benefit the convention center?
It adds 400 rooms next door, helping attract larger conventions that need 700+ rooms nearby.
Has this deal structure been used before?
Yes, the Hilton West Palm Beach next door used the same $1 transfer and leaseback model.
What local impact will the hotel have?
It will create over 1,000 jobs and bring in $123 million in annual visitor spending.
Ready to Invest in West Palm Beach Real Estate?
The area around the convention center is growing fast, with major projects like this $290M hotel reshaping the landscape. Whether you're buying, selling, or investing, it pays to work with experienced professionals who understand the market and the opportunity in downtown West Palm Beach.
Contact The Mastropieri Group, Realtors® at (561) 544-7000 for smart advice and trusted local experience. We help buyers and sellers across South Florida make confident, informed real estate decisions.
Posted by Larry Mastropieri
Enjoy this blog post? Click here to subscribe for updates
Leave A Comment