Delray Beach looks up as townhouses sell and resell

Developer New Urban Communities looks to South Miami and the Chicago area next.

Along-dormant section of Delray Beach, Florida, is begin-ning to revive, thanks in part to a townhouse, retail, office, and loft project organized by New Urban Communities and two predominantly African-American community development corporations. New Urban Communities, the four-year-old firm of Timothy L. Hernandez and Kevin Rickard, has completed and sold 55 townhouses — the first element in a mixed-use project that’s changing the atmosphere of a mostly black neighborhood west of Delray Beach’s downtown.

“This is the first major private development on this side of town in more than 40 years,” says Annetta Jenkins, senior program director for the Palm Beach County Local Initiatives Support Corp. (LISC). LISC helped arrange financing for the $25 million project, which teams New Urban Communities with the Delray Beach Community Development Corporation and the Technology, Enterprise, and Development Center.

New Urban, based in Delray Beach, started construction at the 4.6-acre site in December 2002 with three-story block and stucco townhouses of 1,400 to 1,700 square feet. The first units sold “in the high $100s to the mid-$200s,” says Timothy L. Hernandez, a principal in New Urban. Ten townhouses were sold voluntarily to low- and moderate-income families, who purchased them for $134,000 each, with the proviso that if they resell the units within 10 years, they must pay back some of the downpayment subsidy they received. The recovered money would be used to benefit future buyers in the neighborhood.

a hot market

Since then, the market has taken off. The area along Atlantic Avenue, about three blocks west of the traditional dividing line between rich and poor, white and black in the 60,000-population city, has demonstrated a growing appeal. “One resale unit is on the market for $369,000 now,” Hernandez notes.

New Urban is now constructing the project’s mixed-use portion: three-story buildings containing retail space on the ground floor, offices on the second floor, and 20 lofts on top. The 48,000 square feet of retail and office space are expected to benefit from nearby public investments, including a courthouse and government administration buildings and a yet-to-be-built public library. The two community development corporations will each reap 25 percent of the profit from the development and will reinvest it in the community.

Most of the townhouses have been built close to the sidewalks, which occasionally jog around oak trees that have been preserved. Garages face drives that are inconspicuous from the street. The outdoor space of each unit is small, but a courtyard in the center of the block provides relief. The townhouses have been built at grade. If they had been built with raised foundations, the first-floor rooms facing the sidewalks would have had more privacy, but Hernandez says that “raising the building would raise the cost by $10,000; we’d have to charge an extra $13,000 per unit.” Another 14 townhouses are yet to be built.

Hernandez, who previously worked for production builder Pulte Homes, and Rickard, who worked in custom homebuilding, say New Urban Communities has fared well by focusing on developing and building new urbanist projects, often on infill sites. Since its start in 2000, the company has developed and built, or is in the process of building, 902 dwellings and 105,000 square feet of commercial space in 10 projects, all in Palm Beach and Broward Counties. In addition, it developed 407 units that others constructed.

Now the company is reaching farther. “We’re working on a project in South Miami near the University of Miami,” Hernandez says. The company is also expanding to the Chicago area, where it hopes to win approval by year’s end for a mixed-use development across from a commuter rail station in a western suburb, Hanover Park. The Hanover Park project, on eight acres currently vacant, would have about 50 townhouses, 18 live-work units, 32 condominium units, and 18,000 square feet of retailing. “You could walk out your door to the train station and go to the Loop,” Hernandez says. “We are true believers in the principles of New Urbanism and the community benefits it provides.”