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update on Aletto

Boca Flip Flops as Aletto Offices Collapse.

by Alan Neibauer

UPDATE FEB 13: Below is Alan Neibauer’s opinion piece on the world-wide problem of excess office space in a post pandemic work-at-home world. In his usual crotchety style, he reflects many a resident’s view of the overdevelopment risk to Boca’s downtown by the 130,000 SF Aletto Office towers. Alan’s take on all this was published February 1 2024. In the piece, Alan says: “It is not official, but it’s more than rumors.” and “word on the street” that Aletto is “reverting back to primarily residential.”

Compson Associates Vice President Carl Klepper objected to the “tone” of the article (his words), met privately with council members and went to the CRA to cite his grievances under the guise of providing an update on Aletto. When asked by Mayor Singer if the project was going to be “flipping back to residential plans”, Mr Klepper said “no”. The video of the complete exchange is below.

We’ve reviewed Alan’s piece and considered Mr Klepper’s comments and Mayor Singer’s concern that Aletto will flip to residential. Here’s our take:
1) Alan used multiple sources of the type “who would know”. They told Alan Aletto may flip office space to residential.
2) The Compson Associates home page says Aletto is “Residential and Retail” (as shown in this Feb 13 Screenshot) which at face value reinforces 1).
3) Alan’s characterization of the possible flip as “it’s more than rumors.” is a little hyperbolic but adequately caveated and reinforced with “word on the street” to indicate it is not official.
4) Mr Klepper expects special treatment by City staff to fast track permits so they can complete clearing the site by Summer/Fall.

Office vacancy in Boca is high but, as noted by the Sun Sentinel, leasing activity is going to BRIC and others; Not downtown. We shall see if Aletto gets the necessary leases to get office space loans and builds Aletto as 100% office towers or if it flips to a version with residential. Alan’s article doesn’t question Compson’s ability to bring the project into fruition. It plainly says what the rumors are and accurately describes the risk that Aletto is to the Downtown and, for that matter what office space is everywhere. We stand by the article.
– BocaFirst Editorial Board

The Aletto Square project was the brainchild of Compson Associates, the same developer responsible for Tower 155. But it was the Mayor and City Council who vigorously championed its cause and promoted unrealistic claims that two large new office buildings were a necessity for downtown. But now things have changed. And Boca  flip flops as Aletto offices collapse. So as always, elections matter. Vote wisely on Tuesday March 19.

Boca’s Mayor and City Council were blind to the fact that office buildings across the country are sitting empty and close to financial default. Somehow, our politicians missed the headlines, and questions from residents asking “Are you nuts?!”

Headlines show that two new office towers in downtown are ill-conceived

Apparently, their desire for offices and/or loyalty to a developer, could have left us with unoccupied or even unfinished office towers smack dab in the middle of our downtown; another monument to concrete. We can only ask, what were they thinking?

Planning for two office towers when there are thousands going in default.
What were City of Boca Raton officials they thinking by planning two office towers when thousands were failing?

Boca Flip Flops as Aletto Class A Office Financing Faces Reality

But let’s back up and look at Aletto from the beginning. From the start, our politicians supported and justified Aletto’s existence. But with each change of the project, there was a flip flop to find new justification. The trouble with flip flopping on issues is that you have to make up new excuses for the flip, only to make more excuses for the following flop. Caught somewhere in this problem, and a step behind commercial building reality, is Boca’s Mayor and City Council. 

The Aletto project was first proposed having one office tower and one residential tower with a fully automated parking garage. The Mayor and Council praised the project. Fortunately, city staff was against the trouble-prone garage and residents strongly opposed a 12-story building across from Sanborn Square. 

Compson redesigned the project into two office towers and promised free evening parking in the garage for downtown.

Our Mayor and Council took to the project like vultures on roadkill. They did everything to praise the plan. Marc Wigder, chairman of the CRA, explained that the city already added 3000 residential units downtown but no new office buildings. And, in an interview with Boca Mag, said “a listing all of the benefits of the two office towers would fill five pages”.

Mayor Singer gushed that no new class A office buildings had been built in 20 years. He promoted and praised the project from every hill and dale. And, according to an article by Randy Schultz here, made it clear that office buildings were so important that, “the need for new office space outweighed fears of traffic congestion” referencing the debilitating downtown traffic Aletto will bring.

Even Carl Klepper, one of the Compson owners, highlighted the city’s involvement when he claimed he was just “meeting the city’s call for more Class A office space in a big way.” And the name of the project started showing up as The Aletto Offices at Sanborn Square.

LoopNet website showing the office focus of Aletto

Nero fiddles while Rome burned, Boca style

But, no one at City Hall was reading the headlines. As reported in the Coastal Star, City Council was “all in” on the new office buildings. “I have been talking about the need for Class A office space for a year and a half,” said Deputy Mayor Monica Mayotte. “I am excited to see this project come to fruition.”

As it turns out, reality strikes. The world is currently adrift in empty offices, and investors face an apocalypse of financial ruin. Yet, Boca’s Mayor and Council were channeling their best “Pied Piper” leading Boca blindly into the intracoastal.

Office towers are facing a catastrophic failure

But if the Mayor and Council weren’t reading the headlines, commercial lenders were. Subsequently, funding for two office towers might have hit a snag. But not to worry, look for a flip flop as the Aletto offices collapse.

Lenders are not interested in investing in office space

Could we be going back to number one?

It is not official, but it’s more than rumors that the “game-changing” office towers with “five pages of benefits” are reverting back to primarily residential. Word on the street is that a new, third, version of Aletto would have as little as 25% office space and 75% residential and retail. Apparently the 3000 residential units really aren’t enough. This would flood the downtown with too many residential units. It may also require stealing land use units, a second time, from the Brightline area in order to go over the current allotment, as a gift to the developer.

As an interesting note, the Compson Associates website home page has been featuring a picture of the original proposal. This included a 12-story residential tower and a seven-story office building. The picture has been up on the site for some time. This could just be sloppy web design with an old picture. Or, could this be a sign they plan to return to that design? If so, it would mean city council overriding the staff’s objection to an automated garage. But anything is possible. Inquiring minds want to know.

Current Compson website marketing original version of Aletto as residential

We’re told the Mayor wanted taller buildings, so watch the project grow

We don’t know what the heights of any newly designed buildings might be. The two buildings of the first Aletto design totaled 19-stories. The second version, just 16-stories. But watch for the height of the buildings to grow if there is a third rendition. After all, as a resident reported last year, the developer told him that the mayor wanted taller buildings. I have no reason to doubt a reliable source, but I have no first-hand knowledge that the mayor actually said that. 

To be clear, we don’t doubt Compson’s ability to bring this project to fruition, given adequate funding. Our concern is that the city’s enthusiasm for two office towers may collide with the realities of the current situation with office space. There is a long way from being “in discussions” with unnamed sources, to construction money in the bank, cranes in the air, and sufficient square feet leased.

Whatever Compson and the city are up to, beware of “justifications” from City Hall that explain a possible flip flop from residential to offices, and back to residential again. What might seem to make perfectly good sense, as a number of politician pronouncements, are just excuses to hide the truth. The city has no real plan for the downtown except listening to their development partners. Remember. Boca flip flops as Aletto offices collapse.

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