Peary Court developer wants changes to taxpayer-financed agreement

BY PRU SOWERS

KONK LIFE STAFF WRITER

Key West City Commissioners were supposed to get their chance June 5 to decide a controversial plan to expand the Peary Court affordable workforce housing development but the agenda item was postponed until Aug. 6.

The postponement was requested by Mayor Craig Cates and Commissioner Sam Kaufman because they were unable to attend the June 5 meeting. Kaufman, who was worried that the purchase of the former military housing complex by a private developer in 2016 wouldn’t benefit Key West’s lowest income residents, wanted to be sure he was present for the vote on the Cornfeld Group’s proposal to convert 48 existing two-bedroom apartments into 96 one-bedroom units instead of building 48 new apartments, as the original development plan called for.

The idea to split the two-story, two-bedroom units into separate top and bottom apartments with one bedroom each was narrowly approved by the Key West Planning Board by a 4-3 vote on April 19. Final approval must be granted by city commissioners.

The original development deal, which received a $12.5 million grant from the Monroe County Land Development Authority after Key West voters rejected a proposal to purchase the property outright for $55 million, was that in addition to keeping the property as affordable workforce housing, the Cornfeld Group would be granted 48 BPAS building permits to construct 48 new affordable units on the 24-acre property. But the Cornfeld Group is requesting permission to change that agreement to expand the number of units by renovation, not new construction.

City commissioners will likely have strong opinions one way or the other on the proposal, which has been moved back to their Aug. 6 meeting.

“All seven of us [on the city commission] should be here on any big items like this,” said Commissioner Billy Wardlow said about the postponement.

If the August commission meeting is anything like the planning board meeting on the request to modify the development agreement, owner Jeff Cornfeld may get an earful. While acknowledging the Cornfeld application was fully compliant, planning board member Ed Russo voted against changing the agreement because rents in the converted one-bedroom apartments are not projected to decline significantly. Cornfeld told board members the monthly rent on the converted one-bedroom apartments would be approximately $300 less than the two-bedroom units. Current rents for two-bedroom units in Peary Court range from $1,654 to $2,898 depending on tenant income levels. The one-bedroom units will rent from $1,470 to $2,576 a month depending on tenant income, he said.

“I’m looking at this and I’m frustrated that it’s like a shell game and affordable housing is at stake,” Russo said at the April 19 planning board meeting. “I can’t support it because I don’t think it lives up to the spirit of what the people of Key West expected.”

“I thought we were getting 48 new units and not simply reworking the existing structures,” planning board member Greg Lloyd said at the same meeting. Russo and Lloyd were joined by Jim Gilleran in voting against the proposal but it passed 4-3.

The decision to give $12.5 million in county Land Authority money to the Cornfeld Group emptied the fund, which collects approximately $2 million each year in local bed tax monies. In return, Cornfeld agreed to keep the 157-unit rental housing development as affordable workforce housing in perpetuity.

“It’s forever,” said Cornfeld, one of the family members that own the privately-held commercial real estate investment and management company, in 2016 about the affordable deed restriction. “Two hundred years from now people are going to look back at Peary Court. It will still be a workforce community, the backbone of the community.”

Key West City Commissioners voted 4-3 in 2016 to recommend using the land authority money despite voters in 2016 overwhelmingly voting down a proposal for the city to purchase Peary Court for $55 million. The $12.5 million land authority grant was used to pay the bulk of what Cornfeld estimated at the time would be a $10 million to $15 million down payment on the property.

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