Stephen Ross’s tax-break hotel: neighbors sue to void the vote

Two West Palm Beach neighborhood groups, the Grandview Heights Neighborhood Association and the West Palm Beach Neighborhood Alliance, sued Palm Beach County, Related affiliates and others on Wednesday, Oct. 14, in the 15th Judicial Circuit, challenging the county’s Sept. 29 approval of a $26 million convention hotel deal that they say was rushed through in violation of Florida’s Sunshine Law (complaint; WPTV; The Real Deal; Law360). The complaint, which carries the clerk’s e-filing stamp of 9:33 p.m. that day and Case No. 502026CA011605XXXAMB, asks the court to declare that the approval of Agenda Item 3C1 violated section 286.011, Florida Statutes, and article I, sections 9 and 24(b) of the Florida Constitution and is “void ab initio” (complaint; WPTV). It asks the court to bar the county from executing, recording, performing or disbursing funds under the deal “unless and until the Board takes independent, final action on the Transaction at a meeting noticed in compliance with the Sunshine Law,” and to enter a temporary injunction in the meantime “upon a bond in a nominal amount” (complaint). These are requests, not findings.

We found no new act in the case through Oct. 18. The complaint says the plaintiffs “will file an Emergency Motion for Temporary Injunction” and “will request a hearing on the earliest available date,” but none of our sources had reported that motion being filed, a hearing being set or a ruling, and we found no public county response to the suit itself (complaint, para. 202; WPTV; The Real Deal; Law360; plaintiffs’ counsel’s news page). No new vote has been noticed: our text search of the county commission’s Oct. 20 agenda, posted Oct. 14, and its Oct. 6 agenda found no item on the hotel, Related, CityPlace, South Rosemary or the leaseback (Palm Beach County agendas).

On Tuesday, Sept. 29, Palm Beach County commissioners voted 6-1 to buy about 1.8 acres at 940 South Rosemary Avenue in West Palm Beach, now a parking lot next to the county convention center, together with the 18-story, 400-room hotel to be built on it, from CityPlace South Tower II, LLC, a Related Ross affiliate, for $26,000,000 (county agenda, item 3C1; WPTV; The Real Deal). Commissioner Gregg Weiss cast the only no vote (The Real Deal; Palm Beach Post; CBS12). The purchase needed a supermajority of five commissioners (county agenda). The county pays in deposits, a $5 million initial deposit and $21 million later, released to the seller toward construction costs and credited at closing; county officials said the $21 million comes after the developer secures financing, permits and other construction milestones (county agenda and backup; WPTV). The money is a $26,000,000 budget transfer out of General Fund reserves (county agenda, motion CC; WPTV).

Once it owns the finished hotel, the county leases it back to the Related Ross side for an initial 33 years, with options for another 33 and then 31, up to 97 years in all (county agenda, motion E; The Real Deal; CBS12). “The sale-leaseback structure allows the developer to avoid paying property taxes on the hotel and land,” The Real Deal reported (The Real Deal). The county’s consultant, BAE Urban Economics, using Related Ross’s own tax estimates, put that treatment at “approximately $2.5 million per year in 2025 dollars” (BAE memorandum, July 23, 2026; WPTV). Stephen M. Ross, a former tax attorney who founded Related Companies in 1972 and whom Forbes values at $21.5 billion as of Oct. 18, is listed in the county’s disclosure among the people holding 5% or more of the seller and of CityPlace Hotel, and he sat in the front row and waved in support, The Real Deal reported (Forbes; county disclosure of beneficial interests; WPTV; The Real Deal).

Your stake: if you pay Palm Beach County property tax, the $26 million comes out of the county’s general fund reserves (county agenda; WPTV), and by the county consultant’s estimate the hotel deal spares Related about $2.5 million a year in property tax (BAE memorandum; WPTV); West Palm Beach separately agreed in August to forgo more than $1 million a year in city tax revenue from the hotel (Palm Beach Post). Against that, the county is to collect about $1.825 million a year in initial hotel and parking rent, rising 3% a year, plus 6% of hotel revenue above $77 million a year (county agenda; CBS12). If the neighbors win the relief they ask for, the county could not carry out the deal until commissioners vote on it again at a properly noticed meeting; that would not by itself end the deal (complaint). No cited figure supports a per-household amount, so we print none.

The money

The rent is where the county gets paid back. Initial Hotel 2 base rent is $1,117,000 a year and combined parking rent is $708,000, $402,000 for the new hotel and $306,000 for the existing CityPlace hotel, “totaling approximately $1,825,000 at initial contractual rates, with 3% annual increases” (county agenda and backup). Base rent is deferred for the first nine full months, accruing interest, and participation rent is 6% of gross revenue above an initial $77,000,000 threshold that rises 3% a year (county agenda; CBS12). Those are payments to the county, not profits to anyone.

The county paid less than the land’s appraised value. Two appraisals put the land’s as-is value at $42.7 million and $43 million, averaging $42.85 million, and the finished hotel at $321 million and $377 million, averaging $349 million, values that “assume completion of the hotel” (county backup; Stet News). County Administrator Joe Abruzzo said that because Related agreed to spend $5 million to retire a debt on the garage, the county will pay only $20 million for the land (Stet News).

Two estimates of the lost tax circulate, and they measure different things. BAE’s figure, about $2.5 million a year in 2025 dollars, values the tax treatment from Related Ross’s own estimates (BAE memorandum; WPTV). At the meeting, county staff estimated the property would generate about $1.649 million a year in property taxes if it stayed privately owned (WPTV), and Weiss cited “the loss of roughly $1.6 million in annual property tax revenue” (Stet News). The city made its own trade first: in August, West Palm Beach commissioners voted 3-2 to rescind a 14-year-old arrangement with the county that required the owners of the hotel land to keep paying city property taxes, giving up more than $1 million a year (Palm Beach Post). Mayor Keith James called the hotel a “great deal” for the county, noting the city chose to forgo collecting property taxes on the site in favor of making a deal (The Real Deal). The 2012 agreement that kept the land on the tax rolls requires the existing CityPlace hotel to make annual payments in lieu of taxes; the amendment removes the continued-taxation requirement for the new hotel’s land if the county takes title and the Property Appraiser finds it exempt, and the existing hotel’s payments continue (county backup). Our text search of the backup found payment-in-lieu terms only for the existing hotel.

The structure was on the table a year earlier. In May 2025, after Related broke off talks, Assistant County Administrator Isami Ayala-Collazo told the Tourist Development Council that Related’s tax-break request could not be met under the existing request for proposals: “We told (Related) if that is the path you require it cannot occur under the current RFP.” Related’s draft proposal then sought to sell the hotel to the county for $1 and lease it back so it would not pay property taxes; Related Vice President Alex O’Connor cited interest rates, tariffs and a downturn in the hotel business (WLRN / Stet News, one outlet). This September, Abruzzo said, “They said it would cost the county $1.6 million for every month past Sept. 30,” and, “We verbally agreed to do it in September” (Stet News). WPTV, citing the suit, reports that Abruzzo acknowledged the county had “verbally agreed” with Related to bring the deal to a vote in September (WPTV). Abruzzo also said the meeting was scheduled “in part, to accommodate Related and protect the county,” and city officials said Related is still awaiting building permits, Stet News reported (Stet News, Oct. 6).

After the meeting, WPTV asked Ross about parking during construction. “Well, we will do everything during construction to try and alleviate it the best we can,” he said, and “The garage is so underparked” (WPTV).

How it works

A sale-leaseback moves ownership to a government so the building can be treated as public property while a private company runs it. Here the county buys the land and the finished hotel, the hotel company leases them back, and the lease says that if the tenant is ever required to pay property taxes on the land, the improvements or the leasehold, the county “shall pay all such ad valorem real property taxes directly,” unless a law of general application to Florida counties prohibits it (Hotel 2 Lease, Section 3.3(a)(ii); county agenda summary). Whether the land and hotel are exempt is the Property Appraiser’s determination; if the exemption fails, the taxes come due, and under the lease the county pays them (county backup). The lease also gives Related a purchase option at fair market value of the county’s interest, so the term can end sooner than 97 years; that is why we say up to 97 years (county backup; The Real Deal; CBS12).

The suit turns on a different rule: Florida’s Sunshine Law, which requires public boards to give reasonable notice of their meetings. The neighbors say the notice was too short; the county says it gave more than the law requires (complaint; WPTV).

What could still stop it

The county’s case is on the record. Staff says the hotel “would address a substantial portion of the projected need for 600 additional hotel rooms serving an expanded Convention Center,” and the county’s Property Review Committee recommended approval without comment on Sept. 18 (county agenda). BAE found the proposal “appears to provide a reasonable balance of public contribution, private-sector responsibility, committed revenue that would be paid to the County, and other potential long-term financial returns to the County” (county backup). Commissioner Maria Sachs said, “I think you’ve given our taxpayers the best long-term economic benefit with the least risk” (WPTV), and County Mayor Sara Baxter said, “Everyone is going to benefit from this, the city, the residents and them” (Stet News). During the meeting, county officials said the hotel could support about 650 permanent jobs, including roughly 255 hotel jobs, WPTV reported (WPTV, one outlet).

The suit is allegations. According to the complaint, the county published its official agenda for the Sept. 29 meeting on Sept. 23 with no reference to the hotel land, Related or the leases; at 4 p.m. that day an “Additions, Deletions, & Substitutions” sheet listed Item 3C1 for the first time, marked “*ADD-ON”; and the county first made the 715-page item file public at or about 8 a.m. on Sept. 29, ninety minutes before the meeting (complaint; WPTV; The Real Deal). The complaint says board rules permit an add-on only “in the event of an unforeseen or emergency situation” (complaint). The backup file’s own metadata shows it was last modified the morning of Sept. 29, which shows when it was last changed, not when it was first posted (county backup file). Margaret Frazzini, president of both plaintiff groups, spoke at the Sept. 29 meeting: “Not enough time for us to assemble the people who had something to say” (WPTV). Lead counsel William A. Brewer III, whose pro hac vice motion is pending according to the complaint’s signature block, said, “Plaintiffs believe the County cannot use an emergency procedure to avoid accountability,” and, “The West Palm Beach community should not have to fight to ensure its public servants follow the rules” (WPTV; complaint). The complaint is signed by Stanley Q. Casey of West Palm Beach (complaint).

The county’s answer on notice came at the Sept. 29 meeting, before the suit was filed. County Attorney David Ottey said, “The law only requires us to provide a minimum of 24 hours,” and “By providing it five days out consistent with our agenda process, it is not an issue” (WPTV, Sept. 29). The complaint says the county attorney responded that the county “met all requirements pursuant to Florida law” (complaint). We found no public county response to the suit itself. Related’s side: spokesperson Maura Daves said the hotel brings “new opportunities and jobs for local residents while contributing to our city’s vitality,” and that, aside from real estate investments, the company has given $15 million to local nonprofits (The Real Deal); Related Ross told WPTV, “We have always had a long-term commitment to West Palm Beach,” and that the hotel brings “new opportunities to the city for residents with local jobs” (WPTV).

A separate, earlier case, filed Sept. 30 by the same neighborhood groups, challenges the city’s approvals of the same site; the complaint describes it as a petition for writ of certiorari, Case No. 50-2026-CA-011062-XXXA-MB, that “concerns the same site and overlapping facts” (complaint; Palm Beach Post). The Real Deal says that case “has not yet moved forward, according to court records” (The Real Deal). Related Ross and the city declined comment on that suit (Palm Beach Post; Stet News).

Why it matters across Florida

Florida counties are being asked to finance convention hotels, stadiums and arenas, and the question is always who keeps paying property tax once a government holds title. This deal puts the answer in a lease: the tenant, a company WPTV says Stephen Ross controls, does not pay the tax, and if the exemption ever fails, the county does (county backup; WPTV). Forbes values Ross at $21.5 billion as of Oct. 18 (Forbes; see the Forbes 400 story). Any Florida taxpayer whose county is weighing a public-private hotel or arena can read the Palm Beach terms as the template, and the suit tests how much notice a county owes the public before it signs one.

What to watch

Whether the plaintiffs file the emergency motion for a temporary injunction the complaint promises, and when a hearing is set (complaint, para. 202). The county’s answer to the Oct. 14 suit (WPTV; The Real Deal). Whether commissioners notice a new vote; the Oct. 20 agenda carries none (Palm Beach County). Whether the $21 million second deposit is released, which depends on financing, permits and construction milestones (county agenda; WPTV). The Property Appraiser’s determination on exemption once the county takes title (county backup). The Sept. 30 case against the city’s approvals (complaint; Palm Beach Post). Posted minutes of the Sept. 29 meeting, which were not among the minutes listed for approval on Oct. 6 (Palm Beach County).

Correction

Correction, Oct. 19, 2026: An earlier version of this story said The Real Deal reported that the suit asks the court to declare the Sept. 29 approval void. The Real Deal reported that the suit asks for the development to be paused; the complaint and WPTV state the request to declare the approval void (complaint; WPTV; The Real Deal).