In what promises to be one of South Florida’s largest office deals, Office Depot is planning a trio of five-story mid-rises in Boca Raton, with an auditorium, cafeteria and outdoor dining area to house its headquarters, according to plans filed with the city.
Under terms of an incentive deal, Office Depot will keep the 1,750 jobs it now has in South Florida, as well as add an additional 580 jobs. The jobs pay an average salary of about $77,000 a year. The 624,230-square-foot hub is planned as the anchor of a new 54-acre business park just north of Yamato Road.
Codina Group of Coral Gables, now part of Jacksonville-based Flagler Development Group, is developing the yet-to-be-named park on land formerly controlled by Washington Mutual. Office Depot’s headquarters will span three 208,077-square-foot buildings on 28 acres. How the balance of the site – which is zoned to house an additional 320,000 square feet of corporate office, research and development space – will be developed has yet to be determined, said Flagler Development’s Keith O’Donnell, who is based in Boca Raton. Flagler has acquired a 20 percent stake in the site, purchased from Washington Mutual last year by the giant pension fund TIAA-CREF. Office Depot, which has long been based a few miles north in Delray Beach, is keeping relatively quiet about its new headquarters as it waits to get its $16.7 million public incentive package sewn up.
Saying it was considering relocating outside Florida, the office supply chain won approval in July from the county for $6.5 million in tax rebates over 10 years. It also is seeking $10.2 million in state incentives, which are still pending.
“The important thing is that they are staying in Palm Beach County,” Boca Raton Mayor Steven Abrams said.
Meanwhile, the retailer appears to be moving full speed ahead with its new $210 million headquarters, which also will house new Latin American operations.
News of the deal means that Office Depot will abandon its existing office buildings along Congress Avenue in the south end of Delray Beach. The three buildings span about 566,852 square feet, including the 214,929-square-foot custom-designed building that Office Depot commissioned and leased in the mid-1990s. Office Depot sued and obtained the right to buy the building from its landlord, paying $24.8 million in January. The move gives the office supply retailer control of all three buildings and 42 acres of land, which it intends to sell.
Dallas-based Lincoln Property Co. is now negotiating to buy the property, according to sources close to the deal. Lincoln Property Senior VP Steve Medwin declined to comment on the transaction.
But the site may become more valuable as the city works to create a new zoning overlay along Congress Avenue, extending south of Atlantic Avenue to the Boca Raton line.
The overlay would allow for a mix of uses, including high-density residential. Developers would be required to provide a minimum of workforce housing units and could also win density bonuses for doing so.
While Delray Beach Mayor Jeff Perlman said he is dismayed about losing the city’s largest corporate employer, the sale of the Office Depot campus presents redevelopment opportunities.
“If you are going to lose a company to Boca Raton, it’s not that bad because it doesn’t really disrupt the community,” Perlman said. “Would I have rather kept them? Yes. But if they are going to go, I look at it as a great opportunity.”
Financial terms of Office Depot’s deal with Flagler and TIAA have not been disclosed, but the retailer plans to lease its headquarters once built, according to county documents. This is not the first time the retailer has proposed building a new headquarters in Boca Raton.
In 2004, Office Depot went so far as to buy 23 acres in the T-Rex Corporate Center in Boca Raton from Stiles Corp. for $11.84 million, with plans to build a 600,000-square-foot hub there. A few months later, it sold the land back to Stiles following the departure of then-CEO Bruce Nelson.
SOURCE: South Florida Business Journal