Dallas-based Third Palm Capital is preparing to maximize its potential for the remaining developable land at its Grand Cypress Resort property, filing a Land Use Plan amendment this week that was long overdue to liberate its use of entitlements.
The company acquired approximately 1,400 acres of Grand Cypress Resort property in 2012, generally located east of Walt Disney World Resort, along Winter Garden Vineland Road and E. Buena Vista Drive.
Third Palm was drawn in by the trophy asset-nature of owning the Villas at Grand Cypress, a 45-hole Jack Nicklaus Signature-designed golf course, and more importantly the rich entitlements still available for about 450 upland acres remaining for future development.
"Since then we haven't really done anything substantial with it, besides trying to maintain the property and our property owner's association," David Pace, chief operating officer for Third Palm affiliate LWP Florida, told GrowthSpotter. "We bought it without a clear plan, and because of other pressing matters never moved the ball forward."
But in the last 18 months, Third Palm's ownership has established a dedicated development and investment team out of Dallas who are building market strategies for all of the company's holdings.
Pace was hired in August to lead Third Palm's strategic planning for its Florida assets, and find new investment opportunities.
"This Grand Cypress asset has tremendous entitlements, great land and location," he said. "It's been here 35 years and the world has literally been built up around it. So here we are now taking a hard look at it, and we feel really good about our options."
Those remaining entitlements include up to 1,581 residential units, 755 hotel keys and 100,000 square feet of commercial/retail, with approximately 450 upland acres available.
To give Third Palm greater flexibility to use the entitlements, it's land owner affiliate Grand Cypress Orlando LLC filed an 11th amendment on Monday to the Grand Cypress Resort Land Use Plan/Planned Development zoning.
"What we're doing with this LUP amendment is trying to be less specific as to what exactly goes where," Pace said. "We're not asking for new height or added units, just for the right to place our entitlements on our land in different spots."
One example is about 100 acres of vacant property across from the Hyatt Regency Grand Cypress. Right now there is a specific piece there with retail entitlements and another with hotel entitlements.
"But we think that's an ideal location for a mixed-use town center project," Pace said. "In the past you placed your entitlements with pinpoint precision, but in an area like that it shouldn't matter if we spread retail out in a village center or clump it together on one end.
"We want to react to the market. A lot of (developers) in hotel, retail and residential would love to own that land around the Hyatt," he continued. "We're getting a lot of unsolicited interest in those parcels for hotel, retail and multifamily; there's very easy underwriting in this market.
"We think there's a positive synergy for the whole resort area if that became a nice town center, as opposed to a classic strip center with just garden-style apartments," Pace added. "But to do that we must amend the PD."
Third Palm has also acquired a handful of small contiguous parcels since 2012 totaling 10 acres, which would be brought into the PD with this amendment.
Pace has the simultaneous mandate -- and luxury -- of looking at every opportunity with the Grand Cypress land for internal development or sale. Third Palm can act as investor, developer or co-investor, and if the company partnered on a project it would likely contribute equity along with the land.
"We don't currently operate retail centers, but we have built apartments and condos in various markets and we do own and operate hotels," Pace said. "So depending on who that potential partner is, we could sell outright or do a JV."
An 11th amendment to the LUP could take six to 12 months to earn final approval from the county. Pace said he's optimistic that by December 2018, Third Palm will have some deals and developments to announce.
"I hope by that time the world will see that Grand Cypress is on track to being finished," he added.