Despite the problems and uncertainty caused by Florida’s new post-Surfside condominium requirements, many buyers still crave the condo lifestyle.
Longtime island builder Bob McNally plans to tap the top end of that market.
His company, Palm Coast Development, will begin taking reservations this weekend for luxurious new riverfront condos in Somerset Bay.
The condos will debut with renderings and details on Saturday and Sunday at the grand opening for Azalea Lane, another Palm Coast project featuring three new single-family homes in Central Beach.
Developed and built by McNally, the Signature Series at Somerset Bay condos will be huge, with 3,300 square feet under air and two terraces, including one with long, postcard views of the Indian River Lagoon.
“They are like houses in the sky,” said Douglas Elliman broker associate and listing agent Sally Daley. “We believe as many as half of our buyers will be people who start out looking for a single-family home on the river, pause at the cost, and decide on one of Bob’s condos, which live like houses.”
The three-bedroom, three-and-half-bath units with private elevators and vast kitchen/great room/terrace configurations will be priced from $2.7 million to $3.4 million.
Comparable riverfront houses in 32963 are considerably more expensive: A three-bedroom, four-and-half-bath, 3,300-square-foot, five-year-old home in Riomar Bay II is currently listed for $6,250,000, and a three-bedroom, four-bath, 3,500-square-foot, riverfront home nearby that was built in 1974 recently sold for $4,435,000.
House-like features of the planned condos include two-car, air-conditioned garages with storage space for most units and three-car, air-conditioned garages for penthouse apartments, McNally told Vero Beach 32963.
The project plan includes a pair of four-story, 31,000-square-foot buildings that will complete the Somerset Bay Condominium layout a quarter of a century after the development began.
There will be just two condos on each of the three residential floors, making each residence an end unit, with three walls open to light and air. The first floors will encompass entryway; bright, contemporary lobby; private gym; storage space and garages.
“I am a pretty conservative guy, with a conservative building style, but I wanted the lobbies to be very contemporary with a wow factor like you would find in a nice Miami hotel,” McNally said.
“There will be a waterfall feature and a social gathering area as well as the building gym, which will have professional equipment and be very well done.”
There are nine existing condo buildings in Somerset Bay arrayed along a gently curving road facing the lagoon. They were built in a couple of phases over a six-year period, with the earliest completed in 2001, according to county records.
Most of the units are 2,760 square feet, 500 square feet smaller than the new condos. Daley said they trade between $1.1 million and $1.7 million, depending on age, condition and floor.
The project petered out in 2007 due to market conditions and a series of lawsuits filed by owners against the builder and the developer over leaky roofs and windows that have since been resolved with repairs completed and a well-run HOA now in place, according to McNally.
“The people running the HOA now are 24-carat,” he said. “The existing condos have been updated and assessed and meet state requirements.”
Two prime building lots remained when the project stalled. They sat dormant along the Jungle Trail for 15 years until November 2022, when McNally bought them from the original developer, paying $4 million for 0.9 acres of riverfront land already plated and approved for development.
Daley describes the design of the planned condos as “a do-over” of the earlier units.
The footprint, height and style of the buildings was pre-determined by the original site plan, but within that framework there was a rare opportunity to update and improve the original layout, refining successful features and eliminating problematic details.
McNally – who was fully engaged in the design process, pushing his architect and engineer to think outside the box – got rid of odd, angled walls in the earlier layout, opened up and brightened the units with more and larger windows and sliders, and moved plumbing lines to reduce the chance of leaks.
He decided on a new type of foundation, with a nine-inch-thick steel reinforced slab supported by pilings and grade beams and revamped the lobby.
“In the original layout, the kitchen sink was in an island, which meant the trap was in the ceiling of the unit below,” McNally said. “That meant you have to cut into another owner’s ceiling to repair a leak or clog, which is a bad setup and one of the reasons people are afraid of condos, so we moved the sink to the wall and built out the wall with two-by-sixes so the water and drain lines are easier to access and won’t leak into the unit below.”
Opening up the interiors, McNally created a 22-foot-wide by 60-foot-long main social space, extending from the stone kitchen counter to the glass railing of the river terrace.
A bedroom hallway that had been dark and dead-end was opened to the front terrace and filled with light. Storage space was increased throughout the units, and garages will get epoxy floors and individual temperature control.
“If something is going to be expensive, it might as well be the best,” said McNally, adding that he has poured his heart into the redesign. “I dream about this project when I am sleeping at night.
These will be triple-A buildings with triple-A materials that will withstand the rigors of the coastal environment, including Anderson impact resistant windows that will also have storm shutters to keep the units safe and secure.”
McNally and Daley think they have the right product, with well-built, finely finished, of-the-moment “houses in the sky,” with great river views and good amenities, but McNally remains somewhat cautious.
“We paused after we bought the land to see what was going to happen with the condo legislation and all the problems that have been in the news. I wanted to see some blue sky at the end of all that.
“When you are about to start on tens of millions in construction you have to wonder if there is going to be some kind of suffocation of the condo market, with everyone lumping all condos together, despite the fact that we will be brand new, with great reserves, much lower insurance costs and a 10-year building warranty that I pay for.”
McNally said he has been in discussions with Brown and Brown Insurance about costs for the new residences. “We don’t have a number yet, but I can say owners will be able to get insurance and it will be reasonable, not steadily escalating. We will put the insurance cost in writing when we get it.”
McNally said he still isn’t sure how the condo market will emerge from the current turmoil but has decided to test the water by taking reservations.
When the weight and momentum of interest reaches a level he feels good about, he will start construction.
“When we get four of the six in the first building, we will pull the trigger and build both buildings at once,” he said.
At that point, non-binding reservations with small deposits will be converted to hard contracts with larger deposits and a set timeframe.
“Once we break ground, people will be able to move in within 18 months,” McNally said.
McNally started in construction and development working for his father’s company in New Jersey, where he climbed through the ranks to become CEO.
“We built 3,700-some condominium units and 2 million feet of office space,” he said. He came to Florida in 1995, working for a couple of years for his wife’s uncle, Phil D’Angelo, building mega-mansions in Stuart – up to 34,000 square feet – before concentrating his efforts on the barrier island.
Here, he has built nearly 300 custom homes and 45 condo units, including those in Ocean Park, the highly regarded condominium and retail development at Humiston Park.
“I walk my jobsites every day,” McNally said. “So I don’t take on much work outside of Vero.”
