A plan to expand downtown Orlando’s Dr. Phillips Center for the Performing Arts includes adding two residential towers totaling as many as 350 units, drawing concerns about putting private housing on city-owned land.

The new details came to light as leaders of the nonprofit performing arts center pursue funding to build phase three of its nine-acre campus, which sits on publicly-owned land. Phase 3 will include an outdoor performance auditorium, a 750-seat theater, an elevated park, a cafe, a restaurant, and more.

Dr. Phillips Center plan would add theaters, put downtown park in the sky

The arts center is seeking $145 million from the Tourist Development Tax and $15 million from the City of Orlando to complete the expansion.

The residential component is not part of the funding request, said Christine Skofronick, a spokesperson for the project who works as an account executive with Uproar PR.

“At this time, the Dr. Phillips Center team is still ironing out final details on the timeline and developer partner” for the residential piece, she told GrowthSpotter.

She said the current plan is for between 300 and 350 units on the property, adding that the team is still determining what kind of residential product would go in the towers.

It’s early on, but opinions about the residential aspect are mixed.

Trevor Hall, the executive managing director of land services with Colliers International‘s Orlando office, raised an objection to the plan, which would bring high-rise residential to land owned by the City of Orlando.

“That seems real curious to me,” he said. “That’s publicly owned land.”

The city, he said, shouldn’t be competing with private developers for residential products. “It’s beyond the scale of what the government ought to do.”

To Hall’s point, Susan Morris, the founding broker of RDIP Florida, said there are five or six other properties available for sale in downtown Orlando right now where residential towers could rise.  For years, she’s been marketing a 1-acre site directly behind the Dr. Phillips Center for Performing Arts that currently holds a two-story office building.

“There are three within half a block of that (Phillips Center) location,” she said. “If we were short on locations, I would support (the residential component), but I just don’t think the timing is right. …There are ample places to build highrise downtown and I don’t feel like at this time the city should be competing. I think there are a lot of reasons the performing arts center should hold off on doing (residential) at this time.”

According to the master plan, the two residential towers would go up on the back parcel, facing Rosalind Avenue.

Hall also questions this location, noting it’s along three busy one-way streets and in a spot on the campus that’s currently used for trucks loading and unloading band equipment.

“That location seems to me to be of marginal appeal,” he said.

Hall also questioned whether the residential component is financially feasible.

The average rent for high-rise apartments in downtown Orlando is $2,291 or $2.38 per square feet, according to data by CoStar.

“I will wager the rents will not cover the costs,” Hall said. “Almost every mid- and high-rise project we are seeing these days just don’t pencil out. Debt and equity costs are way up. Construction costs have risen and seem to be stabilizing but at a high number. …My suspicion is there is no way to build those units there, profitably.”

Shelton Granade, the executive managing director of investment with Institutional Property Advisors, views the prospect more favorably.

He said the demand for rental housing downtown continues to be strong. The average occupancy for stabilized properties in the submarket is around 95%, he said.

“And having an amazing community asset like the Dr. Phillips Center at your doorstep is an attractive amenity that will be unique,” Granade said. “Feels like it will be a win-win – a plus for the Center to have a critical mass of people nearby, and a benefit for residents living there that can take advantage of all Dr. Phillips has to offer.”

He doesn’t share Hall’s viewpoint about city-owned land housing residential assets.

“Residential is probably the highest and best use, and maybe the only development that could get capitalized today,” he said. “It will help activate that space even further.”

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