Palm Coast to Purchase 259 Acres in Town Center for $17M as Part of Lawsuit Settlement

The Palm Coast City Council has approved a $17 million settlement agreement that will end litigation with Palm Coast Holdings LLC while giving the city ownership of approximately 259 acres of vacant land in Town Center, officials announced this week. The purchase resolves a lawsuit filed in October 2025 and positions the city to directly shape future development on one of the largest remaining undeveloped parcels in Flagler County's urban core.

Under the agreement approved by the council, the city will acquire the property and all associated development rights, while Palm Coast Holdings and related entities will relinquish remaining interests in the land and agree not to contest the city's future decisions regarding those rights. Both parties will release their claims and dismiss the lawsuit once the purchase closes, with neither side admitting wrongdoing. Each party will cover its own legal expenses.

What's happening

The settlement calls for Palm Coast to purchase approximately 259 acres of currently vacant or undeveloped property within Town Center for $17 million. The city has a 60-day review period to conduct inspections, surveys, and environmental assessments of the property. If the review proceeds as planned, closing is expected within 30 days after that review period ends, putting potential ownership transfer in late fall 2026.

Palm Coast Holdings LLC and related entities filed the lawsuit against the city in October 2025. According to the city's announcement, the litigation involved disagreements related to Town Center development and the availability of water and sewer capacity. The city has denied liability throughout the case.

As part of the settlement, the sellers will transfer all development rights associated with the 259 acres to the city and waive any future challenges to how the city exercises those rights. The city is not required under the agreement to develop the property itself, giving officials flexibility to determine how the land can best serve municipal economic development goals.

"This agreement gives Palm Coast an opportunity to take a difficult situation and turn it into something that could benefit our community," said City Manager Mike McGlothlin. "Owning this land gives the City more options for the future and allows us to be more directly involved in determining what types of development make sense for this important part of Palm Coast."

Impact on Palm Coast's development trajectory

The acquisition represents a significant shift in how one of Flagler County's largest mixed-use districts will evolve. Town Center sits along Palm Coast Parkway and Old Kings Road, anchoring the city's commercial and civic core with City Hall, the main library, shopping centers, and medical facilities. The 259-acre parcel—roughly equivalent to 200 football fields—is among the largest contiguous undeveloped tracts remaining in this established area, giving the city substantial influence over the district's future character.

Municipal ownership of development-ready land is relatively uncommon in Florida, where private master developers or individual landowners typically control urban parcels. By owning the property outright, Palm Coast can negotiate directly with prospective tenants or developers, set specific terms for uses that align with city priorities, and potentially offer the land as an incentive for projects the private market might not otherwise pursue in a mid-sized coastal community. Projects of this nature in similar Florida cities have ranged from corporate office campuses and logistics facilities to mixed-use town centers combining retail, residential, and entertainment uses.

The acquisition also removes uncertainty that litigation creates for adjacent property owners and nearby businesses. Unresolved lawsuits over development rights can freeze investment decisions, as potential buyers or tenants wait for clarity on what can be built and when infrastructure will be available. With the settlement, the city gains the ability to market the property with clear title and defined development parameters.

Infrastructure and capacity questions

The lawsuit centered in part on disagreements over water and sewer capacity availability in Town Center, infrastructure that determines how much development an area can support. Palm Coast's water and wastewater systems are managed by the city's utility department, which operates treatment plants and distribution networks funded by user fees and impact fees paid by new development.

For a property of this size, utility capacity is a threshold question. Commercial and residential projects require commitments that adequate water pressure, sewer conveyance, and treatment capacity will be available when buildings come online. In Florida's growth corridors, municipalities and utilities routinely plan infrastructure extensions years ahead of development, funding them through a combination of impact fees on new construction, developer contributions, and system-wide rate revenue. Palm Coast has expanded its utility systems substantially over the past two decades as the city grew from fewer than 40,000 residents in the early 2000s to more than 100,000 today.

The settlement's resolution of the capacity dispute suggests the city and the former landowner have reached an understanding—either that sufficient capacity exists or will be made available, or that the city will control the pace at which development proceeds to match infrastructure buildout. City officials stated that once the property is acquired, they will evaluate options for its use, a process that typically includes utility capacity modeling and capital planning to ensure infrastructure can support intended development densities and intensities.

With municipal ownership, the city can also sequence development to align with utility capital improvement plans. If certain portions of the property require sewer line extensions or water main upgrades, the city could prioritize those areas in its budget or require developers to fund specific infrastructure as a condition of purchase or lease agreements—common practices in public-private development partnerships.

Economic development and market positioning

City Manager McGlothlin framed the acquisition as a tool for economic development, signaling that Palm Coast intends to actively market portions of the property to businesses, investors, or developers whose projects align with municipal goals. In Florida's competitive economic development landscape, shovel-ready sites with clear ownership, established zoning, and available utilities are significant selling points when recruiting employers or catalytic projects.

Palm Coast competes for investment with larger markets in Jacksonville and Daytona Beach and with neighboring St. Johns County's established corporate corridors. Town Center's location along major arterials and its existing mix of retail, medical, and civic uses position it as a logical site for office users, medical specialists, or hospitality projects that benefit from proximity to existing amenities and traffic counts. The property could also accommodate residential development if the city determines housing density would support Town Center's evolution into a walkable mixed-use district.

Control of development rights gives the city negotiating leverage. Rather than responding to proposals brought by private landowners—who hold the leverage in typical zoning processes—the city can proactively solicit uses it wants. That might include targeted recruitment of industries identified in economic development strategies, such as technology firms, advanced manufacturing, or healthcare providers. It could also mean setting design and sustainability standards higher than baseline code requirements, using land sale or lease terms to require features like structured parking, LEED certification, or enhanced stormwater management that the private market might not voluntarily provide.

Flagler County's economy has historically centered on construction, retail, and healthcare, with a large share of residents commuting to jobs in Volusia or St. Johns counties. Diversifying the employment base is a stated goal in the city's strategic plans. Property of this scale offers the footprint for an office park, a regional distribution center, or a mixed-use project large enough to function as a job center rather than a single tenant site.

What happens next

The city now enters a 60-day due diligence period during which staff and consultants will conduct property inspections, boundary surveys, title searches, and environmental assessments. Environmental review is standard for Florida land transactions, particularly for vacant parcels, to identify any soil contamination, wetlands, or protected species habitat that could limit development or trigger regulatory permitting requirements. Wetlands and floodplains within the property would require permits from the St. Johns River Water Management District if development proposes any fill or alteration, and endangered or threatened species—such as gopher tortoises, which are common in undeveloped Central Florida sites—would require relocation under state protocols.

If the review satisfies the city's requirements, closing will occur within 30 days of the review period's conclusion, likely in October or early November 2026. At that point, the lawsuit will be formally dismissed by the court, and the city will hold clear title to the 259 acres.

Once the city owns the property, staff will present options to the City Council for how to proceed. That process typically includes market analysis to understand what types of users or projects the site could attract, fiscal impact modeling to estimate tax revenue and service costs from various development scenarios, and public input to gauge community priorities. The council will ultimately decide whether to market the entire parcel, subdivide it for multiple projects, reserve portions for public uses like parks or stormwater facilities, or phase development over multiple years.

City officials indicated they will share additional information about the property and future plans as the purchase process advances. Public meetings and council workshops would be the typical forums for presenting options and soliciting resident feedback before the city commits to a specific development strategy.

A turning point for Town Center's future

The settlement transforms a contentious lawsuit into a strategic asset acquisition that could define Town Center's next chapter. As Palm Coast continues its rapid growth—Flagler County was among Florida's fastest-growing counties in the 2020 census—Town Center's role as a mixed-use hub faces pressure to evolve beyond its current retail-and-services model. The 259-acre acquisition gives city leaders the tools to actively shape that evolution rather than reacting to private proposals.

How the city chooses to deploy this land will influence not only Town Center but Palm Coast's competitive position in Northeast Florida's development landscape, where cities and counties are vying for investment, employers, and the tax base to fund infrastructure and services for growing populations. The outcome of this settlement, and the economic development strategy that follows, will be closely watched by developers, businesses, and residents across Flagler County as a signal of the city's long-term ambitions.