Land Use and Real Estate Analysis
Metro Forecasting Models’ Interactive Growth Model (IGM) has analyzed Cape Coral’s growth and predicts that the population will grow by 100,000 persons in the next 25 years. At final build-out, the City should reach a population of 375,000 people, exceeding the current populations of Cleveland, Honolulu, or New Orleans. While continued infill of platted lots south of Pine Island Road will continue, the major growth will occur in the northern sections, as show in the IGM maps in the exhibit below:
The City of Cape Coral’s 119.4 square mile area is catalogued by 127,830 individual property records totaling 57,213 acres not including canals and roadways. Utilizing Lee County’s Property Appraiser records, there are total of 1,575 non-residential improved properties in 38 categories of building use (Department of Revenue Code – DOR). The tax database is the most reliable source of evaluating existing buildings on a city-wide scale.
As shown in the table below, there are five major groups of DOR categories:
In total, the 1,575 buildings account for 21,664,775 square feet of floor space. The building stock is largely older in nature, with a weighted average of 30.1 years occurring. In the past ten years, 4,367,796 sf of new space has between added to the inventory, or a gain of 20.2 percent. It should be noted that inventory growth has only been witnessed in half (19) of the 38 categories, as shown below:
The Commercial sector is segmented into Financial, Food Service, Lodging, Mixed Use, Offices, Recreation, Retail, and Service categories. In total, there are 1,032 buildings containing 10,469,780 sf, with an average age of commercial structures of 31.5 years. In the past ten years, 1,053,921 sf of inventory has been added, or a gain of 10.1 percent.
Activity is focused along the Pine Island Rd. corridor as well as along Veterans Pkwy., Del Prado Blvd. S., Santa Barbara Blvd., Skyline Drive, Viscaya Pkwy., and Cape Coral Pkwy. While the downtown does show some activity, more development in the business core should be targeted. However, the northwest Cape is devoid of new commercial construction which will be certainly needed in the future as population growth to the north and west is anticipated. The exhibit below illustrates the location of new commercial structures in the three major sectors of offices, retail and food services.
There are 39 financial buildings totaling 168,578 sf with an average age of 28.4 yrs. In the past 10 years, only 10,835 sf or 6.4% has been added to the inventory in this category. New construction has mainly occurred in downtown or on Del Prado Blvd S. The average financial use building is 4,323 sf.
There are 101 food service buildings totaling 402,807 sf with an average age of 31.0 yrs. Two sub-categories are included in this sector: Restaurants, cafeterias; and, Drive-in restaurants.
There are 8 hotels and motel buildings totaling 200,963 sf with an average age of 26.9 yrs. In the past 10 years, 58,339 sf or 29.0% has been added to the inventory, making this an fairly active element. New construction has primarily occurred on Pine Island Rd. The average food service use building is 25,120 sf.
There are 10 mixed-use buildings totaling 688,126 sf with an average age of 18.1 yrs. In the past 10 years, there has been no new contruction added to the inventory, but City-wide, there are many mixed use properties currently under development. The average mixed-use use building is 68,813 sf, but this figure is skewed by the major component in the group, the Westin Hotel property, which accounts for 91% of the category.
There are 377 office buildings totaling 2,161,250 sf with an average age of 34.2 yrs. Three sub-categories are included in this sector: Single story; Multi-story; and Professional.
There are 22 buildings in this group totaling 269,617 sf with an average age of 40.8 yrs. Five sub-categories occur in this sector: Bowling alleys, rinks, arenas; Enclosed theater/auditorium; Golf course, driving range; Night clubs, lounges, bars; and, Tourist attractions.
There are 449 buildings in this group totaling 6,434,272 sf with an average age of 31.3 yrs. Six sub-categories are in this sector: Auto sales, repair, etc.; Community shopping center; Department store; Regional shopping center; Stores, one story; and, Supermarkets.
There are 26 buildings in this group totaling 143,897 sf with an average age of 19.3 yrs. Three sub-categories are included in this sector: Airports, terminals, piers.; Service stations; Department store; and, Laundry/Laundromat.
The Commercial sector is a largely older building stock that has not witnessed dynamic growth in Cape Coral. With an inventory gain of only 10.1% in the past ten years, the opportunity to fill space needs at present for the targeted industry employment will be problematic without more inventory additions. The three key areas of office, retail and food services are key to this pathway.
Office Space
For example, in the office sector, targeted industry employment in two key areas suggests the need for nearly 1.8 million sf of new office space:
Commercial real estate data indicates that the office market in Cape Coral is very tight. Cushman & Wakefield’s 2nd Quarter 2024 shows an office inventory of about 1.63 million sf with a vacancy rate of only 1.1% and no new office projects under construction. Current net absorption is a positive 3,000 sf indicating further tightening of the market.
While start-ups and incubating companies can occupy older buildings while they scale, the need for modern, energy-efficient structures, especially if LEED certified, is a priority for most corporate users. From both a data and observational viewpoint, the City of Cape Coral is clearly lacking in larger business operations. To attract corporations to a community, both the labor force and the real estate potential must be weighed. Given Cape Coral’s out-commuting workforce figures and the population growth expectations, the labor force component can be considered as a positive driver. But the older, and mostly smaller-sized building stock is a deterrent at present. What is needed to be successful is the development of a base on new multi-story office buildings, preferably in a business-park setting with floorplates of about 25,000 sf so that companies in the 100–200-person size can be actively pursued. Attracting larger companies to Cape Coral must be considered as a priority to help maintain a sustainable economic growth trajectory.
Retail Space
With an inventory of just over 6.4 million sf of space, the retail sector is the largest component of the commercial category (61%). Retail buildings are also older in nature at 31.3 years, and average size of 14,330 sf. At 3.1 million sf, the Community Shopping Center (strip center) is the most prevalent use type, followed by One-story Stores (1.9 million sf). Auto sales and Supermarkets are a more distant third and fourth place, followed then by Regional Shopping Center and Department Stores. With an expected employment gain of about 1,430 jobs in the Consumer Products and Services targeted cluster, and utilizing an industry rule of thumb of about 450 sf per employee, we should expect to see at least 643,000 sf of new retail space added to the market in the next five years. By population growth comparison, the current retail inventory ratio is 29.7 sf per person, using the 2022 population (216,984 persons). With a projected growth of 375,000 by 2050, that would mean a demand increase of nearly 4.7 million sf of retail space.
The IGM report is somewhat different in analysis. Their report indicates a retail inventory of 7.7 million sf and a ratio of 36 sf per person increasing to 39 sf per person by 2050. E-commerce is radically affecting how we shop and its effect on brick-and-mortar investments is clearly evident nationally. It is only reasonable to assume, therefore, that floor space metric will decrease in the future, not increase as per IGM’s assumptions. But to some degree, retail space will be increasing at a proportional relationship to population albeit at a pace yet to be calculated.
According to the Colliers 4th Quarter 2023 Retail report, Cape Coral/N. Fort Myers contains 8.8 million sf of retail space which is 3.4% vacant. Net absorption is a negative 13,900 sf indicating that there is more supply than demand. New construction is quoted as 80,000 sf but several large housing and mixed-use projects currently being developed in Cape Coral will provide hundreds of thousands of square feet of new retail space in the coming years.
Cape Coral is a large community becoming a mid-sized city but does not have a major indoor shopping mall. Likely as a result of this absence, there are many retail chains that have no presence in the City. Many of these retailers prefer space location in covered malls as opposed to free-standing facilities. However, in many malls around the country, pad sites or dedicated building extensions house chain facilities are becoming increasing popular in that they permit easier access by shoppers from their vehicles. Chains such as Barnes & Noble, Starbucks, and Panera Bread are typical of this type of development trend. Examining how new patterns in retail are evolving will be necessary for any community to be successful in the coming years. A newer retail shift that is gaining traction in how retailers think about offering entertaining events -- “Retailtainment”. This approach acknowledges the changing consumer expectations, where shopping is not just a transaction but a desirable activity in its own right. Cape Coral does not need to repeat the undue mistakes made by other communities such as having to fill acres of empty regional mall space but can chart new directions by being aware of the needs of retailers in the newer age.
We would recommend the use of “pop-up” retail events, retail fairs, and other venues to encourage chain retailers to examine Cape Coral’s large buying public and recognize the revenue possibilities created by fulfilling the unmet desires of this growing population. Utilizing unique local elements such as the canals or the natural preserves can provide the backdrop to promote recreational or clothing products or services that will ultimately lead to more retail development. While new mall development may or may not occur, the “facelifting” of existing strip centers and outmoded one-story shops with creative graphics and displays indicative of the tropical locale should be encouraged. Wherever possible, the integration of entertainment or dining with retail should be promoted a way of enhancing the retail experience.
Food Service Space
Food service facilities have a combined area of just over 400,000 sf. The average age of food service building is 31.0 years, and the average is just under 4,000 sf. For this category, the age or average size is not as important as the location. From mapping, t is evident that new food service developments occur along major arteries, similar to retail. But a unique feature of dining is that is generally neighborhood centric, serving as gathering places for locals.
Cape Coral’s many neighborhoods are more defined by vehicular access rather than walking. As such, the concentration of restaurants within a few minutes’ walk does not generally occur other than outside of the CRA downtown. By our analysis, Cape Coral can develop a “foodie” industry by more direct promotion of restaurants, specialty food retail, cooking schools, mobile food service, and catering. A critical feature of this effort will be the establishment of neighbor dining opportunities. This can be achieved both by in-person food service or by delivery-to-home options (Doordash, GrubHub; UberEats, etc.). In this regard, use of empty facilities as new food service opportunities must be considered as viable building stock potentials.
During the Covid epidemic, Americans participated in unique dining experiences, such as closed and tented streets for outdoor serving. While much of this has disappeared as a return to normal conditions, the concept of outdoor permanent dining is a real possibility for temperate climates. As an initial solution, the permitted use of food trucks in parks, other underutilized or vacant properties, or temporarily closed streets should be considered. This lower-impact approach in key locations can help to build awareness for the benefits of neighborhood dining with ethnic variety and unique preparation approaches (fusion) can help to instill a new direction for Cape Coral.
In a more permanent approach, new “restaurant rows” could be established as dock-n-dines along the canals, especially the freshwater inland waterways. An island tiki hut restaurant in Lake Kennedy near Sun Splash Park, or at the foot of Saratoga Lake, Lake Meade, any of the other plentiful lake locations could provide the tourism/dining connection that Cape Coral is lacking. The concept is that although the many 4-corner intersections of the major roadways are already saturated with retail strips or have residential uses directly abutting streets without progressive zoning opportunities for restaurants and smaller shops common to town centers, the canals represent opportunities to partly help correct the problem. The footprint for a new commercial activity center can be both dry and wet simultaneously, with land side connections supporting new “island” developments directly within neighborhoods. Private boat use or light water taxi services can accommodate patrons.
The key is creative planning that will allow for zoning changes to occur. Food service is often the first venture for neighborhood revitalization or change due to the intrinsic nature of dining and impromptu gathering. The “buzz” that occurs when a new restaurant opens is unlike that of any other commercial venture. Adding retail or services to an established restaurant area is more easily accomplished once the audience is already present.
The Industrial sector is segmented into: Light manufacturing; Cannery, brewery, winery; Mineral processing; and, Warehousing, distribution terminals categories. In total, there are 332 buildings containing 4,970,503 sf, with an average age of commercial structures of 27.8 years. In the past ten years, 961,909 sf of inventory has been added, or a gain of 19.4 percent. The exhibit below illustrates the location of new industrial structures in the Light industrial and Warehousing sectors. Existing industrial development is mainly centers in the three industrial park areas:
There are 32 buildings in this group totaling 446,395 sf with an average age of 37.1 yrs. Three sub-categories are in this sector: Light manufacturing.; Cannery, brewery, winery; and, Mineral processing.
There are 300 warehouses and distribution terminals totaling 4,524,108 sf with an average age of 26.9 yrs. In the past 10 years, 899,690 sf or 19.9% has been added to the inventory, making this a fairly active element. The average warehouse building is 15,080 sf. New warehousing activity is focused along the Pine Island Rd. corridor as well the three industrial areas. Of the new warehouses in the last 10 years, 542,545 sf or 60% represented self-storage projects.
The Industrial sector is a largely older building stock that is seeing new life primarily in the development of self-storage facilities. There is limited flex building construction or larger distribution-type warehouses with high cube volume being erected. Especially missing is refrigerated or freezer warehouse space for food storge.
According to commercial realtors, Cape Coral has an industrial inventory of 3.26 million sf that is currently 1.9% vacant . Net absorption is a negative 48,000 sf, implying that supply is outpacing demand. The report indicates that 38,000 sf of industrial space is under construction.
Excluding newer self-storage projects, the industrial building stock in Cape Coral does not meet the present market need. Worldmetrics.org, a leading provider of market insight states that the average size of a warehouse in the United States has grown by 143% since 2000, and in 2020, the average warehouse was 184,693 square feet. Through analysis wholesale employment with the Targeted Industries, at least 735 new positions will be required in warehousing industries across all sectors. Utilizing the figure of 750 sf of warehouse space per wholesale employee, the need for warehouse space in Cape Coral will be 551,000 sf in the next five years. Wifitalents.com indicates that there is 39 sf of warehouse space per person in the United States . In Cape Coral, that figure is currently 21 sf per person, likely indicating that the City is under-warehoused. But, even using this metric for the 2050 population growth, Cape Coral would have as shortfall of 3.3 million sf of warehousing space.
The IGM report has pointed out that the City is quickly running out of industrial land, and we concur. It is vital that larger commercial tracts under control of the City be held for this purpose. These would include the N. Prado Commerce Park and the Burnt Store 300 parcels.
For startups that need light manufacturing or warehouse or space, the older and smaller footprints of vacant structures may be a workable solution. However, use of these buildings would be more suitable as incubators or for intermediate occupancies. Increasingly, however, companies around the US rely on flex industrial buildings as the preferred model for scaling business operations due to the configuration and footprint modifications allowable by this type of structure. Wherever possible, industrial developers in Cape Coral should be encouraged to add this building type to the City’s industrial inventory.
The Institutional sector is segmented into: Churches, Temples; Private schools &am; colleges; Privately owned hospitals; Mortuary, Cemetery, Crematorium; and, Clubs, Lodges, Union Halls. In total, there are 87 buildings containing 1,227,137 sf, with an average age of institutonal structures of 38.2 years. In the past ten years, 189,668 sf of inventory has been added, or a gain of 15.5 percent.
Activity has been mainly focused in the southeast quadrant of the City, south of Pine Island Road, likely following the patterns of historical housing development. Northwest Cape is essentially devoid of institutional activity which will be certainly needed in the future as population growth to the north and west is anticipated. The exhibit below illustrates the location of existing institutional construction in the Churches/Temples, Private Schools, Privayte Hospitals, and Clubs/Lodges subgroups which represent most of this category.
There are 68 churches and temples totaling 913,227 sf with an average age of 40.5 yrs. In the past 10 years, 143,149 sf or 15.7% has been added to the inventory, making this a somewhat active element. New construction has primarily occurred on Del Prado Blvd. N. and Cape Coral Pkwy. The average size for a church or temple is 13,430 sf.
There are 7 private schools & colleges totaling 132,990 sf with an average age of 27.2 yrs. In the past 10 years, no new space has been added to the inventory. Existing activity has primarily occurred along Santa Barbara Blvd., Pine Island Rd., and Diplomat Pkwy. E. The average size for a private schools or college is 18,999 sf.
There are 2 privately owned hospitals totaling 89,535 sf with an average age of 12.9 yrs. In the past 10 years, 46,519 sf or 52.0% has been added to the inventory, making this an active element. New activity has primarily occurred in the vicinity of Pine Island Rd. The average size for a privately owned hospital is 44,768 sf.
There is 1 mortuary, cemetery, crematorium totaling 8,439 sf with an age of 57.0 yrs. In the past 10 years, no new space has been added to the inventory, making this an inactive element. Existing activity has occurred on Chiquita Blvd. S. (Note: Other facilities may exist in Cape Coral under leaseholds not covered by tax assessor data).
There are 9 clubs, lodges, union halls totaling 82,946 sf with an age of 44.2 yrs. In the past 10 years, no new space has been added to the inventory, making this an inactive element. Existing activity has occurred on primarily along Cape Coral Pkwy. and Pine Island Rd. The average size for a club, lodge, or union halls is 9,216 sf.
While new development activity in this sector is marginal, the need for institutional investment is one that parallels population growth. As Cape Coral attracts a larger and more diverse resident base, the need for multiethnic religious, educational, and social facilities will also increase. Specialty healthcare is a priority and the growing national shortage of nurses and healthcare workers is placing much too great a financial strain on large public hospitals. Cape Coral has a few urgent care locations, but the demand will be for more as the population grows.
The absence of new private school development is troubling. While we do not foresee the need for a major education institution to be built in Cape Coral, smaller private schools or training academies devoted to culinary, visual and performing arts, IT/communications/media, or other pursuits should be flourishing. These investments will be necessary adjuncts to the development and promotion of the targeted industries in the immediate future.
The Government sector is segmented into: Public County schools; Hospitals; Lee County - Other, State of Florida - Other; US Gov't – Other; and, City of Cape Coral - Other. In total, there are 108 buildings containing 4,964,644 sf, with an average age of commercial structures of 32.7 years. In the past ten years, 100,347 sf of inventory has been added, or a gain of 2.0 percent.The following exhibit illustrates the location of new government construction in the City.
There are 16 public county schools totaling 2,824,329 sf with an average age of 32.8 yrs. In the past 10 years, no new space has been added to the inventory, making this an inactive element. Existing activity has occurred on primarily along Cape Coral Pkwy. and Pine Island Rd. The average size for a public county school is 176,521 sf.
There are 2 hospital properties totaling 632,409 sf with an average age of 46.7 yrs. In the past 10 years, no new space has been added to the inventory, making this an inactive element. Existing activity has primarily on Del Prado Blvd. S. (Cape Coral Hospital) and Pine Island Rd. The average hospital size is 316,205 sf.
There are 4 Lee County - Other buildings totaling 102,487 sf with an average age of 26.5 yrs. In the past 10 years, no new space has been added to the inventory. Existing activity has primarily been on Veterans Pkwy., Country Club Blvd., Hancock Bridge Pkwy., and Chiquita Blvd. N. The average Lee County – other building size is 25,622 sf.
There is 1 State of Florida - Other building totaling 1,500 sf with an age of 22.0 yrs. In the past 10 years, no new space has been added to the inventory. Existing activity has primarily been at the Four Mile Cove Ecological Preserve on Veterans Pkwy.
There are 4 US Government - Other buildings totaling 281,343 sf with an age of 16.2 yrs. In the past 10 years, 48,126 sf or 17.1% has been added to the inventory. Existing activity has primarily occurred along Diplomat Pkwy. E., Viscaya Pkwy., and Cape Coral Pkwy. The average US Government – Other building size is 70,366 sf.
There are 81 City of Cape Coral - Other buildings totaling 1,122,576 sf with an age of 29.1 yrs. In the past 10 years, 52,221 sf or 4.7% has been added to the inventory, making this a very active element. New construction has primarily occurred on Veterans Pkwy., Nicholas Pkwy., Santa Barbara Blvd., Tropicana Pkwy., and Burnt Store Rd. The average City of Cape Coral – Other building size is 13,859 sf.
Investment in public facilities is often a measured and judicious process based on reasonable assumption of population growth and serviceability of selected locations. Local, state, and federal guidelines for building siting and development are beyond the scope of this study, however, some recommendations can be made from data developed during this analysis.
Public Schools
The School District of Lee County operates public county schools in Cape Coral, along with the Oasis network (one high, one middle, two elementary -- public taxpayer funded charter schools). According to the US Census, there are 29,569 K-12 students enrolled in Cape Coral , which represents 13.6% of the total population. With a public county school space inventory of 2,824,329 sf, this equates to 95.5 sf per K-12 student. For a population growth to 375,000 persons and utilizing the same student to population ratio, Cape Coral will need an additional 2.057 million sf of new school space to meet population demand. With the current average of 176,521 sf per school, future growth could result in a need for 12 additional schools in Cape Coral.
We would recommend that the City discuss future locations options for public school demand with Lee County, including a study on the expansion potentials of the current facilities inventory to partially meet future student requirements.
Hospitals
Lee Health is the operator of the Cape Coral Hospital and the Pine Island Rd. Surgical Center. As per research, Cape Coral Hospital has 291 beds. Using the 2022 Cape Coral population figure of 216,984 persons, there are 134 beds per 100,000 population. In comparison, hospitals throughout Lee County account for 2,176 beds and equate to 265 beds per 100,000 population. The State of Florida’s average is 320 beds per 100,000 population. If Cape Coral Hospital does not expand and no new hospitals are built in Cape Coral, the projected 375,000 population will result in only 78 beds per 100,000 population. To meet the Lee County standard, Cape Coral will need an additional 992 beds in the future.
Using the simple ratio of number of current beds to hospital inventory square footage, Cape Coral has 2,173 sf per bed of hospital space. To meet the 992-bed shortfall in the future, hospital space would need to grow by an additional 2.156 million sf.
It is clear that at least 1 new hospital is needed in Cape Coral. Public sentiment gathered through the survey process has revealed that desire for a competing health care provider to enter the market. The City should begin the process of evaluating whether continuation with a one-operator model going forward is in the best interests of the community.
State Offices
The State of Florida operates 19 agency offices in Lee County through leased offices. Given that Fort Myers is the county seat, a majority of these facilities are located there. However, Cape Coral is the largest population component of the Metropolitan Statistical Area, and in our view, should benefit from better State representation in terms of real estate utilization.
In the table below, the 19 State of Florida office locations are shown by their leased square footage. In total, there is 321,851 sf of space of which Cape Coral shares only 7,049 sf or 2% of the inventory. It is our opinion that the City should encourage the State to consider more agency locations in Cape Coral, especially as dynamic population growth will increase public services need in the future.
Civic Buildings - Post Offices
While there is no specific metric for postal location based on population, the four Cape Coral US offices are generally located in the recognized four quadrants of the City:
Post offices are often one of the key features of town centers. Traditional four-corner downtowns also feature restaurants and cafes, leisure and entertainment venues, offices, medical facilities, hospitality accommodation, and civic and cultural facilities.
Cape Coral will require additional post office locations in the future, and these locations could help create some much needed town center development. With northward expansion, currently underdeveloped intersections at major roadways such as Diplomat Pkwy. W, & Chiquita Blvd. N., Diplomat Pkwy. W, & Eldorado Blvd., or others will present opportunities for establishment of semi-concentrated commercial centers for Cape Coral. The Future Land Use map indicates the forward thinking by the City for more commercial/professional use of these properties rather than single family housing, but civic uses should also be contemplated.
Civic Buildings - Libraries
According to the Institute of Museum and Library Sciences (Imis.gov), the US average is approximately 3.0 public libraries and 5.8 outlets (branches, bookmobiles) for every 100,000 people. In the State of Florida, there are 296 public libraries for the 22.245 million population, which translates to 0.75 libraries per 100,000 persons. Statista.com ranks Florida in 35th position in this category, which is poor. Library use is actually growing in the US. Words Rated (wordsrated.com) reports more people are attending programs at their public library than ever before. Total program attendance reached 125.55 million in 2019, up 23.1% since 2014 and nearly doubled since 2004 At present there are 2 excellent public libraries in the City:
At the current population level of 216,984 in 2022, this would be equivalent to 1.1 libraries per 100,000. But, as the City expands to possibly 375,000, that ratio would drop to 0.6 libraries per 100,000. To meet even the Florida ratio of 0.75 libraries per 100,000, Cape Coral would need 1 additional facility. Population expansion is forecasted for mainly north of Pine Island Rd. We believe that the Northwest Regional Library is well suited for the NW quadrant of the City, but a 3rd facility should be considered for the Cape NE in the future.
The following exhibit illustrates the importance of post offices and library locations. Cape Coral can be visualized in four-quadrants, with Veterans Pkwy. and Santa Barbara Blvd. representing the X- and Y-axes. A 3-mile buffer has been drawn around the four post office locations indicating essentially the reasoning behind their placement. The majority of Cape Coral‘s residents in each quadrant can easily be served by the present locations, but not so in the future. Recommended post office and library locations are indicated on the graphic.
Utilities
The only component of this group is Utilities. There are 16 buildings totaling 32,211 sf with an age of 28.3 yrs. In the past 10 years, no new construction has been added to the inventory, making this an inactive element. Existing construction has primarily occurred south of Pine Island Rd. on various roadways. The average building size is 2,013 sf..
Utility building construction directly follows infrastructure development and expansion. The 16 buildings are owned by 7 companies or agencies:
Added to this list of owners would be the City’s utility facilities which are likely catalogued under the Government section. While it is unknown how many new utility buildings will be needed in the future, it is certain that they will follow the population expansion northward.
In the recently prepared Need for Multi-Family Rental Apartments Study prepared for the City by Reinhold P. Wolff Economic Research, Inc., there is an annual shortfall of about 704 units per year that are need to meet demand by middle income groups.
Our Target Industry analysis determined that new workers in tourism, industrial services, and community services will be needed in the immediate future. Many of these occupations are only at the middle-income level, and the cost of housing in Cape Coral is rapidly outpacing essential service workers’ capability to live within the community they serve. While developers are benefiting from the State of Florida Live Local SB-102 workforce housing initiative, these are largely significantly-sized developments that will contain at least 71 units to be eligible. Certainly, this is a laudable program and the City should encourage its use.
We see an overlooked avenue for affordable housing that does not require such extensive investment.
Investment in Opportunity Zones has been successful throughout the US, with many projects focusing on affordable housing. An Opportunity Zone is a designation and investment program created by the Tax Cuts and Jobs Act of 2017 allowing for certain investments in lower income areas to have tax advantages. The purpose of this program is to put capital to work that would otherwise be locked up due to the asset holder's unwillingness to trigger a capital gains tax. In Cape Coral, there are two Opportunity Zones, consisting of three Census Tracts:
As shown in the exhibit (below), the Cape Coral Opportunity Zones cover approximately 5,454 acres or 8.5 square miles, with a total of 17,371 parcels, 6,546 of which are vacant (37%). The City of Cape Coral owns 75 of the vacant parcels in OZ’s, set aside for future use as well or other public assets, leaving a total of 6,471 parcels or 1,962 acres of vacant land in private ownership.
Recognizing that demands on land use will be changing with population increases, the City has designated its Future Land Use (FLU) categories to meet those needs. Much of the North Cape area which was previously zoned as R-1 Single Family residential has been reclassified as Single Family and Multi Family. Refer to the exhibit below for more detail.
By GIS analysis, we conclude that the largest FLU component of the Opportunity Zones’ land use will be Single Family and Multi Family (SM). This predominance will occur north of Pine Island Road in the Census Tract 120710102.01 region.
We believe that there is a solution. Due to its development history, Cape Coral is a wide expanse of pre-platted residential lots with little consideration for progressive zoning of graduated land use densities. In many places throughout the City, there is lack of “four-corner” commercial development which would normally allow a scale down of uses from mid-rise commercial or mixed use gradually down to single family lots.
Assemblage is the Answer
The solution lies in the assembling of contiguous vacant lots. In real estate, two contiguous parcels can, in many instances, command higher value if combined. This term is known as “assemblage” and developers often seek opportunities to achieve property assemblages to reduce overall costs and increase buildable area of properties. In this regard, there is a benefit to the developer in terms of more building area being provided over the same land costs, resulting in lower costs per square foot of delivered product gained by efficiency. For single-family development, this approach leads to a large home to be built. But for multi-family development, this can result in additional units such as a 4-unit project shown below:
In Cape Coral’s Land Development Code, R-1 zoning standards restrict density to a maximum of 4.4 housing units per acre. This is the basis for the 80 ft x 125 ft lots of 10,000 sf. The zone district dimensions table describes the setbacks and density for a single-family lot:
But, given the FLU changes to allow multi-family uses in former R-1 zones, we will examine the next lowest density use, the Residential Multi-Family Low (RML).
The higher density allowance of the RML offers the potential to develop low-rise apartment projects on assembled lots in duplex, triplex, and quadplex configurations. The multiplex housing model can be accomplished in compact, walk-up, breezeway connected apartment flats that can be erected quickly and affordably on a large scale.
The proposed SM or Single Family and Multifamily zone in Cape Coral’s Opportunity Zone (north) presents a unique opportunity to solve the market dilemma of affordable housing. From realtor websites, it appears that an interior 10,000 sf lot in Cape Coral is currently selling for approximately $75,000, and a waterfront lot for considerably more.
To illustrate this, a simplified development model is shown below. The Opportunity Multiplex Program proposes that a special allowance of 2,500 sf Lot Area per Unit be permitted for projects that will be developed under this framework.
In the first scenario, a two-story duplex is constructed on 2 combined lots. Each lot contains 4 units, and a total of 8 units are produced. Total land acquisition cost is $150,000, and land costs per unit are calculated at $18,750. The example would result in a 6-housing-unit bonus over two single family homes.
In the second scenario, 3 lots are combined to produce a triplex of 12 units. Land acquisition is $225,000 with the same $18,750 per unit cost. This scenario results in a 9-housing-unit bonus over three single family homes.
In the final scenario, 4 lots are combined into a quadraplex of 16 units. Land acquisition is $300,000 with the same $18,750 per unit cost. This scenario results in a 12-housing-unit bonus over three single family homes.
These project types are achievable developments that an individual or small investor pool can accomplish. Economies of scale may factor into the larger undertakings, but generally these can be fixed-cost products. Prefabrication of building components will result in greater economy as well as possibly acting as a catalyst for local industry development.
To illustrate the potential for multiplex affordable housing, refer to the exhibit below. Darkened rectangles represent the 3,082 vacant SM parcels in the Opportunity Zone (north). There are literally many dozens of site assemblage opportunities available from the plentitude of contiguous vacant parcels. Higher density housing development should be considered as a gateway to single family homes. Accordingly, concentration of projects along major corridors or at 4-corner intersections will help to create the progressive zoning vision that is so lacking in many parts of the City.
Incentivizing Development
For many cities, the establishment of a housing authority is a necessary function to manage and operate city-owned public housing projects. For Cape Coral, this is not the case, but nevertheless, the problem remains as to how to produce affordable housing for a growing population in need. The development community is aware of the problem, and although individual builders may try and produce affordable housing product, market realities often result in market rate and above price points. Florida’s Live Local Act is attempting to rectify this condition by providing support for larger multifamily projects.
For the Opportunity Multiplex Program, we need a different approach. We believe that the City of Cape Coral can encourage this type of low-impact development on a wide scale through the following:
The goal should be the attempt to lessen the gap of the annual shortfall of affordable units discussed earlier. If this program could generate at least 50 new multiplex housing infill projects in the next two or three years, that would result in about 600 new affordable units based on the triplex model.
There are three major areas of focus in this section, plus a brief tactical summary of a fourth area. The strategy is to promote the development of signature projects that will define Cape Coral’s identity for the future.
The Burnt Store 300 site is a collection of City-Owned parcels of varying size and configuration. We believe that an executive airport with accompanying industrial park, recreation fields, and a solar farm represents the best and highest use for the property. Some assemblage of contiguous privately-held properties would be necessary to accomplish this objective.
Burnt Store 300 Parcels -- Approximately 322 acres -- Ownership: City of Cape Coral -- Water/wetlands features: approx. 27 acres -- Unexcavated water features: approx. 38 acres -- Net Buildable area: approx. 257 acres -- Current Zoning: Agricultural, R-1 - Future Land Use(s): Mixed Use, Single/Multi Family
Parcel A -- Strap: 304323C2000080000 -- Approxmately 78 acres -- Ownership: Private -- Target: Acquire 100% -- Current Zoning: Agriculural -- Future Land Use: Mixed Use
Parcel B -- Strap: 304323C40001100000 -- Approxmately 10 acres -- Ownership: Private -- Target: Subdivide 50% -- Current Zoning: Agriculural -- Future Land Use: Low Density Residential
Parcel C -- Strap: 304323C4000120000 -- Approxmately 5 acres -- Ownership: Private -- Target: Acquire 100% -- Current Zoning: Agriculural -- Future Land Use: Low Density Residential
Parcel D -- Strap: 3304323C4000130000 -- Approxmately 5 acres -- Ownership: Private -- Target: Acquire 100% -- Current Zoning: Agriculural -- Future Land Use: Low Density Residential
An executive airport serves as a gateway to prosperity, convenience, and exclusivity. While it requires investment, the long-term benefits can significantly impact a city’s growth and reputation. Some compelling reasons include:
1. Enhanced Connectivity
2. Business and Tourism Development
3. Time Efficiency
4. Attracting High-Value Individuals
5. Job Creation and Economic Impact
6. Flexibility for Emergency Services
7. Real Estate Development
8. Supporting General Aviation
Development analysis reveals that the Cape Coral Executive Airport will cost $203,658,500, segmented as follows:
Some basic assumptions about the project include the following:
Refer to the Task 9 Appendices for detailed pro forma analysis of the airport. Emminent Domain vacant lots acquistion costs for Parcels A, B, C and D are estimated at $6,418,000.
The Economic Impact Analysis (EIA) is provided in two parts.
Construction Impacts
The table below illustrates these construction impacts:
Operational Impacts
Operational impacts are determined by the revenue produced by the airport, employment by the tenant spaces, and impact of visitor spending. Overall, 1,247 new jobs will be created and the total operational impact will be $331,318,466, as shown below:
The table below shows these operational impacts:
Total Impacts
When combined, the total impacts for the Cape Coral Executive Airport will be measured over time, since construction will precede operations. In the table below, a 12-year timeline is presented, with the first 2 years representing the construction period, and the subsequent 10 years showing operations. Operations has a ramped utilization factor applied for 100% obtained over 4 years. The additive total impacts for the 12-year timeline is $3,150,757,887. However, since future money has a different value than present-day dollars, the Net Present Value (NPV) of the figure is needed. Utilizing the Federal Reserve’s current 5.5% discount rate, the NPV for the 12 years is $2,134,009,191. With the initial investment of $203,638,500, the Cape Coral Executive Airport will return approximately $11 for each total dollar invested, making this concept a viable plan for the City. For the direct investment by the City, the return is about $26. The following table illustrates the timeline:
Del Prado North Commerce Park Parcel -- Strap: 3304324C3000050000 -- Approxmately 165 acres -- Ownership: City of Cape Coral -- Water/wetlands features: approx. 63 acres -- Net Buildable area: approx. 102 acres -- Current Zoning: Commercial (C) -- Future Land Use(s): Mixed Use (MX)
The Del Prado N. Commerce Park site is an undeveloped property with over 1/3 (38%) of its area in a wetlands, preserve and cypress head natural state. Development on the site must be carefully planned to be in harmony with the natural environment.
The Cape Coral Corporate Park should be a model of sustainable integration that generates the positive financial outcomes required for its implementation. While road front construction along Del Prado N. Blvd, and Kismet Pkwy. E would be easily achievable; the main objective is to penetrate the interior of the site with a road network that will serve well-placed development areas that have the least impact possible on sensitive lands. We envision office “pods” with limited surface area and a flow of vegetative and water features as part of their site plans. A centralized parking area near the Park’s entry from Kismet Pkwy. E. would be reachable from both Del Prado Blvd. N and the existing N. Cape Coral Industrial Park by the interior roadway. Extensive use of public e-scooters available at the central parking area pavilion is envisioned, thereby limiting car movement throughout the site.
The extensive paving scheme for the roadway and parking area would be enhanced using bio-retention techniques. Asphalt below car parking zones would be permeable paving, medians and buffers would be built as rain gardens, and rainwater harvesting storage would be used for non-potable water purposes.
Aerial view from Del Prado Blvd. N
Development analysis reveals that the Cape Coral Corporate Park will cost $215,930,000, segmented as follows:
Refer to the Task 9 Appendices for detailed pro forma analysis of the Park.
Operational impacts are determined by the revenue produced by the Park and employment by the tenant spaces. Overall, 4,908 new jobs will be created and the total operational impact will be $1,532,336,671 as shown below:
When combined, the total impacts for the Cape Coral Corporate Park will be measured over time, since construction will precede operations. In the table below, a 12-year timeline is presented, with the first 2 years representing the construction period, and the subsequent 10 years showing operations. Operations has a ramped utilization factor applied for 100% obtained over 4 years. The additive total impacts for the 12-year timeline is $13,891,569,978. However, since future money has a different value than present-day dollars, the Net Present Value (NPV) of the figure is needed. Utilizing the Federal Reserve’s current 5.5% discount rate, the NPV for the 12 years is $9,231,367,241. With the initial investment of $215,930,000, the Cape Coral Corporate Park will return approximately $43 for each total dollar invested, making this concept a viable plan for the City. For the direct investment by the City, the return is $170. The following table illustrates the timeline:
The Urban Land Institute’s comments about the Downtown were as follows:
To meet those objectives, we recommend the development of a new multi-function Civic Center to be constructed on a visibly dominant downtown site that will serve as a landmark for visitors and residents alike in the CRA. We have identified a vacant group of properties at the corner of Cape Coral Pkwy. and Del Prado Blvd. S that are ideal for this project. The 5.8-acre assemblage will support a new Civic Center, and with the addition of a new parking garage across the street served by a raised pedstrian bridge above Del Prado Blvd. With the implementation of the Civic Center, the Downtown will have a signature location that will encourage ancillary development.
In support of the Civic Center, we envision a new waterfront Entertainment District to be developed along Cape Coral Pkwy, and the Norfolk Canal. A north and South Riverwalk-style esplanade containing shops, restaurants, and bars would add the missing tourism destination that Cape Coral is needing. A possible pedestrian foot bridge above the canal connecting the north and south Riverwalk would be a exciting component to the plan. A water taxi stop at the foot of the Norfolk Canal and the Civic Center would enhance the visitor experience. If successful, we can see the addition of a second hotel to the study area.
Aerial view from Cape Coral Parkway E.
Development analysis reveals that the Cape Coral Civic Center and Entertainment District will cost $151,672,000, segmented as follows:
Refer to the Task 9 Appendices for detailed pro forma analysis of the Civic Center. Acquistion costs of the targeted parcels are estimated at $15,363,000.
Operational impacts are determined by the revenue produced by the Civic Center and the tenant entertainment spaces. The analysis is presented in two parts:
We will assume that the Civic Center hosts 100 events per year in its main space, and 50 events per year in its two ancillary areas. Revenue expectations of $32,220,000 per year are as follows:
Although the Civic Center is envisioned to be more oriented toward residents instead of tourism, it must be assumed that some visitor spending will occur from attendees of conferences or meetings. We project av figure of 10,000 attendees per year will be supported by the facility, staying an average 3 days in Cape Coral. Accordingly, visitor spending is as follows:
Overall, 360 new jobs will be created and the total operational impact will be $47,674,242 for the Civic Center, as shown below:
The table below shows these operational impacts for the Civic Center:
Entertainment District Operational Impacts
For the Entertainment District, we will segment the overall 90,800 sf of building space into 3 equal components: Bars, Restaurants, and Retail. Revenue expectations per component is as follows:
There is an additional revenue expectation for special events to be held in the District (e.g., fashion shows pop-up retail events, outdoor concerts, etc.). The figure of $1,500,000 annually will be utilized for this revenue item.
Revenue expectations of $30,254,000 per year are as follows:
Overall, 325 new jobs will be created for the Entertainment District and the total operational impact will be $27,842,877 , as shown below:
The table below shows these operational impacts for the Entertainment District:
When combined, the total impacts for the Cape Coral Civic Center and Downtown Entertainment District will be measured over time, since construction will precede operations. In the table below, a 12-year timeline is presented, with the first 2 years representing the construction period, and the subsequent 10 years showing operations. Operations has a ramped utilization factor applied for 100% obtained over 4 years. The additive total impacts for the 12-year timeline is $841,337,881. However, since future money has a different value than present-day dollars, the Net Present Value (NPV) of the figure is needed. Utilizing the Federal Reserve’s current 5.5% discount rate, the NPV for the 12 years is $598,934,660. With the initial investment of $151,146,000, the Civic Center and Entertainment District will return approximately $4 for each total dollar invested, making this concept a viable plan for the City. For the direct investment by the City, the return is just nearly $7. The following table illustrates the timeline:
Development along the Pine Island Road Corridor is continuing at a brisk pace. The area is acknowledged as the shopping district for Cape Coral and is the primary focus of developers. The graphic below illustrates the nearly 85 projects in varying levels of development approval in the corridor:
Retail, food service, and mixed-use housing represent the dominant drivers for the Pine Island Road Corridor, and mostly all available parcels have been devoted to that effort. Notable projects west of Chiquita Blvd. such as the Coral Grove Town Center will bring office development opportunities that may partially address the targeted industry focus for more professional and white-collar workers. The remaining larger acreage properties in this area belong to Lee Memorial Health or Walmart.
According to the SR 78/Pine Island Rd. Corridor Vision Plan, ongoing evaluation of safety improvements are being conducted. Recognition of traffic conditions that lead to crashes as well as protection for walking or bicycling pedestrians are being studied. Over-reliance on automobiles is the root cause for traffic issues, and making shopping destinations more interdimensional may provide the answer.
Traditional four-corner commercial infill provides for the convenience of inter-related activities of shopping, banking, dining, mailing or shipping, and more from a centralized location. Parking and walking to adjacent retail or services offers a “Main Street” experience that is lacking on the Pine Island Road corridor. Retail locations are too distant or separated to be convenient for foot traffic. In the graphic below, the four major intersections of Del Prado Blvd., Santa Barbara Blvd. Chiquita Blvd., and Burnt Store Rd. are illustrated with 10-minute walk-time polygons, showing the relative distances which separate these sites.
According to ESRI, the density of existing businesses within each polygon decreases from east to west:
The goal should be to promote more business activity within comfortable walking distances. In total, there are 450 businesses within the four polygons. Using the median value of 129 businesses, we can see that both Del Prado and Santa Barbara are above the median density value, but both Chiquita and Burnt Store are below. Consequently, we would like to see efforts to promote at least 20 more businesses within the 10-minute walk zone at Chquita Blvd., and 125 new businesses in the area of the Burnt Store Rd. intersection. Through judicious use of smaller pad site development in large parking lots or parcels, smaller operations such as dry cleaners, coffee shops, or professional offices can be integrated into the larger properties but closer to the street lines and crossings.
In many of the project concepts presented in this study, the tactical outcomes will depend on acquisition of existing property, both commercial and residential. For transportation-related projects, the eminent domain process will allow the City Cape Coral condemnation powers, but for those elements of the strategy that may only be considered as economic development, the pathway is not as clear. In the landmark Kelo vs New London (2005) court case, the Supreme Court determined that economic benefits are a permissible form of public use that justifies the government in seizing property from private citizens. While this decision expanded municipal powers, its ramifications sparked a watershed of legal challenges afterward which has resulted in many communities to rethink how eminent domain is to be utilized.
One method that Florida communities utilize to achieve similar economic development goals is the creation of a Community Redevelopment Agency (CRA), such as in the South Cape area. CRA’s require a significant degree of planning and legislation implementation to enact. Presently, there are over 220 CRAs in the State. For Cape Coral, the large number of vacant pre-platted lots presents an interesting opportunity.
By creation of a Land Bank, the goals of redevelopment can be met. The Land Bank legislation exists in Florida, although mainly focusing on affordable housing solutions. A Land Bank may also assemble properties for redevelopment, such as tax-delinquent or abandoned properties. They can also acquire properties to convert to other uses, such as retail, parks, or open space. The Center for Community Progress lists five core powers that the Land Bank should possess:
We foresee the potential for a Cape Coral Land Bank (CCLB) that operates in cooperation with the City. It will function as a non-profit Public-Private Partnership (P3), with that objective of acquiring and holding prime vacant properties for transferring, reselling, or reinvesting in areas where the City would like to achieve economic development outcomes. If well-funded, the CCLB can act as equity partner in the speculative development projects led by the City, but also act independently such as acquire existing houses in key canal locations that will be re-purposed as future water taxi stops. The CCLB should be able to offer incentivized property swaps to current residents such as two-for one lot transfers or above market purchase allowances to encourage existing property owners to participate in deals that ultimately are dedicated to public good. Above all else, the core mission of the Cape Coral Land Bank must be the exercise of its responsibility to achieve positive economic development results for the City.
In the early stages while the CCLB is ramping up its programming, the City may need to cover the operating costs through annual budget appropriations, bonds or loans, or in-kind support such as shared staffing. The CCLB can use HOME and CDBG funding (HUD) for certain activities if there is a plan in place for the property which includes a CDBG/HOME eligible end use (e.g. demolition and rehabilitation in target neighborhoods) within the time frame permitted by those programs. The City and the CCLB can coordinate philanthropic foundation grants and private sector donations from organizations interested in community development.
For more information on how land banks can be helpful for affordable housing solutions, please refer to Workforce Housing Concept white paper in the Task 9 Report Appendices.
We conducted a video conference with the Project Review Committee on Sepetmber 30, 2024. Work product to date was discussed and the materials covered were previously uploaded to the website.