More oversight wanted for tax breaks given to developers

Reporter: Peter Fleischer Writer: Matthew Seaver
Published: Updated:

There’s no shortage of projects and growth in downtown Fort Myers. New high-rises seemingly pop up on every corner.

Some of these developments might only be going up because the city helped make them happen.

Michele Hylton-Terry, Executive Director of the Fort Myers Community Redevelopment Agency (CRA), said, “the purpose of the CRA is to increase the tax base and help remove slum and blight.”

To eventually increase that tax base, Hylton-Terry said they provide low-interest loans and tax rebates.

In just the last year. The CRA provided rebates for five different projects across the area.

In the case of a tax rebate, developers ask for a set dollar amount. A CRA-contracted outside expert makes a recommendation. Then the CRA approves a final rebate.

Fort Myers resident Gene Gibson said, “they’ve focused primarily on luxury buildings.”

Gibson has lived in Fort Myers for years and watches the CRA’s spending closely, even writing several op-ed articles.

He didn’t hold back when describing their spending habits.

“Abusive. A CRA can be an innovative program that can help, but there are a lot of tools in the chest,” said Gibson.

Fort Myers Mayor Kevin Anderson said, “it allows incentive for a developer to come into an area that is not attractive to other developers.”

Mayor Anderson, head of the CRA, supports the concept but wants to hire a full-time underwriter to evaluate projects and double-check the math.

“Long-term, I don’t think anyone is looking out for the city itself,” said Anderson. “We’ve got three or four figures, I just want to make sure the figure we settle on is absolutely the right figure.”

“He is 100% on the mark with that. Too often the city council just accepts what the developer says is their profit margin,” said Gibson.

CRA Commissioner Fred Burson doesn’t believe a full-time underwriter’s necessary. “We pay these individuals on a fee basis. I think they represent us adequately. I think it’s still cheaper to do it on a case-by-case basis than pay an individual full-time.”

Anderson says he’s excited about all the new development Fort Myers has seen but he won’t vote for another dollar of rebates until someone runs the numbers with the city’s best interests in mind.

“I want to make sure that we’re acting in the best interests of the citizens and that we’re comfortable that the numbers have been presented to us are absolutely spot on,” said Anderson.

It’s important to note, the tax rebate money comes after developers have paid their city and county tax bill, and it’s paid back after project checkpoints are met.

The City of Fort Myers says the area is close to reaching capacity. With this area thriving, they hope to put businesses and more affordable housing in areas that can use some help.

“The Luminary, Campo Felice, Prima Luce, all are projects built, or in the process of construction in downtown Fort Myers. They also all received millions of dollars in tax rebates from the Fort Myers Community Redevelopment Agency.”

They also all received millions of dollars in tax rebates from the Fort Myers Community Redevelopment Agency.

CRA Chair and Fort Myers Mayor Anderson and CRA Commissioner Liston Bochette claim the CRA has driven a lot of the growth.

Anderson said, “the CRA has done tremendous work in the downtown area.”

Bochette agreed, saying, “it’s obviously been a success in the past and the goal now is to keep it a success in the future.”

These projects are also luxury buildings in an area where people struggle to find affordable housing.

“That’s where I think we need to be putting more of our efforts. Incentivizing developers to take those risks in those areas so that we can hopefully see the same transformation,” said Anderson.

It’s a complicated problem for the CRA. Commissioner Burson explains they can’t tell developers how and where to spend their money. “By law, they can only be spent in the area they’re in. So I can’t take money from downtown and spend it on Cleveland Avenue.”

City records show the CRA has allowed for nearly $30 million in tax rebates for luxury living spaces since the start of 2019, to help transform the downtown area.

“Basically, the taxpayers are subsidizing the building of luxury condos and apartments.” Gibson said, “I just think there are better things the city can do with its taxpayer money.”

Now the tides may be changing. Burson believes because of how quickly downtown Fort Myers has grown, they may offer fewer incentives or TIFs, tax increment financing, for developers to build.

Instead, working to push projects into areas that need the help.

“You’re gonna see the TIF awards probably be reduced because it’s no longer necessary. What we’re trying to do is increase the TIF awards in the other areas so that private businesses are encouraged to go there instead of downtown,” said Burson.

Bochette said, “we can’t help the bottom if the top is not rowing the boat hard enough. It’s a balanced portfolio and we’re striving to get a more balanced portfolio in our building among our citizens where everyone enjoys the quality of life here.”

Gibson hopes the CRA will choose new developments carefully. “Yeah, I’d like to see different types of projects. But even if you find a good project. This is a way to jumpstart a process. Developers also need to have skin in the game.”

CRA officials also point out; while luxury projects aren’t designed with most in mind, they can provide benefits to everyone.

Burson said, “it increases the tax base for Fort Myers tremendously. The more wealth we provide, they bear a bigger portion of the tax base. The rest of the city gets that revenue and it’s spent all over the city.”

Only time will tell.

The CRA hopes to provide rebates for affordable housing projects in the future, but the city is also evaluating how it spends its money.

Mayor Anderson has an agenda item in Tuesday’s city council meeting calling for an audit of every penny spent in the city.

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