| The local building industry can breathe a sigh of relief if the insights of three distinguished business insiders are correct.
Will Stout of Realmark Development, Gary Tasman of VIP Commercial Realty and Joe Mazurkiewicz, executive vice president of the Council for Progress, headlined a panel discussion hosted by the Cape Coral Construction Industry Association Thursday evening. Each said Cape Coral will continue to be a mecca for the building industry, despite the recent decline in housing costs, rising building and construction costs and the recent hurricanes that have hit Cape Coral.
“As a matter of fact, it hasn’t had any effect at all,” said Stout, whose company has developed Burnt Store Marina and Cape Harbour among others. “A hurricane is nothing to me down here. The worst is I’m going to lose power for a few days and I need a window air conditioner run by a generator.”
Stout said the so-called blip in the marketplace is a misnomer. He believes the market is still strong for homebuyers. What has caused the perceived slow down is the reduced number of investors in the marketplace that are no longer buying land and homes in Cape Coral.
“Our market is not going to have some crash,” said Stout. “All the Mid-westerners are still going to move here. We just don’t have every mom and pop speculating in real estate. And that’s not the end of the world.”
Tasman said the same holds true for the commercial real estate market.
“After the rebound from Charlie, which was a couple of weeks, our phones were ringing off the hook at a faster pace than before,” said Tasman. “I think the hurricanes, for some reason, helped the market.”
Commercial developers, on the other hand, face challenges due to lack of zoned property and low rent rates, and the increases in construction costs, delays in governmental processes and cost of land increases.
“What those things tell me is it is going to be very, very difficult to continue to develop at its current pace,” said Tasman. “What needs to happen is either land or construction prices are going to go down or rents need to go up. I think we all agree land and construction costs are not going down. So I would tell you until rents go up in Cape Coral, which is already happening, there will be a hard road to ride for future developers.”
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Stout said the problem lies with the timeline needed to get projects moving. What was once an 18-month timeline from start to completion now takes up to four years.
“The 48 months is exactly the length of time from when we buy a piece of property to when we can expect to get any return on our money,” said Stout.
He did issue a warning about “coastal high hazard” , a result of the flooding of New Orleans due to Hurricane Katrina.
“Remember you heard it here,” said Stout. “There is a ruling coming out on May 6 and nobody knows what coastal high hazard is other than the government has decided we shouldn’t live on the coast because New Orleans is under water. They’re going to define what it is.
Mazurkiewicz said that could be a concern to the Community Redevelopment Agency since the downtown redevelopment project could be deemed 100 percent coatal high hazard.
Another factor hurting commercial development is the fact that Cape Coral is “sliced up” in so many residential pieces, according to Tasman.
“I have been getting calls from developers and land owners who spent four years getting permits and everything, looking at the market and deciding to sell instead of building,” said Tasman. “I can tell you the next wave in the residential market is going to be the fallout from these developers choosing to sell the project for a big premium over what they paid for it. You’re going to see people picking up projects and start building in 30 days.”
Mazurkiewicz raised a red flag that could have an effect on the proposed redevelopment of downtown Cape Coral.
“The Legislature will probably take away eminent domain from the CRA for economic development,” he said. “It would hurt because someone who owns a 25-foot commercial lot could prevent the assemblage and development of a $350 million project.”
The hope for commercial development is that additional residential building will spur commercial development, if the zoning issue can be addressed.
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