Fort Myers gives luxury condo developer break from minority contractor requirement – News-Press

The developer of a luxury condominium complex in downtown Fort Myers will get a break from complying with a city requirement that at least 15% of contractors on the job be minority-owned enterprises. 
Fort Myers city council members, sitting last week as commissioners of the Community Redevelopment Agency, approved what was billed as a temporary reduction in the requirement for the Palmera on the River project, allowing the minority hiring rule to apply to 10% of contractors on the job.
Palmera on the River is planned as a 221-unit community to be built at First Street and Evans Avenue. Its projected cost, when the project was approved, was $56.6 million.
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One minority contractor, Ishmael Rolle of South West Florida Professional Contractors Inc., told the CRA board that reducing participation by minority-owned companies is a “stab in the back” to contractors who were able to take the work a year ago. 
“How is that going to help minorities in Lee County, at least as far as business is concerned?” Rolle said. “How is it going to prove that the city of Fort Myers is behind the minority businesses in our area?”
Representatives of the developer, Tampa-based Soho Sight LLC, said its general contractor is unable to meet the city requirement that 15% of companies hired to work on the project be certified Minority Business Enterprise companies. 
Suffolk Construction, the Boston-based contractor with an office in Estero, was hired to build the apartments. Suffolk sought a six-month extension of its work schedule. The timetable was set when a tax concession for the contractor was approved.
The tax break, called tax increment funding, lets the developer of the project keep part of its property tax payments to pay construction loans.
Created to stimulate construction, especially in distressed areas, the TIF program has also been used for several high-end projects in recent years.
Those high-end projects include the  318-unit recently completed  City Walk, which cost  $75 million; the $56.6 million First Street Apartments, a 274-unit apartment complex planned at the former site of the United Methodist Church; and The Irving a $25.5 million, nine-story development approved last month to bring urban hipsters to downtown Fort Myers.
Suffolk executives said the company has had a difficult time finding enough minority contractors to meet the city’s requirement of 15% minority subcontractors on the job but said it can start construction with 10% minority participation and vowed to bring it up to 15%.
Community Development Director Michele Hylton-Terry told the board that more can and should be done to help minority-owned businesses participate in the program. 
“We have (minority businesses) that are operating at different levels, and I believe we can provide assistance to help them participate,” Hylton-Terry said. “Just because they are registered does not mean they are able to participate at the level that’s required. What can we do to shore them up? I think there are things we can do.”
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Some suggestions for improvement came from Roy Kennix, owner of a minority business and a development consultant for an affordable housing complex in Dunbar.
Kennix said providing timely notification of bidding opportunities and direct technical assistance in preparing competitive bids, as well as assistance in cost estimating — an essential component of successful construction bidding — would help businesses qualify for more work.
Lists of Minority Business Enterprises prepared by Suffolk and used to seek out minority businesses able to participate indicate several may be qualified but couldn’t bid on the project with “lack of manpower” listed frequently as the reason.
Council members approved the reduced minority hiring requirement requested by Suffolk and gave Soho Sight a six-month extension to start construction.
Members indicated that a workshop session would be set in the future to discuss changes to the program.
The CRA board also approved the sale of the right to build a Marriott Corp. franchised hotel in downtown Fort Myers. 
The project was given initial approval in October 2020 and approved for tax increment funding that would mean the developers could use 95% of the increase in property taxes generated by the hotel to pay back construction loans.
Fort Myers:Developer gets tax break for proposed luxury apartment complex downtown
Ownership will be transferred to a new entity, 30% of which will be controlled by David Frye through  FTM Hotel LLC. Despite holding a minority share in the new ownership, FTM Hotel will control the project as general partner.
“The bottom line is the controlling parties of the new entity are the developers,” said CRA attorney Berk Edwards. “That is something we have always strived for, to see that the group that brought forth the application will call the shots.”
With only six members present, board members were unable to approve the assignment for sale of the development agreement for the City Walk at West End project.
City Walk has been built, and the sale was scheduled to close Dec. 9. Council members were stymied by 3-3 votes on how best to protect the city’s interest in $5.5 million in tax increment financing provided to the project. The issue was deferred to a future meeting.
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Some commissioners worried the city could potentially lose money if the new owner rather than the redevelopment authority gets the right to take insurance payments or eminent domain proceeds.
“I don’t know why we should be in a weaker position when it’s not fully explained to me why we need to be in a weaker position,” said board member Fred Burson. “I don’t want to be changing the TIF agreement to asking us to step back from something they agreed to when they came in looking for the award.”
City Walk includes 318 residential units, a garage, 14,000 square feet of office space, and a 12,000-square-foot amenity center.


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