By Joseph Cranney of the Naples Daily News
Two highly-scrutinized redevelopment projects approved by Naples City Council in the past month are expected only to be the beginning of what's described as an inevitable makeover to parts of Fifth Avenue South and other business corridors downtown.
Spurred by a booming real-estate market, investors are buying up swaths of property and builders are planning mixed-use projects that will add dozens of condominiums and thousands of square feet of retail space. There are plans to increase the number of residential units on Fifth by about 33 percent in the next two years, and other upcoming redevelopments would continue the trend.
One proposed project includes four new buildings, with a 51-room hotel and 57 condominiums on Fourth Avenue near Seventh and Eighth streets. Local developer Phil McCabe, who owns the property, calls the project a "game changer."
McCabe's redevelopment of the 400 block of Fifth, a separate project which calls for a three-story building with 11 condos, seems to have set the precedent for other builders who want to capitalize on a demand for residential units, but need to meet the city's parking requirements.
In a first for Fifth, City Council last month approved McCabe's plan to include 43 parking spaces underground. The debate over that project and a conceptually similar proposal on 9th Street that council heard last week each lasted about four hours.
Critics say the projects come with a public cost. Those who frequent Fifth fear that more mixed-use development will increase vehicle traffic and create a canyon of three-story buildings from U.S. 41 to the beach.
And as more developers want to build up, there's a threat to restaurants and other popular eateries on the ground. McCabe's approved project on Fifth will demolish Café Luna and the Avenue Wine Café, among other businesses next May, and eliminate more than 100 seats of outdoor dining. Some employees will lose their jobs.
Another project planned on Fifth would redevelop the old building that housed St. George and the Dragon, a 40-year-old restaurant that closed in 2012. Attempts to reach the property owner failed. Development concepts have included mixed use with residential, retail, restaurant and other commercial use. But the ideas have been "all over the place" and nothing is final, Mayor John Sorey said.
"Residents of the community are getting increasingly concerned, almost to the point of alarm," said Lori Raleigh, an Old Naples resident who spoke up about development at last week's City Council meeting.
Developers say the push for residential space is a response to the downtown housing market that seems to have recovered more quickly from the recession than other areas of the city. And selling multimillion dollar condos make financial sense to owners as property values climb.
"The value of the land has become so expensive it's harder to make a project viable with a single-story concept," said Christopher Shucart, a developer with plans for a three-story building with eight condos and underground parking at 560 9th St. S.
The redevelopment is attractive to Sorey and a majority of City Council members who have supported attracting business and increasing the city's connectivity. The city has taken on a number of ambitious projects that support such a policy since Sorey became mayor in 2012, like Baker Park and the redesign of Central Avenue.
Some council members support their position by pointing to a shift in demographics, as many retiring baby boomers feel a need to escape the suburban sprawl and live in urban areas with easier access to public services. The number of city residents aged 65 and older increased slightly, by about 6 percent, from 2000-10, according to census data. Overall, that demographic makes up about half of the Naples population.
The long-term goal, Sorey and others say, is for walkers and bikers to be able to tour area businesses as they travel east and west from the beach to Baker Park.
"The big plus is for downtown Naples as we get more people in that corridor," Sorey said. "They will frequent the restaurants. They don't drive. It doesn't add traffic. It probably decreases traffic."
To the extent that City Council has any say in the redevelopment, the council has given a pass to builders who put residential units on upper floors that extend above the downtown code's height limit. And critics say the new push for underground parking deserves a greater level of scrutiny, citing flooding and other environmental concerns.
"City Council should consider variances extremely carefully, keeping in mind the long-term impact of incremental changes and the establishment of harmful precedents," said John Lehmann, the incoming president of the Old Naples Association.
Greg Hoffmann, a principal in the real estate company that purchased seven downtown buildings for $74 million in October, said the company wants to construct a three-story building with 22 condos and underground parking at the intersection of Fourth Avenue South and Fourth Street South. Hoffmann said the company hopes to have it built by 2017.
McCabe's plan that would add condos and a hotel to Fourth also includes 315 underground parking spots and 3,500 square feet of restaurant space. McCabe said he would use the space to reopen McCabe's Irish Pub, which was a staple on Fifth before McCabe remodeled it last year.
The project was scheduled to be reviewed by the city's Planning Advisory Board in September, but McCabe tabled it after city staff recommended numerous changes to the projects' plans for sidewalks and stormwater.
McCabe said redevelopment adds value to the area, and he views the multistory architecture as an enhancement to Fifth's aesthetics.
"Change isn't taking from our charm and character," McCabe said. "It's adding to it."
During recent meetings that included deliberation on redevelopment, council members seemed split on how council should review the projects. Sorey insists that council ought to grant requests to what he calls minor variances to downtown building codes. City Councilwoman Linda Penniman, in describing council's role, said last week, "We are the arbiters of market trends."
"Economic cycles always occur," Sorey said. "At some point in time, we'll see a slow time and these projects will stop."