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Pave the road to recovery

June 14, 2013
Cape Coral Daily Breeze

Sitting as the board of the downtown Community Redevelopment Agency, Cape Coral City Council this week agreed to give Starbucks a tax rebate of $27,000 towards the construction of an 1800-square-foot coffee shop in the South Cape.

The rebate will come in the form of Tax Increment Financing, meaning the business will be rebated its city and county property tax levies for the difference between the bill for the undeveloped site and the improved, provided certain development goals and objectives are met. Other undisclosed incentives are still forthcoming.

The money is intended to help offset $78,000 in cost overruns, officials said.

The vote was 6-1, with a board majority hailing Starbucks' decision to build a shop in the CRA District as an economic development coup.

We agree, it is good news.

Starbucks seeks a certain demographic for its facilities and those who point out that similar chains take note of Starbucks locations are correct for the name is well known.

We welcome Starbucks' decision to build a third store, bringing the total to four in the Cape, and we thank those, notably Councilmember Marty McClain, for their work in promoting our city in general and the South Cape in particular to the Seattle-based chain.

But economic development and money well spent?

We think not. It is, in fact, neither.

By definition - by the city's own definition - economic development is business development that brings new money into a community. It does not merely cut slices of the existing revenue pie a little thinner. By definition, economic development also adds jobs of a specific nature, skilled positions with compensation higher than the average within a community.

Using those standards, another Starbucks is business development - desirable business development - but economic development warranting that type of funding it is not.

And even proponents agree that the $27,000 in CRA TIFF money with more to come likely held little sway in the corporate giant's decision to build.

The city has been told that to achieve its goal of attaining a desirable tax balance made up of the proper mix of residential, commercial and light industrial, it needs to become more business friendly.

Throwing money piecemeal at service-related development in a city where commercial occupancy rates are at record lows is not the way to go.

Especially when taken in the context that the city quietly let its single best incentive - one designed to get hundreds of vacant storefronts and thousands of square feet of vacant office space filled - sunset with nary a murmur.

The city of Cape Coral's "change of use" impact fee waiver - a solid initiative that uniformly waived additional impact fees when, say, general office space was leased to a medical concern or a closed retail shop became a restaurant - is no longer in effect although the economy is perking and the Cape now has the greatest opportunity for business and job growth.

That's a marketable incentive worth the money and it never should have been allowed to expire.

The city also has done nothing to follow Lee County's lead and address impact fees head on.

The county has waived 80 percent of its fees on new construction for the next two years. Again, the Cape has fumbled.

Another look at the city's fee structure so as to be competitive with sites in our home county is overdue.

Starbucks' decision to build downtown does tell us one thing: We are on the road to recovery.

The city must - must - make a concerted effort to help get us there.

That's getting empty buildings filled and making new construction, residential and commercial alike, competitive.

Put impact fee discussions back on the table.

Fee waivers are easily understandable. They're fair as they are uniformly available, big name or not. Waivers are used in neighboring communities - including right across the river -and so implementation would immediately level the playing field.

Which is the reason the CRA felt the need to approve $27,000 in tax rebates to a business that sees value in locating in the Cape.

We're all for economic development.

The question remains, is the city?

- Breeze editorial



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