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Cameratta in Focus
By Jean Gruss
Editor/Lee-Collier
It took a total of just 90 days for Cameratta Properties to sell 273 condos at High Point Place on the Caloosahatchee River in Fort Myers at the height of the condo boom in 2004.
In that short span, Cameratta was able to raise prices 26 times. High Point Place condos that started selling in the $400,000 range ended at more than $1 million by the time the towers sold out. Among the customers were chief executives, doctors, lawyers and celebrities such as baseball star Johnny Damon.
Fast forward to 2006.
All eyes are on the Cleveland-based development company as it prepares to sell condos at nearby First Street Village Feb. 15 and start construction on the accompanying complex of offices and shops anchored by a Publix Supermarket. It has scheduled an invitation-only event that evening where it will reveal prices to buyers who have shown an interest in the project.
At a time of soaring construction costs and signs of a softening housing market, the success of Cameratta's project will be one indication of the health of the condo market along the Gulf Coast.
What's more, the shops and restaurants that sign leases there will determine whether downtown Fort Myers is a viable retail market that can stand its own against tough suburban competitors. In addition to Publix, other tenants may include Outback Steakhouse, Starbucks, First Watch and Bonefish Grill, though no leases have yet been signed with any tenants.
Cameratta is moving gingerly. The first phase includes the Publix supermarket, 14 townhomes that will line First Street and 92 of the 356 planned condos. "We're not going to jump in all at once," says Joseph Cameratta, 50, the company's founder and chief executive officer. The success of the first phase will determine when the subsequent condos will be sold. In addition, the plans call for 38,000 square feet of office space.
Cameratta says combining the condos with shops and offices will appeal to people who are looking for urban conveniences such as restaurants within walking distance. What's more, Cameratta's team designed amenities ranging from a rooftop swimming pool surrounded by cabanas and lush landscaping to racketball courts and a suspended jogging track that offers panoramic views of downtown Fort Myers.
"That's what is going to drive sales when we release it," Cameratta says.
First Street Village
Initially, the supermarket, shops and offices weren't in the plans for the vacant 12.5-acre property on West First Street near the historic summer homes of Thomas Edison and Henry Ford. Based on the success of nearby High Point Place, Cameratta bought the parcel for $6.25 million in June 2003 and planned to build 700 more condos on the site.
Looking back, Cameratta might have had a tougher time selling the condos today if city officials had not persuaded him to give up some of the land for a grocery store, shops and restaurants. No other downtown residential project will have that "urban village" mix, he says.
At the time, city officials fretted that Cameratta had gained control of the only parcel of land in downtown Fort Myers that would allow enough room for a supermarket, something they felt was integral to the revitalization of the area. They had hired Miami-based urban planning guru Andres Duany to create a plan for downtown and he had identified the site as a prime location for a grocery store.
City officials had to persuade Cameratta to give up a third of the site for a grocery store. "He could have made a lot more profit on the condominiums," says Don Paight, executive director of the Fort Myers Downtown Redevelopment Agency.
Cameratta hired Orlando economist Hank Fishkind to analyze the deal. The bottom line: Cameratta would have come up $18 million short by giving up his plans for condos in favor of the supermarket. Getting Fishkind's credentials behind the financial analysis went a long way to persuading the Fort Myers city council to agree to provide the developer with $18 million in tax breaks, Paight says.
Under the terms of the deal approved last year, the city will provide $18 million in tax-increment financing, of which $3 million will be given to Publix as rent subsidy for the first five years. The remaining $15 million will be paid to Cameratta over a maximum of 14 years. With tax-increment financing, the city refunds the developer the amount equal to 50% of the increase in taxes that result from the development.
Cameratta secured financing from National City Bank for the $200 million project. Like Cameratta Properties, the bank is headquartered in Cleveland.
Landing Publix
Cameratta knew that persuading Publix to open a grocery store on the site would be a challenge, not the least of which was its small size. At 4.5 acres, the First Street Village site is one-third of the size that Publix usually requires in its suburban locations.
Still, Publix was attracted by the nearby residential neighborhoods and the promise of an additional 2,700 condos that are planned on various parcels along the river. "Publix will put their grocery store wherever there is a need," says Cameratta.
Officials with Publix declined to comment, but their strict guidelines for how stores should be built are legendary among developers.
They present a list of some 85 demands and deals usually fail if a developer can't meet any one of those. The supermarket's guidelines cover everything from the location of the pharmacy to the air vents.
"They don't experiment," Cameratta says. "They know what works."
Recognizing the challenges, Cameratta decided to sell the 4.5-acre parcel to Jacksonville-based Regency Centers for $2.75 million. Regency specializes in developing, owning and managing grocery anchored shopping centers, with 393 properties across the country encompassing nearly 51 million square feet.
Cameratta says grocery chains and other retail tenants often prefer to work with developers who understand their needs. "It's very hard to be good at all things," says Cameratta, whose specialty has mostly been residential development in Cleveland.
Coincidentally, Regency had been in earlier discussions to acquire the entire 12.5-acre parcel when Cameratta acquired it. "Joe bought it and we tracked him down," says William Hanks, vice president of investments for Regency's southwest Florida division.
The most difficult hurdle to overcome was the parking. Publix wanted 200 parking spaces, but 20 of those spaces had to be moved to a side street because of designs called for by the Duany plan. "Parking was their absolute top issue," says Paight, who helped craft the development agreement between the city and the developers. The $3 million tax break was instrumental in removing that barrier, says Cameratta.
Still, Publix wanted to make the deal work and compromised on a number of its guidelines, say those involved in the negotiations. It agreed to move the store's parking lot away from the front of the building and designed the rear of the building to look just like the front because it faces historic McGregor Boulevard.
With the start of construction on the supermarket just a few months away, Cameratta says he's confident more people want to live downtown, and with more people more retailers will follow.
What's more, he says building restrictions due to hurricane evacuation rules will restrict development to what's already planned. His bold prediction: Property values in downtown Fort Myers will escalate to twice those of Naples, its posh neighbor to the South.
After all, he says, "Edison and Ford found this a great place to live."
Cameratta finds the Caloosahatchee
How Joseph Cameratta started doing business in Fort Myers is an all-too-familiar story in Southwest Florida: He used to vacation here.
The Cleveland-based founder and chief executive officer of Cameratta Properties owned a home in the Fiddlesticks Country Club in Fort Myers where he played golf on vacation. As business was slowing in Cleveland, Cameratta started to look around Florida for development opportunities in 2000.
After traveling around the state, he found that Fort Myers offered the best opportunities. "Fort Myers was up and coming and real estate prices were not overheated," he recalls. "I felt they were on the cusp of bigger things."
Most important, Cameratta says he found a city government receptive to growth and development. "To me that was key," he says. What's more, the city had hired well-known Miami-based urban planner Andres Duany to design a development plan.
So Cameratta turned to Bob Pekol, a commercial real estate broker with VIP Commercial in Fort Myers to show him some potential sites. Pekol's mother had helped Cameratta buy the house in Fiddlesticks.
With Pekol's help, Cameratta assembled three parcels along the Caloosahatchee for about $5.9 million and started planning High Point Place, two condo towers with a total of 273 units. The plan had a heavy-duty backer: The Carlyle Group, a $35 billion private-equity firm headquartered in Washington D.C.
Cameratta serves on the board of Boston-based technology company Starbak Communications and he mentioned the project to fellow board member and Carlyle executive Brian Hayhurst. The next day, Cameratta and his team were invited to Washington to meet with Tommy Ellis, the principal in the firm's real estate group.
Ellis says the relatively low price for which Cameratta was able to acquire the land clinched the deal. "He has a real good sense of real estate," Ellis says of Cameratta. "He's extraordinary in that regard."
Although he declined to say how much Carlyle invested, Ellis says the firm put up 80% of the equity for the deal. "The site allowed us to locate the buildings so everyone would have a spectacular view of the river," Ellis says.
Even more important than the financing, Cameratta says Carlyle provided him with expertise in the financial management of the project, from accounting, to reporting and budgets. "They don't miss a beat," he says.
GOING UP
Here is an update on high-rise condo development along Fort Myers' waterfront, according to the Downtown Redevelopment Agency:
Alta Mar
131 condos
Developer: Tarragon Realty Investments
Status: Sold out and building nearing completion.
Beau Rivage
124 condos
Developer: Homes for America
Status: Completed in 2004.
Cypress Club
292 condos
Developer: New
Leaf/BAP
Status: First tower sold out and second tower 60% sold. Developer is waiting for building permits and hopes to break ground in the spring.
High Point Place
273 condos
Developer: Cameratta Properties
Status: Sold out and under construction.
Monaco
70 condos and 300 condo-hotel units
Developer: Homes for America
Status: Sold out the condos and 175 condo-hotel units. Developer expects to break ground in June.
Oasis
1079 condos
Developer: The Related Group
Status: Sold out in three towers and waiting for permits to start construction this summer.
Riviera
150 condos
Developer: Homes
for America
Status: Sold out and under construction.
St. Tropez
150 condos
Developer: Homes for America
Status: Sold out and under construction.
The Vue
180 condos
Developer: Throgmartin
Status: 80% sold and waiting for approval from the U.S. Park Service for a land swap to start construction.
One West
420 condos
Developer: Fort Myers Development LLC
Status: Pre-construction sales will begin in March and the developer plans to start construction this summer.
Legacy Harbour
374 condos and 64 hotel units
Developer: Sullivan-Florida Group
Status: In design phase.
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