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Business Observer Friday, Nov. 4, 2011 8 years ago

Hong Kong Zones

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Platapalooza got people talking about how to fix planning disasters of older communities such as Lehigh Acres and Cape Coral. Removing government barriers is the first fix.
by: Jean Gruss Contributing Writer

REVIEW SUMMARY
Issue. Antiquated subdivisions
Trend. Economic development
Key. Remove government barriers to spur redevelopment.

Could antiquated residential subdivisions on the Gulf Coast become zones of economic freedom like Hong Kong?

Welcome to Platapalooza, a festival of planners, engineers and attorneys who recently welcomed any alternative idea to developing these depressed areas. About 100 of them gathered late last month to discuss a wide range of solutions.

Joining this party of sorts were state legislators from two such communities, Reps. Matt Caldwell of Lehigh Acres and Gary Aubuchon of Cape Coral. Both men have pledged to help remove government barriers for these special areas.

Government is at the root of the problem and removing zoning and development restrictions is the key, says Caldwell. “No one would have built a community like this if it weren't for government subsidies,” he says.

Caldwell says he envisions more densely developed parts of Lehigh Acres in east Lee County could be modeled after Hong Kong, areas free of the existing burdens of zoning and taxation where economic development could be unleashed. “I don't know what we have to lose,” he says.

These two communities and others like them around Florida were planning disasters when they were created decades ago, and they've suffered mightily during the real estate bust. Developers subdivided vast tracts into thousands of residential lots without regard for roads, sewers, commercial space and parks. Because many of these lots were sold to people sight unseen, this fragmented ownership is scattered around the U.S. and overseas.

A government solution is more limited today because Florida voters in 2006 severely curtailed government's ability to take private property for economic development. That fact will likely force a private-sector solution for a problem that has vexed the Gulf Coast for decades.

The scale of the problem is huge. For example, at the current sales pace there is a 200-year supply of residential lots in places such as Port Charlotte, says Adam Cummings, a former Charlotte County commissioner who has been involved in the discussions.

No one expects an immediate solution to the challenge, and developers aren't swarming these areas to assemble parcels. “The urgency is not there, but this is the best time to do this because you don't have the opposition of specific applicants to take the short-term gain,” says Michael Ciccarone, a North Fort Myers attorney and expert on the subject. “This is the time when long-term planning is going to be more effectively implemented and understood.”

Government hands off
Some of the Platapalooza participants say Ciccarone proposed a novel idea that could deter development in some of the more remote areas of these communities: Give up the public roads.

“If you don't want development to occur, that is the single most effective way to cause that to happen,” says Ciccarone. “People can still buy and build out there, but as a practical matter it's extremely difficult to get financing to do that if you're not on a public road.”

What's more, no legislation is needed. Cities like Cape Coral or the Lee County commission could simply decide to stop maintaining these remote roads and give up ownership. “People who are living out there aren't going to like that too much,” Ciccarone concedes.

However, governments could create a system where owners of land in outlying areas could trade for development rights or land where commercial and residential buildings are already concentrated. The depressed real estate market might make the process easier now, some say.

The legislature could be more aggressive about letting municipalities seize land from those who don't pay property taxes. “The process by which government takes over an abandoned property is very cumbersome,” says Bill Spikowski of Spikowski Planning Associates in Fort Myers. Municipalities could swap lots in more densely populated neighborhoods for those in outlying areas.

Government itself wouldn't necessarily be the buyer but it could set up the exchange system. Besides, government has a terrible record when it comes to land buying. “When the government comes in, it's the big elephant and prices triple,” says Spikowski.

What's the cost?
There are some who suggest more aggressive government involvement in fixing the problems of these antiquated subdivisions. In fact, the growth-management bill approved by state legislators this year includes the term “antiquated subdivision” but means only those that were approved on paper but never developed.

“What I've believed for the last 20 years is there would not be a long-term statewide effort to ameliorate the platted lands until the legislature recognized them as statewide areas of critical concern,” says Max Forgey, a longtime planner in the region with Forgey Planning Services.

The state could use conservation-land funds or another funding source enhanced by a local match to acquire and “de-plat” those remote subdivided lands before more people start moving there.

Taxes on real estate transactions might be one source, says Forgey. “One thing I'd really like to see in the next year or two is for us to do an economic study of the actual costs and benefits,” he says.

A program of land swaps or transfers of development rights should also be carefully studied. “It's difficult to find a system that's actually worked,” says Beverly Grady, the partner in charge of the Fort Myers office of Roetzel & Andress who specializes in land use and zoning. “We need to find a successful one,” she says.

“You have to give value to those rights,” says Cummings, the former Charlotte County commissioner who says such a system won't work if local municipalities continue to approve developments in more remote areas. “Nobody uses it because the commission is willing to give development rights for free,” he says, citing the approval of Babcock Ranch in eastern Charlotte County as one recent example.

To give value to development rights, Cummings advocates adopting language in a county's charter that caps development. Charters are more rigid documents that can't easily be changed by politicians. “The important thing that it does is that it acknowledges there is a cost to development rights,” he says.

Advocates of greater government involvement acknowledge that it could be an expensive proposition. “It's not going to be easy nor is it going to be cheap,” says Cummings. “You've given away the farm and now you have to buy it back,” he says.

The problem of platted lands

Often referred to as “platted lands” or “antiquated subdivisions,” these are vast tracts that developers subdivided into thousands of residential lots in Florida and other Sunbelt states in the decades following World War II.

Lots in these developments, including Cape Coral, Lehigh Acres, Rotonda and Port Charlotte on the Gulf Coast, were sold to people outside the state with the promise of owning a plot of land in the Sunshine State. Many people purchased these lots sight unseen.

The problem with these developments was that they weren't designed with room for commercial development, schools, parks or even roads or sewers. Over the years, residents gradually moved into these areas though there remain huge numbers of outlying lots.

At a recent gathering, Fort Myers planner Max Forgey of Forgey Planning Services illustrated the staggering urban-planning challenge presented by these developments with the example of Cape Coral, which was incorporated as a city in 1971.

Cape Coral in Lee County is 120 square miles with 133,000 platted lots, an area four times bigger than Miami and three times the size of Boston. Barely half of the lots have been built upon in its 50-year history so far.

Cape Coral has 1,300 linear miles of streets, nearly double Manhattan's. To drain the area, the developers built 400 miles of canals.

The Rosen brothers, developers of Cape Coral in the late 1950s, first built homes there in the early 1960s. But the Rosens failed to include enough land for commercial development, open spaces or basic necessities such as sewage-treatment plants. To do that in the more densely populated areas of Cape Coral has already cost local taxpayers millions of dollars.

Cape Coral now has about 154,000 residents and could accommodate 400,000 residents. “We have all we need for another 100 years,” says Forgey.

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