With 89 buildings and 14,100 students, Florida Gulf Coast University in Fort Myers has become its own small town since it opened in 1997.
But surprisingly little development has occurred adjacent to the 760-acre campus just east of Interstate 75. You can blame the recession for that.
Now that the recovery is underway, that's about to change. Private Equity Group, a Fort Myers-based real estate land-investment and development company, plans to start developing a mixed-use project nearby called CenterPlace.
Private Equity acquired 5,300 acres adjacent to the university in 2012 from Alico for $10 million. On an 886-acre portion of that land, the company plans to build CenterPlace, which will have room for 1,950 multifamily units, a 250-room hotel, a 30,000-square-foot conference center, an office and research park totaling 300,000 square feet, 246,400 square feet of retail space and 100,000 square feet of office space.
“We're going through zoning right now,” says Donald Schrotenboer, president of real estate for Private Equity Group, a company controlled by CEO O.J. Buigas.
Buigas has a track record of success, acquiring and disposing of real estate and other assets totaling more than $2 billion in Southwest Florida over 30 years. Private Equity has delivered 42% annual compounded return on invested equity, the company says.
Schrotenboer also has a well-established development pedigree. He moved to Southwest Florida to help Domino's Pizza founder Tom Monaghan create the new town of Ave Maria in eastern Collier County in partnership with Barron Collier Cos. Before joining Private Equity Group, Schrotenboer was president of Alico Land Development.
The land for CenterPlace was originally sold to Orlando developer Bobby Ginn, who was going to develop a luxury residential community. But Ginn defaulted during the real estate bust and Alico, which also financed the deal, foreclosed on the land before selling it to Private Equity Group.
Now, the focus is on creating a tie-in with the growing university, linking CenterPlace via walking trails and possibly a water taxi connecting the surrounding lakes. “We're going to develop a university village concept,” says Schrotenboer, whose firm also recently donated 40 acres to the university's foundation for the college's future expansion.
The residential units at CenterPlace will include a portion devoted to apartments for upperclassmen and graduate students. Private Equity Group may sell the land to a student-housing developer or build it for its own account, Schrotenboer says. “We could start turning dirt in the second or third quarter of 2015,” says Schrotenboer, who is aiming for housing to be available to students in time for classes in August 2016.
In addition, CenterPlace will have shops and restaurants that cater to the university students, faculty and visitors within walking distance of the campus. “There are a number of retailers who will want to be near the university,” says Schrotenboer, who notes that the development will include a 68-acre central park for students to enjoy concerts, shop at a farmers market or toss a Frisbee.
Meanwhile, a 30,000-square-foot conference center that's part of the development of a 250-room hotel will provide the university with space for academic gatherings. “The university is looking for a conference center,” says Schrotenboer.
In addition to the cost of the land, Schrotenboer estimates the firm will spend more than $2 million to obtain the zoning and entitlements for the land. “It's not for the faint of heart,” he smiles.
The first phase of the CenterPlace development could cost as much as $30 million for the infrastructure such as the roads, a sum that may be financed by selling community district development bonds. Schrotenboer says preliminary discussions with underwriters and investors indicate they may be able to sell CDD bonds with historically low interest rates.
Schrotenboer acknowledges that the track record of mixed-use projects in Southwest Florida has been mixed. But the firm believes the proximity to Florida Gulf Coast University is the key, especially since some have projected the school could one day have as many as 25,000 students. “We wouldn't be proposing this if it weren't for the university,” he says.
Company. Private Equity Group Development. CenterPlace Key. The growth of FGCU is spurring new development in the area.