Cape Coral council reviews revisions to Chapter 29 to tighten incentives, expand eligible projects

Cape Coral City Council heard a staff presentation Oct. 22 on proposed revisions to Chapter 29 — the city’s economic development incentive code — intended to clarify goals, consolidate financial-review language and expand eligibility for some programs.

Sharon Woodbury, Economic Development Manager, told council the code was adopted in December 2021 and amended after a 2023 referendum. She said the update relocates the stated goals for continuity, adds 12 proposed goals and consolidates financial responsibility and review criteria into a single section. "We are proposing that the incentive participation agreements are only effective for projects greater than $100,000," Woodbury said, and she described that liens and clawbacks would apply only when funds are disbursed up front.

The proposed changes add clearer disqualification triggers and require applicants to maintain certificates of occupancy or completion to keep awards. The draft excludes home-based businesses and lists gas stations, car washes and storage facilities as ineligible for assistance. Staff said they will also recognize lender participation in assessing a project’s viability while clarifying that the economic development office is not performing lender-level underwriting.

Program-level changes shown to council include: - Cape Collaborate / Small Business Partner Program: proposed conversion from upfront awards to a reimbursement-based structure aligned with the Breaking Barriers to Business program; certain expenditures (advertising, furniture and fixtures, machinery and equipment) were removed from eligible reimbursement; staff said the program will no longer require a lien for reimbursement awards. - Business Infrastructure Grant: proposed change to compute the current 10% grant on total construction costs (instead of only eligible infrastructure costs) with a $250,000 cap across funding levels and expanded eligibility to include projects without an identified end user (developers building speculative structures). - Creative Cape arts incentive and Local Job Creation Incentive: language relocated into program sections and adjusted consistent with the strategic plan priorities; staff said retail and wholesale trade remain generally ineligible except in limited co-located retail circumstances described for some grants.

Council members focused on the financial controls and monitoring. Council Member Cowen asked how the city would prevent incentive money from being diverted to owner salary, noting the fungibility of funds; Woodbury said reimbursement awards require documentation of eligible costs and that projects using reimbursements will have already spent funds before the city reimburses them. "So in that case, they would have already spent the money for what they're seeking reimbursement to," she said. Council Member Steinke asked whether the city should provide upfront funds to projects that lack private capitalization; Woodbury responded that converting some programs to reimbursement avoids that risk but acknowledged the job-creation and arts programs may still require upfront awards and therefore carry more risk.

Council members also asked whether objective thresholds should replace language such as "significant" in property acquisition criteria; the city attorney said staff could explore objective measures to reduce subjectivity but noted some flexibility is likely intended so the council can evaluate projects on a case-by-case basis.

Woodbury and staff said the city attorney will draft final ordinance language; the currently posted presentation was illustrative. No ordinance vote occurred at the meeting; staff will bring the redlined code back for introduction and later formal readings.

The changes discussed would change how Cape Coral evaluates and disburses incentive funds, limit awards where projects lack supporting capital, and shift some programs from up-front grants to reimbursement schedules meant to reduce city risk.