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Cape Coral approves incentives for new 112-room hotel with generator-backed emergency rooms
Summary
City council approved a package of incentives to support a 112-room, $29 million hotel that will reserve 37 generator-backed rooms and common space for emergency operations; the measure passed 5-2 after debate about cost and alternatives.
The Cape Coral City Council voted 5-2 on Oct. 22 to approve an incentive package for a proposed five-story, 112-room hotel that the city says will provide 37 generator-backed rooms and dedicated common space for emergency-management use.
The vote approves a development incentive package the city described as totaling $2,430,000 over 15 years, including an enhanced property-value recapture grant of about $1,490,000, a site improvement grant of $770,000 and an impact-fee credit of roughly $176,000. City staff and the developer said the project represents a private investment of about $29 million at 1475 NE 8th Terrace.
City Manager Merritt told the council the agreement resolves a recurring challenge for emergency operations by guaranteeing nearby space outside a special flood hazard area where staff and mutual-aid personnel can stay and operate during storms. "We were able to work out an operating agreement with the developer of this hotel so that those staff can stay there during an emergency outside of a special flood hazard area," Merritt said.
Sharon Woodbury, the city's economic development manager, presented project details and said staff estimates the hotel will produce about 21 full-time jobs and modest increases to tourist-development-tax revenue. Ryan Lamb, Emergency Management and Resilience Director, described the operational need: the hotel will place a generator to power two floors (37 rooms) and provide common spaces staff can use during activations. "Part of this is the city partnering with the hotel to put in a generator," Lamb said.
Developer Continental Properties and management partner Schulte Hospitality are proposing the site outside the special flood hazard area near Del Prado and Pine Island Road. Eric Tom, senior development director for Continental Properties, said the decision to limit generator backup to two floors was deliberate: "This has got to power an elevator. If you have to go to third, fourth, or fifth floor, that elevator power starts to throw your dynamics off with how much of a generator you're gonna have."
Council discussion focused on cost, scope and alternatives. Council members asked whether the city could instead buy and install several generators at existing hotels or provide cash to reserve rooms during emergencies. Council Member Steinke and others argued a retrofit of existing hotels would be more expensive or infeasible because many existing properties sit inside flood-prone areas or lack the internal space and electrical rooms to support a retrofit. Merritt said retrofitting existing hotels often requires extensive rewiring, new electrical rooms and other infrastructure that raises costs well beyond the price of a generator alone.
Opponents on the council and some members of the public said the long-term value and net cost to the city needed closer scrutiny. Council Member Long voted no, citing comparisons showing how a smaller public investment in multiple generators could secure more rooms across the city. Several residents at the podium also criticized the size of the incentive and asked whether large hotel brands already have capacity and resources to support emergency housing without public incentives.
Council members who supported the deal said the agreement creates a permanent operational asset for emergency response, draws hotel capacity into Cape Coral, and creates tax and employment benefits. City staff emphasized that the property-value recapture grant will be paid back only if the project is built, occupied and property taxes are paid; the rebate is returned incrementally and only after the developer pays taxes.
The council approved the measure with a 5-2 roll call: Lehman, Steinke, Donnell, Kadook and Kilraign voted yes; Long and Gunter voted no. The city manager and developer said site-plan review is underway with anticipated construction to begin November 2025 and completion around April 20, 2027.
The hotel deal will be reviewed for possible replication on future projects, city staff said.
