Fort Myers officials denied developer Jaxi Builders’ request to be paid all $15 million of its public incentives at one time for Allure, a 32-story, two-tower luxury condo project on vacant downtown riverfront property.
The Doral, Florida-based company asked to amend an old 2015 agreement that split up the tax increment incentive for Allure into two parts: $8.5 million for tower one and $6.5 million for tower two.
Jaxi representatives said they can’t afford to break ground on the first tower without all $15 million because construction costs skyrocketed in the last decade.
“What used to be the cost for the construction for the entire site will be the cost of what Jaxi will incur to construct tower one,” said Jaxi’s attorney Megan Strayhorn.
Fort Myers Community Redevelopment Agency attorney Clifford Shepard warned that using the CRA incentive for a luxury tower is no longer a permissible public use under Florida statute 163.387, even if it was 2015.
The statute language was revised in 2019 and amending the agreement now would violate current rules, Shepard argued.
Florida statute does not list “luxury towers” among permissible uses of redevelopment agency trust funds.
Shepard added that agreeing to give Jaxi all $15 million at once would be a poor business decision, too.
Jaxi Builders Principal Eduardo Caballero and Fort Myers Attorney Megan Strayhorn.
Fort Myers Community Redevelopment Agency Board of Commissioners
“If you think that tower two will get built after you put all of the money on tower one, the chances of that are slim and none, and slim just left town,” he said at the Fort Myers CRA Board of Commissioners meeting on April 22. “So, you should understand this as a consumer.”
Shepard suggested that if CRA Board members are determined to offer all $15 million for the first tower, they could require that the second tower be built in a certain time frame, with Jaxi giving back the balance if doesn’t happen.
Jaxi principal Eduardo Caballero agreed to those terms. That would allow Jaxi to break ground on the first tower within two years, he said. Once the first tower reaches a successful occupancy rate, then the developer plans to build the second tower.
“That is the plan right now,” Caballero said.
Shepard still recommended against making that deal because it could violate state rules.
The CRA commissioners narrowly denied Jaxi’s request in a 3-3 tie vote. The CRA Board of Commissioners is made up of the same members as the City Council.
Commissioners Liston Bochette, Fred Burson and Terolyn Watson agreed to the developer’s request while Kevin Anderson, Darla Bonk and Teresa Watkins Brown did not.
“I’m just compelled to stand by the advice of our attorney,” Anderson said.
The Fort Myers Community Redevelopment Agency Board of Commissioners meeting April 22.
Fort Myers Community Redevelopment Agency Board of Commissioners
Commissioner Diana Giraldo was absent but issued a statement indicating that she does not support the developer’s request.
Jaxi’s attorney Strayhorn argued that amending the 2015 agreement is lawful because Allure plans include public amenities such as a linear park, internet service, a riverwalk area and utility improvements to the site.
“The analysis really turned on whether or not there is a public purpose to justify these types of agreements,” Strayhorn said.
She estimated that Allure’s tower one would produce more than $100,000 per year for the CRA’s downtown trust fund based on current property tax values.
It’s not clear when or if the Allure project will break ground. Strayhorn said Jaxi would continue to seek a solution.
“We will certainly go back to the drawing board and be in contact with Mr. Shepard,” she said.
Riverfront site where Jaxi plans to build Allure.
Fort Myers Community Redevelopment Agency Board of Commissioners
Jaxi’s other downtown developments
It’s not the first time the CRA Board has debated whether to amend a tax incentive rebate agreement for Jaxi and its development partners.
Jaxi is known for its ONE condo tower, which is now under construction next to the Allure property. It has several other projects downtown.
Jaxi and Florida Value Partners are part of a new development team for The Irving, a 12-story luxury apartment building planned for vacant property at 2401 Bay St.
The CRA in February agreed in a 4-3 vote to give the new Irving team $10.5 million in tax incentives, same as the old team.
That time they did so against the advice of CRA attorney Corris McIntosh who, like Shepard, warned CRA commissioners that they could be violating statute 163.387.
“If we were to enter into this agreement today, I wouldn’t approve it, nor would Mr. (CRA attorney Shepard) approve it as a permissible purpose,” McIntosh said.
Strayhorn also served as the attorney for The Irving development team. She argued that the state statute allows CRA funds to support hotels that serve convention centers. The Irving developers plan to dedicate a portion of their units to short-term rentals that support nearby Caloosa Sound Convention Center.
“That’s where we would argue there is permissible use,” she said.
The CRA in 2024 also approved tax increment rebates totaling $30,170,000 for Jaxi’s planned downtown development, Royal Palm Hotel & Residences, at 2424 Edwards Drive.