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Cape to take part in land auction

By Staff | Apr 7, 2012

Cape Coral will take part in a land auction Monday in an attempt to purchase land in the northwest for use in the upcoming utilities expansion.

The 491 parcels of foreclosed property, most of which are north of Pine Island Road (with some adjacent to State Road 78 in Matlacha Isles), have an approximate value of $20 million for just over 652 acres.

The council voted 6-1 in special session Friday to participate, with Mayor John Sullivan the lone negative vote. Chris Chulakes-Leetz was unable to attend because of a scheduling conflict.

If the city is successful, the land will be paid for with stormwater and sewer funds, and used for such things as retention ponds and staging areas.

The motion did not come without some reservations, as there was concern over how the parcels would be paid for and whether the land could be used for items other than utility expansion if purchased.

Councilmember Derrick Donnell was especially concerned with how the purchase would affect ratepayers.

Mike Ilczyszyn, city business manager, said he saw no impact on the future financial stature of the city or on ratepayers.

“We didn’t see any increase on the business model over the next five years,” Ilczyszyn said. “We are just accelerating the land purchase associated with moving forward.”

The business office assessed the pros of the deal the use for long-range planning of city projects; avoiding the costs of condemnation and the low cost of land, and it’s potential increase in value over time.

The cons include the possibility of a surplus in land; some parcels may be unusable; the possibility of infrastructure failure and the cost to rebuild reserves; property values could decrease and the city would be responsible for maintenance.

“The money was earmarked for expansion,” Business Manager Victoria Bateman said. “The money will be used now instead of five years from now while land is cheap.”

The more Donnell heard, the more he backed the motion.

“Knowing it doesn’t raise our debt, it gets me on board safely,” Donnell said.

Councilmember Rana Erbrick took a similar view.

“This is an opportunity we may never get again. If we don’t try, we’ll always be wondering ‘what if,'” she said. “This is a boon for us, and if the issue costs me re-election, that’s fine with me.”

Sullivan criticized the plan, saying the land should be used however the city saw fit.

“It’s hard to believe we need to buy this land with water and sewer money when we can use it for fire stations, especially when sewer rates are extremely high.” Sullivan said, adding the money should instead be used to finance debt.

Acting City Manager Stephan Pohlman said incoming city manager John Szerlag has been contacted and understood the purchase, though he said Szerlag was concerned about possible toxic waste issues.

City Attorney Dolores Menendez also broached the issue about the needed appraisals on the land, which there would be little time to execute.

In the end, the motion approved will allow the city manager or his designee to participate in the foreclosure auction bidding process Monday to purchase properties at the best value for the city, provided that the amount does not exceed value estimated by the certified appraiser.

Sullivan added Friday, “I didn’t think we should spend money to buy land, not for utility purposes. The council is giving direction to reduce utility bills. buying land won’t do it. The money could have retired debt and lowered rates.”