North commercial boom inevitable

As the housing market gets more upscale, so will businesses along the 41 corridor

By Dick Hogan
dhogan@news-press.com
Published by news-press.com on September 13, 2004

It's still sleeping, but the North Fort Myers commercial market is likely to wake up with a start as expensive homes are seen more and more frequently in the area.

"That whole 41 corridor, which has been dormant for years, still hasn't done much," said Mike Strayhorn, a commercial real estate agent.

On the other hand, he noted that he recently put the Starlite Hotel on North Cleveland Avenue under contract to developer Will Stout as an entry point onto Cleveland from Stout's massive residential holdings to the west.

As fancy homes pop up along the Caloosahatchee River and farther to the north, it's inevitable that the area's sparse commercial landscape will fill in and become more upscale,, experts predict.

"You'll upgrade from a cowboy and western wear store to an upscale wine shop," Strayhorn predicted - stores catering to the affluent will be able to pay higher rents.

But first, some say, will come more mundane retailers.

"It screams for everything from gas stations and Circle K's on up to supermarkets," said real estate agent Libby Evans of Ed Bonkowski Inc. "The first salvo is just standard need."

But, she said, "There's a Catch-22: With land prices for residential what they are today, there's serious consideration for many commercial parcels to be considered as residential. If rooftops are commanding those types of numbers, it may cause a lot of the commercial to disappear and be converted into residential."

Hurricanes Charley and Frances - and the possible effects of Ivan - could change the area's commercial prospects because of the stock of existing older homes there, she warned.

"I think our issues for the future are going to be where are people going to spend their money and where are institutions going to spend theirs," Evans said. "Are we going to get into a situation almost like red-lining, where lenders scrutinize a loan by the type of housing existing in the area."

A lender might not be willing to finance a commercial project in an area with a lot of houses likely to be devastated by the next bad storm, she said. "I think we may see institutions starting to change the way they lend."

For the time being, even without the effects of the storms, prices for commercial property in North Fort Myers are much less than in communities to the south of the river.

Commercial land along 41 in North Fort Myers, for example, would generally go for $5 a square foot for parcels of two acres or more, while in the vicinity of Daniels Parkway and U.S. 41 in south Fort Myers the same property would cost twice as much, said Darius Cochran, a real estate agent with RE/MAX Realty Team in Cape Coral.

That will begin to change as more houses are built and the roads are improved, he said, noting that Bayshore Road is scheduled to be widened from Slater Road east to Interstate 75.

Meanwhile, he said, a lot of needs are being left unmet. "We desperately need a restaurant on that area of Bayshore Road," he said, and there's only one gas station at 75 and Bayshore.

Still, staying in business in North Fort Myers can be a dicey affair, said Billy Ray, who moved his Fun Tree novelty shop to North Cleveland Avenue in 1998 but moved back to Fort Myers earlier this year. "That was a miserable six and a half years."

Relatively low rent was poor compensation for potholes in the parking lot and a lack of visibility from 41, he said. "I'd have to give people instructions: across from Big Lots, or near where the old Publix used to be."

Before things get better, more residential growth will have to occur, said Tom Cronin, owner of The Shell Factory, a North Fort Myers landmark since 1951 at its location between U.S. 41 and Business 41.

The gradual upgrading of the area's residential communities is helping The Shell Factory, he said.

In the past, "People had a reluctance to go north" for recreation because of the area's somewhat seedy reputation, he said, but there's a greater comfort level now. "People can come up for three or four hours and spend time shopping and eating. We're trying to develop a destination."

Dee Intihar, executive director of the North Fort Myers Chamber of Commerce, said that as the area develops, she'd like to see more places for people to go out. "I'm hoping for more restaurants in North Fort Myers, something more diversified - maybe Mexican or something like that."

Wayne Daltry, Lee County Smart Growth director, said the area should be able to develop plenty of commercial property in the long run although as land use becomes more intensive for both businesses and homes, "The issue is where's the infrastructure. The more intense water and sewer system you need, the higher the cost of building."