Voters will decide Nov. 8 whether Cape Coral businesses that follow specific guidelines can be exempt from paying property taxes for up to 10 years.
During the upcoming general election, the “Economic Development Ad Valorem Tax Exemption - Ordinance 31-22" referendum will be on the ballot.
“We're looking at targeted industries. Right now, some of those industries that were identified are manufacturing, light industry, technology, and corporate offices,” Sharon Woodberry, economic and business development officer for the City of Cape Coral, said. “The city has put together a number of incentive programs, and this would be one that we can add to our toolbox.”
The city is looking to attract these businesses by giving them incentives to come to Cape Coral.
"It's always good to let the voters decide by referendum if that's the mechanism that's available,” Cape Coral City Council member Tom Hayden said.
If a business qualifies for the exemption, Cape Coral will forgive up to $2 million a year in property taxes.
For the referendum to pass, it must receive a majority vote, meaning more than 50 percent of voters have to cast ballots in favor. If approved the measure would last for 10 years. Voters would have to renew the exemption, if the city so desired, after 10 years.
“What the city's trying to do, every city does it, so I don't see a whole lot wrong with it,” Doug Raker, owner of Hogbody’s Bar and Grill in North Fort Myers, said.
Raker and his wife, Theresa, previously had a Hogbody’s location in Cape Coral, but it closed a decade ago. He doesn’t believe his business would qualify for the exemption to reopen business in Cape Coral.
According to the city website, to qualify for the exemption, these new businesses must create 10 or more full-time jobs and pay an annual average wage of at least 100 percent of the average annual private sector wage, or obtain capital investment exceeding $10 million for a period of five years.
The investment research company YCharts publishes statistics on the average hourly wages in the private sector. YCharts said that in July, 2022, the average private sector wage was about $29 an hour in Florida. YCharts claims to have a client base of 5,000 investment advisors and asset managers.
For every year that the exemption is granted, these businesses will have to submit an annual renewal statement and annual report.
“I don't think it's going to hurt hardly any of the small businesses that are over there that won't be able to qualify for it because they're not going to be able to pay [the minimum wage],” Raker said. “There's no possible way that a guy can make any money at it, our margins are already so small as is in the restaurant business.”.
Cape Coral home and business owners have mixed emotions about this incentive.
“It's good in the sense of bringing in business to the area, but this area is growing very quickly anyhow. And a lot of major companies are coming down in this direction in the first place,” Nick Libretto, owner of ABC Pest Control in Cape Coral, said. “We've been here, coming up on 44 years. We've seen the Cape grow, we've seen the whole area grow, but Cape Coral has grown tremendously in the last 44 years.”
Small businesses worry they’ll lose employees to newer, bigger businesses that would offer higher pay.
“It's going to hurt small businesses in the long run,” Libretto said.
“Big businesses get a lot of tax breaks from the government in general, not just locally, they get it on the federal level, too,” Libretto added. “I pay 30 percent taxes on money we make, and we're a small company. Bigger companies sometimes only pay 18 percent because they get a lot of tax breaks in the government for pulling so many people.”
"If it's that big of a business, they should be able to pay taxes,” Gayle Boyle, manager of ABC Pest Control, said. “It's not even that it doesn't seem fair, it's just, if you were giving some kind of initiative for small businesses, that would be one thing, but these are big corporations probably have more than enough money.”
Christine Harris of Cape Coral said she doesn’t agree with this referendum. She said passage would only make the rich richer.
Council member Tom Hayden continues to argue for yes votes.
"This just gives us another way to attract businesses to our community and improve our commercial base, which is really important in a city that's 92 percent residential,” Hayden said. “It's important for us to plan our future in a way that makes sense for our community and commercial growth is a part of that.”
This story was produced by Democracy Watch, a news service provided by Florida Gulf Coast University journalism students. The reporter can be reached at hklemery9681@eagle.fgcu.edu.