Estero’s Forecast: Sunny
Optimism is springing forth from the lips of local businesspeople, and recent national and regional surveys back up the sentiment that 2018 will be a great year for economic development in Southwest Florida. It seems few storm clouds are on the horizon. Despite a hurricane, hiring and investments are trending up for 2018. Estero’s economic outlook for the new year is full of blue skies and sunshine.
“The forecast is very bright,” says Village of Estero Manager Steve Sarkozy. “There are a lot of opportunities, and as an organization, we are going to continue to grow with a deliberate process and very measured steps.”
Estero boasts the lowest tax rate in Lee County, and a newly completed Comprehensive Plan will serve as a guidebook for future development within the Village.
“Overall, it’s a great picture,” notes Sarkozy.
The one caveat to optimism is the region’s historical tendency to exaggerate what’s happening in the national economy. When the national economy is experiencing steady growth, Southwest Florida grows even faster. Conversely, if the national economy takes a tumble, the regional economy will crash even harder, notes Florida Gulf Coast University economist Chris Westley.
“The bigger the unsustainable boom, the bigger the bust,” he says.
This phenomenon stems from the area’s heavy dependence on the health of industries tied to tourism and
retirement, he notes. Efforts are now being made by several economic development organizations to diversify the local economy. Westley has initiated the FGCU Industry Diversification Project, a forum for studying and measuring Southwest Florida’s progress. This index shows the region is catching up with the State of Florida in diversification of industries; howe
ver, the state as a whole is not terribly diverse, Westley notes.
By the Law of Averages, he adds, the national economy is due for a “correction” soon. If no recession happens before the year 2020, we will be experiencing the longest expansion period in 150 years.
But don’t tell that to local employers. The most recent Lee County Business Climate Survey Report — a quarterly survey of Lee County executives and business owners conducted by FGCU in partnership with the Horizon Council — indicates that 52 percent of the 100 executives who responded expect to increase employment at their companies in 2018, and 68 percent of companies expect to increase investment in the year ahead. Moreover, 76 percent of these local executives say they expect the economy to improve over the next year.
The Florida Chamber of Commerce’s “Florida Scorecard” data for Lee County gives further reason for optimism: unemployment is declining, housing permits are going up, s
ales tax revenue is rising, and the poverty rate is going down.
“Steady growth” is the forecast for 2018, says Tiffany Esposito, director of the Bonita Springs Estero Economic Development Council (BSEEDC). “We expect this upward trend to continue for our region.”
Within the Village of Estero, real estate records show 2017 was the strongest year since 2010 for single family home sales, and distressed home sales are nearly nonexistent. However, there may be a slowdown in housing starts in 2018 due to market saturation, predicts Judi Gietzen, broker/owner of Elite Realty of SWFL and president of the Estero Chamber of Commerce.
“There is only so much sunshine and shoreline!” she says.
Commercial activity is also trending up. The value of Estero’s commercial building permits rose significantly in 2017, boosted greatly by Lee Health’s $140 million investment to build a 163,500-square-foot emergency room and medical/wellness facility southeast of the intersection of U.S. 41 and Coconut Road. Other significant commercial projects in 2017 included an expansion of The Reef student apartment complex at the northeast corner of Estero Parkway and Three Oaks Parkway, and the Genova condominiums on Via Coconut Point south of Corkscrew Road. Additionally, more than $7 million has been invested in unit renovations for new stores and restaurants within Coconut Point Mall and Miromar Outlets. Several strip malls also are expanding. In November, Grand Oak Shoppes received a permit to construct a new building valued at $725,000. In total, the estimated value of 2017 new construction was about $195 million, compared to $87 million in 2016, according to Village of Estero records.
Hurricane Irma temporarily slowed new construction last fall but fueled building repair projects. Estero has bounced back quickly, and the Community Development Department remains busy.
“We are seeing multifamily (housing) requests, along with office uses, hotels, adult living facilities, various small commercial developments and self-storage facilities,” notes Estero Development Director Mary Gibbs.
The Lee Health facility at Coconut Point is expected to open in November 2018. Along with jobs created by the construction process, Lee Health anticipates employing 200 people initially and 300 within five years, said Alex Greenwood, vice president of Lee Health Coconut Point. An economic impact study produced by FGCU for Lee Health indicates that for every 100 jobs the health system creates, another 78 jobs are generated within Lee County, primarily as a result of employee spending and demand for services.
Growth in the medical industry is desirable for Southwest Florida because it’s not tourism dependent and is somewhat immune to downturns in the economy, notes Sarkozy.
“It will add to the vibrance of this area,” he said.
Construction on the Genova luxury condo complex also is stimulating the local economy. Developer Jim Wallace estimates Genova will generate $78 million in construction employment, and future Genova residents will pay $1.3 million in property taxes annually. The first of six planned buildings is scheduled to open by early March.
In 2018, Estero may see the development of several “mixed use” projects including both apartments and office or retail uses. Currently, Estero Grande Parkside is making its way through the zoning process on a
198-unit apartment complex to be built behind the Estero Grande center at U.S. 41 and Estero Parkway. Several other apartment projects are also in the works.
Additionally, there is interest in locating what Sarkozy calls a “specialty
destination resort” in Estero, and the Village is getting looks from major corporations considering a relocation to Southwest Florida.
“Lee County’s staff is working to ‘sell’ opportunities across every community,” says Jim Wilson, the Estero Village Council liaison to regional economic development organizations like the Horizon Council and BSEEDC. “Estero remains high on the list of locations in Southwest Florida to relocate to, and/or to locate businesses.”
Lee County’s population is projected to grow from its current 772,000 to more than 1 million by 2030. While growth increases the tax base, it also places more strain on local services, including schools, fire districts and roadways. In Estero, traffic headaches will be greatly reduced with planned improvements to the Corkscrew Road interchange with Interstate 75 coming in 2019. Additionally, the Village and Lee County are both studying ways to improve traffic issues on east Corkscrew Road.
The coming year also will bring greater collaboration to prepare the region’s future workforce. The Lee County Business Climate Survey shows 80 percent of executives believe creating an entrepreneurial community in Southwest Florida is important to the future of the region’s economy. A newly formed organization, the Estero Economic Excellence Outreach Council (EEEOC), is working closely with FGCU to recruit retired executives and Estero businesspeople to serve as mentors in the university’s rapidly
expanding Entrepreneurship program.
Twelve student entrepreneurs are already contributing to the local economy by operating their own businesses, including one who is now running a business on-target to generate $1 million in revenue, notes Dr. Sandra Kauanui, director of FGCU’s Institute for Entrepreneurship
“Learning to be an entrepreneur is important whether you are working for yourself or for someone else,” she says. “I have heard from employers such as Hertz and Gartner that they see our students as adding real value to their organizations.”
FGCU is actively pursuing partnerships with many local employers and organizations to grow opportunities for internships and service learning, adds FGCU President Mike Martin. The university also works with local business leaders to align new degree programs with projected needs in the Southwest Florida region.
“The local economy, as we jointly work to stimulate growth, offers our students employment and experience while they’re in school and opportunities for satisfying careers long term,” says Martin. “We are fundamentally tied together.”
What Do Local Executives Think about the Economy?
- 76% expect the economy to improve over the next year
- 52% expect to increase employment at their companies in 2018
- 68% expect to increase investment in 2018
- 83% said the availability of high-paying employment is important for the development of a thriving regional economy
- 72% said the healthcare and social assistance industry is most likely to create new companies over the next 5 years in SWFL
Source: Lee County Business Climate Survey Report Fourth Quarter 2017 (FGCU)