From Luxury Resort to Luxury Hotel. The Future of the Yacht Club still far from what the residents want.

City Council  ·  September 24  ·  Final Budget Hearing

The budget is adopted, 7 to 1. The reserve draw everyone argued about is gone, replaced by a union contract number.

Two weeks ago, Council chose to cover a $1.64 million gap by dipping into the budget stabilization reserve rather than cut programs. Thursday night, before a word of debate, Mayor Gunter put a different answer on the table: budget salaries at what the city is actually negotiating, not at what staff had assumed back in January. It closed the gap, left the reserve untouched, and passed on the same 7 to 1 split as the millage.

What passed

Ordinance 47-26 sets the operating millage at 5.1471 mills, which staff said is 1.35 percent below the rollback rate of 5.2174, plus 0.1554 mills for debt service on the voter-approved parks bonds. Ordinance 48-26 adopts the full FY 2027 operating and capital budget at $1,438,860,205, as amended on the floor. The general fund had stood at $284,541,013 going into the night. Both roll calls ended seven ayes, one nay, with Councilmember Donnell voting no on each. He said he had wanted the rate set at the rollback rate of 5.2174 mills and would not support the budget as a whole.

The change, in plain terms

The mayor said the idea came to him driving home from Wednesday's special meeting on executive staff evaluations, where Council also discussed a tentative agreement with the general employees' union. That agreement averages a 3.25 percent step plus a 1.24 percent merit increase, 4.49 percent in all. Staff had budgeted 7.25 percent. The mayor asked Assistant City Manager Mark Mason to price the difference for the union and for non-bargaining staff, who by long practice get what the general union gets. Deputy Financial Services Director Nicole Reitler put the figure at $1,713,112, about $70,000 more than the $1,642,783 gap the reserve had been covering.

The first motion used only the $1,642,783 and left the extra $70,000 sitting in personnel lines. A council member objected (the transcript does not identify who): if the city identified the savings, why not take all of it? Councilmember Steinke pressed the same point, and the motion was amended on the floor to the full $1,713,112. The stabilization reserve comes off the revenue side of the budget and stays in the bank. Councilmember Kilraine noted that one of the three constitutional amendments on the November ballot would let cities raise that reserve to as much as 25 percent of the general fund, and called keeping it intact the right move.

What residents asked for

Three residents spoke before the vote. Dave Newton thanked Council for not raising taxes but asked it to cut nonessential spending before touching reserves, citing Amendment 3. Lisa King credited Council for coming in below rollback and asked for a written contingency plan showing what leans on one-time money and frozen vacancies. Wes Owen said the budget attachment posted the night before carried mislabeled year headings and two totals $2 million apart, and repeated questions he says remain unanswered. Owen returned during the second hearing to argue that trimming a planned raise is a smaller increase, not a cut. Kilraine answered that criticizing staff was not appropriate and said he stands by their work.

Committee of the Whole  ·  September 23  ·  Yacht Club

Ten residents asked Council to keep hotels off the Yacht Club. Council pointed staff toward the proposal with a hotel, and toward a deal the next Council will decide.

Four years after Hurricane Ian, the Yacht Club is still mostly an empty site with a beach, a portable restroom and some parking. The city's own redevelopment plan came in at a price residents and Council balked at, so Council went looking for a private partner. A formal request for information drew zero responses. Then two unsolicited proposals arrived, and on Wednesday staff laid them side by side.

Where Council landed

Staff recommended K&B because it hews closer to the plan the city already designed. Six members agreed it should be the one taken to negotiation: Mayor Gunter and Councilmembers Kaduk, Kilraine, Lastra, Lehmann and Steinke. Councilmember Donnell said neither, calling the hotel a nonstarter and saying it makes no sense to move a proposal forward only to have it stopped after the turnover. Councilmember Long declined to take a position, and the City Attorney confirmed that is allowed.

The reasons against Forest were specific. Steinke and the mayor both said moving the ramp back onto the river puts launching boats in rough water beside swimmers, the reason it was moved in the first place, and shrinks the beach. The automated boat storage, which several members called a good idea, runs into the city's cap on boat slips under manatee protection rules; the City Manager said adding it would mean reopening the Army Corps permit, at least two more years. And no one on the dais supported selling townhome lots on park land. Staff also flagged, as a point of information, the concentration risk of one developer carrying several large city projects.

The support for K&B was not an embrace of the hotel. Kaduk asked the question that may decide the whole thing: if Council does not want a hotel, will K&B still want the project? A community center runs at a subsidy; the hotel is the moneymaker. Steinke said he is not a hard no on hotel rooms and suggested the next stage could spread the building out to cut its height. Kilraine and Steinke both said the pool has to be open to residents at reasonable prices, not resort rates, and Steinke said lap lanes and swim lessons are a condition for him. The mayor asked what "open to the public" will actually mean. Lehmann asked for K&B's track record on finishing projects on schedule, and said the company deserves a chance to answer written claims Forest handed to Council at the dais.

What residents said

Ten residents spoke on the Yacht Club during citizen input, and none spoke for either proposal as submitted. Neighbors raised traffic on Coronado, Driftwood and Lucerne; others asked for a community pool, a community center, a pier, beach parking, and no townhomes. One speaker asked who decides a proposal is a "qualified project." The City Manager answered that Council did, unanimously, with Resolution 381-25 on December 10, 2025, which designated the park a qualifying project under the state P3 statute before either proposal arrived.

Before Monday  ·  North 3 Utilities Extension

North 3 gets its price tag Monday. Here is what the city's own numbers say a typical lot will pay.

On Monday at 4 PM, Council holds public hearings on Resolutions 243-26, 244-26 and 245-26, the initial assessment resolutions for water, sewer and irrigation in North 3, the next phase of the Utilities Extension Project. It covers about 5,179 parcels and 58.8 road miles along the Tropicana, Yucatan, Gulfstream, Kismet, Van Buren and Old Burnt Store corridors. The total project is estimated at $384.1 million, with $327.8 million of it construction. Assessments on property owners are slated to cover about $321.8 million of that, the rest coming from road, transportation and stormwater funds.

The per-lot numbers

The figures below are the city's estimates for one Equivalent Parcel (10,000 square feet, a standard 80 by 125 lot) receiving all three utilities. Parcels west of Burnt Store Road pay $5,765 more for the Alternative 5 road design Council approved last December at residents' request, which widens the major corridors with greenway, drainage and multimodal space.

Those numbers are the assessment only. After service is available, owners also pay a plumber to connect, which the city estimates at $3,000 to $5,000, plus a $100 septic abandonment permit, $325 for the water meter and a $225 account deposit. Lots bigger than one Equivalent Parcel pay more on the line portion; the city says 55 percent of North 3 parcels are exactly one, and another 38.5 percent fall between 1.1 and 1.9.

For comparison, the same upfront figure was $32,288 in North 1 East and $33,367 in North 1 West. North 1 East's number was held down by $14.5 million in sewer grants; without them, the city says it would have been $36,293. The package notes grants are pending for North 3 too, and any awarded would be applied to reduce assessments. An income-qualified hardship deferral program is available on the installment plan, and federal CDBG grants can cover connection costs for very low income owner-occupied homesteads.

Next steps on the city's schedule: a homeowners' informational meeting on October 19; the final assessment hearing, construction contracts and inspection contract on November 2; and notice to proceed on construction in December 2026.

Housing  ·  October 1  ·  Affordable Housing Advisory Committee

Granny flats are back on the table. Council said no in 2024. Its housing advisers are asking again.

State law requires cities that take State Housing Initiatives Partnership money to keep an advisory committee that reviews eleven affordable housing incentives and sends recommendations to Council. Most of Cape Coral's 2026 report is housekeeping: keep expedited permitting, keep the impact fee deferral programs, keep the parking and lot-configuration flexibility, and do not add density bonuses. One line is not housekeeping.

The committee is recommending Council "consider allowing Accessory Dwelling Units," the garage apartments and backyard cottages that most of the city's single family zoning does not allow today. The report itself lays out the history: ADUs were written into the 2019 Land Development Code and pulled by Council before adoption, and on July 31, 2024, a Committee of the Whole directed staff not to move forward with them. The committee put the recommendation back in on a 5 to 1 poll in July, with Member Harrigan the lone no. Right now the only comparable use allowed is guest or staff quarters in the Residential Estate district, where lots start at 40,000 square feet.

The committee meets Thursday at 5 PM to finalize the plan. Council has to act on it by December 31, and staff has penciled it for October 21 or December 2. Whichever Council gets it will be the first to take up ADUs since the 2024 direction, and it will look different than the one that gave it.

Also on the Record

Three numbers from this week's documents worth keeping.

Also at the Committee of the Whole, Rosen Park Marina liveaboard Keith Stevens returned to ask why he and his neighbors are being evicted from their slips, why Council was not told in advance, and why the city will not wait for the new Council to be seated. No one on the dais addressed it.

The Week Ahead

Monday sets the price for 5,179 lots. Then a quiet week before Bimini East returns.

Mon, Sep 28, 4 PM. Special Council meeting, North 3 UEP. Public hearings on the initial water, sewer and irrigation assessment resolutions covered above. If you own in North 3, this is the first formal chance to be heard on the numbers before the final hearing on November 2.

Thu, Oct 1, 5 PM. Affordable Housing Advisory Committee. Final review of the 2026 Local Housing Incentive Plan, including the ADU recommendation, and the committee's 2027 meeting schedule. Council Chambers.

Wed, Oct 7, 4 PM. Regular Council meeting. The continued first public hearing on the Bimini East development agreement, Ordinance 55-26, is expected here, assuming the parties have finalized terms.

Mon, Oct 19. North 3 homeowners' informational meeting. The city's session for affected property owners ahead of the final assessment hearing. Time and location to be announced; we will post them when the city does.