An affordable and workforce apartment project broke ground in Fort Myers following more than three years of planning and overcoming financial setbacks.
Bloom, a 336-unit project, is being built at 2010 Hanson St. on 5.7 acres that used to include the since-demolished Araba Shrine hall. Brooks & Freund is the construction contractor.
Renaissance Development Group bought the land for $2 million in January 2022, but rising post-COVID construction costs and increasing interest rates later made the project financially challenging.
Tom Rossi, based in Lakewood Ranch and the managing partner of Renaissance Development, went to work to find more funding. After Hurricane Ian devastated the region September 2022 — less than a year after Rossi’s group bought the land — Rossi positioned it to receive federal grant money from former President Joe Biden’s administration through Lee County to help offset the rising costs.
The $20 million grant is part of the federal government’s $1.1 billion allocation to Lee County, most of which is designated for affordable housing projects.
Bloom joins a handful of such projects to break ground, and more are in the pipeline.
“We’re thrilled,” Rossi said. “We’ve been working for years. We kept getting thrown curveballs. But we didn’t give up. We think this is going to be a great project not just for the city and the county, but we think it will help alleviate some pressure on the workforce side.”
Rossi reinvented the funding sources.
For the $86 million construction project, Renaissance also will take a $34.8 million construction loan from Stearns Bank.
Renaissance is also signing a 99-year, $23 million ground lease with Montgomery Street Capital. Based in Dallas, Texas, the real estate investment firm bought the land May 22 for $8.2 million under the name 2010 Hanson Ground Lessor LLC. The price matches the amount of the Fort Myers Community Redevelopment Agency’s tax increment rebate.
To receive lower interest rates and a higher loan from the bank, Rossi said he needed a landlord to front some of the funding, too.
“They provide part of the capital spent,” Rossi said of Montgomery Street Capital, which will have a 35-year commitment to continue owning the land and not sell it. “They provide additional funds to finance the construction project.”
Renaissance likely would still be playing the waiting game had the federal funding and private equity group not gotten involved, Rossi said.
“It’s really hard to get big loans,” Rossi said. “When I say big loans, I mean $40 [million] or $50 million. I got the loan size reduced.
“I keep harping on the interest rates. If interest rates dropped, that frees up a ton of capital. That makes the property worth a little more money, and that takes pressure off the banks. It would have been much harder to get a much higher loan.”
Bloom will have modern amenities, including a pool, fitness center, game room, dog park and business center, plus a 506-space parking garage, which is 1.5 per unit.
Of the 336 units, 172 (51%) will be affordable housing for residents earning less than 80% of the area median income. The remaining 164 units (49%) will be workforce housing for those earning between 100% and 120% of AMI.
The project will take about two years to build with a projected opening in summer 2027.
Having Rossi with a project waiting in the wings helped the county save time in allocating the federal government’s money, Lee County Commissioner Brian Hamman said.
“That was the biggest part of our criteria for this affordable housing, was to make sure that the projects were shovel ready,” Hamman said. “This was a good project because so much of that work already had been done. We wanted to get that money into the hands of people in the market so it could be used.”
The project will also bring much-needed affordable housing to an area where it is in short supply.
“Before Hurricane Ian, there was an unmet need for affordable housing in Lee County,” Hamman said. “With the damage it did, that exacerbated that situation. This is an opportunity to respond to it. This is good news to me. Had we not gotten the [Community Development Block Grant- Disaster Recovery] money, the county would not have had $20 million for this. Now they can do it.”
Fort Myers Mayor Kevin Anderson applauded Rossi for not giving up and sticking with his vision.
“We’re absolutely thrilled,” Anderson said. “Whenever you pick an old building that was blighted and transform it into something nice, you’re providing much-needed affordable housing for those in need. This project’s a win-win-win.”
With Bloom on the west side of the city’s Midtown vision, flanked by Montage at Midtown on the east side, Anderson hopes the city can start filling the spaces in between them — a space that includes City of Palms Park, which has been mostly vacant since the Boston Red Sox left their spring training home in 2012.
“I’m an optimist,” Anderson said. “I firmly believe that when we get Midtown done, you’re going to see it slowly spread down that corridor to the mall. A revitalization.”
