Cape Coral approves Costco deal, then fires city manager

Cape Coral has cleared the way for the city to get its own Costco, and the city manager who helped facilitate it won’t be on staff to see it through.

Cape Coral City Council voted 7-1 on Nov. 2 to approve a $10 million incentive agreement for Costco Wholesale Corp. to build a 165,000-square-foot store with a gas station, just north of the Pine Island Road corridor off Chiquita Boulevard. Council member Keith Long was the lone dissenting vote. Long, who is also a liquor license attorney, declined to comment on why he voted against the incentive package.

Cape Coral Mayor John Gunter, who did not get reelected and was presiding over his last meeting, made a motion at the end of the meeting to fire City Manager Michael Ilczyszyn without cause, ending his tenure after more than 20 years with the city. Ilczyszyn rose through the municipal government’s ranks before becoming city manager, overseeing city operations, staff and major infrastructure initiatives.

The motion did not come without controversy. It passed 4-1, with Gunter and council members Bill Steinke, Derrick Donnell and Joe Kilraine approving and Laurie Lehmann opposing. Council member Jennifer Nelson-Lastra had left the meeting earlier, reportedly for medical reasons, while council members Rachel Kaduk and Long walked out during the discussion and did not vote.

“Sometimes it’s time for good things to come to an end,” Gunter said. “I think the community has articulated through this election process what they’re looking for. I think I’d like to make a motion to terminate the city manager’s contract without cause, effective 11:59 p.m. tonight.”

Under his contract, Ilczyszyn is entitled to a severance payment equal to four months’ salary. Council appointed Maureen Buice, an assistant to the city manager since 2021, as interim city manager at an annual salary of $290,000.

As for the proposed Costco site, neither the city nor the big-box retailer owns it. The address is 600 Chiquita Blvd. S. The parcel measures about 53 acres, including about 30 acres occupied by a water retention pond. The remaining 23 acres are shaped like a reverse letter L, with the land located south and east of the pond.

The parcel last sold for $4.75 million in March 2022, when Chiquita Land LLC purchased it from Chiquita Falls Corp.

WB Construction Group, headquartered in New York City, owns Chiquita Land LLC. Robert Weinstein, who leads that company and typically develops apartment complexes, according to his website, declined to comment.

Costco did not respond to messages seeking comment. Its media website states its policy is not to discuss potential future store locations.

Kilraine made a motion to approve the financial incentives, calling the planned Costco store a “valuable asset.”

The agreement includes an $8 million Enhanced Property Value Recapture Grant used by the city to attract capital investments that expand the tax base and create jobs. It pays Costco back up to $8 million from city property taxes generated by the completed development.

The incentive package gives Costco an additional $1.8 million rebate on development impact fees, with Costco paying for transportation improvements along Chiquita Boulevard, including road widening and a traffic signal. There’s also a deferral of up to $200,000 in Costco’s utility impact fees.

The financial package has been in the works for two years. In 2024, Cape Coral’s Economic and Business Development Office contacted Costco to promote the city as a potential new location, according to a staff report. Costco later asked for financial assistance to build the store and support site development costs.

Ilczyszyn helped put the package together as city manager and met with the media a week before the vote to discuss it.

“We’re super excited about it that our staff has been able to work on this deal, and the community will shortly be able to not have to travel over the bridge anymore, because we’ll have a Costco right here in our backyard,” Ilczyszyn said. “Realistically, this has been the No. 1 request from our community for years. It’s just a great time for this in Cape Coral.”

Ilczyszyn also said the financial incentives would pay off in the long run while adding between 150 and 175 jobs to the city.

“It helps us not to have the administration burden of collecting administrative fees,” Ilczyszyn said. “It’s a great partnership for turning a site that otherwise would have been a dead site in Cape Coral and turning it productive for our citizens.”