Land speculation is not a prudent course of action
To the editor:
Several weeks ago I attended a Northwest Homeowners Association meeting. The city manager, John Szerlag, was there to discuss the purchase the city of Cape Coral made for hundreds of acres (491 parcels) of raw land in April 2012 for 13-plus million $$$$. I asked him if the city had gone into the real estate business His answer was that the city would use some of the acres for various projects and retain the rest, the vast majority, as an investment “because real estate is a good investment.”
Mr. Szerlag only told half the story. The other half, the owners and speculators in real estate, found out first hand from 2007-2012 when they lost hundreds of millions of dollars in equity on their investments (speculations).
Cape Coral had another city manager back in 2005 who read somewhere that if something (the RO plant) was built the people would come. Well he and the Council built it but unfortunately the people DID NOT come and now the residents of Cape Coral are stuck with the tab and the city manager is down the road.
Now the City of Cape Coral has a new city manager. This one wants to speculate in the real estate market and have no doubt about it, it is speculation. When you purchase something that you have no intention of using, you are speculating whether it be stocks, bonds, real estate or some other form of investment. I don’t know what expertise Mr. Szerlag and the City Council have in real estate investment but the author of this article has been in the game for over 40 years and I have yet to hear anyone ring a bell at the top or at the bottom of the market. But then maybe the city manager and Council are more prescient than I give them credit for.
However, this I do know after 40-plus years, as sure as fall follows summer, the real estate market will turn down. The only question I have is, will the people we put into office know when to sell and if so will they be able to unload all that property in a down market without taking huge losses. I am very skeptical that they will be able to. In the meantime no property taxes are being paid on all that property.
I own several million dollars worth of real estate in Cape Coral and Lee County and I am getting out while a can. I do not want to be here when the next debacle (as in RO plant) hits the people who own property here.
And now I understand that the City Council is contemplating getting into the electric utility business at a start up cost to the taxpayers of as much as $500 million or almost the cost of three RO plants!!!!!
When governments get into things they do not understand or have any expertise in, it almost always ends badly, for the taxpayers.
Michael Newton,
Cape Coral