Naples Community Redevelopment Agency will hold off on seeking developers’ proposals to transform an old auto repair shop property into affordable housing, opting to lease the building while considering options.

City Council, acting as the CRA, on Nov. 6 agreed to use CBRE as the leasing agent for the 0.58-acre city-owned property at 160-190 10th St. It also agreed to use CRA funds to pay the utility bills.

“We’re trying to monetize an asset that we have while we’re figuring out what to do with it longterm,” City Manager Jay Boodheshwar told the CRA. “We can just have it sit there, or we could produce some income for the city with something that makes sense.”

The city, using CRA funds, purchased the 8,960-square-foot auto repair shop property for $4.9 million in February. The intent is to build affordable, workforce housing for teachers, police officers and other essential-services workers within city limits. Council wants to target those earning $62,580 to $125,160, 60% to 120% of Collier County’s $104,300 area median income.

CBRE was hired in September 2023, when Council agreed to spend up to $100,000 for various tasks. The Naples real-estate company was asked to evaluate and secure real property for additional parking, open space and redevelopment or to develop affordable housing.

It’s the first property the 30-year-old CRA purchased and is located near Central Avenue between U.S. 41 and Goodlette-Frank Road in the CRA District, which is bounded by Seventh Avenue North, Gordon River, Sixth Avenue South and Third Street South. The CRA is funded by taxing homeowners and businesses within the district.

In June, the CRA agreed to pay CBRE $3,500 to seek options to develop the property under existing zoning, the city’s comprehensive plan or the state Live Local Act, and to consider adding half an 80-foot right of way on Second Avenue North to increase density and units. Existing zoning and the comprehensive plan allow 11 townhomes, 12 if the right of way is vacated. However, they’d have to be sold as “fee simple” — and most seeking affordable housing can’t afford that.

In August, CBRE’s team, which includes Estero-based Trinity Commercial Group and Gridics in Miami, recommended a mixed-use concept: 3,600 square feet of commercial space and parking on the ground floor, with 26 affordable condos above. That requires amending the city’s comprehensive plan.

CRA Vice Chair Linda Penniman questioned whether anyone would want to lease for only a year. But Dan O’Berski, of Trinity Commercial Group, said several parties expressed interest in a year — the baseline — or longer, and the city would have a right to terminate.

“We’re talking about probably closer to 24 to 36 months of time before the development would begin, so we would be trying to navigate the most flexible term that we could without diminishing the potential income completely,” O’Berski said, adding that’s why the suggested rent structure is low, $20 per square foot.

If Trinity finds a tenant, they’ll get a 4% commission, but with a co-broker, the commission would be 6%. O’Berski said rents nearby are $40 to $60 per square foot, but this isn’t a finished space, so the lower rent allows improvements.

The building, which was built in 1976, has three 20-foot roll-up doors, one office and two bathrooms and was last used as a vintage shop.

Chair Ray Christman said Michigan-based American Community Developers, which operates the city’s low-income George Washington Carver Apartments, is interested in expanding, so it will be responding to the city’s request for proposals once they take that step. Penniman called that option “compelling.”

It’s the only U.S. Housing and Urban Development Section 8 complex in the county.

Mayor Teresa Heitmann said it makes her nervous to move forward without reviewing the city’s comprehensive plan, maximum heights and understanding what’s occurred in that area. The increased density would allow a three-story building up to 42 feet high, the maximum for commercial projects, or more for mixed-use and residential projects.

“I want to approach this very carefully because this is the last of our area where we could make a radical change,” Heitmann said, noting residents in Naples Square, a mixed-use development, have complained about disruptions living above restaurants and businesses.

Christman noted they need more information about changing the comprehensive plan and zoning to facilitate development and didn’t want to “open the barn door” to increasing density in a broader area.

“We just need to know that and understand the implications,” he said, adding they shouldn’t proceed with soliciting developers’ proposals.

Vice Mayor Terry Hutchison wasn’t in favor of vacating the right of way, which floods, to provide more land — or increasing density more than 12 units — but Christman said they have to be flexible.

“If we’re going to be able to facilitate new workforce housing on this site or any site … in the CRA, we’re going to have to show some flexibility on density,” he said.

Low-income units are scarce in Naples, which is built out, unlike Collier County. The affordability period for the 70-unit George Washington Carver Apartments expires in 2037, while the 72-unit Jasmine Cay Apartments’ agreement expires in 2044.

Naples Comprehensive Health has said seven to nine job offers weekly are turned down due to housing costs, and a 2023 survey of 1,134 NCH employees found nearly 30% lived outside Collier because they can’t afford it, 44.42% are considering moving elsewhere in Southwest Florida and 40.3% may leave the area. A Collier County Public Schools survey this year found half of employees work a second job to get by and 64% fear they’ll be forced to leave the district due to housing costs.

O’Berski said any income-restricted apartment will result in a waiting list, no matter the apartment size. “It’s such an excessive demand,” he said, noting a recent Fort Myers development has 2,200 on its waiting list.

The CRA agreed to “pause” their decision to move forward on seeking developer proposals to determine their options and rent the building for now.

“We know there’s an affordable housing challenge in Collier County, which includes the city of Naples,” Christman said. “We’re part of that challenge and what steps, if any, do we want to take to be part of the solution?”