Five months after settling a lawsuit accusing the city of Naples of enacting an illegal building moratorium, Mayor Teresa Heitmann suggested a pause on further development until the city adheres to state law.

Her suggestion on Oct. 16 came minutes before City Council formalized that settlement with a resolution that allows Colorado-based M Development to proceed with modified plans to redevelop a 4.32acre parcel that’s considered the gateway to downtown.

When she ran for a second fouryear term this year, Heitmann promised residents she’d preserve Naples’ small-town charm, fight overdevelopment, increase resiliency and ensure that infrastructure could handle continuing development. As a result, she’s cast the dissenting vote on several of the city’s large commercial and housing developments, including Naples Square, 1111 Central and Hyatt House Naples — and was the lone nay vote again on Oct. 16, when Naples Square submitted revised plans to downsize a restaurant.

The temporary pause wasn’t on the agenda, but the mayor asked to add it at the start of the meeting. It was opposed by Council and City Attorney Matthew McConnell, who said it wasn’t on the publicly noticed agenda and would require direction from the full Council.

“This is not something that I felt was something I could ignore, but it’s also something that is very concerning,” Heitmann explained of her surprise proposal.

She referred to a state-required annual concurrency report, which requires public facilities, infrastructure and services needed to support development be available “concurrent” with the impacts of a development that’s pending approval. The annual report hasn’t been completed by the city in more than a decade and is similar to the county’s Annual Update and Inventory Report on public utilities.

Heitmann said she’s concerned because the city code says that if Naples’ level- of-service standards dip below acceptable adopted levels, developments cannot be approved.

Illegal moratorium

The city got into trouble last year when it imposed an ordinance that was considered an illegal moratorium after Hurricane Ian. The intent was to improve resiliency efforts and the city’s ability to recover from future hurricanes.

The city’s new ordinance and four others prompted by the hurricane were pre-empted by Senate Bill 250, which became law on June 28, 2023, preventing municipalities from imposing stricter land-development standards until a year after Hurricane Ian. Last November, the state prohibition was extended two years, until October 2026, tying City Council’s hands.

In December 2023, M Development-affiliate Fifth Avenue South Holdings sued the city, three months after Council voted to halt plans for underground garages due to flooding concerns after Hurricane Ian. M Development, which is redeveloping the former St. George & the Dragon property, branded the move an illegal moratorium that halted administrative staff approvals, including its pending plans — just as staff was about to approve them. Its plan included two underground garages. In June, the city reached a settlement with M Development, which was allowed to proceed with a scaled-down plan without underground parking.

Although most Council members balked at Heitmann’s suggestion, Vice Mayor Terry Hutchison thanked her for bringing it up and asked the city attorney to assure Council they weren’t breaking laws, as Heitmann suggested.

“I need to know that I’m acting lawfully in considering the items that we’re considering,” Hutchison said.

McConnell, who was hired this year, said he discovered Naples wasn’t complying with the annual report and provided Council with a detailed history of the law, which was enacted in 1985 and required concurrency requirements to avoid urban sprawl, development of areas without roads or infrastructure.

However, after Naples resident Rick Scott took office as governor in 2011, he eliminated the state Department of Community Affairs, which was responsible for land planning and development, McConnell said.

It was replaced by the Florida Department of Commerce, which changed submittal requirements for cities to develop level-of-service standards, alleviating the need to address urban sprawl by establishing codes for concurrency. The law currently requires concurrency reports before developments are approved that ensure costs are paid by developers as impact fees, not by raising property taxes.

City hasn’t adhered to state law

In 2014, Council discussed the standards and directed the Planning Advisory Board and planning staff to review concurrency requirements to determine if changes were needed based on the 2011 standards. That never occurred.

McConnell told Council he, City Manager Jay Boodheshwar and planning staff will complete an internal audit by January and present a proposed annual concurrency report to Council in February. However, he assured Council the city’s comprehensive plan addresses concurrency and staff vets every development.

“Maybe they need to change. Maybe they don’t,” McConnell said. “This is an internal audit of our facilities to determine if we need to modify those, or if we are good to go with the level-of-service standards that have been adopted.”

Let staff work on concurrency

Other Council members objected to discussing a pause without alerting the public before a meeting. Council member Ray Christman noted the city building official had just advised them that more than 1,000 properties citywide were affected by Hurricane Ian. Since then, he said, Naples was affected by several more hurricanes.

“You’re not just talking about stopping (new) developments from occurring,” Christman said. “You’re preventing homeowners who need to repair their properties in the short term from being able to exercise those rights, as well as people who just want to improve their properties — even if they weren’t impacted by a storm. … I have problems with us even discussing it or entertaining it, let alone implying it.”

He suggested Council allow the city attorney and planning staff to finish their audit and educate Council, so it can make “sound decisions.”

Heitmann explained she wasn’t suggesting a moratorium.

“There were a lot of developers putting the fear out to our community and homeowners that they should sell, and it put our community in a frenzy,” she said. “It was to take a look at what had happened to the community so that we could make good sound decisions moving forward.”

But she said she wants to uphold the law, and the city hasn’t filed a concurrency report.

Land-use attorney Clay Brooker of Cheffy Passidomo, who was there to represent M Development, told Council that a pause on building, especially developments pending city approvals, would be illegal.

“Florida law does not allow a local government to stop development because it has not lived up to its obligations in ensuring that infrastructure is in place,” Brooker said. “… The city of Naples actually does have a concurrency program, and it is enforced. There are level-of-service standards on the books.”