MARCO ISLAND — With twice as many condominium units as single-family homes, Marco Island is seeing the effects of a slow condo real estate market caused by past hurricanes, high interest rates and a new state inspection and safety law.
Total real estate sales were down 8% in August versus a year ago, according to the Marco Island Association of Realtors. Condos are staying on the market 120 days, up 79%, compared to 69 days for single-family homes, which is down 7%.
“The biggest issue with condos on Marco and like Naples, a lot of it, without a doubt, has to do with the past storms,” Creach said. “We’ve had Irma in ’17 and then ’22 of course, September of ’22, so the deferred maintenance aspect of it, like when a lender wants to see if there’s any, you know, maintenance that is being deferred.”
The law that allowed associations to defer critical maintenance was eliminated after the collapse of Surfside’s Champlain Towers in June 2021 that killed 98 people. A state law, SB 4-D, went into effect this year in July that was designed to ensure the safety of condo buildings. Engineering inspections are being required for condos of three stories and higher when they reach 30 years of age and again every 10 years after. Any future repairs must be fully funded.
“The biggest issue here is a lot of condos have deferred maintenance from the storms,” Creach said.
A June 29, 2021, photo of the rubble of the Champlain Towers south condo collapse in Surfside, Florida, in which 98 people were killed. The collapse has been blamed on a lack of adherence to building codes as a contributing factor for the collapse, prompting Florida Legislature to pass new safety inspection laws and reserve requirements for condo associations.
In Marco Island, the largest of the Ten Thousand Islands, people tell stories based on when a hurricane hit. Was it before Irma or after? Before Ian or after? Was it as long ago with hurricanes like Donna or Wilma?
On this island of 24 square miles, there are six miles of beaches and 100 miles of waterways. There are about 16,521 full-time residents, but room for as many as 60,000 during the winter tourist season. With more than 10,000 condominium units, there are twice as many condos than single-family homes.
The repercussions of Hurricane Irma in 2017 and Hurricane Ian in 2022 are still being felt, with lawsuits against insurance companies that wouldn’t pay to completely fix the damage and some of that work still being completed. There are roofs and lanais just now being replaced after the direct hit of Irma. And many further damaged by Hurricane Ian.
“There are some challenges with the new (Florida) laws,” Creach said. “Marco as a whole isn’t seeing like a widespread problem, like what they’re seeing on the East Coast. … I’ve probably only seen one or two places that had issues so far.”
With a deadline of Dec. 31 for Phase 1 “milestone inspection” reports, only 29 of Marco’s qualified condo buildings have filed theirs, according to an open records request with the City of Marco Island. Those reports either give condo associations a clean bill of health and 10 more years or recommend a Phase 2 report if substantial structural deterioration has been identified. In Phase 2, condo associations have to have a plan and timeline for repairs and reserves to cover the repairs.
A few buildings that haven’t yet filed but are required to do so include Riverside Club in Olde Marco, Tampico at Cape Marco and South Seas Towers. The five-story over parking Riverside Club on Marco River is one of the oldest condos, built in 1981. The South Seas towers on the beach were built in the early 1980s. The 14-floor Tampico at the south end of the island is the oldest and shortest building in Cape Marco, built in 1994.
Creach said he hasn’t been able to write a loan for condos at Riverside Club since before Irma.
“They had issues for a while, and that was just due to Irma damage,” he said.
Irma made a direct hit on Marco Island and Riverside Club saw widespread damage with condos, all of which face the water, blown through from one end to the other; lanais torn off; and the marina flooded and destroyed. Concrete staircases between buildings collapsed during the storm. Only this year, has the reconstruction of the lanais been completed.
“They were in the middle of litigation against insurance companies for proceeds. And you know, of course, we had roof issues there. There were lanai issues, there, staircase issues there,” Creach said. “So, all those were considered safety, but now have been pretty much completely rectified. So, they look to be back in good standing. But those are the type of things that can take place.”
A staircase collapsed between two buildings at Riverside Club on Marco Island, FL, during Hurricane Irma. Marco Island took a direct hit from the storm on Sept. 10, 2017. Riverside Club, at 1085 Bald Eagle Drive, is required by the state conduct a structural inspection.
J. Kyle Foster is the Senior Growth & Development Reporter for the Naples Daily News.
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