In last week's column I focused on the construction and development activity within the city of Fort Myers, particularly in the downtown River District. This week we look to that city to the west — Cape Coral — where recent growth and development demonstrate the huge potential in store for Southwest Florida's most populous city.

Without rehashing the well-publicized housing market downturn, let's look at Cape Coral's commercial and residential growth and how it is being absorbed by the market.

The population growth in many parts of the city is already being supported by infrastructure and commercial development, but more is needed to service the needs of a geographic area as large as the 115 square miles that comprise Cape Coral. The ratio of commercial to residential land use is far less than what is considered adequate for the future of Cape Coral's commercial needs. And as in any growing city, some roads are in need of widening or other improvements, and the monumental task of bringing municipal water and sewer throughout the entire city will take time and money.

The Pine Island Road corridor is experiencing a staggering amount of development activity, and its geographic location is in the heart of where most of the growth is likely to occur due to the land area still available for development. Case in point: the proposed Publix anchored 67,680-square-foot shopping center at Del Prado Boulevard and Kismet Parkway in north Cape Coral.

There is no secret to the typically strong correlation between where the major supermarkets choose to locate and where robust residential population exists or is projected to live. The proposed mall on Pine Island Road could add more than 1 million square feet of commercial space, but not until the segment of the road between Burnt Store Road and Chiquita Boulevard is widened to four lanes. The Florida Department of Transportation still must acquire more right of way and hopefully find a way to reduce the $64 million price tag of the project.

Permit activity for new single-family home construction has declined by more than 30 percent throughout 2006, which is not a bad thing due to the high inventory for sale, and multifamily permit activity has dropped off. The number of commercial building permits issued in Cape Coral last year fluctuated from month to month, with more than 630 commercial units permitted throughout the year for a combined value of more than $75 million not including the land.

Looking ahead, there will be more than $1 billion worth of ambitious mixed-use projects planned just in the Community Redevelopment Agency area in southeast Cape Coral.

Commercial vacancy rates in Cape Coral are currently less than 4 percent overall, which is similar to the low vacancy rates a year ago. That is a good sign that space is being absorbed, but not necessarily an indicator that this trend can be sustained. The timing and volume of new commercial space coming online could potentially outpace demand for a period of time.

The city council's set of goals for the new year relate to economic development, land use planning, utilities, transportation and a few others; all of which are closely tied to the momentum hinted at by the items mentioned above.

The next year will bring many of these elements together to set the stage for growth in Cape Coral. The timing of new infrastructure, population growth and equally important, the timing of new development coming to market all impact absorption, vacancy and economic prosperity. .