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Coffee Talk
+ Holland and Knight
goes to the Middle East
At a time when many law firms are consolidating offices, freezing hiring, reorganizing or cutting pay, Holland & Knight LLP is expanding.
To the Middle East.
The Tampa-based law firm has opened a law office in Abu Dhabi, United Arab Emirates. The new office will allow the firm to serve clients in - or doing business in - the Middle East as well as in the surrounding regions of Africa, Central Asia, India and Pakistan.
The office will also support the increasing number of cross-border transactions between those regions and the Americas, Asia, Europe and Russia, as well as the firm's cross-border dispute resolution practice.
Holland & Knight, which has represented clients in the region on business and investments for years, will work with the independent Abu Dhabi-based law firm of Al Masaood & Associates to provide clients with legal services.
Donald Moore, a Holland & Knight partner previously in the firm's Miami office, has relocated to Abu Dhabi and will serve as the executive partner there.
At least one other partner and Holland & Knight associates will also be relocating. Moore and the other Holland & Knight attorneys have experience in business and investment transactions in the region, particularly in construction, energy, equipment and project finance, hospitality, maritime and transportation.
+ Big cash payments
come at the right time
Gevity, the Lakewood Ranch-based publicly traded human resources outsourcing firm, is in the midst of a nine-month run of declining revenues and profits. But it recently received an early Christmas present in the form of a $47-million net gain in payments it had previously earmarked as collateral for worker's compensation claims.
The payments, which are being returned to Gevity by AIG Commercial Insurance, are broken down between a $33.1 million cash allotment and $14 million in waived payments AIG was expecting to receive from Gevity in the 2008 fourth quarter.
AIG paid out the $33.1 million to Gevity Sept. 25, almost double the $17 million return Gevity had been expecting for the third quarter.
AIG had been holding the money for worker's comp insurance claims on behalf of Gevity, which has numerous clients in construction and manufacturing related fields - a frequent site of worker's comp claims.
"The net amount is pretty significant," Gevity spokesman Patrick Lee tells Coffee Talk. "We're thrilled."
The company's financial data backs up just how significant that payment is. For example, in the second quarter, the company reported $128.6 million in revenues. If that number holds in the third quarter, the $33.1 million would represent 20% of total quarterly revenues.
The reimbursements are the result of several factors, says Lee and Garry Welsh, Gevity's chief financial officer, not simply a gift from AIG, which, given what's happened to its parent company over the past month, needed its own gift.
The reimbursements are instead the result of combining strong underwriting and a refined focus on claims management control with changes in worker's compensation trends and regulations, says Welsh.
The good news, however, wasn't too much of a boost for the Gevity's stock, which has been stuck in the $7-$8 a share range for the past few months, about $5.50 off its 52-week high.
The company, traded on the Nasdaq under the symbol GVHR, saw a slight bump the day the company released the news, but it didn't last, as the overall market suffered historic drops during those days as well.
+ Sell two restaurants,
win a Mercedes
We've all heard about incentives for brokers to sell more homes. Now that trend is beginning to appear in the slowing commercial real estate business.
Al Molin, senior associate with commercial real estate brokerage CB Richard Ellis in Fort Myers, is offering the use of a new 2009 Mercedes for one year to the broker who can help him sell two restaurants.
Molin made his pitch at a recent gathering of commercial real estate brokers in Fort Myers. "It's sitting out there in the parking lot," Molin told them. Together, the two restaurants are asking nearly $4.4 million.
+ One percent of Forbes 400 on Gulf Coast
Four of the 400 richest people in America call the Gulf Coast home, according to the latest ranking by Forbes magazine. The price of admission to the magazine's list this year was $1.3 billion.
They include:
• Dennis Albaugh of Marco Island ($3.5 billion). Dubbed the "prince of pesticides," he founded Albaugh Inc. in 1979 and began selling a generic version of the main ingredient in Monsanto's Roundup herbicide. He's reportedly selling the company.
• Edward Debartolo Jr. of Tampa ($1.8 billion). Son of the mall tycoon, Debartolo now owns $1.4 billion worth of stock in Simon Property Group. Debartolo continues to develop retail and residential properties in several states.
• Ronald Wanek of St. Petersburg ($1.5 billion). Wanek built Ashley Furniture, the nation's best-selling furniture brand, which reported annual sales of more than $3 billion.
• George Steinbrenner III of Tampa ($1.3 billion). Steinbrenner bought the Yankees baseball team for $10 million from CBS in 1973 and the franchise is now worth $1.2 billion.
+ Wiregrass center
plows forward
Despite tight economic times that have forced the closure, shrinkage or stalled expansion of many retailers, the Shops at Wiregrass shopping center project in Wesley Chapel, in south central Pasco County, is still planning for an Oct. 30 grand opening.
The open-air shopping center, at State Road 56 and Bruce B. Downs Boulevard, held a job fair this past weekend. More than a thousand people stood outside a Holiday Inn Select in New Tampa for 300 job openings.
The stores interviewing included Barnes & Noble, Victoria's Secret, Coach, Williams-Sonoma, Express, Pac Sun, Kay Jeweler's, Macy's and Pottery Barn.
The hiring will prepare for the opening and set the foundation for the all-important Christmas shopping season.
The developers, The Goodman Company of West Palm Beach and Forest City Developments, are also bringing in notable people for the grand opening, including Rebecca Weinberg, HBO's "Sex and the City" stylist, and fitness expert Kim Merkel, who will appear at JCPenney's Health and Fitness Event.
A few miles up the road, The Groves, another new open-air Pasco retail center, opened its new Cobb Theater this month. And also a few miles away, in contrast, work on the Cypress Creek Mall, on the southwest corner of State Road 54 and Interstate 75, has come to a standstill.
The Cleveland-based developer, Richard E. Jacobs Group, is waiting for the Army Corps of Engineers to reissue the building permit.
The massive site has been cleared, there are concrete drainage pipes on the ground, but no additional land preparation work has been done for months and there is no vertical construction so far.
+ Florida business
hopes to attract neighbors
The Florida real estate market is really hot after all.
At least it is to hundreds of eastern Europeans hoping to capitalize on the combination of the weak U.S. dollar and the rise of Florida foreclosures.
And a pair of Sarasota attorneys, in addition to well-known local real estate executive Ian Black, are hoping to capitalize on those possible buyers, who are coming from places such as Prague, Slovakia and other Central and Eastern European countries and cities.
Black has joined Alan Tannenbaum and Ivo Travnicek, of the Sarasota-based law firm Levin Tannenbaum, in founding Florida Venture Partners, a firm designed to serve as the managing general partner for foreign companies, investment funds and individual investors looking to get a Sunshine State steal.
Travnicek, a Czech Republic native who lived in Indiana before relocating to Sarasota, is the catalyst for the company. He's fluent in five languages, including Czech and Slovak, and has taken several trips back to his homeland and the surrounding area over the past year to meet with possible clients. (See Review, May 2, 2008.)
And Tannenbaum, who specializes in real estate and construction law, spent several years in the 1990s working with an immersion program run by the University of North Florida that brought Czech and Slovak businessmen to Florida.
The Florida Venture Partners trio is making their first official visit to Eastern Europe, including Prague and Bratislava, Slovakia, next month.
Sarasota group aims
for elected in mayor
A plan to create an elected mayor system of government, albeit in a watered down plan, is coming back to Sarasota. A group made up mostly of attorneys and local small business owners and entrepreneurs has formed the Elected Mayor Now Committee, with the goal of running a petition drive to get the issue placed on a citywide ballot next March.
This is the third organized effort to bring an elected mayor form of government to Sarasota; the other efforts, in 1996 and 2002, failed mostly because people were concerned about giving too much power to one person or office.
The current city government system in Sarasota is made up of a five-member city commission that votes among themselves every year to choose a mayor, which is mostly a ceremonial title. A city manager serves as the day-to-day administrator of the city.
Elected Mayor Now members, however, believe Sarasota will be better served with having one elected official who can be held accountable for decisions.
ECONOMIC SNAPSHOT
What the data shows: Building-investment taxable sales include those by building contractors, heating and air-conditioning contractors, insulation, well drilling, electrical contractors, interior decorating, paint and wallpaper shops, cabinet and woodworking shops, soil, lumber and building suppliers, and roofing contractors.
What it means: The Tampa Bay region fared much better in June than the rest of the Gulf Coast when it came to building investments. In fact, sales in that category were better than the statewide average on a percentage basis. Tampa's more diverse economy than the rest of the Gulf Coast is one reason. Meanwhile, Fort Myers and Punta Gorda continued to feel the ill effects of the construction downturn.
Forecast: Future building investment now depends on the fortunes of the credit markets. Financing for projects is drying up and that will likely have an impact on building investment from Tampa to Naples. Building investment will remain anemic until the economic recovery takes hold later next year or in 2010.
But while the other elected mayor efforts might have scared people off from a consolidated power perspective, the new proposal might not go far enough to create any real change.
The committee's proposed amendments to the city's charter include allowing the city manager position to remain intact, with the same duties and responsibilities. The elected mayor would have a voice and a vote on the city commission, be he would not be given veto power. He would work with the city manager on the annual budget.
Sarasota's current form of government is a rarity on the Gulf Coast. The city of Fort Myers switched to an elected mayor system a few years ago, leaving Hillsborough County as one of the only other major population centers without an elected mayor. A group there, Elected County Mayor Political Committee, is also working to get the issue on an upcoming ballot.
Elected Mayor Now in Sarasota needs to collect 3,600 verified signatures by Nov. 3 to get the issue before voters March 10, the next City Commission election. If approved on March 10, voters would choose an elected mayor for the city no later than March 2010.
Goodbye, bulletin boards
The days of posters and paper stapled and tacked to cork college bulletin boards outside of class buildings and in libraries and dining halls may be quickly coming to an end, thanks to a two-year-old Tampa technology company.
Electronic Digital Media, which employs 10 people, has installed eDean: Thirty 40-inch LCD screens which broadcast messages at the University of South Florida and two at the University of Tampa.
Installation is pending at Saint Leo University, Manatee Community College and Florida Tech. eDean stands for Electronic Dispatch for Emergency and Academic Notices. EDM President Michael Garcia is a USF grad.
The screens display news, weather, academic calendars, performing arts schedules, social calendars, sports schedules and special event times and locations.
Last month, the president signed into law a bill that supports measures to improve safety at colleges, including communication systems. School officials manage and update school information and alerts on eDean through a Web portal.
eDean is provided to the universities at no cost. Community businesses support the system with their sponsorship and receive a business message on the displays in return. Companies can support a local charity by running messages for the charity on the system in exchange for their sponsorship dollars.
eDean was used this past summer when a man with a rifle on USF's main campus caused the university to activate an emergency message on the system. For 30 minutes, students and faculty were alerted on the new display that there was the possibility of danger and to avoid the area outside Cooper Hall and surrounding buildings.
The emergency was cancelled when it was determined that the man carrying a rifle was an ROTC student carrying a practice rifle. The system carrying the alert was immediately updated.
JPMorgan Chase:
No sunshine in housing
In its investor presentation outlining the acquisition of Washington Mutual, JPMorgan Chase published a chart showing various scenarios for home prices in Florida.
It's not a pretty sight, especially if you consider the worst-case scenario. JPMorgan estimates current home prices in Florida will decline another 16% before they hit bottom. In a deeper recession, they could fall 21% from current levels and in a severe recession they could decline 36%. From peak to trough, home prices in Florida could fall 64% in the case of a severe recession.
The following chart shows estimates of home price declines under various scenarios, from both current levels and from their peak a few years ago.
From current levels to bottom
Current Deeper Severe
estimates recession recession
Florida ‑16% ‑21% ‑36%
US ‑8% ‑11% ‑20%
From peak to bottom
Current Deeper Severe
estimates recession recession
Florida ‑44% ‑49% ‑64%
US ‑25% ‑28% ‑37%
Sales IN June
($ in millions)
Area Sales Annual chg.
Fort Myers $58.9 ‑27%
Naples $36.3 ‑18%
Punta Gorda $13.2 ‑30%
Sarasota $55 ‑7%
Tampa $211.5 ‑0.5%
Florida $1,643.5 ‑6.1%
Source: Florida Legislature Office of Economic
& Demographic Research
Existing-home prices decline
The median prices of existing single-family homes on the Gulf Coast continued to drop by double-digit percentage rates in August, Realtor data shows.
In the case of some areas, such as Cape Coral-Fort Myers, the price drops boosted sales. In other areas, however, the price declines weren't enough to lure more buyers in August than the same month a year ago.
The existing-condo market continued to struggle for buyers, with the exception of Naples and Cape Coral-Fort Myers.
Existing single-family homes
August sales August Median Price
Area 2007 2008 Chg. 2007 2008 %Chg.
Cape Coral-Fort Myers 520 684 32% $250,800 $146,900 ‑41%
Marco Island 35 29 ‑17% $507,900 $435,700 ‑14%
Naples 152 195 28% $417,000 $260,000 ‑38%
Punta Gorda 223 176 ‑21% $186,500 $138,100 ‑26%
Sarasota-Bradenton 779 551 ‑29% $291,400 $218,200 ‑25%
Tampa-St. Petersburg-Clearwater 2,154 2,154 0% $214,100 $171.200 ‑20%
Existing condos
August sales August Median Price
Area 2007 2008 Chg. 2007 2008 %Chg.
Cape Coral-Fort Myers 128 168 31% $252,900 $193,800 ‑23%
Marco Island 28 25 ‑11% $316,700 $310,000 ‑2%
Naples 141 175 24% $285,000 $220,000 ‑23%
Punta Gorda 24 14 ‑42% $166,700 $170,000 2%
Sarasota-Bradenton 216 126 ‑42% $235,000 $220,000 ‑6%
Tampa-St. Petersburg-Clearwater 553 482 ‑13% $173,900 $141,400 ‑19%
Sources: Florida Association of Realtors, Naples Area Board of Realtors
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