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Coffee Talk
+ A Tallahassee tea party?
A recent statewide survey from the National Federation of Independent Business reads as if it's coming out of Taxachusetts, not the Sunshine State. Almost nine out of every 10 business owners that responded to the survey said their commercial property taxes have increased over the last year.
And specifically, 34% of the 400 respondents said their 2006 increase was greater than 20%.
In the survey, which polled members' attitudes toward the state's property tax hikes, two out three respondents reported they are considering layoffs, moving out of the state or closing down altogether in response to the hikes. Another 39% reported thinking about postponing expansion plans.
"Like many homeowners, small-business owners are suffering from soaring property taxes," says NFIB/Florida State Director Allen Douglas. "Small businesses need immediate relief from the growing property-tax burden that is effectively acting as a wet blanket on Florida's economy."
The NFIB reports that 81% of respondents believe high taxes to be a legitimate threat to their business. In response to the increase, 42% have increased prices, 21% have cut staff and 16% have reduced employee benefits; sixty-four percent said their business has absorbed some of the increase.
Other avenues of relief could come from the government, the survey reports, such as a 3% cap on annual commercial property values, or a "homestead" exemption for businesses, as well as capping tax increases and state spending. About three-fourths of respondents to the NFIB survey support those ideas.
Says Douglas: "Small-business owners understand revenue at the local level is far outpacing their own personal revenue growth and want the trend reversed."
+ Franchise heads north
Bradenton is losing a company headquarters, as breakfast and lunch franchise operation Peach's is moving to a Columbus, Ohio suburb. The company, with six corporate employees who are all moving north, has become one of the fastest growing restaurant chains in the country.
President and CEO Gary Hoyle tells Coffee Talk the move makes good business sense, as the Columbus area, as well as the entire state of Ohio, is a focus of the restaurant chain's growth, with at least 50 stores planned there over the next several years. The area is also a good location to serve as a middle-ground for training managers and employees of the 50 new Peach's being built over the next few years in cities such as Dallas and St. Louis.
What's more, Hoyle, who has led the Peach's franchise effort since a March round of golf with Peach's founder Michael Luciano, has a more personal reason for moving back to his native Ohio: His father died in August and he wants to be closer to his mother, who lives outside Columbus.
The corporate defection of Peach's Franchise LLC - now officially called Rise and Dine Restaurants - from Bradenton to Worthington, Ohio, also puts an end to a quirky Manatee County business nugget: Peach's had combined with Lakewood Ranch-based First Watch Corp. as competing breakfast-lunch restaurant chains headquartered within 10 miles of each other (See Review, 9/15/22).
Both companies intend to open dozens of stores over the next five years, with First Watch using a corporate-owned only approach and Peach's using the franchise model.
Hoyle says that growth can be better managed in Ohio. "We're not infatuated by growing this thing by leaps and bounds," says Hoyle. "We want to do it the correct way and manage it properly."
The move had been in the works for about the past six months and Hoyle began a regular commute from Bradenton to Worthington about six weeks ago. It was made official Feb. 14.
There are 11 Peach's in the Sarasota-Bradenton area, 10 of which are licensed affiliates still owned by Luciano, who opened the first restaurant under the Peach's name in New Hampshire in the 1980s. Luciano's company, Peach's Restaurants Inc., will remain in Bradenton.
+ Beefing up business
As promised, Shutts & Bowen continues to add top-ranked litigators to its first Gulf Coast office, which opened in Tampa last March.
New hires include John "Sean" Johnson, whose representation of Wyle Laboratories Inc. and six of its managers made National Law Journal's top 10 defense verdicts in 2000.
Semiconductor distributor Avnet Inc. of Phoenix sued the managers and Wyle, accusing them of conspiracy and interference after the managers left a Dallas electronics company that Avnet was acquiring to work for Wyle. The five-month trial, in which Avnet sought $154 million, is one of the longest trials in Hillsborough County's history.
Shutts & Bowen recently wooed Johnson away from Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis PA where he'd worked for more than 20 years.
Johnson joins about 18 other attorneys that have left big-name Tampa firms, such as Carlton Fields, Fowler White and Shumaker Loop & Kendrick, to join the Miami-based firm's Tampa office.
Shutts & Bowen's Tampa managing partner, R. Allan Higbee, who left Fowler White last year after about 25 years, says the law firm's local growth is in response to the burgeoning demand for corporate lawyers as more companies open offices on the state's Gulf Coast.
+ Correction
Sarasota banker Tramm Hudson, an adviser to the board of Coast Bank, said he expects a "positive" outcome for the bank. Last week's Review incorrectly stated his comments.
In search of excellence
The Review is seeking the best and brightest Gulf Coast entrepreneurs for the newspaper's 10th annual Entrepreneur Award.
And for the second consecutive year, the Review will be recognizing the best from its entire coverage area: Tampa Bay south to Naples.
If you know of a worthy candidate, please send us his or her name. We're looking for entrepreneurs whose company's results over the past three years show exceptional performance and growth. Nominees should be visionaries and leaders who have overcome obstacles or demonstrated extraordinary characteristics that have led their companies to exceptional achievements. The entrepreneurs must be owners or part-owners of their companies, and their companies must be based on the Gulf Coast.
Last year's overall winner was Ian MacKechnie, the president and founder of Tampa-based financial services firm Amscot Financial. The Tampa region winner was Mark Swanson, founder of four Bay-area businesses; the Sarasota-Manatee region winner was John Williams, president of Gould & Lamb Healthcare Consultants; and the Fort Myers-Naples winner was Brian Stock, owner of Stock Development.
To nominate an entrepreneur, send his or her name to Mark Gordon at [email protected] or call (941) 362-4848. Please include the person's name, company and a brief description of what distinguishes the candidate.
+ Chico's CFO still in charge
Charlie Kleman's surprise resignation as chief financial officer of Fort Myers-based women's retailer Chico's FAS has some investors scratching their heads as to who could possibly replace him.
After all, equity analysts and portfolio managers polled by Institutional Investor magazine last year said Kleman was the country's best CFO in the retailing/specialty stores industry.
Kleman sounded just as energetic about the company's prospects while speaking at the Citigroup Retail Conference in Orlando on Feb. 12, just four days after he announced his resignation.
Michael Smith, Chico's vice president of investor and community relations, couldn't resist ribbing Kleman at the conference. "Charlie may be retiring from his CFO position, but he's not leaving," Smith told analysts. "His hair may go back to blond from gray."
Known for his candor, Kleman said of his resignation: "This company has ambitions that, frankly, could benefit from executive skills that I'm not necessarily in a position to bring to the table." Kleman won't be leaving, however. Once a successor CFO has been hired, Kleman will chair Chico's charitable organization and will be involved in investor relations. "It might be more fun without the title, that's what I think," Kleman told analysts at the Citigroup conference.
Still, investors wonder whether that's the last shoe to drop at Chico's.
"I don't know whether to be spooked by Kleman's parting comments or impressed with the candor. Is the upcoming work really that hard, or are the folks at Chico's just far too earnest for those of us jaded by years of mealy mouthed corporate excuses?" wondered one on the Motley Fool investing blog.
Chico's stock has been stuck in the low $20 range since it started reporting negative comparable-store sales last year. The stock's 52-week high was $49.
Watch out New York
Florida is projected to become the third most populous state between 2015 and 2020, as the state hits the 21.8-million mark and passes New York to come in behind California and Texas, even though the state's annual growth rate has slowed to about 2%, according to economists.
And, for the first time, the state's age mix is expected to shift this year to produce a higher percentage of people aged 45-64 than aged 25-44 as Baby Boomers age.
The Florida Economic Estimating Conference says the fastest growing industry in the state is professional/business services, which is projected to grow at 4.8% this fiscal year and 3.6% in '07-'08. More than half of the growth is in employment agencies, temporary help and leasing services, janitorial and cleaning.
The state is projected to lose 10,300 jobs this fiscal year, ending June 30, in several sectors, including construction, manufacturing and mining and natural resources. Other employment sectors, however, are expanding modestly.
Population growth remains Florida's primary economic engine, fueling employment growth, projected at 2.3% this year and 1.7% in '07-'08, and income growth, at 2.8% this year and 3.4% through 2010.
Only five Florida counties had unemployment rates higher than the national average of 4.4% in October 2006. They were Hardee, DeSoto, Glades, Hendry and Madison counties.
Single-family home construction is projected to continue its decline through '08-'09, while commercial construction will accelerate 10.1% this fiscal year and moderate in the following years.
Of the 10 most populous states in the nation, Florida had the fastest job growth rate at 2.8% and the lowest unemployment rate at 3.1%, according to the most recent forecast.
BY THE NUMBERS
Population Unemployment Rate Housing Starts
County 2006* 2015** 1990 2006*** 2001 2006
Charlotte 160,315 189,500 4.9% 3.2% 2,283 2,986
Collier 326,658 451,500 5.6% 2.7% 7,546 5,473
Hillsborough 1,164,425 1,382,700 4.9% 3% 11,840 11,697
Lee 585,608 741,700 4% 2.5% 12,560 20,052
Manatee 308,325 380,100 4% 2% 4,549 4,264
Pasco 424,355 517,400 6.4% 3.4% 4,596 5,738
Pinellas 948,102 1,007,400 4.7% 3.1% 4,426 3,934
Sarasota 379,386 443,500 3.8% 2.6% 5,387 5,022
Source: Office of Economic and Demographic Research, Florida Legislature. *Estimated **Projected ***Preliminary
WCI Communities hangs 'For Sale' sign
Bonita Springs-based homebuilder WCI Communities has hired Goldman Sachs to evaluate the possible sale of the company.
But now the question is: Who needs more land for housing?
WCI's ace is its huge inventory of lots, many of which were acquired at a relatively low basis long before the boom. According to a recent Moody's estimate, WCI has more than seven years' worth of lots.
Investors hoping a large homebuilder such as Pulte or Lennar buys WCI may be disappointed. Large U.S. homebuilders have been writing off millions of dollars of land options in recent months and they're not likely to be buying more anytime soon. Builders recorded $1.65 billion to write off land options and write down the value of inventory in the second and third quarters of 2006, according to a recent JMP Securities report cited by Bloomberg News.
So for now, speculation about who the buyers might be include private equity firms and foreign companies who are patient enough to wait out the housing cycle.
In the meantime, savvy investors such as corporate raider Carl Icahn, value-oriented money management firm Hotchkis & Wiley, hedge-fund superstar Steve Cohen (SAC Capital Advisors) and others have been on a stock-buying spree, collectively acquiring 82% of WCI's shares outstanding. Here's a list of investors who have acquired large positions in WCI's stock since June 1, 2006, according to securities filings:
BY THE NUMBERS
WCI COMMUNITIES
# /shares % of total shares
Investor acquired outstanding $Value*
Hotchkis & Wiley Capital Management 6,637,180 15.9% $146 million
Carl Icahn 6,096,175 14.6% $134.1 million
Neuberger Berman 2,819,127 6.7% $62 million
SAC Capital Advisors 2,762,713 6.5% $60.8 million
SAB Capital Partners 2,629,267 6% $57.8 million
Citigroup 2,508,391 5.9% $55.2 million
Dimensional Fund Advisors 2,419,294 5.8% $53.2 million
Iridian Asset Management 2,332,700 5.6% $51.3 million
Marvin Schwartz 2,226,100 5.3% $49 million
Wachovia Corp. 2,180,578 4.9% $48 million
Basswood Partners 1,070,550 2.6% $23.6 million
Wellington Management 921,750 2.2% $20.3 million
*based on $22 per share
+ Entrepreneurial focus
Tampa Bay area public television station WEDU has a new show designed to inspire and empower Florida's entrepreneurs, says host Jill Isaac, an adjunct professor at the University of Tampa and a producer who has worked in Asia and her native Canada.
The "Small Business Academy," underwritten by Raymond James Financial of St. Petersburg, offers tips from business and community leaders. Isaac focuses on the commonalities shared by entrepreneurs and discusses business strategies.
The show airs on the last Thursday of each month at 9 p.m. and the last Sunday of the month at 3 p.m.
Correction:
Sarasota banker Tramm Hudson, an adviser to the board of Coast Bank, said he expects a "positive" outcome for the bank. Last week's Review incorrectly stated his comments.
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