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Coffee Talk
+ Billionaire buys WCI shares
Billionaire corporate raider Carl Icahn isn't the only one paying close attention to Bonita Springs-based homebuilder WCI Communities.
Connecticut hedge-fund tycoon Steve Cohen and his New York City firm, SAC Capital Advisors, quietly revealed Dec. 29 that they acquired 6.5% of the shares of the Southwest Florida homebuilder (stock symbol WCI; recent share price $19).
Cohen is a superstar of the hedge-fund world. According to a front-page story about Cohen in the Wall Street Journal in September, his flagship hedge fund generated an average annual return to investors of 43.5% since 1992.
Cohen, whom Business Week once called "the most powerful trader on Wall Street you've never heard of," is known for his rapid-fire trading in and out of stocks and investors watch his moves closely. He manages about $10 billion in assets.
In November, Icahn's Icahn Management, bought about 4% of WCI's stock. Icahn is famous for shaking up corporate boards and management of undervalued companies.
Some leadership changes have already started to occur. Don Ackerman recently announced he would step down as chairman of WCI at the company's next annual meeting on May 17. WCI Vice Chairman Charles Cobb Jr., the former chairman and CEO of Arvida Corp. and Disney Development Co., is Ackerman's likely successor.
+ Hell of a reputation
It's the proverbial case of good-news-bad-news with the American Tort Reform Foundation's 2006 Judicial Hellholes report.
First, the good news: The Florida Legislature was one of five state governmental branches to make the 'Points of Light' list, reserved for jurisdictions that have considerably improved civil justice, says the foundation, particularly when it comes to containing scandalous asbestos litigation.
Florida legislators also passed a tort reform bill in 2006; the bill repealed joint and several legislation, which had required businesses with deeper pockets to pay more in economic damages in negligence lawsuits.
Now, the bad news: South Florida came in second place on the overall nationwide Judicial Hellhole list, a ranking of the worst places to be facing a lawsuit. Only the state of West Virginia is considered a more hellish place to be sued.
In its report, the foundation states South Florida has a reputation for high awards, improper evidentiary rulings, class actions, asbestos cases, and medical malpractice payouts. Also in 2006, the report states, appellate courts have reversed area trial courts for inappropriately certifying class actions, allowing people who are not injured to sue.
American Tort Reform Association President Sherman Joyce says South Florida is one of the places "where judges systematically apply laws and court procedures in an unfair and unbalanced manner, generally against defendants, in civil lawsuits."
"What many will find interesting about this year's report is that the top six Hellholes are in states that recently enacted significant tort reforms," Joyce says, "yet a handful of judges are either ignoring those reforms or otherwise abusing their discretion to distort cases in favor of plaintiffs."
Here's a recap of the report's rankings:
Hellholes
1. West Virginia
2. South Florida
3. Rio Grande Valley and Gulf Coast of Texas
4. Cook County, Illinois
5. Madison County, Illinois
6. St. Clair County, Illinois
Points of Light
• Illinois Supreme Court
• California Appellate Court
• Florida Legislature
• Various State Legislatures and Courts
• Oregon Trial Court
+ Residential land woes continue
Development and homebuilding companies that scrambled to buy land during the residential boom are now rushing to unload it or restructure deals with sellers.
The latest effort involves a huge land deal in Lee County between agribusiness giant Alico and Orlando-based luxury residential developer Ginn Development Co.
Alico agreed to restructure contracts worth $138 million for 5,590 acres in Lee County in exchange for $7.5 million in cash. Alico also agreed to move back the date on which Ginn was supposed to begin making payments to September 2007 and gave the developer options to extend the payments due to as far out as 2014.
Other Florida developers have been doing the same thing. Bonita Springs-based WCI Communities wrote down $13.4 million in land options in the third quarter while Miami-based Lennar Corp. said Jan. 2 it plans to walk away from deposits and options worth between $400 million and $500 million.
+ Fitness business muscles into North Carolina
St. Petersburg-based Lifestyle Family Fitness is resolving to fatten up, at least in revenues and the number of centers it operates. Late last month, the company announced it plans to open a new facility in Raleigh, N.C., in April, its fifth, in the state. "The demographics [there] are similar to those of Tampa Bay," president Todd Bright tells Coffee Talk.
The North Carolina expansion was announced two days after the company said it plans to open its fifth facility in the Orlando-area by spring 2007. The two new additions bring the total number of Lifestyle Family Fitness centers nationwide to 43, with 28 of those in Florida. The company has 180,000 members throughout Florida, North Carolina and Ohio.
Bright says Lifestyle Family Fitness, founded by 2006 Review Entrepreneur Award runner-up Geoffrey Dyer, plans to continue its rapid growth strategy in 2007. It wants to double its current number of 43 branches by 2009, focusing on adding locations to many of its current markets in Florida, North Carolina and Ohio; Bright didn't rule out entering new markets, although he declined to elaborate on where those would be.
Company revenues will also continue to grow significantly in 2007, Bright predicts. In 2006, the company reached $80 million in annual revenues, a 45% jump from 2005 revenues of $55.32 million. The company has had a compound annual growth rate of 37% over the past five years.
+ Tampa port still primed for Ethanol
When the Review profiled Bradley Krohn, a scientist cum ethanol plant entrepreneur last summer, the biggest decision he was facing was where to build Florida's first large-scale ethanol plant: Tampa or Port Manatee.
Krohn' has decided to drop the Port Manatee project. A dispute over sub-leasing about 20 acres from a current port tenant, fuel storage company TransMontaigne Product Services, had been lingering for more than six months - too long for Krohn, president of Riverview-based U.S. EnviroFuels. (See Review, 6/9/06).
Krohn, who studied ethanol and other bio-energy projects while working for St. Louis-based agricultural giant Monsanto Co., isn't sitting idle. Krohn founded U.S. EnviroFuels in 2003 based on Florida being the third biggest gasoline consumer market in the country.
He says construction is nearly ready to begin with the Tampa project, an $86 million plant that will use industrial fermentation to distill ethanol from crops shipped into the port.
Krohn hopes the Port Sutton plant will not only be the biggest, but also the most successful ethanol plant in Florida. Ultimately, Krohn hopes to blend the ethanol with gasoline to produce what proponents say is a cleaner-burning fuel that uses less imported crude oil.
+ A new dinner theater - coming soon?
In building a new dinner theater in Lakewood Ranch, veteran director Robert Ennis Turoff, of the Golden Apple Dinner Theater, is stuck with a new headlining performer: Manatee County.
Over the past six months, construction has progressed rapidly on the new theater, part of the $10 million, 65,000-square-foot San Marco Plaza project.
Within a few weeks, county officials will need to christen the complex with a certificate of completion. Turoff only needs to look a half-a-mile up the road at Lakewood Ranch's Main Street to see how difficult that could be. That mixed-use project has been open for more than a year, yet some of the flagship businesses were delayed for several months due to bureaucratic hold-ups.
Turoff hopes to avoid that drama. Once county planners sign off on the project, there is still more work to be done inside the theater, including laying the floor and building the balcony. "If we can get in by the middle of February," Turoff tells Coffee Talk, "with any luck, we could be open by late spring, early summer."
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