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Coffee Talk
Economy rains
on home parade
The economic downturn is raining on the fall parade of homes.
The Collier Building Industry Association recently decided to forego its fall parade of homes, citing the economic downturn and the cost of marketing the event. Instead, the group will focus all its efforts on the spring parade of homes that begins during the last weekend of February and lasts until the middle of March.
A fundraiser for the building industry trade group, the parade lets prospective homebuyers tour model homes. It was a popular event during the real estate boom and the Collier builders held two such events a year, one in the spring and another in the fall.
With the cost of marketing the event pegged at $100,000, builders have decided to focus on the spring season when more tourists and snowbirds are in Naples. "They're really tight with money," says Brenda Talbert, executive vice president of the association. "They've got a marketing budget, but they're being very careful with it. I can't agree with them more."
The spring parade of homes will likely be well attended because Naples is now more affordable than a few years ago. "We think we're going to get some good traffic down here," Talbert says.
Sun Hydraulics founder,
plant innovator, dies
Robert Koski, the co-founder of Sarasota-based Sun Hydraulics who pioneered flat corporate hierarchies long before the idea became corporate dogma, died Oct. 11. He was 79.
Koski, an industrial engineer and championship marksman, co-founded the company in 1970 with John Allen, who now lives in Oregon. He pioneered the concept of "horizontal management," which empowers all employees to make decisions to the best of their abilities.
At the time, the concept of horizontal management was contrary to the typical top-down decision making in most companies. But Koski's concepts later became case studies for students at Harvard Business School and Dartmouth College's Tuck School of Business.
In his original business plan, Koski wrote: "The ultimate quality of a corporation is largely determined by the character of its employees who are attracted into employment and develop because of the corporation's environment."
Koski and Allen started Sun in a small building on 57th Street in Sarasota and later built the first building in 1980 off University Parkway, where the company's headquarters are now located. Sun manufactures hydraulic valves and manifolds, employing 700 people in Sarasota, 30 in Kansas and 200 overseas in England, Germany, France, Korea, China and India.
Sun, which went public in 1997 (symbol: SNHY), reported revenues of $167 million in 2007, an 18% increase over the previous year. The company was ranked 79th largest on the Gulf Coast in 2007, measured by total annual revenues. The Koski family currently owns 28% of the company and daughter Christine Koski is a board member.
A celebration of Koski's life will be held on Nov. 2 at 4 p.m. at the Asolo Theater, 5555 N. Tamiami Trail, in Sarasota.
Super visiting time,
just in time
The Gulf Coast is getting ready to host the Super Bowl in February and just in time for the game and its visitors, the new 255-room, 16-story Westin Hotel will open its doors on Tampa's Courtney Campbell Causeway, just west of the Hyatt.
While the developer, Impact Properties Inc. of Tampa, is happy to be open in time for the big game, that actually wasn't the main motivator for the timing of the opening of the $60 million project.
The main reason was construction costs.
Until recently, construction costs skyrocketed, especially in 2006 and 2007. When they started to come down, Impact decided it could make the numbers work, so it hired Hardin Construction and started building in July 2007.
Impact has owned the six-acre property since the mid-1990s. It tore down the old Days Inn on the property about two years ago.
The new construction timing worked out coincidentally so that the hotel will open as Super Bowl guests arrive in February.
"Timing is everything," CEO and Chairman Dilip Kanji told Coffee Talk. Impact develops, buys, sells, owns and manages hotels.
Besides the Westin, Impact is developing a Hampton Inn and Suites in Jacksonville, scheduled to open in December; and a Marriott Residence Inn in San Diego, set to open in mid-2009.
Impact owns six hotels, but at its peak in the mid 1990s, it owned more than 26. It has developed 16 hotels in Florida and Georgia the past 25 years.
Impact originally planned to build two hotels on the six-acre site, but decided only on one. So it is selling the neighboring three-acre vacant parcel.
"Events like the Super Bowl come and go, and they give a big boost, but you want to make sure the costs are in line," Kanji says. "We didn't think it would make the Super Bowl. But we've been fortunate with weather and the construction team in place."
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.
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.
ECONOMIC SNAPSHOT
Gulf Coast Retail Activity
July retail index
Area Index of retail activity %Annual change
Fort Myers 289.9 10.6%
Naples 320.6 7.5%
Punta Gorda 270.8 11.3%
Sarasota 221.5 9.5%
Tampa 216.2 7.2%
Florida 250.9 6.3%
Source: Florida Legislature Office of Economic & Demographic Research
What the data shows: The index of retail activity is constructed to measure personal consumption and it combines the categories of autos, consumer durables, tourism and consumer non-durables. The index's base equaled 100 in 1988. For example, an index of 300 today would have taxable sales equal to three times the base period in 1988, or a 200% increase.
What it means: July showed a greater decline in retail activity in all areas of the Gulf Coast compared with the state as a whole on a percentage basis. Fort Myers and Punta Gorda, two of the hardest-hit by the construction decline, saw double-digit percentage declines. The unemployment rates have increased in all areas and as a result people are spending less.
Forecast: The decline in retail activity presages what may be even steeper declines during September's financial turmoil. Few retailers expect a better holiday season than last year and there are anecdotal reports that landlords are lowering rents as incentives for retailers to keep their doors open.
Advertising firms
upset with EDCs
Should economic development groups hire local marketing firms?
That question was raised last week when a group of economic development organizations from Sarasota to Naples decided to hire Ohio-based Chisano Marketing Group to design a branding campaign to attract corporate relocations to the region.
The economic development groups in Charlotte, Collier, Glades, Hendry, Lee and Sarasota counties recently formed a coalition called Southwest Florida Economic Development Partners to promote the region and they hired Chisano, which also has offices in Tampa and Orlando, to design a multi-media branding and marketing campaign.
An association of Gulf Coast-based advertising firms criticized the selection. In a letter to news organizations, the American Advertising Federation's Southwest Florida chapter writes that local firms are better qualified to promote the region because of their investment in the area's growth.
But economic development groups counter that they considered all local agencies, including many from the Gulf Coast. In the end, Chisano presented the best plan, they say.
"The Southwest Florida Economic Development Partners did a thorough search for the best agency to handle our regional branding initiative," says Tammie Nemecek, president of the Economic Development Council of Collier County, in an e-mail response. "We considered 31 agencies, including several in the area, with the hope of selecting one in the region. We are very pleased that we found a marketing communication firm in Florida that has actively been working with clients in our regions for more than 20 years and that has a good understanding of the many benefits and challenges of our region."
Dear Joy:
Gendusa gives advice
You can't fault Joy Gendusa for not taking the personal approach.
Recently, Gendusa, the affable chief executive officer of Clearwater direct mail company PostcardMania, wasn't content to just talk about business strategy with her small business customers.
So she also sent a letter to them, trying to ally their fears about the financial markets. Her main point: Control your reactions and don't over-react.
The letter, done in collaboration with her personal financial advisor, mentioned three common mistakes businesses make as the stock markets wildly move down and up and credit markets are unstable.
The three common mistakes Gendusa outlined were:
• Making short-term changes to a long-term plan. Markets go in cycles and business decisions shouldn't be driven by panic and fear.
• Failing to understand the difference between volatility and loss. Volatility is the expected short-term changes in the life of an investment. Loss is the smaller value of an investment at the end of an investment life span, which, in the case of stocks, is usually at least 10 years.
• Failing to prosper during times of economic turmoil. Companies that do better in tough times become more efficient and expand their markets.
Gendusa also mentioned that companies that increase business in tough market cycles continue to market and promote their business.
Fort Myers airport
gets more destinations
Airlines keep trimming service at airports around the country, but Southwest Florida International Airport in Fort Myers is getting three new airline destinations this winter, according to Bob Ball, the airport's director.
AirTran is scheduled to start service to Columbus, Ohio on Nov. 7. Also next month, Southwest Airlines is scheduled to start nonstop flights to St. Louis. And in December, JetBlue will begin nonstop service to Washington Dulles International Airport.
In addition, Air Berlin will offer three nonstop flights from Fort Myers to Dusseldorf, Germany. That's one more flight per week than the airline offered last year.
The new flights are welcome news to tourism officials who are worried the economic downturn will hurt occupancies this winter. Twenty domestic and international airlines fly to Fort Myers.
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