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Coffee Talk
Business Observer Friday, Feb. 24, 2006 14 years ago

Coffee Talk

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What bubble?: A bevy of economists, both local and nationwide, have been saying the residential real estate bubble might not be bursting, but it's at least deflating.Re-apply here: The St. Petersburg Area Chamber of Commerce wanted somebody to shake things up.Economy keeps on rolling: The top economist for Chicago-based Harris Private Bank brought her message to Longboat Key Feb. 21, and it was enough good news to make a pessimist smile: Nationwide unemployment under 5%, with Florida's at a 30-year low and Sarasota's at a near microscopic 3.3%.Orion Bank expands east, consolidates in Naples: After nearly a decade marching up the west coast of Florida from its roots in the Keys, Orion Bank is turning east.New player on the Gulf: Kolter Communities LLC obviously doesn't see the west coast of Florida as a one-trick pony.Commercial's turn?: The highpoint in well-known economist Hank Fishkind's presentation to the Manatee Chamber of Commerce Economic Development Council's State of the Economy Breakfast Feb. 21 was directed toward commercial developers and property owners.
by: Adam Hughes Staff Writer

Coffee Talk

+ What bubble?

A bevy of economists, both local and nationwide, have been saying the residential real estate bubble might not be bursting, but it's at least deflating. Still, anecdotal evidence at some Gulf Coast homebuilders show the market is still sizzling.

For starters, the Tampa Bay Division of U.S. Home reported it sold a record 156 new homes in January. And the record sales pace hasn't slowed, said Mark Metheny, president of the Tampa Bay Division: The unit has sold more than 150 new homes in February. Average sales price for the homes was $250,000.

The Tampa Division of U.S. Home builds homes in 15 neighborhoods in Hillsborough, Pinellas and Pasco counties.

And Neal Communities, the Sarasota-based homebuilder and development company, had a record number of closings in 2005, with a total volume of $132 million representing 261 closed transactions.

"Last year was an extremely busy year," says company President Pat Neal, "and we are also preparing for a good year in 2006."

+ Re-apply here

The St. Petersburg Area Chamber of Commerce wanted somebody to shake things up. That's what John T. Long III is doing in just his first month as president and chief executive.

Long is requiring the entire chamber staff to apply again for their old jobs, or for new ones that will be created in a restructuring that he expects to complete by June 1.

"You see a lot of different organizations doing this," Long tells Coffee Talk. "We're looking for the best people."

Long says St. Petersburg, with a bustling downtown business district, has a dynamic reputation, and he wants the chamber to reflect that with creative staffers open to new approaches.

"It's awfully difficult for people to have to go through," Long acknowledges of his personnel reassessment. "But the organization has to have a business mentality. So we're not making any commitments. We're not guaranteeing people positions."

The 59-year-old Long comes to the Gulf Coast from Michigan, where he doubled the membership of the Kalamazoo Regional Chamber of Commerce in six years. He pulled off a similar feat earlier at a chamber in his native Maryland.

A former banker, Long takes over from Russ Sloan, the St. Pete chamber's top executive for 11 years, who left for the presidency of the Florida Council on Economic Education.

+ Economy keeps on rolling

The top economist for Chicago-based Harris Private Bank brought her message to Longboat Key Feb. 21, and it was enough good news to make a pessimist smile: Nationwide unemployment under 5%, with Florida's at a 30-year low and Sarasota's at a near microscopic 3.3%. The much-maligned real estate market is still humming, albeit at a slower-clip. Overall economic growth of at least 3%.

Things are looking good in Florida, and for the country overall, said Sherry Cooper , a former economist for the Federal Reserve Board, where she served as a special assistant to then-Chairman Paul Volcker. Cooper, who is based in Toronto and has a home in Sarasota, has also written two books on the economy. She spoke at a Harris sponsored luncheon at the Longboat Key Club; Harris has branches in Sarasota and Naples.

"It's a positive time for the state of Florida," she said, pausing before delivering the dreaded but. "Now you have to get the infrastructure to catch up with everything."

In an interview with Coffee Talk after the luncheon, Cooper said Florida's number one tool against any economic slowdown is demographics. And those demographics show that people will be moving to Florida in high numbers, both baby-boomers and their offspring. The rub is to make sure there are enough basic things, such as roads, homes and hospitals to meet the population surge, without detracting from the quality of life reasons people move here in the first place.

And it would be nice to get rid of that red tide, too.

+ Orion Bank expands east, consolidates in Naples

After nearly a decade marching up the west coast of Florida from its roots in the Keys, Orion Bank is turning east.

The Naples-based bank says it plans a major expansion into Palm Beach and Broward counties over the next three years, adding 12 to 15 locations there. "We have committed $50 million in capital in those marketplaces for the next three years," says Jerry Williams, Orion's chairman, president and chief executive officer. Williams says he expects deposits there to reach $1 billion in three years and make the same amount in loans. The bank is already off to a fast start: It has booked more than $75 million in loans and $20 million in deposits in its first 60 days there.

Orion Bank is a subsidiary of Orion Bancorp, Florida's second-largest privately held bank holding company with more than $1.8 billion in assets and 19 locations stretching from the Florida Keys to Sarasota.

Meanwhile, Orion has bought Fifth Third's headquarters at the corner of Golden Gate Parkway and Goodlette-Frank Road in Naples for $15.5 million. Previously, the 65,000-square-foot building was the headquarters of First National Bank of Florida prior to its acquisition by Fifth Third. Williams says it's one of the few buildings in Naples that could accommodate the company's growth, which includes hiring an additional 100 people. The company employs 120 people in the Naples area.

+ New player on the Gulf

Kolter Communities LLC obviously doesn't see the west coast of Florida as a one-trick pony. One of the under-mentioned elements of Kolter's debut of The Grande Sarasotan condo complex in downtown Sarasota was Kolter's plan to open an office in St. Petersburg to manage the Sarasota development and other future Gulf Coast-area projects. With the exception of The Grande Sarasotan, Kolter has stuck entirely to Florida's east coast, mainly in Palm Beach County.

The company is building its local office around Peter Donnantuoni, who lives in St. Petersburg and was executive director for the North American operations of Taylor Woodrow. Donnantuoni was a real estate lawyer with the law firm of Piper Rudnick in Tampa before joining Taylor Woodrow in 1993.

Robert Vail, president of the Tower Division for Kolter, said the company is looking along the west coast, all the way north into the Panhandle.

Kolter is expecting to take about three or four years to sell out the $1 million-plus units in the 144-unit The Grande Sarasotan.

+ Commercial's turn?

The highpoint in well-known economist Hank Fishkind's presentation to the Manatee Chamber of Commerce Economic Development Council's State of the Economy Breakfast Feb. 21 was directed toward commercial developers and property owners.

Fishkind says the non-residential development sector in Manatee County is more in-line with demand, particularly when compared to the exorbitant residential market.

Fishkind predicted that higher interest rates and other factors would cause a dip in non-residential development in the county in 2006 and 2007. But by 2008, new construction would be back at record levels, even exceeding the go-go days of 2001, 2004 and 2005.

+ Correction

A Coffee Talk item on The Grande Sarasotan in the Feb. 17 issue of the Review listed an incorrect height and number of parking spaces. The high-rise condominium is 17 stories and has 294 parking spaces in its garage.

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