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Coffee Talk
Business Observer Friday, May 12, 2006 16 years ago

Coffee Talk

Nervous Nellies make an appearacneHow to buy a piece of Babcock RanchA better yearfor Suncoast CEOStill Red HotChow downDagwood's dream comes to life
by: Adam Hughes Staff Writer

Coffee Talk

+ Nervous Nellies

make an appearacne

When David Lereah, chief economist for the National Association of Realtors, told a Tampa area crowd of real estate professionals he had just bought a condo in Fort Myers, Coffee Talk prepared to call a Realtor to get in on the action. But then Lereah confessed to being "nervous."

Lereah pointed to some uncertainty in the economy that could dim prospects on even the super-desirable Florida real estate market. His worries focused on interest rates, insurance, hurricanes and oil prices. Of the four, the most widespread concern was oil.

"For every month that oil remains high we are losing 1.3% of GDP growth," Lereah told the audience at a Florida land conference in Lakeland April 28. "At some point this will start to affect consumer confidence, which will give us a recession"

Further, he says hurricanes have caused people to relocate to other states. Locally, he pointed to the flight of some extremely wealthy people from Naples to the Smokey mountains.

On the plus side, Lereah says the Florida real estate market is fundamentally healthy. It's still got "gravity" to attract the baby-boomer generation as it nears retirement. The current slowdown in residential activity, he says, is more a period of pause after the pullout of investors who had over-hyped the market. This year, be ready for 10% instead of 40% appreciation.

Fort Myers matches his more immediate prediction, thus the condo purchase. Most of the demand is going to move, he says, from the major boomtowns to areas nearby that haven't experienced the same type of appreciation. Then, as prices in the outlying areas rise or demand reaches a certain equilibrium, the buyers will return to the boomtowns.

+ How to buy a piece

of Babcock Ranch

Want to own a piece of Babcock Ranch? You can by investing in the Morgan Stanley fund that has agreed to buy the 91,000-acre ranch that straddles Charlotte and Lee counties.

In recent securities filings, the Morgan Stanley fund that plans to buy Babcock Ranch says the minimum investment in its fund is $1 million. So far, the fund has raised $380 million and says it plans to raise $1.5 billion. Most investors in these kinds of funds are institutions such as pension funds and insurance companies, but wealthy individuals who can afford the price can invest as well.

Morgan Stanley and West Palm Beach developer Syd Kitson have teamed up to buy Babcock Ranch. While the purchase price hasn't been disclosed, some have estimated the sum to be close to $700 million. The state of Florida has agreed to purchase 74,000 acres for conservation for $350 million, or $4,729 an acre.

+ A better year

for Suncoast CEO

The pay envelope of John T. Stafford, president and chief executive of Suncoast Bancorp Inc., has been thinner than some of his fellow Gulf Coast bankers.

A year ago, the Review reported that Stafford was the lowest-paid bank CEO among seven who ran publicly traded holding companies in the Tampa and Sarasota markets during 2004. His $96,075 salary increased to $97,826 for 2005, according to a regulatory filing earlier this month.

But Stafford is going to be doing better after engineering the sale of Sarasota-based Suncoast, the parent of SunCoast Bank, to an out-of-state banking concern for just shy of $36 million.

Suncoast's sale to NBC Capital Corp., a Starkville, Miss.-based holding company for Cadence Bank, is pending. But the math indicates Stafford will be doing better in 2006 than he did in either 2004 or 2005.

The March 16 announcement of the proposed transaction pushed Suncoast's $16 share price upward by $2 in over-the-counter trading. It has since gained another $1.50 to reflect NBC's cash-and-stock offer of $20.50 a share.

The stock rise has helped increase the value of Suncoast options that Stafford can exercise.

Using the May 5 closing price, for example, Stafford could have claimed a pre-tax profit of about $134,000, if he had sold the stock derived from vested options.

In addition, the Suncoast stock he held as of April 26 will bring him $674,101 from the NBC deal.

There could be other compensation coming Stafford's way, which may be disclosed before all shareholders take a final vote on the sale. Altogether under this scenario, however, Stafford would make about $808,000.

The 58-year-old Stafford is staying on as president and CEO of the re-branded Cadence Bank, if the deal goes through.

+ Still Red Hot

Put one worry aside: Construction work doesn't seem to be slowing down. On the contrary, it's growing. The U.S. Census Bureau reported that construction spending in March was estimated at a seasonally adjusted annual rate of $1.2 trillion, the ninth consecutive record month and an 8.4% increase from March last year.

Ken Simonson, chief economist of The Associated General Contractors of America, says although private-residential construction was expected to slow later this year, so far it hasn't happened. New multifamily construction grew by 21% year to date and single-family was up 14%.

What's more, there was a huge jump in the 'multi-retail' category, which grew by 40% compared to last year and construction for public projects was higher in almost every category, led by educational (up 14%) and street work (7.7%).

+ Chow down

Looking for some good grub at some cheap (well, cheaper) prices?

Then the week of May 16-21 is for you. That's when the Sarasota Convention and Visitor's Bureau is hosting the area's first restaurant week, designed to give foodies a chance to sample some of the best restaurants in town.

The 18 participating restaurants will offer fixed-price meals and interactive chef demonstrations.

Greater Sarasota is a good place to celebrate classy restaurants, as several eateries have had positive reviews in the prestigious Zagat's guide.

For more information, go to

Dagwood's dream comes to life

Blondie comic creator and Clearwater Beach resident Dean Young is teaming up with Lamar Berry, former chief marketing officer for Popeye's Fried Chicken, to launch "the planet's best & and most awaited chain of sandwich shoppes."

Blondie followers might have seen a recent strip where Dagwood Bumstead dreams about opening a sandwich shop and says it's time to "walk the walk."

The new chain was to be announced at a May 11 press event at Dagwood's headquarters on U.S. 19, Clearwater. The first shop will be at a Palm Harbor strip mall.

Young, Dagwood's alter ego with a "self-proclaimed Ph.D. in sandwiches and a black belt in buffet" has collected sandwich recipes for years - in expectation of the big day. Young's father, Chic Young, started the strip in 1930.

Valerie Oberle, former vice president of Disney University, will oversee training for franchisees in Clearwater and at the "top secret test kitchen" in New Orleans. Berry will be CEO.

And, yes, there will really be a foot-high cold cut sandwich.

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