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Coffee Talk
+ Naples college gets pumped up with donation
International College, a Naples-based college that focuses on career-oriented studies such as accounting and information technology for working adults, landed a multimillion-dollar gift from Lavern Norris Gaynor, an heiress to the Texaco oil fortune. By one estimate, the gift may have been more than $11 million.
College officials declined to put a value on the gift, citing the donor's wishes. But they said it was the largest gift ever received in the college's 16-year history and is large enough to endow the college president's compensation in perpetuity. The endowment was named the Lavern Norris Gaynor President's Chair.
According to the latest available nonprofit filings with the IRS in 2004, International College paid President Terry McMahan $330,564 in salary and benefits. Assuming the endowment pays out 3% annually to cover the president's compensation, Coffee Talk estimates the gift totaled more than $11 million.
Gaynor, a Naples resident since 1976, has been an ardent supporter of nonprofit organizations ranging from the YMCA to the Conservancy of Southwest Florida, The Naples Philharmonic, the Naples Historical Society, The Naples Alliance for Children and Youth Haven. Her family inherited a portion of the wealth created by John Gates, who founded The Texas Oil Co., known today as Texaco.
+ Development lending up
The folks who pay off depositors at failed banks have issued their latest quarterly overview of the Florida economy, just in time for the Review's special banking issue. The Federal Deposit Insurance Corp. sounds a little worried.
The FDIC says Florida community banks are lending money on commercial real estate at unprecedented levels. Construction and development loans, one of three components of commercial real estate lending, along with multifamily and non-residential, are of particular concern to the FDIC.
More than half of Florida's community banks, those with a maximum of $1 billion in assets, had a construction loan portfolio that equaled or exceeded their capital. At the peak of the last Florida development boom, 1987, just 22% of community banks had construction loans on their books that equaled or exceeded capital.
The FDIC singled out Fort Myers and Naples among the metropolitan areas where development activity is currently the most feverish.
Construction and development loans are some of the riskiest for a community bank. The FDIC has advised banks with high concentrations of construction loans to increase their underwriting standards and take other precautions.
Naples had the fastest housing price appreciation in the state last year. That has pushed the price of housing out of the reach of many in Collier County, according to the Office of Federal Housing Enterprise Oversight. Only 16% of Naples homes are affordable for a family earning the area's median income.
The rising housing costs have put hardly any pressure on wages, according to the FDIC, despite Florida's low unemployment. But the combination of pricier shelter and nearly full employment has not been welcomed by employers.
"Jobless rates in some areas, such as Southwest Florida, have dropped to such lows that employers are having difficulty finding qualified workers," the FDIC says. "Despite the potential for labor shortages, incomes continue to trail the nation."
+ A good audit
During this time of year, the word audit is normally not a good thing. But for Sarasota County, a recent audit turned out OK.
This particular audit concerns whether the county was properly using the money it gets from building permit fess. The Argus Foundation, a Sarasota-based non-profit, pro-business group, brought in a CPA to perform the audit. Argus officials told county administrator Jim Ley it was seeking a review of the county's procedures to make sure the fees were being used solely to enforce the code, as required by Florida law.
The auditor determined the county has done "a good job" separating costs of enforcing the code. There is a surplus of collected funds, which go toward employee retention and training, as well as an emergency fund. In a letter to Ley, Argus President Tim Hensey even writes that Argus and many of its members were happy with the service they have been getting from the building department. Wow. As Sarasotans know, it's not often the Argus Foundation compliments anything about the government.
+ Bancshares of Florida reveals growth strategy
Naples-based Bancshares of Florida officials are mum about their planned secondary offering of stock, but its recent filing provides some revealing clues about the future of the company headed by CEO and President Michael L. McMullan
Among other plans, the bank holding company intends to boost its presence in Hillsborough, Lee, Palm Beach and Pinellas counties. On their attorneys' advice, bank officials say they can't discuss their strategy until after they've sold shares.
Currently, Bancshares of Florida is the holding company for three subsidiary banks: Bank of Florida-Southwest in Naples; Bank of Florida-Tampa Bay in Tampa; and Bank of Florida in Fort Lauderdale. Since it was formed in 1998, the company has grown total assets from $49 million to $570 million, a compound annual growth rate of 63%. Its shares are publicly traded (symbol BOFL; recent price, $21).
Now Bancshares plans to raise $55 million by selling 2.5 million shares at $22 a share. Underwriters Raymond James, Ryan Beck and Allen & Co. have the option to buy another 375,000 shares, raising an additional $8.25 million. After deducting fees, the bank will net $50 million and $57.5 million if the investment bankers decide to buy additional shares.
Here's how it plans to spend some of the $50 million, according to the filing. First, it intends to spend nearly half of the proceeds - $22.7 million - to open branches in Bonita Springs and Aventura, as well as open a loan-production office or branch in Pinellas County. No date has been scheduled for the offering. Bancshares stock closed at $21.40 the first trading day after the filing, down 2.6% from the previous day's closing price. Shares have traded as high as $24.50 in the past year.
+ HMA to bond market: You're OK
The corporate-bond market doesn't look so bad after all.
A week after canceling a $400 million bond sale because of "market conditions," Naples-based hospital chain Health Management Associates decided to go through with it anyway. The hospital company says it will use the proceeds to repay bank debt.
The bonds, which mature in April 2016, were sold April 18 with a 6.152%, yield or 1.18% over benchmark 10-year Treasury notes. Citigroup Global Markets and Merrill Lynch co-managed the sale. However, all things being equal and hindsight being 20/20, HMA may have benefited if it had done the bond deal a few months ago when Treasury yields hovered around 4.5%. With the same 1.18% spread, HMA probably would have paid less than 6% interest.
+ Firm looks for strong premier
Premier Properties, the luxury real estate arm for Naples-based Lutgert Cos., confirmed April 12 what Coffee Talk reported on April 7: The company has hired away a top executive from Michael Saunders & Co. to lead its first expansion north to Sarasota.
Steve Bailey was named vice president and regional manager of Premier's downtown Sarasota office, expected to open this summer. Bailey had been a top vice president with Saunders, the biggest real estate firm in the Sarasota luxury market Premier is aiming for.
Bailey, according to Lutgert officials, is well versed in selling real estate in competitive markets. Prior to his stint with Saunders, Bailey was in charge of several sales operations for a few suburban New York City firms in Long Island and Connecticut. He also has a law degree from Tulane.
And Bailey is no stranger to real wars: He served with the Army in the Vietnam War, where he was awarded several medals, including a Purple Heart.
+ Company denies getting VC, yet
Coffee Talk thought we'd heard good news about Gemesis Corp., a Sarasota maker of synthetic diamonds, in the aftermath of a boffo presentation at the Florida Venture Forum's annual venture capital conference in January.
Then we contacted the company. Contrary to the talk on the street, Gemesis has not secured an $8 million round of funding.
"Although we did have a few exploratory meetings following the Florida Venture Forum, we have not received any funding from any of the contacts," Britta Schlager, marketing manager at Gemesis, tells Coffee Talk.
The forum, the state's leading matchmaker of entrepreneurs and VC firms, hosted more than 20 startups looking for investors at the end of January in Ponte Vedra Beach.
The biggest confirmed winner so far among the companies that were on the Ponte Vedra Beach conference agenda is SkyCross Inc. The Melbourne developer of advanced wireless antenna didn't need to present. It withdrew at the last minute after obtaining $14 million from a Philadelphia VC firm.
Gemesis has attracted loads of publicity for a process of manufacturing colored cultured diamonds that are difficult to find in earth mines.
+ Tech up
Florida was only one of two states in the top 10 that added technology jobs in 2004, according to the annual Cyberstates report by AeA, one of the nation's largest tech trade groups.
The report, released April 19, shows Virginia and Florida added the most tech jobs, while California lost the most. And not only did Florida add jobs, its high-tech exports jumped $1.5 billion to $11.08 billion, making it third after California, at $47.88 billion and Texas, at $34.08 million.
TOP 10 CYBERSTATES BY EMPLOYMENT
State 2003 2004 Numeric Change
California 915,500 904,900 -10,600
Texas 446,000 435,400 -10,500
New York 305,300 300,700 -4,700
Florida 258,800 265,500 6,700
Virginia 244,200 253,300 9,100
Massachusetts 235,600 233,200 -2,400
Illinois 210,600 204,500 -6,100
Pennsylvania 203,800 200,300 -3,500
New Jersey 202,600 197,100 -5,500
Michigan 183,200 178,000 -5,200
+ Palm Avenue prospect still attractive
Could the wake of the collapse of the Ersa Grae's proposed Plaza Verdi in downtown Sarasota have made it easier to develop the city-owned parcel? At least one developer says yes.
Sam Holladay, owner of Sarasota-based Seibert Architects, which had partnered with Arcadia Land Co. during the city's last call for proposals for the site, says the city has resolved much of the arts connection to the project.
"Some of the problems with the project last time was the involvement by Golden Apple and the opera," Holladay says. "If they're not in the cards this time, I think that's good. That turned it into total chaos."
It appears at this point that the only arts connection for any future proposal would be the allotment of 135 parking spaces for the Sarasota Opera during its peak season.
The decline of the Plaza Verdi plan could be attributed to requirements by the city commission that Ersa Grae involve both of the arts groups. After the Golden Apple pulled out of the project in April of last year, it led to a redesign of the project that both delayed it and changed the incentives for the opera to participate, which then led the opera to back out of the project as well. When the opera quit the development, the city commission abandoned the agreement.
+ What's Ahead...
May 9 - The Real Estate Investment Society's monthly luncheon will feature guest speaker Tom Missimer of Missimer Groundwater Science who will discuss water resource issues. The lunch begins at 11:30 a.m. and ends at 1 p.m. at Pelican Preserve Town Center in Fort Myers. Cost is $25 for members and $35 for guests. Reserve by May 4 at www.reis-swfl.org or call Sharon Heston at (239) 410-1253.
May 11 - The Sarasota Economic Development Corporation and the Gulf Coast Business Finance Co. are sponsoring a workshop for entrepreneurs, small businesses and business startups from 9 a.m. to 10:30 at MCC Lakewood Ranch, 7131 Professional Pkwy. E. A $10 registration fee includes refreshments. E-mail registration to [email protected] or call (941) 309-1200, ext. 207.
May 19 - The Greater Naples Chamber of Commerce's annual dinner will feature guest speaker Susan K. Neely, former assistant secretary of homeland security. The black-tie event starts at 6 p.m. and dinner will follow at 7 p.m. at the Naples Beach Hotel and Golf Club. Call Brenda O'Connor at (239) 262-6376.
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