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Coffee Talk
+ Game on
It looks like Naples-based luxury developer Lutgert Cos. is going to enter the Sarasota real estate market with a big hitter. Coffee Talk learned last week the company has hired Steve Bailey, a top executive from Michael Saunders & Co., to run the Sarasota operation.
Bailey has been a vice president with Michael Saunders, the biggest independent real estate company in Greater Sarasota and a fixture in the area's luxury market. Lutgert is one of the dominant companies in that department for Naples.
Lutgert officials had no comment on the hire, saying they hoped to make an announcement soon. Michael Saunders also declined to comment; Bailey couldn't be reached.
Lutgert previously stated it would be opening an office in Sarasota by August in the Plaza at Five Points downtown.
+ Times change
At least one Sarasota-area developer has gone past the condo market slump phase and headed straight for the total bust phase.
"There is no market for condos right now," says Ali Ebrahimi, president of Houston-based Ersa Grae when speaking about a city-owned parcel on Palm Avenue in downtown.
Ersa Grae went through a protracted dance with the city and various neighbors over the development on the 2.25-acre parcel of a 1 million-square-foot high-rise with office, retail and facilities for two arts groups, called Plaza Verdi.
The Sarasota City Commission, sitting as the community redevelopment agency, abandoned the project in August after the Sarasota Opera backed out.
This past week, the city voted to draft another request for proposals for the site.
"It may be an ultimately futile effort," Ebrahimi tells Coffee Talk. "The market has changed. Construction costs have gone up drastically the past two years. The condominium downtown market is extremely weak. Just look, not a single new building has gone up downtown in the last 10 months."
Plus, when Ebrahimi or any other developer adds in the prospect that government mandates call for so-called affordable housing to make up 10% of any development on the site, it does not look good.
"It just wouldn't work," he says. "Try to do anything under $200,000 made out of concrete, whether it's a mid-rise or a high-rise, and it just won't get done."
+ Miva top executives leaving, but not empty-handed
Craig Pisaris-Henderson, 36, resigned from his post as chairman and chief executive officer of Fort Myers-based Internet company Miva April 4. Phillip Thune, 35, resigned as president, the company said in a release.
The announcement didn't say why the two resigned, but Coffee Talk suspects the company's $130 million net loss last year might have had something to do with it. The stock's fall from its high of $23.70 on Oct. 22, 2004, to $3.56 recently probably didn't sit well with investors either.
Miva's board hired Deutsche Bank Securities in January to help it decide whether to sell the company.
Meanwhile, the board named Lawrence Weber the new chairman. Weber is founder of public relations firm Weber Shandwick. It also named Peter Corrao as the new CEO. Corrao joined Miva in September as chief operating officer.
Still, Pisaris-Henderson and Thune may not be leaving empty handed. According to securities filings, they are eligible for payouts if they leave for "good reason." Based on the latest compensation agreements filed with the Securities and Exchange Commission, Coffee Talk estimates Pisaris-Henderson will leave with about $2.1 million, and Thune will depart with about $1.7 million. Company officials couldn't be reached to confirm those figures.
And the two won't separate from the company entirely. Pisaris-Henderson will remain as a director of Miva. He controls about 5% of the shares of the company, a stake valued recently at about $6.2 million. Thune, whose stake in the company is valued at about $2.4 million, also will remain on the board.
+ Watching the construction pump
It seems builders have been watching material suppliers as much as most drivers watch the gas pump. According to The Associated General Contractors of America, construction materials are still outpacing both consumer and producer prices by a "wide margin" and that will likely not change throughout 2006. Nationwide, the producer price index fell by 1.4% in February, but the PPI for construction materials and components rose 0.3%.
In the AGC's Construction Inflation Alert, the association stated it expects the increase to be closer to the 10.1% felt in 2004 rather than the 6.1% rate increase of 2005.
The AGC represents more than 32,000 firms, including 7,000 general contractors and more than 11,000 specialty-contracting firms.
+ Goodbye retirement
After more than 35 years in the Tampa Bay area real estate market, Jim Shapiro was ready to retire, or at least that's what he thought.
But easy living with little to do lasted only a month or so.
Shapiro, former president of the Tampa Bay Chapter of the National Association of Industrial and Office Properties, joined Ross Realty Group as senior vice president recently.
"I didn't want to slow from 70 mph to zero," Shapiro says. "Somewhere in the 40 to 45 range was about right."
Shapiro refers to himself as a member of the "Charlie Alumni Association," for his many years with Charles Rutenberg, both at U.S. Home Corp. and the Rutenberg Corp. He retired from Peter Lawrence Commercial Real Estate in February.
+ Loan funds to get tighter?
Pinellas Park bank analyst Richard X. Bove is reading behind the headlines again. What he finds should further unsettle the mortgage industry, in general, and one prominent home lender in Florida, in particular.
First, there is some good news.
Annual surveys by the federal Bureau of Labor Statistics show steady growth in the income of those of us who like to spend money on goods and services. From 1989 to 1994, consumer after-tax income rose 3%. From 1999 to 2004, it grew 5.2%.
So we're a little flusher than a decade or so ago.
But we're also borrowing more. The net increase in total consumer liabilities of 5.9% between 1989 and 1994 was downright modest, compared to a 21.5% spike for the 1999-to-2004 period.
Most of the additional debt appears to have been taken out on our homes. Federal Reserve Bank data show Americans are making larger mortgage payments as a percent of their disposable income.
"It seems that debt is at the highest level relative to consumer wealth in the past 53 years," Bove writes in a recent research report.
One company that advances a lot of money to homeowners is Seattle thrift Washington Mutual Inc. But Bove says federal regulators may be clamping down on WaMu and other big home lenders.
A government agency that oversees the Federal Home Loan Banks around the nation has proposed new rules that, according to Bove, would restrict the funds available to banks and thrifts for home lending.
If the rules are implemented, Bove sees higher borrowing costs for WaMu, which has made a big push into Florida.
Instead of borrowing from a regional home loan bank, WaMu would have to pay higher wholesale rates on the open market. In turn, WaMu customers would pay higher rates, too.
Bove says WaMu has the 13th-highest ratio of home loan bank borrowing-to-total liabilities of any American bank or thrift with at least $5 billion in assets. Fort Lauderdale's BankAtlantic Bancorp Inc. holds down the 14th spot.
+ Not great news
A business going by the name "That's Great News" has been contacting companies listed in the Review's Gulf Coast 250, a ranking of Manatee and Sarasota's largest companies, with solicitations to buy plaques and other products. The business has sent e-mails and made phone calls to several companies over the past few weeks, using the name Gulf Coast Business Review in its solicitations.
The Gulf Coast Business Review and its affiliates are not associated with these efforts or the business.
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