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Coffee Talk
Business Observer Thursday, Mar. 2, 2006 14 years ago

Coffee Talk

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Florida's job machine noticed: The Milken Institute, the California-based think tank founded by former junk-bond king Michael Milken, says the area stretching from Fort Myers to Naples is a jobs-creating machine.If only we'd invested in Chico's: Fort Myers-based women's retailer Chico's FAS has made a fortune for investors over the last 10 years.First National deal is pricey: The proposed $120 million sale of Bradenton-based First National Bancshares Inc. was one of the four highest-priced bank deals in the country last year.C&I space is scarce: Commercial and industrial property is getting tight in the Tampa Bay area, says Chris Sass, a real estate broker with Cushman & Wakefield Inc.Peach's new franchise face: When Michael Luciano, who has owned and operated Peach's restaurants for 21 years, said he was going to venture into franchising Feb. 27, Coffee Talk knew this change had to come from somewhere.One hand on your wallet: Like the sun coming up in the morning, it's only natural to read that the government is taking a bigger tax share.
by: Adam Hughes Staff Writer

Coffee Talk

+ Florida's job

machine noticed

The Milken Institute, the California-based think tank founded by former junk-bond king Michael Milken, says the area stretching from Fort Myers to Naples is a jobs-creating machine.

In a ranking of the top 200 metropolitan areas of the U.S., the institute ranked Cape Coral-Fort Myers and Naples-Marco Island in second and third place, respectively, for their strength in creating and sustaining jobs. First place went to the Palm Bay-Melbourne-Titusville area, which unseated last year's winner, Cape Coral-Fort Myers.

The institute says the top areas all have similar characteristics: strong and growing service sectors, a robust recovery in tourism, growing populations, an increase in the number of retirees, little heavy manufacturing, low costs and-despite hurricanes-good weather.

Other Florida cities that ranked favorably: Orlando-Kissimmee (6th place); Fort Lauderdale-Pompano Beach-Deerfield Beach (9th); Port St. Lucie-Fort Pierce (12th); Ocala (13th); Sarasota-Bradenton-Venice (24th); Tampa-St. Petersburg-Clearwater (25th); Gainesville (26th); West Palm-Boca Raton-Boynton Beach (27th); and Lakeland (33rd).

+ If only we'd

invested in Chico's

Fort Myers-based women's retailer Chico's FAS has made a fortune for investors over the last 10 years.

According to a recent analysis by the Wall Street Journal, an investor who put $1,000 into Chico's shares at the end of 1995 would have ended up with $180,708 at the end of last year. With a similar sum invested in the Standard & Poor's 500-stock index, an investor would have ended up with just $2,284.

The Journal says Chico's has the best 10-year track record out of 1,000 companies it analyzed for its annual Shareholder Scoreboard. The company clocked an average annual return of 68.2% over the last decade.

Chico's also ranked fifth among the Scoreboard's top five-year performers, with an average annual return of 80.1%. So far this year, the stock has gained 8%.

+ First National deal is pricey

The proposed $120 million sale of Bradenton-based First National Bancshares Inc. was one of the four highest-priced bank deals in the country last year.

That is the conclusion of the Hovde Organization, a Washington, D.C.-based investment bank and asset manager, in a new report wrapping up 2005 and making a few predictions about 2006.

Of course, Hovde doesn't mind bragging about Whitney Holding Corp.'s acquisition of 1st National Bank & Trust's holding company at more than four times tangible book value: Hovde advised First National on the transaction.

But Hovde did give props to two other mergers and acquisitions, in which it played no role, that were even more expensive than the Whitney-First National combination. One of those sales, Commerce Bancorp Inc.'s takeover of Palm Beach County Bank, was the most expensive announced bank deal in the nation in 2005, on a price-to-book value basis.

New Orleans-based Whitney is scheduled to close on the First National sale sometime in April.

Nickolas J. Barbarine, Hovde's director of East Coast investment banking, says there were fewer 2005 deals but the prices were still high for assets in fast-growing Sunbelt states such as Florida and Georgia.

Looking at the rest of 2006, Hovde, perhaps optimistically, predicts another busy year. The M&A adviser claims margin pressure and declining credit quality will make nervous bank and thrift directors anxious to cash out.

+ C&I space is scarce

Commercial and industrial property is getting tight in the Tampa Bay area, says Chris Sass, a real estate broker with Cushman & Wakefield Inc.

Sass and fellow broker Tim Callahan told a recent meeting of the Bay Area Manufacturers Association the space crunch could stay tight for up to two years. That's how long it may take for some of the new construction just breaking ground to come on the market.

After a long lull, commercial and industrial buildings are again in demand, says Sass. Unfortunately for manufacturers, the demand for land with residential zoning hasn't softened much.

The vacancy rate for industrial square footage in all of the Bay area stands at 4.6%, according to Cushman & Wakefield. It's slightly better in Hillsborough County, where the rate is above 5%, than Pinellas County, where is it just below 5%.

+ Peach's new franchise face

When Michael Luciano, who has owned and operated Peach's restaurants for 21 years, said he was going to venture into franchising Feb. 27, Coffee Talk knew this change had to come from somewhere. The source in this case is serial entrepreneur Gary Hoyle.

Hoyle has been involved in several franchise related businesses, from a pavement sealer operation to electric cars. Hoyle told Coffee Talk it was during a break between jobs that he first saw the Peach's concept.

"I was living out on the island soaking up the sun," Hoyle says. "I met Mike through a mutual friend of ours. I just kept bumping into him around town. We also played golf together."

Before he had even suggested the idea of franchising to Luciano, Hoyle started visiting all of the Peach's restaurants with the goal of figuring out how the business plan ticked. Hoyle also researched what he determined was a significant growth in breakfast restaurant demand, particularly among the baby-boomer generation.

Shortly after thanksgiving, Hoyle pitched the idea to Luciano. The plan worked and now Hoyle is president and CEO of Peach's Franchise Corp. The goal for the new franchise company is to grow by about 30 restaurants this year, beginning along the Gulf Coast, with prospects for the Fort Myers-Naples market. Next, the plan is to expand state- and nationwide. The decision to franchise comes as Luciano prepares to open his 10th Peach's on State Road 64 in northeastern Bradenton.

+ One hand on your wallet

Like the sun coming up in the morning, it's only natural to read that the government is taking a bigger tax share. According to Florida TaxWatch's annual comparison of national, state and local taxes the state tax burden is at its highest level in 18 years.

In 2004, the latest figures available, Florida's tax collections grew 12%, compared to 8% nationally. From 2000-2004, state tax collections grew 24%, the third largest growth in the nation, compared to national growth for the period of 10%.

The report attributes the increase to the growth in consumer spending and real estate values while acknowledging that there have been few if any tax increases.

Florida's state tax burden per person is 35th in the nation, up five spots from the year before, and the highest since 1988. Adding local taxes, the state and local tax burden rose three spots to 32nd highest in the nation.

But because the tax growth has been coupled with increasing income, Florida's state tax burden expressed as a percentage of personal income is 38th in the nation, up four spots from the year before. Adding local taxes from 2003 estimates, the combined state and local tax burden ranking was 44th, up one spot. The report notes that ranking would likely be higher if more recent local data were available.

Florida's sales tax burden is the third highest in the country, up three spots from last year. The report also says that Florida's top gas tax rate remains the highest in the nation. Florida TaxWatch is a private, non-profit research organization focused on government revenues, expenditures, taxation, public policy and programs.

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