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Coffee Talk
Business Observer Friday, Aug. 31, 2007 15 years ago

Coffee Talk

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Donut entrepreneur focuses on Far East: Sarasota entrepreneur Marvin Kaplan is selling a majority of his stake in 18 Gulf Coast Dunkin' Donuts shops, just as he gets closer to his long-stated goal of opening a series of stores for the franchise in China.Downturn claims advertising victim: AdvertisingWorks, a 12-year-old advertising firm in Naples that recently won several awards at the Collier Building Industry Association's annual Sand Dollar Awards, is closing its doors.Downturn claims advertising victim: AdvertisingWorks, a 12-year-old advertising firm in Naples that recently won several awards at the Collier Building Industry Association's annual Sand Dollar Awards, is closing its doors.Tampa International needs more international flights: CEOs that travel appreciate Tampa International Airport after sprinting through endless terminals and riding trams, escalators and moving sidewalks for what seems like miles at other airports.Nationwide pullout opens opportunity: You can appreciate cost cutting if you run a business. But it's a tad different when the cost cutting may affect you.Bank of America surge: made in Tampa: Bank of America CEO Ken Lewis made some headlines earlier this year when he urged his top managers to "Go for the jugular" in taking more market share.WCI's winners: Bankers and lawyers: Shareholders and bondholders of Bonita Springs-based WCI Communities are licking their wounds as the value of their holdings h

Coffee Talk

+ Donut entrepreneur

focuses on Far East

Sarasota entrepreneur Marvin Kaplan is selling a majority of his stake in 18 Gulf Coast Dunkin' Donuts shops, just as he gets closer to his long-stated goal of opening a series of stores for the franchise in China.

Along with his partners, Kevin Millard and Shawn Cabrall, Kaplan is selling the Florida stores in counties including Sarasota, Manatee and Charlotte, to Bill Daly, a Massachusetts-based franchiser who runs 14 stores in the Bay State. Daly plans to open at least 25 more shops for the franchise over the next five years.

Kaplan, who also has several Sarasota-area commercial real estate holdings, says he wasn't necessarily looking to sell, but Daly found him and the timing turned to be right: Kaplan has spent most of the past year working out the kinks of opening stores in China - think Green Tea flavored donuts - and this deal gives him more time to spend on that project. "It will give me a few more dollars to spend over there, too" Kaplan tells Coffee Talk.

Kaplan and his partners will still be involved in the local Dunkin' Donuts stores. They will handle the real estate side of Daly's expansion, helping him find locations for new stores.

Kaplan declined to disclose the sale price of the stores.

+ Downturn claims

advertising victim

AdvertisingWorks, a 12-year-old advertising firm in Naples that recently won several awards at the Collier Building Industry Association's annual Sand Dollar Awards, is closing its doors.

Vivan Dawson, the firm's director of corporate communications, cited "severe local real estate conditions" as the reason for the firm's closing in an email to customers. Most of the firm's clients included builders such as Centex Homes and D.R. Horton as well as developers such as Indian Hill Partners and D'Jamoos Group.

+ Tampa International needs more international flights

CEOs that travel appreciate Tampa International Airport after sprinting through endless terminals and riding trams, escalators and moving sidewalks for what seems like miles at other airports.

But at a recent town hall-type meeting, business people and residents told TIA officials that they'd like more direct international flights. One sought after destination: Cuba.

The current list of international non-stops: London, Toronto, the Cayman Islands, Montreal, Ottawa and Halifax. Except for Toronto, the rest of the Canadian nonstops are seasonal.

The key to boosting that number, TIA officials say, is convincing airlines there is demand to support the routes.

Coffee Talk thinks surveys and a summary report with good anecdotes from local companies with international business, such as Tech Data and Clearwater Enviro Tech, can produce hard data that airlines can look at. This seems like a job for an economic development agency, such as the Tampa Bay Partnership.

+ Nationwide pullout

opens opportunity

You can appreciate cost cutting if you run a business. But it's a tad different when the cost cutting may affect you.

That happened the past week when Nationwide Insurance Co. of Florida, the state's fifth-largest property insurer, said it would drop 39,000 homeowners and 1,600 commercial policyholders when they come up for renewal starting in January.

Nationwide isn't alone. But Coffee Talk wonders: If some insurance companies think Florida homeowners and businesses are too big a risk to insure, who will? Won't a company take advantage of a need and make a pile of money?

Of course, with state-run Citizens Property Insurance now warping the market, it's possible that won't happen and Florida residents will be more on the hook in catastrophe.

+ Bank of America

surge: made in Tampa

Bank of America CEO Ken Lewis made some headlines earlier this year when he urged his top managers to "Go for the jugular" in taking more market share.

The bank appears to be making good on that, agreeing to buy Chicago's LaSalle Bank for $21 billion, starting free online stock trades, no-fee mortgages and investing $2 billion in Countrywide Financial Corp.

Not one to miss a historical connection, Coffee Talk remembers that Mr. Lewis cut his Jaws-like banking teeth right here in Tampa, as the head of the Florida operations of NCNB, the predecessor of Bank of America. Arriving in Tampa in 1985, Lewis consolidated back-office operations and eventually cut 10,000 jobs.

Bank of America's market value has tripled since Lewis took the CEO helm and it now only trails Citigroup in the banking world.

+ WCI's winners:

Bankers and lawyers

Shareholders and bondholders of Bonita Springs-based WCI Communities are licking their wounds as the value of their holdings has plummeted in recent months.

But two firms engaged by WCI have done quite well, thank you very much: Wall Street investment firm Goldman Sachs and lawyers at Simpson Thacher & Bartlett. The homebuilder hired both firms earlier this year to find a buyer for the company.

WCI Executive Vice President and Chief Financial Officer James Dietz told investors recently that the company spent $10 million so far this year to defend itself against billionaire Carl Icahn's proxy fight and to find a buyer for the company. Icahn recently took control of WCI's board after no buyer was found. The company recently reported a net quarterly loss of $33 million.

Despite Goldman's apparent inability to create value for shareholders, the investment bankers remain on the payroll, Dietz told investors.

+ Mortgage firm sees

open door in down market

A late August itinerary for Rick Floyd, an Atlanta-based president of the Southeast division of a national mortgage company, had him flying into Tampa and then, in two days, hitting three of the once-smoking hot Gulf Coast real estate markets: Sarasota, Fort Myers and Naples.

Save the tissues, though. This wasn't a pink-slip trip. Nor was it a group-hug session about the woes of the mortgage industry.

Floyd, president of Opteum Mortgage, came to the Gulf Coast on a hiring mission. For real.

"We are in growth mode," Floyd tells Coffee Talk, "even amongst the turmoil in the industry."

When Coffee Talk last heard from Opteum Mortgage, in early July, its parent company, Vero Beach-based Opteum, a real estate investment trust, had cut the mortgage company loose. It wanted to get out of the collapsing industry as soon as possible. Chicago-based private equity firm Sterling Capital, as it has been doing with mortgage companies across the country, bought Opteum off the low-cost rack. (See July the 27, 2007 Review.)

Turns out Sterling was an early Christmas gift for Opteum Mortgage. The private equity firm bought the company's entire mortgage portfolio, but the weighty parts, such as buybacks, repurchases and early payment defaults, were absorbed by Opteum's parent company.

The upshot, says Floyd, is Opteum the mortgage company can use Sterling's capital for growing, as opposed to meeting margin calls and paying down debt. "There's a place for the entrepreneurial privately-held firm that focuses on mortgage banking," says Floyd, who doubles as president of the Mortgage Bankers Association of Georgia. "We are getting back to the basics."

Overall, the mortgage company plans on increasing hiring by 30% over the next few moths, as well as using some of Sterling's $125 million investment to launch some new marketing and technology programs.

On the hiring front, Floyd and another Opteum executive, Sarasota-based Bob DeCecco, met with mortgage officers from several well-known companies. In particular, the Opteum executives interviewed a trio of mortgage loan teams from Naples, Fort Myers and Tampa. If all three teams join Opteum, DeCecco says, it could eventually triple Opteum's Florida mortgage origination portfolio.

+ Mortgage entrepreneur

not sticking around for spurt

Ironically, Bob DeCecco is leaving Opteum Mortgage - just as the company defies the industry by hiring new people and pushing for growth. DeCecco founded Aclarian Mortgage in Sarasota in 2005; he sold that company to Opteum in 2006 and stayed on as the top executive for the Gulf Coast market.

DeCecco says he's going to put more time into his entrepreneurial pursuits, including a Tampa-based software company and a Sarasota-based Web site domain name and Internet search firm. Still, DeCecco tells Coffee Talk the timing of his departure is bittersweet, as he admires Opteum's aggressive approach to the down market.

DeCecco also says he will continue being involved in the mortgage industry, such as lobbying for reform that could prevent, or at least lessen the impact, of future mortgage meltdowns.

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