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Coffee Talk
Business Observer Friday, Sep. 19, 2003 15 years ago

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This week's items: Quote from Michael Kovac Executive Director of High Technology Engineering Development Old Station in Fort Myers soldCell phone linking to UPC bar codes in Fort MyersJudicial Qualifications Commission case

Quote of the week

Michael Kovac, executive director of High Technology Engineering Development, University of South Florida. Sept. 16, to an audience at the North Port Economic Development Forum.

'Florida is fifth in the nation in terms of high-tech employment. We got that almost by being asleep. Look at Silicon Valley - it has a culture of risk-taking, entrepreneurship and intelligent discovery. Florida's High-Tech Corridor is our Silicon Valley. Seventy percent of the high tech activity in Florida is coming out of the High Tech Corridor, anchored by the Technology Bay on the west and the Space Coast on the east.'

SOUTHWEST FLORIDA

Old station bought

It has been a relic for the five years since Trailways and Greyhound abandoned it as a derelict corner of Cleveland Avenue, just a short distance from downtown Fort Myers. The old station outlived its usefulness as a transportation hub. For most of those years it was vacant. The owner, Barron Collier Co., placed it on the market a couple years ago.

Listed at $575,000 for the approximately 7,000-square-foot building, the price was lowered to $425,000. But it didn't sell. Then Carlo and Fe Pendaranda bought it for $320,000, says broker Jim McMenamy of RE/MAX Realty Group Commercial Division. If the couple's plan pans out, half of the bus station will have a new life as a restaurant with the other half leased out.

Live scanning

Camera cellular telephones will soon be used for more than calls, text messaging and photographs. In the Fort Myers area, there will soon be a new service that allows consumers to use phones to scan codes on store products.

NeoMedia Technologies Inc. announced a new sales agreement with SRP Consulting Group LLC of Ijamsville, Md. SRP will sell and license NeoMedia's PaperClick Internet linking technology that allows cellular phones to scan UPC bar codes to link to Web sites with coupons or other product information.

The technology, available first on Nokia 3650 camera phones, also may be used one day for self-scanning check out in stores or for authentication of a product.

Next time you scan a soft drink container you may get a commercial. Or a recall notice.

Hillsborough

Holder on hold

The state Judicial Qualifications Commission's case against Gregory P. Holder appears to be starting to crumble. So it was not surprising that the JQC cancelled a Sept. 12 hearing for Holder and pushed the new hearing date into the middle of November.

What a shame it would be for the public - if not for Holder - were the JQC to fold its cards and settle or even drop the plagiarism charges against the whistle-blowing Hillsborough County circuit judge before the rescheduled Nov. 14 hearing.

Coffee Talk says that after reading a list of witnesses whom Holder lawyers David B. Weinstein and Gregory W. Kehoe intend to call in their client's defense.

The JQC's special counsel is trying to nail Holder, 49, of Tampa, for allegedly borrowing lengthy excerpts from another author to complete a 1998 research paper that helped the judge win promotion to colonel in the U.S. Air Force Reserves.

Holder has denied the allegations.

His defense team recently made public an affidavit from USAF Lt. Col. William O. Howe Jr. The Aug. 20 sworn statement suggests the purported copy of Holder's research paper that anonymously came into the JQC's possession might have been doctored.

Howe states he may have graded Holder's paper because he recognized his handwriting on a few of the pages, although he has no independent recollection. But the Air Force officer found it "unusual" that the JQC's copy had no concluding remarks or a notation of his grade for the Holder paper on the final page of the document. Howe says it has been his standard practice to put both on the last page.

Holder didn't retain an original copy of his paper from five years ago, complicating his defense against the charges that were filed in July.

But his star-studded witness list could shed light not only on the charges against Holder but what has gone on behind the scenes of recent Tampa corruption investigations.

Heading the list is a handful of local jurists, including U.S. District Judge James S. Moody Jr., Second District Court of Appeal Judge Virginia M. H. Covington, and circuit judges Emmett L. Battles, Martha J. Cook, William P. Levens and Robert J. Sims.

Not on the list are F. Dennis Alvarez, Robert Bonanno, Gaspar J. Ficarrotta and Edward Ward, all of whom left the circuit bench during the past three years while under JQC scrutiny that Holder played some role in.

Other luminaries on Holder's witness list include: state Rep. Kevin C. Ambler, R-Tampa, an attorney and major in the Air Force Reserves; Tampa plaintiff's lawyers C. Steven Yerrid and James Wilkes; St. Petersburg media lawyer Patricia F. Anderson; Tampa labor lawyer Thomas M. Gonzalez; John F. Rudy II, a former interim Hillsborough state attorney; and local Republican power broker Dick Mandt.

Perhaps the most interesting name on Holder's list is Kelly J. Thomas, who is assigned to the FBI's Sarasota resident-agency office. Thomas has been a case agent for a Hillsborough courthouse probe that stalled last year after a failed sting on since-retired sheriff's Maj. Rocky Rodriguez.

Federal prosecutor Jeffrey J. Del Fuoco, who used to work public-corruption cases in Tampa, appears on the witness lists of both Holder and the JQC special counsel.

Like we say, stay tuned.

Back in the game

Tampa real estate investor Steven Green isn't about to let controversy deter him from his acquisition strategy. He just bought another multifamily property in Tampa.

Intense scrutiny bore down on the investor as news reporters delved into the well-documented code violations at properties his corporations own in Tampa. He responded to St. Petersburg Times news coverage with a libel lawsuit, which recently settled after he agreed to pay the paper's legal costs and dismiss the complaint.

It appears Green is now after compromises. St. Petersburg attorney Glenn Goldberg says Green wants to negotiate a settlement with Hillsborough's code enforcement officials.

"We're meeting head on with attorneys for the code enforcement board to wrap it all up," he says. Goldberg says Green wants to donate or create low-income housing in exchange for leniency.

At stake is the $1.3 million in fines that Green's Amberwood Realty Corp. accrued at the 212-unit Amberwood apartments, says John Ferdon, of the Hillsborough County Housing and Community Code Enforcement Department. That's a property acquired in 2000 for $4 million, or about $18,868 a unit.

The county says Green is responsible for those fines even though Fort Lauderdale-based PDQ Kenaliz LLC, controlled by Alan Kaye, recently bought Amberwood at auction through a settlement with Fargo Bank Minnesota NA. Ferdon says the county maintains nine open code enforcement violations against properties owned by Green's corporations. Goldberg argues the Green companies deserve consideration since many of the code violations existed at the time of acquisition.

Despite the trouble, Tampa-based Adagio Realty Corp., which lists Green as its president, recently acquired the 84-unit Club Mirage apartments at 3600 E. Fletcher Ave. for $2.9 million, or $34,524 a unit. Goldberg says Green is " expanding the real estate holdings into upscale apartment communities."

Pinellas

Republic sale rumors fly

Bank analyst Richard X. Bove joined those who think the parent of St. Petersburg's Republic Bank is on the auction block. Bove says the likeliest acquirer is Royal Bank of Canada, which is on the prowl in Florida.

There's also talk in the banking community that BB&T is looking at Republic. Neither would be a surprise.

Royal Bank officially entered the Florida market with its purchase of Admiral Bank on the East Coast and Provident on the West through its American company, RBC Centura. Royal Bank executives made it clear that the bank intends to quickly become a dominant player in the state. But Burney Warren III, BB&T's executive vice president for mergers and acquisitions, has averaged acquisition of six banks per year.

According to speculation, Warren and RBC Centura's CEO Kel Landis are circling one another, waiting for Republic to blink. Neither Ken Brown, spokesperson for RBC Centura nor the media representative for BB&T, would comment.

Bill Klich, Republic's president and CEO, did not return Coffee Talk's phone calls on the subject prior to press time.

Bove works in St. Petersburg for Hoefer & Arnett Inc., which is a market maker in Republic Bancshares Inc. stock. The veteran analyst praises Republic management in a Sept. 15 report. But he says the stock was overvalued at the Sept. 12 close of $28.74. And the bandied-about buyout price of up to $40 would be more so.

"These numbers raise the issue as to whether the bank must now sell because the fundamentals will not support the current valuation," writes Bove, who has a neutral rating for Republic.

If Republic stays independent and continues as a community bank, Bove foresees a significant drop in the stock to around $17 a share, or roughly 16 times expected 2004 earnings. That's a value more in line with other Florida institutions, although he notes it is not unusual for a Sunshine State bank to go for a premium.

Bove estimates net income of 73 cents a share for this year and $1.01 for 2004. "It is doubtful that earnings can rise rapidly enough in the next three years to justify the current price of the stock," writes Bove.

So management has two choices. Work like crazy for the next three years and see if the stock ascends again to current levels, due to stronger fundamentals rather than a speculative frenzy. Or take the three-year out price now.

SARASOTA

Zoning Ordinance decision postponed?

At a break during a recent Sarasota County Commission meeting, two county planning and development staff members vented about the proposed zoning ordinance changes. The new provisions, including the controversial sign ordinance, are slated to go before the commission at the end of the month, presumably for a final vote.

But it doesn't sound like that is going to happen. According to the staffers, they still have so much work to do on the ordinance, they felt certain the presentation of the ordinance to the commissioners for a vote would be postponed until December. They quoted one commissioner as expressing doubt the zoning ordinance changes would even be ready by December. Anne McClung, the county's representative on the zoning ordinance changes, did not return telephone calls.

During the same conversation, the two staffers said the county's proposed 2050 plan "has come to a grinding halt." Said one staffer: "It doesn't matter what we do or happens right now with 2050. There is no way that is not going to end up in litigation."

New insurance business for Neff, Thomas

Ray Neff, former chief executive officer of FCCI Insurance, and Olivia Thomas, another top FCCI executive, are starting a new insurance-based business.

Sarasota-based Insurance Home Office Services LLP was officially formed in mid-August by Neff and Thomas, along with William Nelson and Rob McCarthy, two other Sarasotans with strong insurance backgrounds. The new company will provide non-claims-administration outsourcing services to insurance companies. Specifically, Insurance Home Office Services will have available on a contract basis individuals qualified to provide to insurance companies financial, actuarial, data processing, regulatory compliance and other specialized services. The company can also do feasibility studies for existing companies considerin adding an insurance element to their business, an increasingly common practice, especially for financial organizations.

"We are finding more and more insurance organizations who, in order to be competitive from an expense perspective, are interested in outsourcing and sharing resources," says Neff. "This is more cost-effective for them than hiring individuals at salaries possibly higher than the company can justify paying. The insurance industry has readily accepted outsourcing claims administration functions; we are simply expanding on that idea."

Neff says that while start-up and smaller insurance organizations are the most likely candidates for their services, they have already talked with bigger companies that are interested as well. The company is putting together the infrastructure, gathering the talent and identifying its initial set of customers. "There's no question we will have revenues by the

end of the year," says Neff.

While the company will start in Sarasota and have its initial wave of clients in Florida, it envisions expanding to a larger level in the future.

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