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Coffee Talk
+ Awards are nice,
sales are nicer
Top 10 lists aren't what always what they appear.
For instance, the owners of the Sarasota Sir Speedy franchise recently learned their store made the company's national top 10 list for the eighth year in row, beating some 400 other stores in the top sales rankings.
But this year, store revenues were down 7%, from $3.6 million in 2006 to about $3.3 million last year. Annual revenues had grown 44% since 2004.
The accolades are nice, co-owner Eileen Rosenzweig tells Coffee Talk, but it's no substitute for robust sales. "We're ready for this to be over," she says, noting that walk-in foot traffic to the store, located on a busy intersection about two miles south of downtown Sarasota, has significantly decreased. "It's our first down time in 20 years."
Rosenzweig's strategies to survive the downturn are not novel, just necessary and a little gutsy.
She's added another full-time salesperson, hoping that the added expense of another employee will pay off in the long run in more and bigger contracts. She's also looking for ways to increase margins on the online graphics side of the business, a side that's actually been growing.
And of course, like any small businesses, Rosenzweig is constantly seeking ways to cut costs.
One positive in all the gloominess is the store's lead salesperson, Carol Schoff, was recently named the salesperson of the year for the franchise's Southeast Region. It was the third time Schoff has won the award.
+ Rooney buys
Kraft Construction
When Kraft Construction Co. Chairman and Chief Executive Officer Fred Pezeshkan hinted to the Review about a joint venture a few weeks ago, turns out the deal was a little more than that.
Rooney Holdings, one of the largest privately held companies in the U.S., acquired 40-year-old Kraft, the largest Gulf Coast-based construction firm with $559 million in revenues last year. Terms were not disclosed.
Forbes magazine last year ranked Rooney as the 341st largest privately held company in the country with $1.28 billion in annual revenues.
Together, the companies say they will have combined annual revenues of about $1.5 billion, ranking Rooney among the top 20 companies on the Gulf Coast based on revenues.
Kraft will become a subsidiary of Manhattan Construction Group, which has an office in Tampa and generated revenues of about $100 million from that office last year. Manhattan is itself a subsidiary of Rooney Holdings.
Rooney Holdings Chairman Francis Rooney was not available to discuss the deal, but Pezeshkan says Rooney is seeking to boost Manhattan's presence in Florida by acquiring Kraft. "They're looking at this long-term," Pezeshkan says.
For Pezeshkan, Kraft's majority shareholder, the deal means he won't have to worry about succession when he retires in a decade or so. In addition, Rooney provides Kraft with the capital to grow statewide. Pezeshkan will remain chairman and chief executive officer of Kraft and will retain some minority ownership of the subsidiary.
Neither company plans to cut staff. "We are privately held companies, so we look at things very differently," Pezeshkan says. "I look at it like we're pulling these two companies together and we'll grow the business."
Rooney Holdings has its executive offices headquartered in Naples and administrative offices in Tulsa, Okla. Manhattan was founded in 1896 and is now in the fourth generation of Rooney family ownership.
Besides construction, other Rooney companies are involved in insurance and electronic contract manufacturing. Francis Rooney, who most recently served as U.S. Ambassador to the Vatican, is also a successful Republican fundraiser.
+ CNL makes
another big buy
CNL Commercial Real Estate, which bought Two Harbour Place, a 12-story office building on Harbour Island in downtown Tampa in January, said it was bullish on Tampa Bay.
It is putting its money where its mouth is with another purchase. CNL recently acquired Wachovia Plaza in downtown St. Petersburg and will lease and manage it.
The 185,674-square-foot Class A office tower at 150 Second Ave. N. is currently 98% leased to more than 30 national and regional corporate tenants, including Wachovia Bank, UBS Financial Services, H&R Block, Universal Health Care and the law firm of Beltz & Ruth.
CNL bought the property from Parkway Properties Inc. of Jackson, Miss. for $26.3 million.
Built in 1985 and renovated in 1995, the 17-story office building is a well-recognized structure in the city's central business district.
+ Money in motion
gains speed
Here's another sign of life in the residential real estate industry. It's what mortgage broker and real estate investor Jeff Tumbarello calls "money in motion."
Sales in Lee County in dollar terms have risen 87% in the second quarter versus the first quarter of this year, says Tumbarello, who heads the Southwest Florida Real Estate Investors Association and tracks such numbers. Now, that's money in motion.
Two of Lee's most hard-hit areas, Lehigh Acres and Cape Coral, are seeing some of the biggest increases in sales because they've witnessed some of the biggest declines in prices.
"If you're a Cape agent, you should be making money," Tumbarello says. "If you're not, you're in the wrong price range."
Cape Coral's resurgence is a good sign for the market, Tumbarello says. That city has seen a 105% increase in sales in dollar terms in the second quarter compared with the first quarter this year. "The Cape is the leading barometer," he says. "People are buying because it makes sense."
+ Peru files motion
in Odyssey case
The case of the Black Swan, which involves a major shipwreck discovery by Tampa's Odyssey Marine Exploration Inc. near Spain, has gotten even more complicated as lawyers, the company and countries wade through a swirl of history, geography, politics and diplomacy.
Peru has filed a motion in federal court seeking to recover some of the items from the Black Swan shipwreck. Among the discovery: about 17 tons, or about 500,000, gold and silver coins, among other valuable artifacts.
Not to be outdone, Odyssey told Coffee Talk it has assembled what it calls an international "dream team" of lawyers from Tampa, New York, Washington and Spain to help it win the Black Swann case.
The case is currently pending before the U.S. District Court in Tampa. Spain originally made a claim to the shipwreck findings.
"Odyssey's position is to encourage every appropriate claimant to present its potential claims in a case like this, so we welcome Peru's filing, even as the company reserves its legal position," said Greg Stemm, Odyssey chief executive officer.
Peru's filing raises a question relating to whether a former colonial power or the colonized indigenous peoples should receive the cultural and financial benefit of underwater treasures derived from previously colonized nations.
If the shipwreck site turns out to be that of the Mercedes, that ship would have carried Peruvian-minted silver and gold coins, made of Peruvian precious metals.
Some see Odyssey as doing what governments and others can't afford to do: Uncovering history that the world can learn from. The company is working on an 11-part TV series on the Discovery Channel which debuts next year.
+ What brain drain?
Seeking to turn the tide
A trio of Sarasota-area business have dropped a plug into the so-called brain drain of college students and young professionals leaving the Sunshine State for supposedly sunnier opportunities elsewhere.
The companies, working in conjunction with the Economic Development Corp. of Sarasota County and the Florida High Tech Corridor, were three of 13 Florida companies to participate this summer in the internship program known as STEM - Science, Technology, Engineering and Math. NASA and Space Florida are the statewide sponsors of the initiative.
The program is essentially EDC's salvo in the ongoing battle to find ways to keep college graduates in the area (read: find lots of high-paying and high-cool quotient jobs).
"The students now realize there are other opportunities they had no idea existed in this business community," EDC President Kathy Baylis says. "This will help us bring back the talent."
The local students, each of whom spoke about their experiences at a recent EDC breakfast, were paid well for their efforts. In terms of real dollars, each participant who completed the program received $5,000.
But in looking at the entire 10-week process, the students chose to focus on the experiences, not just the money. Scott Vensel, an aerospace engineering student at the University of Central Florida, who spent his summer with Venice-based window manufacturer PGT Industries, says he learned about how hard it is to get a new product idea from concept to the marketplace. And he attended a lot of meetings, too.
"It's a process you just can't learn in the classroom," Vensel says of the entire experience.
Frances Brlit, a pre-med student at St. Thomas University near Miami, interned with Osprey Biotechnics, a Sarasota-based firm that manufactures and distributes a range of bacteria-based formulas used to treat compounds in wastewater, soil and groundwater. In words befitting a wide-eyed college student, Brlit says the summer internship experience was a dream come true.
"I'm three years ahead of where most other students are," Brlit says. "It has been by far the most fantastic experience of my life."
Teleflex Electrical Systems, a division of a suburban Philadelphia-based medical supply, marine and aerospace manufacturing conglomerate, also participated in the 2008 internship program. Other Businesses interested in participating in future internship programs sponsored by the Sarasota County EDC can contact the EDC at (941) 309-1200.
+ Naples visitor
count rises in June
The number of visitors staying at hotels in the Naples area rose 3.5% to 110,700 in June compared with the same month last year, according to research by Research Data Services for the Naples, Marco Island, Everglades Convention and Visitors Bureau.
About half the visitors to the Naples area were from Florida, June figures show. The number of instate visitors rose 2.6% to 55,903, offsetting a 10.1% drop in visitors from the northeast and a 5.8% decline from the Southeast. Midwest visitors rose 7.2%.
The biggest jump in visitors came from Canada and Europe. The number of Canadian visitors rose nearly 65% to 1,550 and the number of European tourists jumped 21% to 11,734. Tourism officials prize foreign visitors because they stay longer and spend more money than domestic tourists.
Occupancies at Naples area hotels declined 2.4 percentage points in June to 63.6%, while average daily room rates rose 2% to $139.90 and revenue per available room declined 1.8% to $89.
+ Mountain man holds
mountainous optimism
Doug Dieck is president of the Tampa office for development company Ryan Southeast, which designs and builds commercial buildings.
But when he's not doing that Dieck, 39, is climbing other mountains.
Literally.
Dieck has scaled Mount Rainier and Mount Whitney and has done mountain climbing in Mexico. "I'm a mountaineer," he told Coffee Talk. "It's my passion and second job."
Besides the physical health benefits, climbing helps keep the flatlands back in Tampa in perspective, he says.
Dieck relocated to Tampa from Des Moines, where he worked for Ryan, a family-owned firm headquartered in Minneapolis. He leads a staff of 30 in Tampa.
Dieck is positive about the Florida real estate market pulling out of its downturn sooner than later.
"This is closer aligned with late '80s-early-'90s downturn," he says. "It was softer in and will be softer out. The stock market is not down too much."
Ryan is committed to Florida.
"We are celebrating our 70th anniversary," Dieck says. "We're here for the long term."
+ Clarification
The construction company that built the new headquarters for U.S. Tent Rental, profiled in the Aug. 22 Review, is Tom Wessel Construction Corp. Another company started the job but went out of business before it was completed.
RETAIL ACTIVITY
What the data shows: The index of retail activity is constructed to measure personal consumption and it combines the categories of autos, consumer durables, tourism and consumer non-durables. The index's base equaled 100 in 1988. For example, an index of 300 today would have taxable sales equal to three times the base period in 1988, or a 200% increase.
What it means: Every area of the Gulf Coast showed greater percentage declines in the index of retail activity than the state average. However, the wealthy enclave of Naples fell less than any other area. By contrast, areas hard hit by the construction bust such as Fort Myers and Punta Gorda saw the greatest declines in retail activity.
Forecast: The rebounding sales of existing homes in many areas of the Gulf Coast may revive the index of retail sales, as homebuyers purchase new appliances and furniture. However, the rising unemployment rate in many areas and declines in airport traffic may dampen consumer spending.
INDEX OF RETAIL ACTIVITY
Area Index of retail activity Annual chg.
Fort Myers 295.3 ‑8.3%
Naples 326.5 ‑4.9%
Punta Gorda 277.4 ‑7.8%
Sarasota 227.1 ‑6.9%
Tampa 220.6 ‑5.3%
Florida 255.3 ‑4.6%
Source: Florida Legislature Office of Economic & Demographic Research
Gulf Coast unemployment rate rises
Unemployment rates in metro areas along the Gulf Coast rose in July as the construction industry continued to contract, according to state figures.
The Punta Gorda and Cape Coral-Fort Myers areas saw gains in unemployment that vaulted their rate over 8% for the first time in recent memory. Every metro area along the Gulf Coast showed higher unemployment rates than the state in July (the figures are not seasonally adjusted).
While the rising jobless rate may impact the retail business, it also means employers who are still growing will have less difficulty finding workers than they did a few years ago when the unemployment rate was under 4% in many areas.
The tourism industry remains relatively stable even as airport passenger traffic has fallen slightly. If that industry holds up this winter, expect the unemployment rate to begin to fall when hiring picks up later this year.
Area July 2007 July 2008 % Point change
Bradenton-Sarasota 4.6% 6.9% 2.3
Cape Coral-Fort Myers 5.1% 8.4% 3.3
Naples-Marco Island 5.3% 7.7% 2.4
Punta Gorda 5.8 % 8.6% 2.8
Tampa-St. Petersburg 4.5% 6.6% 2.1
Florida 4.4% 6.4% 2
U.S. 4.9% 6.0% 1.1
Source: Florida Agency for Workforce Innovation
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