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Coffee Talk
Business Observer Friday, Aug. 8, 2008 12 years ago

Coffee Talk

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+ Sarasota projectcorrals deep-pocketsThe first chunk of financing for what is projected to be one of the biggest redevelopment efforts in the history of Sarasota is supposedly in place, courtesy of a $40 billion-plus private equity firm in New York City.+ Brooks to tacklechallenges of CEOsYou know him because of his all-pro play as a linebacker for the Tampa Bay Buccaneers and for his help educating children. Now Derrick Brooks is planning to tackle the education of athletes and chief executives with the help of Gulf Coast CEOs.+ Priority problemstoo tough for top bankerKevin Hale, one of the most respected executive bankers in Florida, looked at his most recent task - to save Bradenton-based First Priority Bank from a messy financial failure - as something akin to pushing a boulder up a mountain: Difficult, but not impossible. + Miami clues usin to inflationThe Federal Reserve is fretting about inflation. Should you?+ Rough domestic economypushes company to go globalExpanding internationally to countries such as Brazil wasn't high on Steve White's priority list late in 2006 when he took over Lakewood Ranch-based Signs Now, a sign and graphics design franchise operation with 200-plus stores nationwide.

Coffee Talk

+ Sarasota project

corrals deep-pockets

The first chunk of financing for what is projected to be one of the biggest redevelopment efforts in the history of Sarasota is supposedly in place, courtesy of a $40 billion-plus private equity firm in New York City.

Coffee Talk hears that the New York-based Carlton Group is pumping between $100 million and $125 million into the project known as the Proscenium, a proposed $1.25 billion redevelopment that includes plans for an 800-seat Broadway-style theater and a Waldorf-Astoria hotel, a few blocks north of downtown Sarasota.

Although developer Gary Moyer confirmed the Carlton Group is the lead financing arm for the project, he declined to elaborate on how much money the firm is lending him.

Carlton Group executives didn't return phone calls seeking comment. But if the number indeed surpasses $100 million, it would mark the second time this year that a multibillion-dollar private equity firm has dropped tens of millions of dollars into a Sarasota development. Earlier this year, the Carlyle Group, an $82 billion firm in Washington D.C., signed a deal to become the lead investor in the Hyatt Siesta Key Beach, a $100 million fractional condo project on Siesta Key.

The Carlton Group, which was founded in 1991, carries a lower profile than the Carlyle Group, which has investments stretching from international real estate to Hertz rental cars to Dunkin' Donuts. The Carlton Group focuses mostly on commercial real estate projects. In addition to its New York headquarters, the Carlton Group has offices in Atlanta, Palm Beach, Washington D.C. and Tel Aviv, Israel.

In national commercial real estate circles, the Carlton Group's biggest headline-generating transaction of late was serving as an equity adviser for a $1.6 billion recapitalization of the landmark General Motors building in New York City.

What's more, on its Web site, the firm boasts that it has closed more than $4 billion worth of deals since August 2007, the beginning of the current nationwide credit issues. "Contrary to accepted wisdom," the site states, "there is plenty of capital available for equity infusions [in deals] which make sense and have market adjusted expectations."

Moyer continues to have big expectations for the Proscenium. For example, Moyer and his partners have been saying for a few months that several major announcements are forthcoming regarding potential tenants for the office and retail component of the project.

The first of those tenants, Sarasota-based SKY Sotheby's International Realty, was announced Aug. 5. The luxury real estate brokerage said it would be buying a 33,000-square-foot office in the project.

Finally the development, specifically the parking and traffic components, recently survived a lengthy vetting by Sarasota city officials. Moyer says demolition work on the six-acre plus property could begin by the end of 2008. Construction could begin by early 2009.

+ Brooks to tackle

challenges of CEOs

You know him because of his all-pro play as a linebacker for the Tampa Bay Buccaneers and for his help educating children. Now Derrick Brooks is planning to tackle the education of athletes and chief executives with the help of Gulf Coast CEOs.

Brooks and former DeBartolo real estate executive Steve Mordue have founded the Pro CEO Institute, a group that will work with local CEOs to provide executive coaching and peer counseling for professional and retired local athletes and CEOs.

They are putting together a roster of players from the Bucs, Rays and Lightning and local CEOs and hope to get the discussion groups started in about two months. The roster will be divided into teams of 11, with 10 CEOs and one athlete per team.

Mordue, Brooks and former Bucs Mike Alstott and Dave Moore started a real estate development company, Pro Realty Advisors, in Tampa in 2005.

Because of a slowdown in the real estate market, it prompted the partners in the real estate group to move forward with the CEO program. The group has been talking about the new venture for more than a year.

"About 75% of athletes have problems adjusting to the business world in their first year out of sports," Mordue says. "They have no business background. Their finances can plummet pretty quickly. Derrick is a smart guy and he wanted to help his fellow athletes to make it, post-football or baseball or whatever they are doing."

This group requires CEOs to have a company with sales of at least $10 million a year. The meetings and retreats will discuss topics such as competition, management and succession.

Mordue was surprised when he listened in on some locker room conversations when visiting Brooks.

"You would think they'd be talking about the next opponent," Mordue says. "They are actually talking about business. All they talk about is business."

+ Priority problems

too tough for top banker

Kevin Hale, one of the most respected executive bankers in Florida, looked at his most recent task - to save Bradenton-based First Priority Bank from a messy financial failure - as something akin to pushing a boulder up a mountain: Difficult, but not impossible.

But not even Hale, who once ran Fifth-Third Bank's $9 billion-plus Florida operations, could budge this rock. "I just got there too late," Hale tells Coffee Talk in an interview two days after federal and state regulators shut down First Priority. "The bank was hurting in way too many ways."

So much so that the bank became the first failure in Florida since Tallahassee-based Guaranty National Bank was ordered to close down in 2004 - a remarkable stretch of success considering the statewide growth the past four years in investment capital blanketing the industry and de novo bank approvals.

Still, the failure stings for Hale and several other former First Priority executives. Hale, for one, has been at the top of most of the need-to-know bankers lists on the Gulf Coast for at least the past decade. Before taking the leadership role at Fifth-Third, Hale served as president and chief executive of First National Bankshares of Florida, growing that institution to a $5.3 billion statewide bank that was ultimately bought by Fifth-Third.

Hale declined to comment further on the First Priority jobe he took on February. The bank continued its downward trajectory after Hale came on board, losing $12 million in the 2008 second quarter, a drop that brought its capital base down to a mere $1.5 million. Its capital ratio, which regulators like to see at no less than 8%, had dropped to 0.7%.

Hale also declined to elaborate on his next career move, only to say he already has "some interesting opportunities."

Meanwhile, First Priority's failure has become an opportunity for Atlanta-based SunTrust, which is taking over most of the bank's insured accounts and other assets through a purchase and assumption agreement coordinated by the Federal Deposit Insurance Corp.

+ Miami clues us

in to inflation

The Federal Reserve is fretting about inflation. Should you?

The most recent local data from the U.S. Bureau of Labor Statistics comes from the Miami area, where the consumer price index (CPI) is measured bimonthly. The other closest metro area where the CPI is measured is Tampa, but the government only gauges inflation there twice a year.

In June, the Miami area's CPI was up 5.8% over the same month last year. That's significantly higher than the 5% increase in the national measure of inflation for the same month.

Gary Jackson, director of the Regional Economic Research Institute at Florida Gulf Coast University in Fort Myers, recently broke down the components of the Miami area annual change in the CPI:

• Food and beverages rose 5.7%;

• Housing rose 4.2%;

• Apparel fell 1.2%;

• Transportation rose 12.7%, with motor-fuel costs rising 34.3%;

• Medical care rose 4.8%;

• Recreation rose 4.7%;

• Education and communication rose 0.9%;

• Other goods and services (such as tobacco and personal-care products) rose 7%.

+ Rough domestic economy

pushes company to go global

Expanding internationally to countries such as Brazil wasn't high on Steve White's priority list late in 2006 when he took over Lakewood Ranch-based Signs Now, a sign and graphics design franchise operation with 200-plus stores nationwide.

But running a business heavily connected to making signs and products for the domestic housing and construction industries in the current market slump can make any executive run to Rio.

That's the position White now finds himself in as Signs Now slowly embarks on an international expansion. It's going global with the assistance of Edwards Global Services, Inc., a consulting firm that helps American companies set up franchise businesses outside the U.S.

Signs Now, a division of Northville, Mich.-based Allegra Network, had been growing its franchise operations in the U.S. and Canada. But same store sales growth and overall company revenues have flattened out the past year after several years of double-digit increases, White says. Add the current international exchange rates into the mix, and it's a clear opportunity to go global.

"We're being a bit opportunistic," White tells Coffee Talk. "But this is our first time out. We want to make sure to do it carefully."

White says he brought in Edwards Global Services to help the company select the right franchisees abroad and make sure it treads carefully.

Gulf Coast Airport Traffic for november

June June YTD YTD

Total Passengers 2007 2008 change 2007 2008 change

Tampa International 1,636,883 1,574,467 -3.81% 10,113,275 9,997,196 -1.15%

Southwest Florida Int. 525,258 488,266 -7.04% 4,760,406 4,537,306 -4.69%

Sarasota Bradenton Int. 113,928 100,301 -11.96% 903,956 913,324 1.04%

St. Pete-Clearwater Int. 65,087 72,475 11.35% 386,220 489,035 26.62%

TOTAL 2,341,156 2,235,509 -4.51% 16,163,857 15,936,861 -1.40%

June June YTD YTD

Cargo/Freight 2007 2008 change 2007 2008 change

Tampa International 17,934,622 16,783,586 -6.42% 97,616,260 107,221,300 9.84%

Southwest Florida Int. 3,234,050 2,432,662 -24.78% 20,332,895 16,992,999 -16.43%

Sarasota Bradenton Int. 42,811 31,812 -25.69% 290,540 261,834 -9.88%

St. Pete-Clearwater Int. 4,872,587 3,265,504 -32.98% 30,454,120 23,870,063 -21.62%

TOTAL 26,084,070 22,513,564 -13.69% 148,693,815 148,346,196 -0.23%

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