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Coffee Talk
+ Location, pricing ...
still the success keys
Amid the gloom surrounding residential real estate, there are pockets of sunshine based on the fundamentals of the industry.
Exhibit A: The Snell Aisle Apartments, 1515 Eden Isle Blvd. N.E., in St. Petersburg.
Laramar, a Chicago-based development company, bought the run-down 1960s-era property, which includes 16 buildings, some two stories, some five, and 272 apartment units with waterfront views.
Snell Aisle is an upscale area of town, with some striking and stately homes, but the apartment property had fallen into disrepair. Laramar is gutting it, tearing it down to the studs, and remodeling.
It has finished redoing three of the buildings, with apartments ranging from $875 to $2,000 a month, and they are full of tenants. The right location at the right price is still the winning formula.
+ Fort Myers back
on Grubb & Ellis map
Grubb & Ellis is back in Fort Myers.
Robert Johnston and Jerry Messonnier recently left CB Richard Ellis in Naples to form Grubb & Ellis 1st Commercial in Fort Myers. Both are experts in industrial space. Grubb & Ellis is one of the largest national commercial real estate brokerage companies, with 130 offices around the world.
Grubb has some history in Fort Myers. It entered the Southwest Florida market in about 1997 and partnered with Frank D'Alessandro, a well-known commercial broker who drowned mysteriously while kayaking off the coast of New Jersey last year. Subsequently, D'Alessandro formed his own company and Grubb continued to operate in Fort Myers until it pulled out in the spring of 2005.
Now that Grubb is back, Johnston and Messonnier plan to build a new team that will include office, land and retail brokers.
+ Southwest Florida
still bankers' trouble spot
Of all the regions in Florida, the southwest area and Lee County in particular, remain tough places for bankers.
Take a look at the recent quarterly results of Naples-based Bank of Florida Corp., the publicly held $1.4-billion bank holding company with operations in the Tampa Bay area, Southwest Florida and Southeast Florida.
Currently, six large loans totaling nearly $14 million are nonperforming, meaning in default or close to it. And all of them are in the bank holding company's Southwest Florida market. These include a 200-unit residential condo project in Fort Myers, two eight-unit condos buildings on four acres in Lehigh Acres and a residential lot in South Naples.
"The primary factor impacting the value of these and the other nonperforming loans is the overall market value deterioration," the company says. So far, it appears the damage is limited to Southwest Florida.
+ Pro-business campaign
receiving high marks
When a few of Sarasota's top business leaders gathered together late last year to combat a growing anti-business sentiment in the community, they expected a positive response, both vocally and financially.
They just didn't know how long they could sustain the interest, what with the economy seeming to get worse each week. But just about six months later, the campaign known as Sarasota Tomorrow, run through the Greater Sarasota Chamber of Commerce, is surprising even its organizers' highest expectations.
From a sheer dollar perspective, the campaign has just about reached its goal of $2 million, spread over five-year pledges. The chamber, which is still taking donations through May, is planning a victory celebration for late June, chamber President Steve Queior tells Coffee Talk. "The negative aspects of the economy," says Queior, "have been like a call to arms."
Initially, pledges came in five-year blocks from $25,000 to as high as $100,000, from companies such as SunTrust Bank and Schroeder-Manatee Ranch, the developers of Lakewood Ranch. (The Observer Group, parent company of the Review, has committed $25,000 over five years to the campaign.) But over the last two months or so, says Queior, the fundraising campaign has broadened its base to reach donors in the $5,000 and $10,000 range.
While the money is essential to pay for programs, such as one to promote the area's redevelopment initiatives, Queior and Tom Dabney, the co-chair of the fundraising campaign, are even more impressed with the amount of enthusiasm the donors have shown beyond opening their checkbooks. Indeed, the Chamber has been so inundated with interest it recently hired a marketing manager to sort through the opportunities. Says Queior: "Everybody wants to start 10 or 12 or 15 initiatives at once."
One of the campaign's current targets is promoting its support of a special bond referendum up for countywide vote May 6. At issue is whether the county should be allowed to raise its bond borrowing capabilities from its current $19.5 million limit to up to $300 million. The money would only be used for voter-approved infrastructure projects.
The passage of the bond issue is a key first step to proving that the Sarasota Tomorrow campaign carries weight outside simply raising money and running pro-business programs. "To us," says Queior of the bond referendum, "this is like motherhood and the flag."
+ Wait it out,
the affluent remain
Companies selling luxury goods and services have felt the changes in the economy. Consumers of those items have seen the impact on their portfolios.
But the companies shouldn't discount or broaden the appeal of their product or service because they risk losing their core consumers when the economy rebounds, Christopher Ramey, chairman of The Luxury Marketing Council of Florida, told Coffee Talk.
"The key to being successful is you can't dumb-down your assortment because business is slow," says Ramey. "There's a tendency to dumb down. You may not get the affluent back when they return to the market. Don't lower your standards."
The council has chapters in Tampa, Sarasota, Fort Lauderdale and Miami and will be adding more in Naples and Palm Beach. The chapters are groups of local companies that create luxury goods or services and use the council meetings to build relationships, collaborate and share information. The Florida Council can also link members to other chapters around the world.
Ramey quoted Burt Tansky, president and CEO of the Neiman Marcus Group: "The affluent customer is resilient. For them, downturns are merely a moment in time and do not signal a lifestyle change."
The softer economy hasn't affected council membership. In fact, Ramey said signups, which cost $2,500 to $7,000 a year, are 50% higher than he anticipated.
+ Zirkelbach Construction
builds for Honda, FedEx
Two of the most well-known brand names in the country - Honda and FedEx - now symbolize a lot more than reliable cars and on-time overnight deliveries to one Manatee County construction firm.
That's because Palmetto-based Zirkelbach Construction has $15 million in new projects with those two companies, with the most recent being a $7 million deal to build a new FedEx Ground facility near Port Manatee. The second project is an $8 million expansion of Honda Cars of Bradenton, where work has been underway for a few months.
"These two projects are extremely important to us," says Zirkelbach President T. Craig Campbell. Combined, those jobs represent about 25% of the total revenue the firm expects to generate in 2008, Campbell says. The company is projecting about $35 million in revenues this year, down from $44 million in 2006.
The FedEx project, for which Campbell expects the firm to begin construction on next month, is planned as a 123,000-square-foot distribution facility. The Memphis-based shipping firm has outgrown its other Gulf Coast package-sorting facility on Florida Mining Road in Tampa.
The Honda Cars of Bradenton job is an 18-month renovation and expansion project, where the crews will keep the showroom intact while demolishing and rebuilding other parts of the facility.
+ Tense times
for Tampa Tribune
First there were layoffs at The Tampa Tribune during the last two years. More recently, some sections of the newspaper have been cut or consolidated.
This month, Media General offered voluntary buyouts to half of its Tampa staff, which includes the Tribune, WFLA-TV and TBO.com.
Back in the late 1980s, The Tribune had aspirations of being the leading newspaper in Florida and opened bureaus in several counties. But after a period of growth, it has been slowly scaling back.
While many people in the industry debate the future of the daily newspaper, many have also wondered if the Tampa Bay area can support two daily newspapers. Many other U.S. markets, some larger than Tampa Bay, have seen one of the two competing papers in the same city close.
At least two things are playing out in the background. One, like other newspapers, The Tribune has lost a considerable amount of money from fewer classified ads, which are now on the Internet on places like Craig's List.
Second, Harbinger Capital Partners is trying to seat three people on the Media General board and is proposing more aggressive cost cutting, including selling the Tampa properties and getting out of non-core businesses, such as Internet properties. Media General management is opposing Harbinger.
Markets and industries have always evolved, but monopolies have seldom been a positive development for consumers or business, when it comes to cost, innovation or urgency of service.
+ Former elected official
running for new office
Donna Clarke couldn't stay out of the game for long. The former Florida State representative, who ran an unsuccessful campaign for Congress in 2006, is getting back into politics.
The decision comes six months after taking a job as a commercial real estate broker for the Sarasota branch of Coldwell Banker Commercial NRT, focusing on business relocations. Back in October, Clarke, a Republican, told Coffee Talk she was "excited about being a real person for a while." (See Review, 10/12/07.)
Clarke's attempt at returning to elected office will be a Herculean challenge: She has filed election papers to run as the Republican candidate for Sarasota County Tax Collector, running against Barbara Ford-Coates, a Democrat who has held the post for the past 24 years. That spans six elections, the last three of which she ran against no opposition.
Clarke was Florida State representative from 2000 to 2006 for District 69. Keith Fitzgerald, a Democrat and a professor at New College, now holds that seat.
+ Wanted: Businesses
that promote good business
The Coalition of Business Associations of Sarasota is asking for help from local businesses in proving to the non-business world just how important businesses really are. In a project that's a separate initiative from the Greater Sarasota Chamber of Commerce's Sarasota Tomorrow campaign, the organization, known as COBA, is seeking businesses and companies to fill out a brief questionnaire.
To obtain a copy of the survey or for more information, contact Larry Anderson at (941) 412-9696, ext. 13 or send an e-mail to [email protected]
Sarasota Memorial Hospital
moves up in ratings world
A top bond-rating agency has boosted its grade for Sarasota Memorial Hospital's debt from A to A+. The agency, Fitch Ratings, cited the community hospital's improved operating performance, its leading market share and its strong liquidity as three key factors in improving the grade for the facility's $544 million in outstanding debt.
The agency, in a press release, also says "management's continued improvement in operating performance, as evidenced by the highest profitably ratios in the past five years, was a key factor in the upgrade."
What's more, the agency says the "financial flexibly" the hospital has through its ability to raise taxes contributed to its stable rating - even though hospital executives and board members told the agency there are no plans to seek any new taxes over the next five years.
The Sarasota County Public Hospital District, which runs the 600-plus bed hospital, reported total revenue of $576.5 million in the 2007 fiscal year, including $19.4 million in income from operations, a 3.5% operating margin. The hospital is projecting about $17.3 million in operating profit in the 2008 fiscal year, the Fitch release stated.
In addition to the news of its improved ratings, the board that oversees the hospital recently announced it's seeking applications for an interim member to fill the board spot previously occupied by William Lyons, who died in April.
Lyons held a seat representing the northern section of the county, which is comprised of Longboat Key, parts of Siesta Key and the areas north of Fruitville Road to the Manatee County line. The interim member would serve on the board until the general election in November, when county voters will elect a new member.
GULF COAST UNEMPLOYMENT
What the data shows: The unemployment rate in every area of the Gulf Coast rose faster than the statewide rate. Areas of Lee and Charlotte counties saw unemployment rates in the 6% range while other areas remained at the 5% level.
What it means: Charlotte and Lee counties have been hit hard by the construction downturn because their economies are heavily skewed towards those industries. However, chronically low unemployment levels have eased and employers now have more choices. Rising unemployment may also provide employers some relief from fast-rising wages.
Forecast: Economic observers are concerned that an increase in job seekers at the height of the tourism season means the unemployment rate will increase substantially this summer. Although the labor shortage has eased, a rise in the rate of unemployment could crimp retail sales further this summer.
march unemployment rate
Area 2007 2008 Point chg.
Bradenton-Sarasota-Venice 3.3% 5.3% 2
Cape Coral-Fort Myers 3.5% 6.5% 3
Naples-Marco Island 3.0% 5.0% 2
Punta Gorda 4.0% 6.9% 2.9
Tampa-St. Petersburg-Clearwater 3.6% 5.1% 1.5
Florida 3.4% 4.7% 1.3
U.S. 4.5% 5.2% 0.7
Source: Florida Agency for Workforce Innovation
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