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Coffee Talk
+ The end
really was near
Builders who gathered at a Collier Building Industry Association dinner last week were buzzing about the latest Florida homebuilder to file bankruptcy: Tousa Inc., based in Hollywood.
Among the brands that Tousa owns is Engle Homes, which gained notoriety in Southwest Florida for its highly visible campaign proclaiming the end of low prices for new homes. The advertising campaign featured a crazed man waiving a placard that proclaimed "The end is near."
Builders allowed themselves a bit of gallows humor at the CBIA dinner by pointing out the double meaning of the ad campaign now that the builder is in bankruptcy.
However, it may not be over for Tousa. The company is reorganizing under Chapter 11 of the U.S. Bankruptcy Code and it received $135 million from Citygroup Global Markets. The money will be used to fund operations, including paying employee wages, construction costs and supplier costs.
+ Geography change
might do it good
Jim Tille, president of a 60-employee, Sarasota-based commercial plumbing firm, is about to go on business trips to Puerto Rico and Aruba, among other places. But he's not exactly happy about his exotic itineraries.
"I'm not a fan of going out of the country for work," Tille grumbles to Coffee Talk. "There are too many variables."
Still, Tille, who runs American Plumbing of Sarasota Inc., says there are too many problems when it comes to doing work in and around Sarasota and Bradenton, his preferred locations. Mainly, there is not enough work in town to sustain the company, which, with $18 million in 2006 revenues, is one of the largest commercial plumbers on the Gulf Coast.
"There's a lot less work out there," says Tille, "and way too many people looking to do it."
So Tille decided the best antidote to the slowdown is to follow his customers. That includes going to those jobs in the Caribbean, in addition to ones in Charleston, S.C. and Chattanooga, Tenn.
American Plumbing is a 30-year-old firm that does plumbing work for both residential and commercial construction, with a client list that includes hotel companies, condo developers and even the Sarasota-Bradenton International Airport. Current projects in Florida include a renovation of the Sarasota Hyatt hotel and a mixed-use project in St. Petersburg.
The Gulf Coast construction slump, though, has hit the company hard. The company's 2007 revenues were down from 2006, although Tille declines to give a specific figure. And the company's employee base has been trimmed by at least 40 people since the end of 2006.
Tille says 2008 will be a survival year, projecting revenues and employees to stay about the same. His best-case scenario is to begin growing locally in 2009, when he predicts the slump will be over.
"We'll be able to keep everything in place and wait until the market comes back," says Tille. "I'm very committed to working in our hometown."
+ Competing brokerages
to form one entity
Executives at two of the Gulf Coast's largest Re/Max residential real estate firms have taken the "time to buy" mantra of the local real estate market literally, with a twist. Re/Max Properties and Re/Max Gulfstream Realty have seen it's time to merge.
Those firms, which have been operating independently of each other in the Sarasota-Bradenton real estate market under the Re/Max name for more than 15 years, are officially one entity now. The new Sarasota-based company, to be called Re/Max Alliance Group, has more than 400 employees in 12 offices and would be one of the biggest residential realty firms in Florida by 2007 sales volume.
What's more, the deal was so significant that the top executives from Re/Max's Denver-based corporate office spoke at the new firm's first meeting. "This is an innovative strategy that consolidates significant overlapping resources," RE/MAX International co-founder and chairman Dave Liniger said. "The consumer will be better served by a more efficient Re/Max Alliance Group."
The merger was officially announced Jan. 28. But Peter Crowley, the son of the Re/Max Properties' founders who will serve as president of the new company, says a merger between the two competitors has been in the works for several years. "Conceptually," Crowley tells Coffee Talk, "this has always been in the back of everyone's mind."
But over the past year, a few factors came together to push a merger to the front of people's minds. First, Crowley began working with Re/Max Gulfstream co-founders David Coupland and Ron Travis on developing a regional MLS system that could make property searches easier. Then the firms began working together on some joint advertising programs.
And finally, the area's residential real estate market began its descent. That last factor was key in jump-starting merger talks, but it wasn't the only key. "We wanted to be real certain that this merger makes sense in both a challenging market and in a good market," says Crowley. "This is a long-term play for the company."
Crowley and Travis both said the merger also allows the company to grow in some underserved areas, including its international marketing division, Internet sales and training employees on green living and building principles.
+ Angels flocking together
in Southwest Florida
More than just Lee County is involved in an effort to create a regional angel investment fund. Coffee Talk first reported the move to create the Southwest Florida Regional Angel Fund last week.
As it turns out, the economic development arms of Charlotte, Collier, Hendry, Lee and Sarasota counties have joined together to determine if such a fund might be feasible. They're working with the Gulf Coast Venture Forum, an organization that brings wealthy investors and budding entrepreneurs together in Naples. The Regional Business Alliance of Southwest Florida, an economic development group in Naples, is also involved.
These groups have enlisted the help of students at Florida Gulf Coast University and Hodges University to assess whether a fund would be successful.
If the assessment is positive, it could raise as much as $10 million with help from the Florida Opportunity Fund, a $30 million state fund that will invest in a portfolio of venture-capital and angel-capital funds, says Susi Winchell, economic diversification manager with the Economic Development Council of Collier County. The students' assessment is scheduled to be completed later next month.
+ And now, the greening
of the death business
Going green continues to be the trend of all trends in business, from so-called eco-friendly vodkas to green manufacturing practices to even green garbage collection. Now comes a new player to the green marketplace: Funerals.
Despite the grave topic, Coffee Talk had a slight chuckle over this one. The company undertaking this latest greening initiative, suburban Atlanta-based Eternal Reef Inc., boasts that it's the only business in the country to combine an individual's cremated remains with an eco-friendly concrete mixture that's used to cast artificial reef formations. Those reefs then become both a permanent memorial to a loved one and a way to bolster natural coastal reef formations.
Eternal Reef has actually been hosting simultaneous burial ceremonies and bottom-of-the-sea reef ball drops for 10 years, including dozens in the Gulf Coast, from Tampa south to Naples. The waters off Sarasota have been one of the company's most popular destinations.
But the company has only recently begun plugging the green angle. Indeed, in a late January press release promoting its two drops in Sarasota for 2008, the company plays up how the rise in cremations nationwide could lead to more "green burials."
One caveat on going green in death: It doesn't come cheap. The reef balls cost from $1,000 to more than $5,000.
+ Bad loans crop up
in commercial real estate
Is the economic downturn starting to impact commercial real estate?
Evidence that some commercial real estate loans are starting to sour is starting to crop up at Gulf Coast banks. Take the latest earnings report from Naples-based Bank of Florida, one of the largest Florida-based publicly held banks.
In the fourth-quarter earnings release issued by the company recently, Bank of Florida CEO and President Michael McMullan reported that during the fourth quarter the bank "identified certain commercial real estate loans that were impacted by current market conditions in Southwest Florida, especially in Lee County, where deterioration of real estate values has been among the sharpest in the state."
He added: "This contraction in Southwest Florida caused an increase in our nonperforming loans which, along with continued reassessment of loss exposure in the company's other markets, resulted in a $2.7 million loan loss provision in the fourth quarter."
Industry observers say other banks are likely to report similar challenges.
Tampa broker
tops in nation
There are a lot of business awards, but when you're from Tampa and you top businesspeople in New York, Los Angeles and Chicago to be best in the nation, and then do it again, it's worth noting.
David Conn, executive vice president with CB Richard Ellis in Tampa, has earned national honors from the commercial brokerage company for the second straight year.
Conn, 48, was ranked No. 1 in the nation for retail for 2007 among CB brokers, based on gross commissions, for the second consecutive year. He was also first in the state for all CB brokers in 2007.
Conn's been practicing in Tampa for 21 years and is doing projects such as the C ypress Creek Mall the Richard E. Jacobs Group is building off Interstate 75 in south central Pasco County.
"Things are very active in Florida and I have a great book of clients," Conn told Coffee Talk. "Fortunately they've been active and I'm fortunate to be in an active market."
Bradenton community bank puts priority on experience
When the board of Bradenton-based First Priority Bank set out to find a new chief executive six weeks ago, the mission was to find someone who could ultimately take the bank from $270 million in assets to the banking big leagues: Passing $1 billion in assets.
The bank is now pinning those hopes on Kevin Hale, a 26-year banking veteran who has spent most of his career in the Naples-area. His most recent job was heading the $9 billion Florida operations for Fifth Third bank, which bought the bank he had previously worked at, First National Bank of Florida. And before FNB, Hale spent 15 years in leadership roles with SunTrust in Naples.
First Priority's future growth goals are going to be put on hold though, while the bank deals with its current issues, which include about $33 million in non-performing loans, a direct result of the housing and economic troubles, bank officials say. In addition to hiring Hale, the bank has retained a Dallas-based investment firm to help raise capital.
Hale says there are a few mitigating factors within the loan troubles that make the problems workable, as opposed to a full-blown crisis. The non-performing loans, for instance, are all local and from local investors and the majority of those are commercial, not residential. That will be a big help in working with the customers to repay the loans, Hale says.
What's more, First Priority never entered the sub-prime mortgage or credit card markets, so its problems aren't compounded. "Once we get through these issues," Hale told Coffee Talk, "it would be my goal to expand in Southwest Florida."
Any expansion would come on the heels of a subtraction: On the day before the bank officially announced Hale's hiring, it said it would be laying off 16 of its 80-plus employees, a move bank officials said was in direct response to being overstaffed in the slowing market.
In addition to those job losses, the bank will also be moving forward without George Najmy, a co-founder of the bank who was president and CEO until late 2007, when he gave up his position to take on an untitled marketing role within the bank.
More recently, on Feb. 4, Najmy completed resigned from First Priority. Bank officials said Najmy left to pursue other interests. Najmy couldn't be reached for comment.
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