Loading
Coffee Talk
+ Million-dollar tax
bill goes to court
Fresh off selling his multimillion stake in Venice-based window manufacturer PGT Industries, Paul Hostetler sought a bank and an investment firm to reduce his and his family's tax bill. He settled on Wachovia.
Almost seven years and $10 million in taxes, fees and fines later, Hostetler is looking elsewhere to reduce his bill: The courts.
Hostetler, who co-founded PGT with Randy White in 1980, is suing Wachovia Bank for what the lawsuit terms "deliberate fraud."
The suit contends Wachovia directed Hostetler's money into what the IRS later determined was an abusive tax shelter sold by accounting firm KPMG, costing him more than $10 million after interest.
In the court documents, filed in Sarasota County's 12th District earlier this year by Naples attorney Chris Vernon, Hostetler is also seeking more than $7 million in principal he says he lost due to investing in inappropriate variable annuities suggested by Wachovia personnel.
A Wachovia spokeswoman declined to comment on the case.
Hostetler's attorneys previously reached a settlement with KPMG for an undisclosed amount. Vernon, who declined to comment specifically on the Wachovia lawsuit, says several attempts to settle the case with the bank failed. Now Hostetler is seeking a trial to recoup the commissions and fees Wachovia earned off him, as well as the money he lost in the investments and tax shelter.
Hostetler sold his interest in PGT in 2001, five-years before the $371 million company went public. Still, according to the lawsuit, the sale "was structured in a way that resulted in an immediate, large taxable gain" for Hostetler and a trust he set up for his two children.
The problems, Hostetler alleges in the lawsuit, multiplied from there. First, the suit states Wachovia earned a $520,000 referral fee for sending Hostetler to KPMG - an agreement Hostetler claims he knew nothing about.
Then KPMG officials put Hostetler's money into a tax shelter known as a Family Office Customized Partnership, or FOCUS. The accounting firm had placed money from other well-heeled clients into the shelter, the lawsuit states, claiming it was a legal way to minimize taxes from large one-time gains.
The IRS though, later ruled the FOCUS strategy was "an abusive tax shelter." That ruling put the onus for an $8 million tax bill back on Hostetler, triggering the legal action.
A trial date for the case hasn't been scheduled yet.
+ WCI: Icahn makes
banks blink
News that banks granted Bonita Springs-based WCI Communities until June 2009 to gets its financial house in order had Carl Icahn written all over it.
Icahn, the billionaire investor who became chairman of the company last year, owns nearly 15% of WCI's stock. Icahn acquired the stake when the price of WCI's stock was still elevated and even made an offer to buy the remaining shares he didn't already own for $22 each early last year. Recently, the stock has traded at about $3.
Investors have been betting Icahn won't let WCI file bankruptcy because he wants to preserve his equity. It's not clear if Icahn owns any of WCI's bonds, most of which were recently trading at 50 cents on the dollar, according to bond-data provider MarketWatch. Bondholders get paid before stockholders in bankruptcy court.
What's more, investors are betting the banks don't want to foreclose on real estate they don't know how to manage. All that means Icahn and WCI will have some time to rebuild the homebuilder.
+ Westshore's Austin
bullish on Giuliani
Al Austin, the Tampa developer known as the father of Westshore, Florida's biggest business district, keeps busy with more than real estate these days.
Austin's other fascination: Politics.
"I'm addicted to politics," he told Coffee Talk. "I study it far more than the average person."
Austin's candidate: Former New York mayor Rudy Giuliani.
Mr. Al, CEO of the A.S. Austin Co., which controls Westshore office buildings, hosted a $1,000-a-person event Monday at his home for the Republican presidential contender.
Despite Sen. John McCain's recent victories and Mitt Romney's business experience, funding and campaign organization, Austin believes Giuliani has the best shot at winning Florida, the GOP nomination and the presidency because he is even better than Romney and McCain in those categories.
The prospect of senators Hillary Clinton or Barack Obama winning the presidency would be disastrous for the country, Austin says.
"Of the two, I'd rather have Hillary than Barack," he says. "He has zero experience. He'd be a catastrophe."
+ Sarasota money
draws a crowd
In these tough economic times, Coffee Talk was surprised to hear yet another wealth management firm is entering the Sarasota market. Adding to the surprise was finding out the company, Cleveland-based National City Corp., is bringing in nearly a dozen account managers from day one.
But as Matthew Bower, the local executive for National City's Private Client Group sees it, the timing has everything to do with the type of company National City is, not the type of market it's in. Bower tells Coffee Talk the ultra-affluent customer is being underserved in the heavily fragmented Sarasota-Bradenton money management market.
"That is not due to lack of choices," Bower says. "It is underserved due to the way this service is being delivered."
Bower says National City approaches wealth management "holistically" and looks for long-term relationships, as opposed to simply hawking products. The company, Bower says, is seeking to find high net worth clients, what it defines as having at least $1 million in assets.
Bower says the company's marketing strategy to recruit clients and generate name recognition in the crowded marketplace relies mostly on sponsoring community events. So far, in just the past month, the firm has made what Bower calls "sizeable" contributions to the Sarasota arts community, including the Sarasota Opera House, the Asolo Theater and the Ringling College of Art & Design. Bower declined to release a total figure the company has spent or intends to spend on sponsorships.
In addition to Sarasota, National City operates wealth-management branches in Naples, Orlando and Palm Beach. Bower says the company is looking into other Florida markets, too, such as Tampa/St. Petersburg.
National City also operates several other business units, including retail banking. The company doesn't currently operate any banks on the Gulf Coast, but after a 2007 acquisition it picked up about 100 retail banking branches along Florida's east coast.
+ Downtown Fort Myers condos on hold for duration
If construction hasn't started on a downtown Fort Myers condo tower yet, buyers will have to wait until the residential downturn is over.
There are 2,300 condos spread among a half-dozen towers that developers are holding off building until the residential market recovers, says Don Paight, executive director of the Fort Myers Redevelopment Agency.
"High-rises that haven't started construction will be delayed a year or two," Paight says.
+ Sawgrass Creek building
nears completion
Talk about defying conventional wisdom: Chicago-based Kimball Hill Homes, which has built in Tampa Bay, Sarasota-Bradenton, Fort Myers and Naples, is nearing completion on the first of eight condo buildings in Sawgrass Creek, a project in the upscale area of New Port Richey, northwest of Tampa.
It has also started construction on a second condo building. Each building has 15 units of three-and four-story terrace homes. So far, the company has sold 38 units.
The buyers include retirees, families with children, singles and first-time home owners. The draw has been the maintenance-free lifestyle and lower homeowner insurance rates, says Jeff Morin, Kimball's Tampa area sales manager.
"We have shown success mainly because we address a part of the market not previously serviced by our competitors," Kelley Wright, spokeswoman for Kimball Hill, told Coffee Talk. "We provide an affordable product in a very desirable part of town."
+ Managers eye Merrill's Florida pension business
A hot topic among money managers who gathered at a meeting in Naples recently was a report that the Securities & Exchange Commission is investigating the pension-advisory business of Merrill Lynch in Jacksonville.
A December report in the Jacksonville Business Journal says the SEC subpoenaed Merrill's Florida pension-consulting unit. The review is focusing on the unit's potential conflicts of interest with the money managers they select.
Money managers believe they can take business from Merrill, which is the largest pension-fund advisor in Florida. With the market in turmoil, some are sure to gather new business.
+ McKibbon goes green
with new hotels
Tampa-based McKibbon Hotel Management, which develops, owns and manages hotels, is building three new "green" hotels in Tampa's Westshore business district and told Coffee Talk it plans to retrofit its 27 other hotels in the state with the environmentally friendly features.
Gov. Charlie Crist signed an order in July giving preference to green lodging when state government is looking to book room nights in Florida.
"A majority of the hotels are trying to get on the bandwagon," says McKibbon spokeswoman Paula MacDonald.
The three new Tampa hotels, going up at Spruce and O'Brien streets, are scheduled to open in May, the fall and in December.
That 19-acre project, called the Avion Park, will also include retail, office and condominiums. Highwoods Properties is developing the office portion and is looking for an anchor tenant.
+ Metro, Shaw enter
joint venture
An entity in the D. E. Shaw group, a global investment management firm, and an affiliate of Metro Development Group of Tampa, have entered into a joint venture with up to $250 million of equity capital to buy and develop land throughout central Florida and the Southeast.
The joint venture will acquire land to develop home sites and residential communities for builders of entry-level homes. To expedite land development, the joint venture will pursue properties that have been zoned and are pursuing the entitlement process.
The joint venture recently closed its first acquisition when it acquired 8,300 home sites in seven Florida counties, then bought 1,000 additional home sites in southern Hillsborough County.
Metro intends to continue focusing on Florida, targeting areas from Jacksonville to Fort Myers. The joint venture is expected to complete all acquisitions within 18 months.
+ HMA gets bump
from Wachovia analyst
Naples-based hospital chain Health Management Associates got a boost from a Wachovia Securities analyst who says management changes will begin to pay off this year and next.
It's welcome news for executives who have seen their company's stock fall 50% in the last six months as the volume of uninsured patients who can't pay their hospital bills has grown. The stock (symbol: HMA) rose 9% following the report to $5.90 per share.
In a report to clients on Jan. 7, Wachovia Securities Senior Analyst William Bonello says accelerating internal growth, margin expansion and asset sales could be catalysts for the stock's growth.
In 2007, HMA hired Burke Whitman as CEO and he replaced the chief executives at 18 of its 59 hospitals and implemented a host of managed care contracting, case management and patient-volume initiatives.
St. Pete to issue
RFP for Trop site
Even if the Tampa Bay Rays face an uphill battle in financing a new, open-air waterfront ballpark, the city of St. Petersburg is preparing for it.
City officials recently prepared and may soon issue a Request For Proposals for a 86-acre assembled site at the western edge of downtown St. Petersburg, which could be available for phased development as early as 2009.
The site is currently occupied by Tropicana Field, home of the Rays. The baseball team has submitted a plan to the city to build a new ballpark at an alternative site, thereby making the Tropicana Field site available for development.
It is anticipated that responses to the RFP will be due about 60 days after it is issued. The site is adjacent to I-175 and I-275, with multiple interstate access points, and is about one mile west of the St. Petersburg-Tampa Bay waterfront. For more information, go to the Notice of Intent online at http://stpeteshines.stpete.org/default.aspx?pageid=877.
'no hats' to thwart bank robberies
The Florida Bankers Association is hoping to reverse a statewide trend showing an increase in bank robberies, starting with bringing the popular "No Hats" program to the Sunshine State.
The gist of the program is a play off the well known "no shoes, no shirt, no service" slogan seen in convenience stores and fast-food restaurants. Only this time, the slogan is "no hats, no hoods, no sunglasses." And banks aren't being asked to deny service to any potential customers, only refer those who refuse to remove those items to a more secure area of the bank.
"Bankers aren't just going to hope robbers won't come," FBA President and CEO Alex Sanchez says in a statement. "We're going to be proactive by implementing policies and technology that will help prevent bank robberies and apprehend robbers if attempts are actually made."
The FBA, along with the FBI and the Florida Department of Law Enforcement, says it is suggesting the voluntary program based on recent robbery statistics. The number of bank robberies in the state increased nearly 40% last year, to a total of 361, ninth most in the country.
And in those 361 robberies, 40% of the perpetrators wore some type of mask or facial disguise, while 66% used or threatened to use a weapon. More than $2.4 million was stolen during bank robberies in Florida in 2007, the FBA says.
FBA and law enforcement officials cited Missouri as a positive example of how the program can work. That state implemented a "no hats" policy in 2002 and robberies statewide dropped 33% in the first year and 47% over three years.
ECONOMIC SNAPSHOT
DECEMBER UNEMPLOYMENT
Area Dec. 2006 Nov. 2007 Dec. 2007
Cape Coral-Fort Myers 2.7% 5.4% 5.7%
Naples-Marco Island 2.5% 4.7% 4.7%
Punta Gorda 3.2% 5.9% 6.2%
Sarasota-Bradenton-Venice 2.6% 4.5% 4.7%
Tampa-St. Petersburg-Clearwater 3% 4.4% 4.7%
Florida 3% 4.2% 4.4%
U.S. 4.3% 4.5% 4.8%
Source: Florida Agency for Workforce Innovation
GULF COAST UNEMPLOYMENT
What the data shows: Unemployment rates grew in every area of the Gulf Coast in December. The increases were especially pronounced in Charlotte and Lee counties, which were among the top 10 Florida counties with the highest rate of unemployment at yearend, according to state data.
What it means: Employers are likely having an easier time finding employees. Industries that created the most jobs last year were education, health services, leisure and hospitality. Together, they accounted for 70% of the 85,800 new jobs created from Dec. 2006 to Dec. 2007.
Forecast: The unemployment rate may stabilize as the spring tourism season begins and hospitality businesses hire seasonal employees. However, the continued decline in the construction sector may continue to push the unemployment rate higher.
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
