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Coffee Talk
+ Gaining and losing
muscle in the Russell
Coast Financial Holdings, the battered parent company of Bradenton-based Coast Bank, has suffered yet another setback: Being booted off the prestigious family of Russell Indexes, one of the leading stock market tracking funds.
Coast, which has had a slew of bad news since disclosing nearly 500 loan problems relating to a failed builder early this year, joins three other Gulf Coast companies in being removed from one of Russell's lists, which are made up of the Russell 3000, the Russell 2000, the Russell 1000, the Russell Midcap and the Russell Microcap.
The other Gulf Coast-based companies removed from various Russell lists are Pinellas Park-based First Community Bank Corp of America, a $390 million asset bank with offices in Charlotte, Hillsborough, Pasco and Pinellas counties; St. Petersburg-based Flanders Corp., a designer and manufacturer of air filters; and Quality Distribution, a Tampa-based chemical transportation firm.
Despite those unceremonial droppings, the Gulf Coast is providing some replenishments for Russell.
Beginning the week of June 25, the indexes welcomed:
• Sarasota-based Sun Hydraulics, a valve manufacturer that has been a Wall Street darling for the past few years;
• Odyssey Marine Exploration, a Tampa-based shipwreck discovery firm that has been a media darling the past few weeks, ever since its crews found a potential $500 million treasure off the coast of Spain;
• Bradenton-based Gevity, a human resources firm for small-and mid-sized businesses;
• St. Petersburg-based MTS Medication Technologies, which manufactures and sells medication packaging systems.
The Russell indexes go through what the company calls a "rebalancing" of its stocks every year to find the most comprehensive and telling monitors of what the market is doing and what it will do in the future. The most watched and well-known index, the Russell 3000, was up 22.6% for the year ending May 31, the company says.
+ Chamber recognizes
pro-business legislators
A diverse combination of old standards and rookie state legislators from the Gulf Coast were given high grades, and praise, by the Florida Chamber of Commerce when it comes to voting and pushing through bills in the best interests of business.
The chamber recently released its annual report card grading all legislators, looking at both 'yes' and 'no' votes on business related bills, as well as general promotion of The Sunshine State's economy and business climate.
Many are pro-business stalwarts. For example, Sen. Mike Bennett, R-Bradenton, scored a 92, and even though that was down from the 100 he scored last year, the chamber specifically acknowledged him for sponsoring efforts to protect non-profit chambers from fraud. Sen. Mike Fasano, R-New Port Richey, dropped from 97 to 90 in the scorecard this year, but he too was honored for specific legislation: Petition reform, which the chamber says would help small business owners.
In the house, Mike Davis, R-Naples, got an overall 100 for the second straight year and just like Bennett and Fasano, he was one of 13 legislators to be named a 2007 Distinguished Advocate by the chamber. Davis, according to the Chamber, "worked hard to pass legislation that will provide solutions for the workforce housing shortage for Florida."
There were some surprises, too, namely several Democrats receiving high marks, both in grades and praise. Keith Fitzgerald, a freshman representative from Sarasota, scored a 100 and in its report, the chamber says as "a quiet leader in the Democratic caucus, he supported legislation to jump start Florida's economy."
Michael Scionti, a fellow freshman Democrat, from Tampa, also scored a 100. The chamber says he is a "pro-business Democrat who supported key Chamber priorities."
+ Coffee businesses
roast a good deal
Sarasota-based coffee entrepreneur Michael Duranko's main goal since he opened his first Local Coffee & Tea shop on Siesta Key in February has been to combine his ambitious growth plans with a keep-it-local mantra. Duranko took a big step on both fronts earlier this month by closing on a deal to buy three retail coffee stores from his supplier, a fellow Sarasota-based coffee entrepreneur.
Duranko's Local Coffee & Tea bought three retail shops previously owned by Latitude 23.5 Coffee and Tea, another coffee company with big growth plans. Two of the stores are in Sarasota, on Tamiami Trail and at the Marie Selby Botanical Gardens, and a third store is on 1st Avenue South in downtown St. Petersburg. A fourth Latitude 23.5 retail store, on Clark Road in Sarasota, is not part of the deal and will be closing.
Both Duranko and Latitude 23.5 president Dimitry Erez declined to disclose the sale price, but both called the deal a well-timed one that served both sides: Duranko was seeking to expand in retail Erez was seeking to get out of it.
Erez says the sale allows his company to focus all of its time and effort on growing the roasting and wholesaling part of the business. "We couldn't build a successful wholesale business trying to focus on two different things," Erez tells Coffee Talk. He adds that the company has gone from 50 wholesale customers in it first year, 2004, to 350 customers this year.
Duranko, who comes to the coffee business after one career in chemical engineering and a second career in newspaper advertising, tells Coffee Talk sales at the first store have come in spurts the first four months, but the summer hasn't been as bad as he'd planned - so far. He plans to build on the Local Coffee & Tea brand with the trio of new stores, adding artwork by local and neighborhood artists, for example. He also plans to continue buying his beans from Latitude 23.5
Duranko also hopes to continue growing the brand with even more new stores in other Gulf Coast developments, focusing on some of the new projects going up in and around downtown Sarasota. Says Duranko: "We are a nice fit for a developer that wants to put something in the project that's not a Starbucks."
+ Bay City Plywood
re-brands
Tampa-based home improvement chain Bay City Plywood is modifying its name to add "Cabinets" to become Bay City Plywood & Cabinets.
"Because we virtually do more cabinets than anyone in the area, it seemed only natural to add cabinets to our name," says operations manager, Rick Buathier.
Bay City Plywood & Cabinets is recognized for its three laughing characters in TV commercials. For nearly 30 years, the company has sold plywood, but also cabinets as well as ceramic tiles and other building materials. It operates in Hillsborough, Pinellas, Pasco and Manatee counties.
The company recently opened an additional store in Carrollwood with high-tech capabilities.
+ Hovnanian: Fort Myers is the worst housing market
What once was one of the best housing markets has turned into the worst.
That's according to Larry Sorsby, chief financial officer with Hovnanian Enterprises, one of the nation's largest homebuilders. New Jersey-based Hovnanian acquired Lee County's largest homebuilder, First Home Builders of Florida, at the height of the boom in 2005.
Here's what Sorsby said about Fort Myers at the Reuters Real Estate Summit in New York City recently: "It is by far the worst housing market that we're in, and I wouldn't be surprised if its not the worst housing market in the country."
Hovnanian builds homes in 19 states, including Florida. It delivered more than 20,000 homes in 2006 and reported $6.1 billion in revenues. The company is publicly traded (symbol HOV, recent price $17).
+ Colliers Arnold growing, makes moves
Clearwater-based real estate brokerage Colliers Arnold has hired 70 new people in the past year and is planning a move to bigger office digs.
In November, the brokerage is going to Park Place, where it will lease 17,000 square feet. It leases 11,000 now. Earlier this year, Colliers Arnold opened a new office in Naples.
Part of the growth has come from a shift in responsibilities. The Clearwater office has taken over the property management work from the Jacksonville and Miami offices.
+ WCI Communities
stock drops below $20
The stock of WCI Communities dropped 18% in the week ending June 26, generating endless speculation on message boards and blogs.
After hovering in the low $20 range for months, the Bonita Springs-based homebuilder's stock suddenly fell below $17. New York billionaire Carl Icahn offered $22 a share earlier this year for the company but it expired in May after WCI's board refused to remove a poison-pill provision.
Most of the message boards and blogs make unsubstantiated claims about WCI's ills. Coffee Talk suspects many of them are short-sellers, or investors who bet and make money on declines in the stock price. According to Bloomberg, short interest accounts for nearly one-third of the company's shares.
There were no securities filings as the stock dropped and WCI officials had no explanation for the decline either. Most publicly traded homebuilder stocks have seen declines in the last few weeks as housing-data reports showed no prospects of improving and investors fretted over the deteriorating mortgage market.
Existing-home sales on Gulf Coast continue decline
The number of sales of existing single-family homes along Florida's Gulf Coast declined by double-digit percentage rates in May versus the same month a year ago, but prices generally haven't followed suit.
Sarasota and Punta Gorda were notable exceptions, according to the most recent figures from the Florida Association of Realtors. The Sarasota-Bradenton market was one of the best-performing large areas in the state in terms of volume, with a 7% decline in the number of sales and a 9% drop in the median sales price.
In Punta Gorda, median sales prices dropped 12% in May versus the same month a year ago, but that didn't keep the number of sales from falling 39%.
Prices have a long way to fall before they hit pre-boom levels. In May 2002, the median sales price of a home in Fort Myers was $157,000, in Sarasota-Bradenton it was $166,500 and in Tampa-St. Petersburg-Clearwater it was $124,700, according to FAR data.
On the condo side, Fort Myers, Punta Gorda and Tampa all registered substantial declines in the number of sales in May versus the same month in 2006. Sarasota-Bradenton was the exception, showing a 1% gain.
Still, a drop in condo prices didn't seem to stop the decline in the number of sales. For example, the Fort Myers area saw sales fall 22% in May versus May 2006 despite a 29% price decline.
(Numbers for Naples are not available; the Naples Area Board of Realtors does not provide monthly data.)
BY THE NUMBERS
Single-family existing homes
Sales Sales Median price
Area May '06 May '07 %Chg. May 2006 May 2007 % Chg.
Fort Myers-Cape Coral 993 575 ?42% $286,500 $281,500 ?2%
Punta Gorda 387 235 ?39% $213,400 $186,900 ?12%
Sarasota-Bradenton 834 772 ?7% $322,600 $294,700 ?9%
Tampa-St. Petersburg-Clearwater 3,891 2,241 ?42% $226,300 $209,300 ?8%
Existing condominiums
Sales Sales Median price
Area May '06 May '07 %Chg. May 2006 May 2007 % Chg.
Fort Myers-Cape Coral 250 194 ?22% $320,800 $226,500 ?29%
Punta Gorda 61 31 ?49% $151,300 $148,800 ?2%
Sarasota-Bradenton 336 339 1% $274,200 $246,200 ?10%
Tampa-St. Petersburg-Clearwater 819 610 ?26% $178,400 $166,000 ?7%
Creative Recycling and Horizon Bay win
ENTREPRENEUR awards
In Kissimmee recently, Ernst & Young did its own version of the Oscars with its annual Entrepreneur Of The Year 2007 Awards. The winners didn't know they won until the presenter tore open the envelope that night.
The two winners from the Gulf Coast were both from Tampa: Thilo Best and Jon Yob (profiled in the Review Nov. 24, 2006). Best is chairman and CEO of Horizon Bay Senior Communities. Horizon Bay is a senior living company that operates several types of communities, including free-standing assisted living and independent living communities.
Yob is president & CEO of Creative Recycling Systems Inc. Creative Recycling recycles and reuses of an array of end-of-life and obsolete electronic equipment.
The West Central Florida finalists and their categories were:
• Financial Services: Paul Simino, president and founder, One Simple Loan, Oldsmar;
• Financial Services: David Serlo, CEO, PSCU Financial Services, St. Petersburg;
• Manufacturing & Distribution: Rod Hershberger, CEO, PGT Industries, Inc., Sarasota (profiled in the Review June 2, 2006);
• Real Estate & Construction: John Cannon, president, John Cannon Homes, Sarasota;
• Retail & Consumer Products: Kenneth Pendery, president and CEO, First Watch, Sarasota (a 2006 Review nominee for Entrepreneur of the Year.);
• Retail & Consumer Products: Crawford Ker, president, Ker's WingHouse, Largo.
The other overall statewide winners were:
• Emerging Companies: Maurice Ferre, M.D., president and CEO, MAKO Surgical Corp. in Fort Lauderdale.
• Manufacturing and Distribution: Charles Fabrikant, CEO, chairman and president, SEACOR Holdings Inc. in Fort Lauderdale.
• Financial Services: John Byers, president and CEO, FPIC Insurance Group Inc. in Jacksonville.
• Real Estate/Construction: William Gay, CEO and founder, W.W. Gay Mechanical Contractors, Inc. in Jacksonville.
• Services: Wayne Gey, CEO, Wayne Automatic Fire Sprinklers, Inc. in Orlando.
• Retail and Consumer Products: Ray Titus, president and founder, United Franchise Group in West Palm Beach
• Lifetime Achievement: Richard Fain, chairman and CEO, Royal Caribbean Cruises Ltd. in Miami.
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