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Coffee Talk
Business Observer Friday, Jan. 19, 2007 12 years ago

Coffee Talk

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Corporate raider Carl boosts WCI stake, demands talks with companyThe Florida Venture Forum will set a milestone next month when 26 companies make presentations at the 2007 Venture Capital Conference in Boca Raton.In Fortune's 100 Best Companies to Work For ranking, published in the magazine's Jan. 22 issue, the Sunshine state has a measly four companies, with the closest one to the Gulf Coast being Lakeland-based Publix - number 57. The honeymoon can't last forever. Things have to get back to normal eventually. Right?And that's where the national housing market is headed now from its all-time peak in 2005, says LaSalle Bank Corp. economist Carl R. Tannenbaum. Normal.The Southwest Florida chapter of the Urban Land Institute is seeing green.The group, composed of planners, developers, engineers and others associated with development, plans to tackle the issue of green building standards this year.

Coffee Talk

+ Icahn boosts WCI stake, demands talks with company

Corporate raider Carl Icahn boosted his stake in Bonita Springs-based homebuilder WCI Communities to 14.6% of the company, spending $112.6 million to acquire 6.1 million shares of the company.

The stock jumped nearly 7% to $22.49 on the news on Jan. 16 (symbol: WCI).

Icahn, well-known for shaking up corporate boards and management of undervalued companies, says in a recent securities filing that he wants to hold talks with WCI and find ways to boost the value of the company's shares.

It's not clear whether WCI will agree to hold discussions with an investor who is now one of its largest shareholders. WCI officials declined to comment.

Icahn is not alone in his quest to boost the value of WCI's shares. Money management firm Hotchkis and Wiley Capital Management recently bought 16% of the shares while also demanding talks with WCI.

Meanwhile, hedge-fund tycoon Steve Cohen on Dec. 29 acquired 6.5% of the company. According to a recent Bloomberg report, Cohen's SAC Capital Advisors returned 34% last year. That's more than double the 15.8% return of the Standard & Poor's 500-stock index.

+ Venture Forumto surpass $1 billion

The Florida Venture Forum will set a milestone next month when 26 companies make presentations at the 2007 Venture Capital Conference in Boca Raton.

That's one more than the previous record set in 2000 during the height of the dot-com era, says Robin Kovaleski, the forum's executive director. In all, the forum has helped Florida-based companies raise more than $961 million over 15 years.

Kovaleski expects that figure to surpass $1 billion this year, she says, adding: "There's a great deal of growth in the state. It's a great time to be an entrepreneur."

Only four of the 26 companies scheduled to present at the Feb. 6 and 7 conference at the Boca Raton Resort & Club are headquartered on Florida's Gulf Coast, down from eight last year. Most call the state's East Coast home; two are from Alachua County.

Don't fret. There's no cause for alarm for the Gulf Coast area, Kovaleski says. The number of each region's presenters varies from year to year.

Chosen by a committee of venture capitalists, those seeking capital tend to be later-stage companies with a proven revenue stream and growth driven by proprietary technology and a strong management team.

"A lot of venture capitalists are interested in Florida and the companies that are here," she says.

It'll be nice to see investments go up. Florida has regularly lagged behind other states in venture capital funding, including California and Massachusetts.

Gulf Coast-based companies seeking capital are Creative Loafing, Tampa, an alternative newspaper; DTI-NanoTech, Sarasota, a division of Discovery Technology International, which specializes in the design, manufacture and distribution of motorized nano-robotics; Network Liquidators, Tampa, which sells used networking equipment and accessories to more than 8,000 customers; and Ultramatics Inc., Oldsmar, which sells solutions for complex system integration.

+ Florida fares poorlyon best places to work

Florida, especially the Gulf Coast, doesn't get a lot of love in the latest national top companies list. In Fortune's 100 Best Companies to Work For ranking, published in the magazine's Jan. 22 issue, the Sunshine state has a measly four companies, with the closest one to the Gulf Coast being Lakeland-based Publix - number 57.

Other Florida companies on the list are Deerfield Beach-based JM Family Enterprises (41), Pensacola-based Baptist Health Care (54) and Coral Gables-based Baptist Health South Florida (81).

JM, a Toyota distributor and Lexus dealer with 4,450 employees, was praised for donating $25,000 to an employee fund that helps workers with emergencies; it also matches employee contributions to the fund dollar for dollar. The company, which had $9.4 billion in 2005 revenue, was ranked 40th in the 2006 list.

Both Baptist health organizations dropped in the rankings compared to last year, but both were still lauded for several rank-and-file employee friendly policies.

The Pensacola Baptist operation, which fell from the 18th spot on last year's list, was complemented for its accessible leaders who follow through with a "no secrets" policy, where all news - good and bad - is shared with employees. The company has 4,095 employees and had $471 million in 2005 revenues.

Baptist Health South Florida, South Florida's largest private employer, was praised for its high-end salaries, as nearly 70 nurses made more than $100,000 last year. Its 13% turnover rate is below the national average of 20%. The company, which covers six hospitals, has 9,446 employees and had $1.5 billion in 2005 revenues.

Publix, the dominant Florida grocery store chain, has 136,863 employees - a number dwarfed by the 470,000 job applications it gets each year. It dropped one spot from the 2006 list, but was still praised for its policy of giving all employees company stock after one year of employment. It had $20.6 billion in 2005 revenues.

+ Upbeat's the word for real estate

The honeymoon can't last forever. Things have to get back to normal eventually. Right?

And that's where the national housing market is headed now from its all-time peak in 2005, says LaSalle Bank Corp. economist Carl R. Tannenbaum. Normal.

Why complain about a 4% decline in housing prices when values spiked 50% or more in some markets in the preceding few years?

Tannenbaum, tall, wiry and full of one-liners, sounded like a comic as he prognosticated on 2007 at the Jan. 16 meeting of the Association for Corporate Growth Tampa Bay.

The chief economist at the Chicago-based bank, Tannenbaum was making the rounds in Florida, talking to the Downtown Tampa Partnership, along with the National Association of Industrial and Office Properties, as well as groups in Fort Lauderdale.

"I just don't think this is disastrous," he says of the housing slowdown.

Tannenbaum predicts moderate interest rates throughout the year. But he says interest-only loans for residential borrowers won't be as readily available - for good reason.

One regulator calls them the "crack that kept the housing market up all night," he quips.

Other reasons to be cheerful: Job relocations will continue to pump up home sales, and there's untapped $10 trillion in home equity and technology spending is up.

Residential mortgage rates remain at 6%, in part because of investments in the U.S. by the Chinese and Saudis, he says.

And if you're still not feeling optimistic, recall the '70s, the decade that most people seem to want to forget. It saw runaway inflation and three severe recessions (not to the mention awful leisure suits).

"This is not Jimmy Carter's economy," Tannenbaum says, an audible sigh seeming to fill the room.

One of the most serious issues facing the economy is health care, he says, adding, "Costs are going to cripple us."

And businesses are stuck in the middle trying to care for their employees and make a profit.

Another issue he expects to come to the forefront this year is under-funded government pension plans by local and state governments, which must be disclosed this year for the first time.

End result? Taxpayers will see higher bills to make up the shortfall.

+ Green building, boomers on ULI agenda

The Southwest Florida chapter of the Urban Land Institute is seeing green.

The group, composed of planners, developers, engineers and others associated with development, plans to tackle the issue of green building standards this year through seminars and panel discussions, says Andrea Tyson, vice president of Naples-based engineering firm WilsonMiller.

Tyson acknowledges that most builders and developers in Southwest Florida have not implemented the green building standards that are becoming commonplace in other parts of the country. Green building standards require special attention to using environmentally friendly building materials and emphasizing energy conservation.

She's blunt about why builders and developers should care: "Green may be mandated," she says. For example, any firm that's contemplating construction of public buildings should expect government mandates for compliance with green building standards.

Also on the agenda: What boomers want. This notoriously unpredictable generation is looking for developments that mix shopping and offices with housing in dense, walkable communities, she says. The ULI plans to help developers and others be prepared for the wave of boomers who may retire to Florida.

Correction

In the year-end stock table published Jan. 12, the Review did not account for a stock split by TIB Financial Corp. Adjusting for the split, the shares of TIB Financial Corp. rose 13.4% in 2006, according to data supplied by Yahoo Finance. TIB Financial is a bank-holding company headquartered in Naples with more than $1.3 billion in assets.

What's Ahead

Jan. 25 - The Southwest Florida Real Estate Outlook conference will feature Florida economist Hank Fishkind and other speakers who will discuss the commercial real estate market from 7 a.m. until noon at Harborside Event Center in downtown Fort Myers. The conference is sponsored by the CCIM commercial real estate organization. Cost is $50 for members; $60 for nonmembers. For more information, visit http://southwestfl.ccimnet.com or call Tim Becker at 239-390-1241.

Jan. 27 - Florida Gulf Coast University will host The Entrepreneur's Law School at the Lutgert College of Business. Lawyers will discuss the legal aspects of raising capital, enforcing real estate contracts, how to value a company for sale, estate planning, commercial litigation and other issues. Cost for the full day is $95 in advance and $105 at the door. To register online, visit http://cli.fgcu.edu/sbdc. For more information, call 239-225-4220.

Feb. 13 - The Real Estate Investment Society will host Fort Myers Mayor Jim Humphrey, who will discuss development in downtown Fort Myers' River District. The luncheon meeting, which is sponsored by the Gulf Coast Business Review, begins at 11:45 a.m. in the Magnolia Room at Pelican Preserve's Town Center off Colonial Boulevard in Fort Myers. Admission is $25 for members and $35 for guests. Reserve by Feb. 8 at www.reis-swfl.org or by contacting Sharon Heston via email at [email protected] or by phone at 239-410-1253.

Feb. 22 - The Urban Land Institute's Southwest Florida District Council will hold its annual Winter Institute at the Naples Hilton Towers. Speakers include SunTrust Bank Senior Economist Gregory Miller.  Cost is $145 for members and $165 for nonmembers. To register, call 800-321-5011 or visit www.swflorida.uli.org.

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