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Coffee Talk+ Icahn buys 4% of WCI, credit downgradedBillionaire corporate raider Carl Icahn's firm, Icahn Management, has bought nearly $29 million worth of stock in Bonita Springs-based WCI Communities, or about 4% of the company's shares outstanding.Icahn is famous for shaking up corporate boards and management of undervalued companies. WCI's stock rose 13% on the news of the filing Nov. 14.On the same day Icahn revealed his firm's ownership in WCI, Standard & Poor's lowered WCI's corporate-credit rating in part because of higher debt and stock-repurchase activity. The new rating is two notches below investment-grade, meaning the debt is speculative. "The downgrades reflect a much steeper-than-anticipated drop in new orders, higher leverage as a result of the company's use of short-term debt to offset a free operating cash flow deficit, and, to a lesser extent, continued share repurchase activity," wrote S&P analyst James Fielding.Some WCI shareholders have grown increasingly frustrated with the company's underperformance since it went public in March 2002. In October, Basswood Capital Management, a New York-based investment firm that owns 5% of WCI, said the company should sell itself to a larger, better capitalized and more profitable homebuilding company.In a letter to WCI Chairman Don Ackerman, Basswood's principal, Bennett Lindenbaum, requested a seat on the WCI board and blamed management for operating with excessive leverage and using cash to buy back shares rather than reduce debt.On Nov. 7, WCI told investors that orders for new homes and condos in the third quarter fell 82% over the same period in 2005. Net income for the third quarter fell 73% to $10.7 million on revenues of $427 million.+ Source Interlink chief resignsCalifornia billionaire Ronald Burkle appears to have lost patience with Leslie Flegel, who resigned as chairman and CEO of Bonita Springs-based Source Interlink Nov. 13.Source Interlink distributes magazines, DVDs, music CDs and other items to 110,000 stores around the country. The company's stock performance has been lackluster in the past year and it's currently trading near the low end of its 52-week range (symbol SORC; recent price $9.25).Burkle lieutenant and Source Interlink director Michael Duckworth was named the company's new chairman. Duckworth is a partner in Burkle's Yucaipa Cos., which is Source Interlink's largest shareholder.The move may pave the way for a possible sale of the company. In March, Source Interlink hired Deutsche Bank Securities to "evaluate strategic alternatives to enhance shareholder value," a fancy way of saying the company is for sale.Company officials couldn't be reached for comment on the resignation or future developments. Senior Source Interlink executives James Gillis and Alan Tuchman have been appointed interim co-CEOs.+ Miscommunication?Wikipedia founder Jimmy Wales' comments in a daily newspaper have rattled members of the local technology community that feted him as the guest of honor at a Nov. 9 awards dinner.Wales, who was honored with the Tampa Bay Technology Forum's first Visionary Achievement award, was quoted as saying it was the first time he'd met members of the local technology community, even though he lives in St. Petersburg.Maybe so. But it's not because Wales hasn't received invitations.Fritz Eichelberger, CEO of HotSpaces.Net and FJE Enterprises, says he invited Wales in November 2005 to be the guest of honor at one of his "Pure & Shameless" Technology Socials.Wales accepted via e-mail, Eichelberger says, adding: "Unfortunately I've never been able to get him to confirm a date."As for Wales' statement that there aren't enough tech events in the Tampa Bay area, Eichelberger says: "I would disagree with Jimmy. The tech community is a very active community. It is not Silicon Valley. No one has ever said it was or will be."There are literally hundreds of technology events held annually, including Eichelberger's networking socials.Says EpicTide CEO Kurt Long, who was honored with the Forum's Entrepreneurial Leader of the Year award: "I'm not supportive of Jimmy's comments. I thought they were ungrateful."Adds Eichelberger: "If you don't want to get involved with the local tech community, don't complain about it."+ TIB marches northNaples-based TIB Financial Corp., the parent of TIB Bank, acquired The Bank of Venice for about $16 million. That's about 1.9 times book value.Shareholders of the privately held Bank of Venice will receive $18 a share in TIB common stock (symbol TIBB) and may elect to receive 10% in cash. The deal is expected to close early next year.The move confirms speculation that TIB planned to enter the Sarasota and Charlotte markets. Although it hop scotched Charlotte County, TIB Bank Chief Executive Officer and President Ed Lett says Bank of Venice Chairman and CEO David Voigt knows the Charlotte market well and can help TIB expand there in the future.Both Voigt and Bank of Venice President Mack Wilcox Jr. will remain with the bank. As part of the deal, the Bank of Venice will retain its own charter, name and board of directors.Lett says the acquisition isn't a change in strategy for TIB. "We have such a great organic growth story that we don't have to make any acquisitions," he says.TIB currently has $1.3 billion in assets and 16 branches from the Florida Keys to Homestead, Naples, Bonita Springs and Fort Myers. The Bank of Venice has two offices in Venice and a third is scheduled to open in late 2007.+ Looking for cash?Private companies in need of capital might find what they're looking for at the Florida Venture Forum's 16th annual conference Feb. 6-7 at the Boca Raton Resort & Club in Boca Raton.About 25 later stage, high-growth companies will be chosen to make presentations at the conference that attracts venture capitalists, private equity investors and investment bankers from around the world, says the forum's executive director, Robin Kovaleski.The 22-year-old forum assists entrepreneurs of emerging companies as they develop their businesses and raise capital.Entrepreneurial companies that want to present should have talented management teams, proprietary technology and high-growth potential, Kovaleski says. And even companies that aren't seeking funding can make a presentation for marketing purposes.Presenters at the last 15 Florida Venture Capital Conferences have raised $897 million, Kovaleski says. About 185 of the 1,200 or so people that attended last year's conference were with venture capital firms from across the U.S., Europe and South America, representing billions of dollars to invest in Florida.Kovaleski calls the conference a "must attend" networking opportunity for venture capitalists and other investors interested in emerging Florida businesses.The final deadline to apply to be a presenter is Nov. 20. Companies can submit an online application at http://apply.flvencap.org. Paper applications aren't accepted.+ Goldman's Kapnick gives $10 million to Naples gardenMaybe money really does grow on trees.Goldman Sachs investment banking division co-chief Scott Kapnick and his family recently gave $10 million to the Naples Botanical Garden for the development of 160 acres that will include cultivated gardens at Bayshore and Thomasson drives.The garden is sandwiched between Naples Bay and the Everglades and includes a 90-acre nature sanctuary with seven ecosystems.The gift is one of the largest ever to a botanical garden in the U.S. Kapnick is a board member of the botanical garden and his wife, Kathleen Kapnick, served as chair of the garden's major fundraiser, Hats in the Garden, in 2005.+ International College names business schoolNaples-based International College named its business school for Kenneth Oscar Johnson, a former ExxonMobil executive and CEO of Florida-based Belcher Oil.School officials declined to say how much Johnson has given to the school, but they noted that the contribution is a big boost for the rapidly growing college that specializes in career-related studies for working adults.Johnson, a longtime supporter of International College, started his career with ESSO, Exxon Mobil's predecessor, in 1942, and worked to develop high-octane fuels for fighter planes during World War II.In 1974, Johnson became the CEO of Belcher Oil and later sold the company to Coastal Corp. Johnson, 86, is a Naples resident.DELAYED REDEVELOPMENTCarole Ketterhagen, executive director of the St. Petersburg/Clearwater Area Convention & Visitors Bureau, says it's understandable that the majority of developers with projects planned for Clearwater Beach are weighing their options."Many of the investors are taking a look-see," Ketterhagen says of the $1 billion in hotel/condo projects previously planned for the Pinellas County beach.Since the housing slowdown seems to have particularly affected condominiums, developers would be foolish to proceed without caution. They are studying market conditions and adjusting plans accordingly, which most likely means there'll be more hotel rooms and fewer condos."Not all of those projects have totally gone away," Ketterhagen says. "In the long run I think most will be built. But until the developers have had an opportunity to fully study the situation and make their projections for the future. It's not known what they're going to do exactly."JMC Communities, a St. Petersburg-based developer, is on schedule with Marquesas, a 6-acre project that includes two 15-story towers with 142 beachfront residences and six penthouses, she says. AmSouth Bank has provided an $81 million loan for that project's first phase.Plans for the Kiran Grand Resort & Spa, whose condominium residences start at more than $2 million, are on hold while investors determine which way they'll proceed, she says.Even with the older, smaller hotels razed for the new projects that are now stalled, the economic impact of tourism in Pinellas this year is expected to surpass last year's $6 billion, she says.As of Sept. 30, tourism's economic impact in Pinellas was up 4% to about $5 billion compared to the same period last year, she says.That's not to say the businesses and merchants on Clearwater Beach aren't suffering from the delays.Real Estate Convergence: Brain TrustReal Estate executives from across the country converge on the Gulf Coast to talk strategy.Michael Saunders, founder and president of one of the biggest real estate firms on the Gulf Coast and a 30-year industry veteran, isn't often bowled over with excitement about new fads and trends.But consider her duly impressed with one of the latest "next big things" to come her way: Specialized 401(k) plans for real estate industry employees. Saunders moved quickly after hearing about the plans, which include investments in real estate holdings, for the first time earlier this month at an exclusive gathering of national real estate executives held in Sarasota. Within a week, an executive with Wachovia Securities in New Jersey was in Sarasota, going over the plan with all of the firm's 500 associates and 200 in-house employees."It's difficult to find advantageous 401(k) plans for our contractor sales agents," Saunders told Coffee Talk after the gathering, "because we're not their employers, so we can't contribute." Saunders heard about the specialized 401(k) plans from Sheri Chase, the president and CEO of Chase International Distinctive Properties, a Lake Tahoe, Nev.-based luxury real estate firm. Saunders and Chase were two of seven top real estate executives from all parts of the country attending what's been dubbed the "Brain Trust," a semi-annual confab of real estate professionals held most recently at the Longboat Key Club. The meetings were closed to the media, but Coffee Talk obtained the details from Michael Saunders, as well as a company spokesman.Of note: All of the executives that attend the meetings - now in its ninth year - are women. And the attendees usually bring some of their staff with them, a group that also tends to be made up mostly of women. The meetings initially began as a spa retreat at the posh Canyon Ranch in Arizona; Saunders says within a few years, the group decided to focus more on strategies than stress relief. Besides gender, though, the group this year had something else in common to talk about: Dealing with a struggling residential market. Areas represented at the conference included Atlanta, Houston, New York and San Francisco, the latter of which might be the only market immune to the national slowdown.Anita Head, president of San Francisco-based Paragon Real Estate Group and the newest member of the Brain Trust, said California's Bay Area is "bulletproof," and while the condo market there is down a little, it's just a blip, as overall, business has been steady. One of the main themes of the sessions and discussions was how to retain and recruit the best sales agents, a constant challenge that grows when there are less houses being sold. Patricia Peterson, president and CEO of Daniel Gale International, a Long Island, N.Y.-based firm, says training agents is essential, but you have to have talent, too. "In a market this challenging, you have to be 100% up to the task," Peterson said at the conference. "If they weren't making it in last year's market, chances are slim that they will do well in this one."Chase spoke about her firm's 401(k) arrangement during a brainstorming session that focused on other techniques for retaining employees.The other parts of the two-day meeting were a combination of work and play, with a majority of the participants saying the highlight was being able to talk openly about strategy and ideas with non-competitors in the same industry. John Tuccillo, a former economist for the National Association of Realtors and a part-time Sarasota resident, spoke to the group about the state of the market. The group also toured the Michael Saunders & Co. training complex, as well as the Longboat Key home of fashion designer Adrienne Vittadini. -Mark Gordon
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