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Coffee Talk
Business Observer Friday, Aug. 6, 2004 15 years ago

Coffee Talk (Sara/Mana edition)

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This week's items: Bradenton Beach City Commission wants to review all major development plansOffice vacancy rates shoot upHotel left out of Fruitville development planFifth Third is first

Coffee Talk (Sara/Mana edition)

Extra set of eyes

The Bradenton Beach City Commission is considering an ordinance that would make elected officials the ultimate reviewer of all applications for major development, redevelopment, variances and appeals.

"It appears that this is intended to circumvent the Comp Plan," says David Wilcox, a Sarasota attorney that represents several developers. He argues that if the city wants to change the review process, it needs to do a Comp Plan amendment, which is much more lengthy and requires state approval.

Bradenton Beach City Attorney Ralf Brookes, of Cape Coral, disagrees with Wilcox. He says the ordinance was suggested to create greater public input in redevelopment decisions.

"The city commission had asked me to draft a moratorium on all major development," Brookes says. "I felt that was too draconian a remedy. This way we will have a public hearing on all major developments. These projects will still go through the planning board, which will make a recommendation."

City Commissioner Lisa Marie Phillips says the impetus for the ordinance stemmed from recent legal filings over development issues. "Because of the rash of litigation, we have been looking for a way for the board and city commission to assume legal liability for the decisions," Phillips says.

The first public hearing was Thursday and a second hearing is Aug. 19.

Vacancy rates shoot up

Office vacancy rates in Sarasota County increased between April and June in all local areas, except one, according to the report by the Commercial Investment Division of the Sarasota Board of Realtors.

On University Parkway, the rate increased from 1.85% to 4.13% - although the jump was attributable to an increase in available square footage from 632,399 in April to 735,882 on June 1.

The only region with a lower rate was the "Other Suburban" region, which decreased from 23.44% to 15.39%. At the same time, the total square footage of space increased from 198,406 to 318,406.

Other than the University Parkway area, the percentage increase was less than 1%.

Vacancy Rates

EXISTING BUILDINGSTOTAL SFVACANT SFPERCENT

UNIVERSITY PARKWAY AREA735,88230,3754.13%

DOWNTOWN SARASOTA2,151,859185,4138.62%

I-75 FRUITVILLE SOUTH TO CLARK1,139,12199,2518.71%

SOUTH COUNTY334,22479,84223.89%

OTHER SUBURBAN318,40649,00915.39%

TOTAL4,679,492443,8909.49%

Hotel left out of Fruitville development plan

John Cox has dropped the hotel component from his development plans for Fruitville Road from Lemon to Central avenues.

Earlier this year, Cox, chief executive officer of Sarasota-based Halfacre Construction Co., announced that he, his son Jack, and E. Russell and Christine James planned to develop a mixed-used development on the Farm and Garden Supply Store, Blue Line and Salvation Army homeless shelter sites. The development was announced as a 100-room hotel, with 78,000 square feet of office space, 24,000 square feet of retail space and a 419-space parking garage.

No longer.

"We are not doing a hotel," Cox says. "I'm not in the business of running a hotel. Now whether or not someone else buys out there and does a hotel, I can't say."

Cox says his group has a contract to purchase the Salvation Army site and it's negotiating with Blue Line to acquire its store at the corner of Fruitville Road and Central Avenue.

Several banks, he says, have shown interest in the Salvation Army site.

Fifth Third is first

Now that Fifth Third Corp. has paid the highest premium for an American bank since the beginning of last year, how long before the Cincinnati banking company starts to make money from the First National Bank of Florida franchise? The answer: A good long time.

Fifth Third's Aug. 2 announcement that it will acquire First National Bankshares of Florida Inc. for about $1.6 billion had to have made jaws drop along the Gulf Coast.

Granted, the parent of First National Bank owns the biggest bank based in Florida, with $5.3 billion in assets, taking into consideration pending acquisitions that include First Bradenton Bank. And, according to SNL Financial, First National is the third largest bank by deposits in its hometown of Naples, fourth in the Fort Myers market, ninth in the Sarasota market, and 10th in the Tampa Bay area.

But was it all worth nearly six times the tangible book value of First National? The price tops Fifth Third's own 2001 purchase of Tennessee's Franklin Financial Corp. for about five times tangible book, according to Hovde Financial LLC, a co-adviser to First National on the Fifth Third deal.

Fifth Third President and Chief Executive George A. Schaefer Jr. thinks it was worth the multiple. "This acquisition provides Fifth Third with a tremendous opportunity in the state of Florida, among the fastest growing deposit markets in the United States," he says.

It will definitely be a good opportunity for an employee of the new combination, First National Chairman and CEO Gary L. Tice, who is staying with Fifth Third. Tice's employment contract calls for him to receive payments of $3.75 million when he turns over the keys to Fifth Third, which is expected to take place early next year. Plus, Tice will be getting Fifth Third stock currently valued at approximately $14.4 million for his 1.2% stake.

Correction

× In the GCBR July 23-29 issue the "40 Under 40" photo page included an incorrect caption. It should have read: From left, John Moffett, Jay Riley, Maggie Moffett and honoree Sarah Moffett.

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