This week's items: Builders face skyrocketing steel costsGovernor stingier than Senate on court fundingSarasota Memorial: on the cutting edge of technologyThe question on Main Street: To sell or not to sell?
Coffee Talk (Sara/Mana edition)
Builders face skyrocketing steel costs
Recent steel price increases and supply shortages are starting to mean big bucks for construction companies and their clients.
"It's a mixture of the tariffs, a lack of supply and a decline in (steel ore)," says Jack Cox, president of Sarasota-based Halfacre Construction Co. "Everyone is facing pretty stiff increases. The price increases started Feb. 1. I think so far they have gone up a total of 66%. So far a lot of companies have been absorbing it, but there is only so much cost we can absorb. We are scheduled for another 25% increase April 1."
Cox estimates that the construction cost of a $1 million, 25,000-square-foot commercial building will jump by at least $60,000 because of increasing steel prices.
Trident Building Systems Inc. of Sarasota, which designs, manufacturers and constructs metal buildings, is one of the companies that has been hardest hit.
"We should be building out of gold; it would be cheaper," Lee Moss, director of sales and product development for Trident, says jokingly. "We've seen product increases of 100%. How can we absorb that? Steel used to be 20 cents to 25 cents a pound; now, it is 45 cents to 50 cents a pound. This is pretty unbelievable. The only times I can remember when we have seen prices go up this much is in 1974 and the Korean War."
Moss says another possible cause of the price increase is that China has increased its purchase of steel from 22% of the total world market to around 35%.
"Steel is one of the most recyclable commodities," Moss says. "The U.S. gets almost all of its product from scrap. (But) the price of scrap has gone from $60 to more than $400 a ton."
Governor stingier than Senate on court funding
Gov. Jeb Bush hasn't budged on his budget proposal to fund the state trial courts under Revision 7 to Article V of the state Constitution - the voter mandate to shift funding to the state from county governments.
A Bush spokesperson told Coffee Talk the governor made no new recommendations for courts funding under his recently released supplemental budget. He issued the supplemental budget in response to estimates that show the availability of about $1.1 billion in new state revenue.
Meanwhile, the Senate Appropriations Subcommittee on Article V Implementation and Judiciary just released its Revision 7 funding projections. It budgeted about $14.6 million more than the governor's budget for trial courts funding.
Although it's difficult to follow the spreadsheet, Elizabeth "Lisa" Goodner, the state courts' administrator, says her staff estimates the subcommittee allocated about $113.5 million in start-up funds for just the state trial courts. The governor originally recommended about $98.8 million. However, the subcommittee recommendation is still far less than the $167 million recommended by the Florida Supreme Court's Trial Court Budget Commission (TCBC).
Sarasota Memorial: on the cutting edge of technology
Despite the recent mishap in the operating room at Sarasota Memorial Hospital (wrong patient receiving the wrong procedure), the region's biggest health care is on the cutting edge (no pun intended) of health care technology. Microsoft Corp. has named Sarasota Memorial the 2004 Microsoft Hospital of the Year for its use of a Microsoft-based application. This award comes just a month after Health Imaging & IT magazine recognized Sarasota Memorial as one of its Top 10 Hospitals for innovation in digital image and information management.
The Microsoft award came at the Healthcare Information and Management Systems Society's annual conference in Orlando. Award judges noted that by implementing a software program, Sarasota Hospital has decreased lab turnaround times for urgent physician orders by 89% and for routine orders 53%. The solution has resulted in an estimated $2 million in annual savings through elimination of printed documents and reduced labor costs.
The question on Main Street: To sell or not to sell?
The talk of the town - downtown, that is, is Main Street. Sarasota's Main Street merchants and building owners and commercial real estate brokers are abuzz over the Ohio-based Isaac Property Co.'s efforts to assemble downtown property to create a large-scale urban retail complex. One Coffee Talk source familiar with Isaac's efforts says many Main Street building owners have been offered top dollar to sell. But they've declined, apparently thinking that by holding out their buildings could be worth even greater amounts in five years or so - the big retirement nest egg.
But as downtown broker Ian Black told Coffee Talk last week, the window to make a deal may be narrow. If owners hold out, the Isaacs easily could walk away. Or someone else may come along with an entirely different idea, leaving Main Street out of the loop altogether.
Not only that, other real estate sources say, at some point many of Main Street's older buildings need major overhauls or should be torn down altogether. As those costs rise, downtown merchants could face the prospect of having to pay large sums to rebuild but not be able to generate the sales to cover their rebuilding costs. "They have to think about having a bird in the hand," Black says.
He doesn't give up: Palmer Ranch Development Vice President Mark Royall tells Coffee Talk that even though his company and its owner, Hugh Culverhouse Jr., thought they had an agreement with Sarasota County not to create a contiguous animal greenbelt from Oscar Scherer State Park to government-owned land east of Culverhouse's property, Royall learned last week the issue has surfaced again. Royall says state environmental officials interviewed Sarasota County Commissioner Jon Thaxton during its research into the widening of Interstate 75 to six lanes in Sarasota County - a portion of which goes through Culverhouse's property. The subject of the animal greenbelt came up again, says Royall. But the state environmental staff never bothered to talk to Palmer Ranch. This fight never ends Sarasota lawyer Bob Johnson says the Sarasota Fairgrounds board will meet April 5 with the Brooks Group to outline how each group will participate financially and otherwise in their efforts to construct a new arena on the site of the Sarasota Fairgrounds. Johnson says the fairgrounds board and Brooks currently have no signed contracts. If they reach an agreement, their next step would be taking their case to the Sarasota County Commission.