Loading
Coffee Talk (Tampa)
High-tech inches up
The Tampa Bay area's technology sector grew by 8% between 2003 and 2005, according to the Tampa Bay Partnership. There are 6,911 firms classified as high-tech this year, compared to 6,401 two years earlier.
But employment at tech firms increased only 1.2% during the same period. This year, about 86,000 people were employed by area technology companies, or about 1,000 more than in 2003.
Lindsey Ballas of the partnership says the increase reflects growth in the number of smaller, more entrepreneurial firms in the area, which includes Hillsborough, Pinellas, Pasco, Manatee, Sarasota, Hernando and Polk counties.
Ballas says sub-sectors contributing to the growth include: medical supplies and equipment manufacturers; Internet publishing companies or Web designers; and scientific research and development companies.
Downtown showdown
The Tiger Bay Club of Tampa took a break from politics at its Nov. 18 luncheon. Or did it?
The club invited Christine Burdick, president of the powerful Tampa Downtown Partnership, to speak about the long-rumored rebirth of the Cigar City's original business district.
Burdick brought along some materials showing all of the multifamily housing projects planned for downtown and the Channel District. Some are even rising up from the ground.
The club also invited the folks doing one of those projects, Trump Tower Tampa. But neither the Donald nor his local developer of the high-rise condominium showed up.
City Councilman John Dingfelder did make it. Dingfelder wishes some of the residential development overrunning South Tampa could be pushed into the rundown precincts of Ybor City and Tampa Heights, where it might be more beneficial.
Now here's where the politics might have come in.
Dingfelder lives in Palma Ceia and represents South Tampa on the council. Those facts didn't escape the notice of tart-tongued retired teacher Lee DeCesare.
DeCesare told Dingfelder that she detected "a whiff of South Tampa condescension" in his stated desire to encourage more development downtown and less in his backyard.
When is a loan lost?
Pinellas Park banking analyst Richard X. Bove is out with another of his so-called banking manifestos.
Bove generally likes the immediate future of the industry, especially larger banks that are less dependent on real estate lending than the majority of Gulf Coast community banks.
Like any good manifesto, though, the Punk Ziegel & Co. analyst uses his latest to rail a bit. The target of his ire is a couple of industry practices that he thinks abuse investors.
The first is the concept of a loan-loss reserve, wherein banks make an accounting entry on their books in anticipation that a few borrowers won't repay their loans.
"Presumably, this action gives regulators and investors confidence in the safety of bank balance sheets," Bove writes. "Actually it is a great sham."
Bove says he and federal securities regulators suspect the loss reserves are really a sneaky way for bank CEOs to manage earnings. The reserves are released later when the bottom line needs a boost, not when borrowers default.
"A bank loses money when it makes a bad loan and pays the money out, not when it realizes that the money is not coming back," Bove says.
Banks will be raising their currently low reserves in future quarters as interest rates go up. But Bove is one guy who won't feel reassured.
His other pet peeve is a long-standing one. Banks are spending too much on branch networks at a time when deposits are dropping.
Demand for commercial and industrial loans is increasing, after a long lull. Yet banks are now going to expensive wholesale sources for funds because their own cheaper deposits cannot keep up with the demand.
"The banks have built too many branches," says Bove. "Branches must be closed."
Everybody and their uncle facing suits
The second annual Litigation Trends Survey, produced by the international law firm Fulbright & Jaworski LLP, doesn't paint a pretty picture of U.S. corporations and, in particular, real estate businesses.
The study, based on 304 interviews with U.S. corporate attorneys, reports that 87% of American corporations are involved in some type of litigation and the average company faces a docket of 37 lawsuits. The most frequent types of litigation last year were contracts (42%) and labor/employment (38%).
The study also showed that real estate along with technology and communications companies were the most likely to have legal budgets of 2% or more of gross revenues. Fourteen percent of real estate companies have legal budgets that total more than 5% of their total gross revenue and 20% of the companies spend between 2 and 5%. The average real estate company was facing 39 litigation actions, five of which they initiated.
Three years ago, the highest incidence of class action cases were found in health care, energy, manufacturing, insurance as well as technology and communications companies. Last year, the highest incidences of class actions occurred in manufacturing (30%), real estate (20%), energy (19%), finance (19%) and technology/communications (17%).
Houston's Greenwood Surveys, an independent research firm, conducted the 2005 survey during June and July.
Another reason for litigation
A Washington, D.C., investment bank that has engineered the sale of several Florida banks this year says low interest rates and easy credit terms aren't the only factors driving up housing prices.
Hovde Financial Inc. sees a dramatic increase in mortgage and appraisal fraud.
The Federal Bureau of Investigation reported 533 pending mortgage fraud investigations in 2004, compared to 102 just three years earlier. Arrests in cases of single-family home purchases are up eight-fold during the past four years.
The situation recalls the savings and loan crisis of the 1980s, but Hovde believes inflated appraisals are more widespread this time.
Hovde points the finger at mortgage brokers, who often hire the appraisers for a house sale or refinancing. The broker's commission is usually based on the number that the appraiser brings back, says Hovde, "increasing the incentives for dishonesty."
A 2003 survey of 500 appraisers in 44 states found that 55% of them have been pressured to overvalue property. More than 8,000 appraisers have signed a petition to the federal government complaining about the pressure.
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
