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Coffee Talk
+ A luxurious incentive
For many Realtors and home agents, getting those fence-sitting buyers to take the plunge and actually buy a house is an on-going battle these days. So Bradenton-based Neal Communities decided to throw a bone to those in the trenches by offering them a special incentive, in addition to other programs designed for buyers. The deal: Sell two Neal Communities homes, you get a Lexus. Sell three, you can get a Jaguar.
Wagner Realty agent Frank Maruca was the first agent to take the prize, selling three homes in the Forrest Creek subdivision in Parrish, Manatee County. But in an ironic and telling sign of how tough this market is, Maruca didn't end up doing much fence pushing, as the buyers were his brother, his daughter and himself. "I didn't do anything spectacular," Maruca admits to Coffee Talk.
Still, it was enough for Maruca to win a $62,000 voucher, which, combined with some of his money, he used to buy a Lexus IS 250 and an ES 350 from Wilde Automotive in Sarasota. He passed on a Jaguar XJ8.
Maruca says his 26-year-old daughter, who is moving back to the Gulf Coast from Orlando, bought a town home in the $250,000 range and he and his brother bought single-family homes in the $300,000 range. Maruca says he was planning on buying the house for investment purposes anyway, so the cars really were an added bonus.
As far as getting those would-be buyers to commit, Maruca says it's not for lack of trying. He and his real estate industry brethren continue to push hard, he says, but he still finds people are hesitant to buy, fearing a better deal is only a few weeks away. Even the buyer of a property Maruca sold had a deer-in-the headlight look after a recent closing, the agent says.
+ PCM trims newspaper company holdings
Naples-based Private Capital Management, which manages $24 billion for wealthy and institutional investors, is sticking to its newspaper story even as a recent filing shows the firm trimmed its newspaper-stock holdings.
PCM says it invests in stocks of companies that are often out of favor but which it believes have long-term value that other investors will eventually recognize. Such is the case with the firm's large investment in eight languishing newspaper stocks, which totaled about $2.47 billion as of June 30, according to the latest filing.
However, Coffee Talk noticed PCM held fewer shares of every newspaper stock in its portfolio June 30 compared with when it last reported its holdings March 31. For example, the firm held 1.8 million fewer shares of Gannett Co. at the end of June versus the end of the previous quarter.
PCM has a standing policy of not speaking publicly. However, in a note to clients, PCM's Bruce Sherman and Gregg Powers acknowledged their customers' growing impatience. "Our investment in newspaper stocks continues to cause concern for some clients," they wrote. "Given the disappointing results thus far, we understand their consternation."
These stocks appear to have been a drag on PCM's overall performance lately. For the one-year period ending June 30, PCM's equity account rose just 0.83%, compared with the 8.62% increase in the Standard & Poor's 500-stock index. After subtracting management expenses, PCM's equity account fell -0.18% in that one-year period. This is not the kind of performance to which clients have been accustomed. PCM's 10-year track record for its equity account has been 19.12% on an annualized basis for the period ending June 30, versus 8.3% for the S&P 500.
Sherman and Powers' frustration with newspaper stocks comes through as well. "In some regards, it would be easier for us to abandon the investment theme than to continue arguing the point," they write. Based on recent filings, it appears they have started doing just that.
+ Going through the government gauntlet
During the past 35 years, the executives at Morton's Gourmet Market, a Sarasota-based high-end grocery and bakery, have gone through the Sarasota's county and city government permitting gauntlet plenty of times, be it trying to expand a parking lot or build an addition to the structure.
So they weren't too surprised when they were met with a similar time-eating process in Manatee County when they set out to open a second store on Main Street in Lakewood Ranch, the master planned community's new retail thoroughfare. But not being surprised doesn't mean not being upset.
"Government runs at a lot slower pace then free enterprise, let's put it that way," Eddie Morton diplomatically tells Coffee Talk.
The 17,000 square-foot Main Street Morton's officially opened Aug. 28, about 10 months later then the owners initially thought. Both the store and a still-being-built movie theater are expected to be a big draw for the fledgling new center made up of mostly independently owned boutique businesses.
Morton says one major hold-up was getting permits for several construction and structural projects, such as a reinforcement effort for the steel on the roof. Manatee County officials told him they were inundated with permits over the last year and were behind on other projects, too, not just his.
Morton doesn't take the delays personally and he realizes the growing county is busy, but the turtle-like permit approval pace combined with architecture issues and higher prices for construction materials have been excruciatingly costly, Morton says. For example, the store hired a crew of managers in December to begin training them and they have been on the payroll ever since, as he didn't want them to seek other jobs.
+ Changing with the St. Pete skyline
St. Petersburg Chamber of Commerce President/CEO John Long says the city's skyline isn't all that's changing: The chamber is redefining itself through the shuffling of eight executives and the hiring of three new leaders in an effort to increase membership and better reflect the growth of the business community.
"We want to have people on the staff who have experience and are aggressive in their goals," Long says. "We want to create an organization that is the finest chamber in the country."
So far this year, the chamber has grown 7% to 2,100 members, Long says. The year's goal is to grow 15%, and there are only four months to go.
Last week, the group announced the hiring of three senior executives, including Alma R. Ayala, who has a bachelor's degree from Yale and a master's in public administration from Harvard. She was named team leader of the business and economic development team and one of her main priorities is to strengthen the organization's relationship with minority business communities.
The two other new senior vice presidents are Bonnie L. Tefft, formerly of the Kalamazoo, Mich., chamber, and Linda A. Borst, formerly a company controller. Tefft, a Western Michigan University graduate, is in charge of growing the membership and expanding member benefits; and Borst, a graduate of the University of California at Berkley and Michigan State University, is charged with keeping the 25-employee chamber in sound fiscal shape. Its 2006 annual budget is $2.3 million.
Long, who joined the chamber in January, says St. Petersburg is a vibrant, growing place whose skyline will significantly change over the next several years. An estimated $2.2 billion in new construction has been permitted over the past year and a half.
To get a view of what the city's skyline will look like in 2008 when the 12 new skyscrapers are built, take a peek at the chamber's Web site at stpete.com.
+ A slap in the Chico
The blogosphere and message boards are buzzing over the plunging shares of Fort Myers-based women's retailer Chico's FAS.
In the past year, the company's stock traded as high as $49.40 (symbol CHS). Recently, the stock traded at $17.81, a 64% drop. The stock took a huge hit last week when Chico's President and CEO Scott Edmonds dropped this bomb: "We have not realized the level of same-store sales in the Chico's brand that we originally anticipated and it appears we are facing our first negative same-store sales results in some time."
Same-store sales are a key indicator in the retail business. They represent growth in stores opened longer than one year and investors watch that figure with an eagle eye to determine the health of the business. Chico's stock dropped 26% in the two trading days after Edmonds' warning.
Message boards and blogs have been jammed with analysis and commentary. Typical is this from a blog called One Guy's Investments: "I have given Chico's the benefit of the doubt as they had merchandising troubles this spring, but have we now gotten to the point that these problems go beyond merchandising? That's the real question-has Chico's reached a saturation point, or have their core customers lost interest in the brand?"
One thing is certain: Chico's shares are now cheaper relative to the broader market and investors are wondering whether this might be a good time to buy shares while they're down. Chico's price-to-earnings ratio was recently near 16, versus 19 for the Standard & Poor's 500-index and 18 for the apparel industry, according to Reuters. The P/E ratio divides the price of a share by the earnings per share for the trailing 12 months and is a widely used yardstick to measure stock value.
Although Chico's doesn't pay a dividend to shareholders, the company is virtually debt free and it has lots of cash. Investors may one day look back at this as a buying opportunity for a company that experienced a temporary setback.
Celebrity for a day
Soon after Venice-based window and door manufacturer PGT went public earlier this summer, company president Rod Hershberger was given the rock star treatment.
Not that he wasn't well-liked before, but Hershberger was greeted with pats on the backs and standing ovations on the company floor for leading the June 28 IPO. The rank-and-file were behind the move so much, they began watching CNBC for the stock ticker while on break, Hershberger told Coffee Talk in an interview soon after the IPO.
Hershberger's latest venture into the realm of a celebrity for a day came Aug. 24 when he rang the closing "bell" at the Nasdaq exchange. Most things are digital at the tech-heavy exchange in New York City, so instead of ringing an actual bell, Hershberger signed a podium to signify the end of trading for the day.
Hershberger then did the financial media tour, meeting with TV and print reporters to talk about the company and the stock. On the latter, shares have been at their highest level since the IPO; a recent price was $14.27 a share.
Florida: Home of the also-rans
Coffee Talk can brag with the best of them, regularly touting Gulf Coast businesses that make the cut in national publications' rankings, such as the Inc. 500.
The flip side of that is revealed in the September issue of Entrepreneur magazine: No Florida cities or regions are in the magazine's list of the top 25 Hot Cities for entrepreneurs. What's more, Florida itself is just the 37th hottest state in the country.
Not exactly bumper sticker bragging material.
The state and the Gulf Coast region is essentially an afterthought, with the magazine citing hurricanes - fear of them and damage caused by them - as the main culprit.
Here's a sampling of some of the areas that ranked ahead of the Gulf Coast: Toledo, Ohio; Rochester, N.Y., Fort Wayne, Ind.; and Rapid City, S.D. Nothing against those fine cities, but clearly, Florida has some work to do.
The rankings, formed by research from the Washington D.C.-based National Policy Research Council, measures business formation and business growth. For the formation aspect, researchers track businesses that started four to 14 years ago and have at least five employees. On growth, the researchers measure the percentage of those businesses that have grown rapidly over the last four years. "An area must have a large number of young businesses and be able to support their growth to achieve a high overall score," the magazine states.
Here's a glimpse at where some Gulf Coast regions rank as compared to other areas on the list, both state and nationwide.
Large cities, 50 ranked:
City Ranking
Phoenix/Mesa, Ariz. 1
Charlotte/Gastonia/
Rock Hill, N.C., S.C. 2
Raleigh-Durham/Chapel Hill, N.C. 3
Las Vegas 4
Austin/San Marcos, Texas 5
Jacksonville 37
Orlando 40
Tampa/St. Petersburg/Clearwater 47
Sarasota/Bradenton 49
Midsize cities, 63 ranked
Mobile, Ala. 1
Charleston, S.C. 2
El Paso, Texas 3
Tucson, Ariz. 4
Madison, Wisc. 5
Naples 28
Pensacola 42
Fort Myers/Cape Coral 48
Melbourne/Titusville/Palm Bay 53
Lakeland/Winter Haven 59
Daytona Beach 61
Ocala 63
Small cities, 162 ranked
Auburn/Opelika, Ala. 1
Green Bay, Wisc. 2
City Ranking
Yuma, Ariz. 3
Laredo, Texas 4
Huntsville, Ala. 5
Fort Walton Beach 88
Panama City 99
Gainesville 119
Punta Gorda 157
States
Arizona 1
Virginia 2
Alabama 3
New Jersey 4
South Carolina 5
Florida 37
Counties, 59 ranked
Mecklenburg, N.C 1
Fairfax, Va. 2
New York (Manhattan) N.Y. 3
Wake, N.C 4
Du Page, Ill. 5
Duval (Jacksonville) 34
Hillsborough 35
Orange (Orlando) 38
Broward 42
Miami/Dade 44
Palm Beach 46
Pinellas 49
+ Naples bank boosts presence in Lee
Naples-based Bancshares of Florida has offered to buy Fort Myers-based Old Florida Bankshares for $82.6 million in cash and stock.
If recent acquisitions are any indication, Old Florida shareholders should be pleased. Their cousins to the south have offered them 3.13 times the bank's book value, in line with other deals this year.
Old Florida Bank has assets of about $326 million and has offices in Fort Myers, Naples, Cape Coral and Bonita Springs. Under the terms of the deal, Old Florida shareholders may elect to receive either 1.7915 shares of Bancshares common stock (which traded recently at $21.50 per share) or $38.50 in cash, or a combination of stock and cash.
Earlier this year, Bancshares paid an estimated 2.07 times book value for Bristol Bank of Coral Gables. Michael McMullan, Bancshares' president and CEO, says the price for the acquisition makes sense because Old Florida is well established in Lee and has a healthy balance sheet. "If you look at how long it takes to build a community bank to $300-plus million [in assets], it takes seven or eight years," he says. Bristol, meanwhile, had only recently achieved profitability and was a much smaller bank with $90 million in assets.
McMullan hinted he's not going to slow the bank's growth in Lee and Collier. "We are actively looking at new locations and sites throughout Lee and Collier," he says. The bank holding company recently completed a secondary offering of stock, raising $58 million.
Larry Johnson, the president and CEO of Old Florida, will join Bancshares' Bank of Florida-Southwest subsidiary as Lee County Area President. Meanwhile, Jim Goehler will continue to serve as president and CEO of Bank of Florida-Southwest.
+ Woodrow executive moves to Little Harbor
Fort Myers-based EarthMark Cos. has brought on a familiar face to cover its Tampa area projects. The company, which is developing the 1,850-unit Little Harbor on 80-acre waterfront site in Ruskin, hired Tom Tosi away from Taylor Woodrow to serve as Tampa Bay operations president.
Tosi, who lives in Bradenton, previously served as senior vice president of operations for Taylor Woodrow's U.S. Tower Division in St. Petersburg. Tosi also spent more than 20 years with the Walt Disney World Co. in Lake Buena Vista as a civil engineer, project manager, executive general manager and as executive director of facility asset management and project management.
EarthMark is currently developing three waterfront communities: the village of Little Harbor on Tampa Bay, a residential resort at Mariner's Club Key Largo and Maranu Luxe Bungalow Resort and Spa in Marathon.
+ Ahead
Sept. 8 - Transportation, including rising fuel costs, is on many executives' minds. Have a say in what regional road projects are a priority by speaking out at the 11 a.m. public hearing at the Powell Crosley Museum, 8374 N. Tamiami Trail, Sarasota. The Chairs Coordinating Committee of west central Florida, which covers Hillsborough, Sarasota, Manatee, Pasco, Pinellas, Polk and Hernando counties, is asking for public input. The current priority list of road projects is available at regionaltransportation.org.
Sept. 14 - The Economic Development Corporation of Sarasota County and the LEAN Consortium will host a panel discussion on LEAN business principals moderated by John Clement, LEAN Consortium chair, from 7:30 to 9 a.m. at Keiser College, 6151 Lake Osprey Dr. in Sarasota. LEAN is a method of processes for businesses seeking to increase productivity and improve the bottom line. Don Borden of Crane Environmental, Bob Beck of Pierce Manufacturing Co., Nicole Salinas of Eaton Aerospace, and Andy Rogish of Yoder Brothers are all scheduled to speak. The cost is $10. For information, call 941.309.1200, ext. 201, or send email to [email protected]
Sept. 21 - Learn how to protect your business or manufacturing facility when a hurricane hits Florida's Gulf Coast at a "Business Continuity" seminar, hosted by the Bay Area Manufacturers Association, at NetPark Conference Center, 5701 E. Hillsborough Ave., Tampa. The free program begins at 8 a.m., with registration at 7:30 a.m. Register at www.bama-fl.org or call (813) 204-5345.
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