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Chamber Mixer
Economic development by Jean Gruss | Editor/Lee-Collier
The success of not-for-profit chambers of commerce has attracted entrepreneurs. Now, there's a move to ban for-profit chambers.
Will the real Fort Myers Chamber of Commerce please stand up?
There are two entries for the Fort Myers chamber in the city's phone book, but the two organizations couldn't be more different. One is a not-for-profit organization, the other is a for-profit business and the two are mired in a lawsuit over the "chamber of commerce" moniker that's dragged on for nearly four years.
It's a dispute that is likely to be repeated in other cities along the Gulf Coast, as entrepreneurs discover the economic value of the chamber of commerce name. To stem the tide, there's an effort underway to legislate a ban on any for-profit for using that name.
Historically, business executives created chambers of commerce as not-for-profit organizations to promote their interests. Over time, these organizations have become so large and generate so many business referrals for their members that some entrepreneurs have started copying the idea.
Armando Nargi (pronounced Nardjee) is the man behind the for-profit Fort Myers Chamber of Commerce Inc., which he registered with the state in 2002. Nargi operates his business as the Lee County Chamber of Commerce.
This doesn't sit well with many not-for-profit chambers in Lee County and elsewhere. For one thing, they allege that the for-profit chamber is misleading the public by misappropriating their name. "The Greater Fort Myers Chamber of Commerce has built a name for itself," says Marietta Mudgett, its executive director. "We want people to know which chamber they're joining."
Nargi responds that he's done nothing illegal. "They're spending membership money suing others," he says. "If they had a case it would be over."
Not-for-profit chamber executives have excluded their for-profit cousins from their statewide trade group, the Florida Association of Chamber Professionals. They and the Florida Chamber of Commerce are actively pushing for legislation that would ban any for-profit company from using the words "chamber of commerce." A similar bill failed to become law in 2003 after Gov. Jeb Bush vetoed it.
The irony of it all is not lost on some chamber executives, however.
"Chambers of commerce should not be afraid of competing in a free marketplace," says Steve Tirey, president of the Chamber of Southwest Florida, a regional not-for-profit chamber of commerce in Fort Myers. "After all, we're supposed to be bastions of free enterprise."
Nargi says the debate over whether chambers are for profit or not-for-profit is irrelevant because they're all after the same goal of encouraging commerce. "Don't be misled by volunteer organizations," he says. "They're all for profit."
Building a new business chamber
Nargi moved to Fort Myers from New York City in 1994 and continued running the publishing business he started, HiCorp Industries. He says he joined a local not-for-profit chamber - he won't say which one - and volunteered time to help the organization.
But when Nargi requested a seat on the chamber's board, he says chamber executives stonewalled him. He suspects the reason is that he's not connected to what he calls the "good old boy" network in Lee County. "I'm referred to as 'That New Yorker'," he says.
So in 1998 he gathered some friends and business associates together and discussed forming a new chamber. They determined that relying on a volunteer board wouldn't serve their members' needs. "That's why we chose to run this as a business, not a charity," he says. Nargi argues that operating as a business means he's more responsive to his customers than a charitable organization is to its donors.
What's more, there was no chamber at the time that served Lee County. Depending on the definition of a chamber, there are as many as 15 chambers of commerce in the county representing diverse communities and interests. "Nobody had the name Lee County Chamber," Nargi marvels. And no one had secured the Fort Myers Chamber of Commerce name, either.
Nargi invested $30,000 and a group of undisclosed investors pooled $50,000 to start the Lee County Chamber of Commerce. Revenues are now about $300,000 a year, but Nargi says it took four years to become profitable. "It took 18 months just to get started," Nargi says. His first customer was the Seminole Casino, which helped jump-start his business.
Today, the chamber boasts 800 businesses as members. A significant percentage of those are companies involved in real estate, including homebuilders, Realtors and bankers.
Depending on the size of a business, it costs $195 to $400 to join the Lee County Chamber. For the cost of membership, Nargi will list a company in the 20,000-circulation Lee County magazine he publishes and on the Web site www.iloveleecounty.com. The membership also entitles members to attend regular networking lunches and events.
Nargi says his networking events are exactly that. For example, luncheons include an hour of networking and there's rarely a speaker because people prefer to network while they're eating instead. After-work events are not designed to be social functions. "If you want to find a date, don't come," Nargi says.
"It's definitely productive time when you're there," says Sue King, marketing director for Rels Title in Florida. Rels is one of the nation's largest providers of services for the lending industry. King is particularly pleased with the referrals she's received from the Lee County Chamber's Web site. "One referral gave us 40 deals," she says.
Nargi says the Web site gets 10 million hits a year and it comes up first on the Google search engine when searching for Lee County chamber. The banner on the home page bristles with advertisers, including large homebuilders such as First Home, KB Home and Beazer Homes.
King also advertises in the group's Lee County magazine, which publishes and distributes 20,000 copies three times a year. The magazine is a destination guide that highlights communities and attractions. It's mailed to prospective residents and tourists and it's also distributed in AAA offices, Dunkin' Donuts restaurants and Baskin Robbins ice cream shops. Nargi says the chamber receives about 140 requests for information from tourists each month via the Internet and by phone.
The Lee County Chamber of Commerce is a member of Visit Florida, the official tourism-marketing agency of the State of Florida. But the Lee County Visitor & Convention Bureau removed the chamber's location from its maps and has not worked with Nargi for several years. D.T. Minich, the bureau's executive director, says the bureau did that because he says he values his organization's relationship with the other not-for-profit chambers.
Nargi forges ahead
Nargi is undeterred, even as the lawsuit filed by the Greater Fort Myers Chamber of Commerce has cost him $20,000 so far. "I don't get intimidated here," says Nargi, a native of New York's South Bronx. "I made this my home."
Nargi likens Fort Myers to Tucson, Ariz., 10 years ago. "I've seen small areas like this boom," he says. "Southwest Florida is going to be a metropolis."
In September 2005, Nargi started a group within the chamber called Lee County Business Women and he launched a publication called Lee County Business Woman in the fall. About 70 to 80 women attend the group's luncheons. The effort also has a Web site, Leecountybusinesswomen.com.
In addition, Nargi has secured other Web sites, including Leecountydining.com and Leecountyattractions.com. What's more, he's registered other chamber names with the state, including South Fort Myers Chamber of Commerce and Alva Chamber of Commerce (Alva is a community east of Fort Myers).
Nargi thinks the Lee County Chamber of Commerce and its customers will benefit as the local residential real estate market slows. "People realize they need new sales and it's not going to fall in their lap anymore," Nargi says.
Florida Chamber backs for-profit ban
Chamber of commerce executives and the Florida Chamber of Commerce are planning to back state legislation that would ban any for-profit company from using the words "chamber of commerce" in its name.
Their last effort in 2003 failed when Gov. Jeb Bush vetoed a similar bill. "Limiting businesses' ability to use a term that is not trademarked would establish a monopoly, which is contrary to the role of government," Bush wrote in his veto. "I trust that business will make the right choice to associate with chambers of commerce that offer needed services with a high degree of integrity."
But Florida Chamber officials think they have a better shot at getting a bill signed now that Charlie Crist is governor. Their tactic now is to gather evidence to show that for-profit chambers of commerce have defrauded small businesses and others.
"We're compiling them internally at this point so we can show examples," says Doug Wheeler, vice president of grassroots advocacy and PAC development with the Florida Chamber of Commerce. It's not clear exactly how many for-profit chambers currently exist, but the Lee County Chamber of Commerce is one that has attracted attention in Southwest Florida.
Wheeler says the bill has a better chance of success if the chamber can show instances of fraud. That's because chamber executives believe this will appeal to Crist's populist leanings, demonstrated when he actively pursued fraud as the state's attorney general.
"We've had dialogue with state attorneys and law enforcement," Wheeler says. He declined to cite cases now. "We're not ready to go public with all that," he says.
Andy Gardiner, R-Apopka, the executive director of the Apopka Area Chamber of Commerce, is likely the one who will introduce the legislation in the Florida House of Representatives, Wheeler says. Gardiner couldn't be reached for comment. The chamber is seeking a sponsor in the Florida Senate.
-Jean Gruss
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