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REVIEW & COMMENT
Survival Stories
by Rod Thomson, Executive Editor
The Gulf Coast economy is made strong by those who do not give up in tough times.
The Gulf Coast economy is weak right now for several reasons, including those manufactured or exacerbated by local governments.
A sampling of what's hurting us:
• High insurance rates in an industry over-regulated by state government;
• High property taxes;
• Stratospherically high impact fees on new construction;
• Anti-growth policies that reduce developable land supplies;
• Regulation-happy officials who strangle the remaining land.
Combine all of this with so many other taxes and fees, and it set the stage for a possibly mild correction turning into a crushing recession on a local level.
Our local government leaders, with an increasingly anti-business attitude, or at least anti-business decisions, cannot escape a part of the blame for today's economic pain.
But economies never stay strong forever, and that is all the more true in sectors of the economy that experience booms and busts and in-between times. Housing and credit markets have cycles and do not spend much time in equilibrium, usually rushing past a balanced position to extremes in looseness or tightness. The fate of bank loans over the past three years illustrates the swings.
The extremes of housing and banking began correcting, and the market is sorting things out in its painful way. (Zero-down loans were probably never a good idea from a banking standpoint.) But then high energy prices added to it, and onerous government taxes and regulations became unbearable.
But even through bad economic times, good companies find a way to survive, and that often starts with the attitude of business leaders whose stories are capsulized below.
They are just a few examples from recent weeks' editions of the Review, but they permeate those who will survive the downturn and be a part of the recovery, even drive the recovery. These are the types of people who make the Gulf Coast economy tick.
So the Review is going to be telling the stories of companies that have survived tough times and what they had to do to make it. Usually the companies, always the company leaders, are now stronger than they were before they were forced to survive. There are lessons to be learned in these stories, lessons that only come through the business school of hard times.
We kick off this week with a survival story on Roger Miles, who took a contrarian route and chose to pump $1.5 million into his tourism publishing company, Miles Media, during the sharp downturn following 9-11. It was painful, but it has paid off huge for the company in the following strong years.
Readers may well find nuggets of wisdom and encouragement in their stories of getting through the tough times.
SURVIVAL ATTITUDES
• Doom and gloom?
Mike Beaumier runs the Gulf Coast division of Suffolk Construction, a Boston-based construction giant that had $1.3 billion in revenues in 2007. Its new Gulf Coast division was opened at the onset of the construction downturn.
"You could sit here and say doom and gloom, doom and gloom. Or you could figure out how to make some money."
• Build affordable homes
It took Lakewood Ranch homebuilder Pat Neal only a few months to do what various Gulf Coast government agencies and bureaucracies have failed to accomplish for years: Build and sell legitimate affordable housing.
The collapsing real estate market drove the announcement that Neal Communities would be selling a series of cottage-style homes in the Forest Creek subdivision of Parrish for under $154,000 and as low as $122,900. The move was an immediate hit when homes went on sale Feb. 22.
The company sold eight of the small cottage homes, plus one larger home, in the first three days. And then over the next week it sold another 14 of the lower-priced homes.
• You need to do something
Susan Cavanaugh, president and publisher of Nuovo Bride, and the bridal magazine's executive editor, Beth Winkle, have worked together for the past eight years at Gulf Coast family living, a free magazine distributed six times a year in the Sarasota-Bradenton area.
Winkle, who founded Gulf Coast family Living, sees Nuovo Bride as a chance to make something positive out of difficult market. Says Winkle: "I'm a big believer that when the market is bad, people need to do something."
• Take unpopular projects
Lynn Murtagh, the CEO of Meridian Construction & Development, was a commercial builder in Lafayette, La., when that state's oil economy collapsed in the mid-1980s. He moved to Fort Myers and began growing swiftly in the niche of building fiber-optic switching stations for telecommunications companies. The telecom bust that ensued took half his volume in a short time and, for the second time, his construction company was faced with an industry collapse.
Now, he is in construction in Fort Myers, an epicenter of the construction downturn. But Murtagh does not dispair. He has learned a lot through those trials. Run a very tight organization, even in the good times, be willing to take jobs and do work that others do not want to do and just flat keep pushing. "The work doesn't come to you; you have to get it. I'll work anywhere in Florida."
And a great, positive attitude is a prerequisite: Murtagh says: "2007 was the best year I ever had, 2008 is better and 2009 is better than that."
• Control your destiny
"I was raised with the belief that I can control my own destiny," says Bill Spindel, owner of Sarasota-based Windshutters. "There's still money out there. This economy could still work."
Spindel is projecting revenues could grow by as much as 20% this year. New jobs, he says, are currently booked out six to eight weeks and his company growth rate is greater than it was during the hectic days after Hurricane Charley in 2004, albeit without the same volume.
The business is growing in other ways, too: It recently added two people to its sales force, created a new position to run the manufacturing and installation divisions and is starting to look for a few more technicians and installers. What's more, Spindel could begin looking for land for a new company headquarters.
• Weeding time
Karen Magee, a small business consultant who recently co-opened a clothing store specializing in Life is Good merchandise on Main Street in downtown Sarasota.
"I am excited about a downturn in the economy," says Magee. "It weeds out the poor competitors. It weeds out the people who don't have the guts to tough it out."
"I love tough times," says Magee, "because it really changes our perspective on life."
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