Business Observer Jan. 30, 2015 by Kat Hughes

JA N UA RY 3 0 - F E B RUA RY 5, 2015 | T H R E E D O L L A R S

FLOR IDA’S NE WSPAPER FOR T HE C - SUI T E

Trend | What the sale of institutional investors’ real estate means for your market. PG.7 P A S C O • H I L L S B O R O U G H • P I N E L L A S • M A N AT E E • S A R A S O TA • C H A R L O T T E • L E E • C O L L I E R

room for

RENT A free-market entrepreneur discovered a way to make transitional housing profitable — without public money. His edge? No one else wants to do it. PAGE 10

Harvey Vengroff | ENTREPRENEUR

TOP DEALS

STRATEGY

LEADERSHIP

NEWS

Learning on the Job

Business of Show Biz

Corporate Report

Hertz expands near Orlando, Miami restaurant franchise closes a deal for Tampa and other business news. PAGE 20

Tampa mobile home park purchased by California investor for $35M. 18

HEALTH CARE

CEO EMERITUS

Shifting Strategy

Tough Love

Ronto Group and partner buy lot for 18-story condo in downtown Sarasota. 18

As head of a $14 million growing company, Chris Harvey knows there’s always more to learn — which is why he built his company around that process. PAGE 8

COMMERCIAL REAL ESTATE

Follow the Growth

To capitalize on the growing thirst for agriculture land, Randy Thibaut is launching a division devoted to it. PAGE 9

As changes in health care regulation cause practices to consolidate, a growing dermatology office expands to stay ahead of the trend. PAGE 16

Bob Tufts worked his way from driving a truck to serving as an executive at Coca-Cola. His advice? Be patient and overachieve. PAGE 22

Naples Courtyard by Marriott sells for $12.3 million. 19

PAGE

21 How corporate responsibility can boost your ROI. 146235

DON’T MISS

Ken Feld, CEO of Feld Entertainment, says embracing change is critical — even when things are going well. PAGE 12

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BUSINESS OBSERVER | JANUARY 30 – FEBRUARY 5, 2015

BusinessObserverFL.com

Vol. XIX, No. 5

A Division of The Observer Media Group

WE ARE OFFICE ON THE SUNCOAST!

BusinessObserverFL.com The Business Observer, formerly the Gulf Coast Business Review, is Southwest Florida’s newspaper for business leaders. With offices in Hillsborough, Pinellas, Pasco, Manatee, Sarasota, Charlotte, Lee and Collier counties, the Business Observer is the only weekly business newspaper that provides business leaders with a regional perspective. The Business Observer’s mission is to deliver relevant news and information on Southwest Florida’s leading and growing companies, up-and-coming entrepreneurs and the important economic, industry and government trends affecting business. The Business Observer is also the leading publisher of public notices on the Gulf Coast of Florida.

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Executive Editor / Kat Hughes khughes@BusinessObserverFL.com Deputy Managing Editor / Mark Gordon mgordon@BusinessObserverFL.com Editor-Lee/Collier / Jean Gruss jgruss@BusinessObserverFL.com Research Editor / Sean Roth sroth@BusinessObserverFL.com Tampa Bay Reporter / Michael Hinman mhinman@BusinessObserverFL.com Editorial Design / Nicole Thompson nthompson@yourobserver.com Contributing Writer/Traci McMillan Beach

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CoffeeTalk Double check on ‘customer creepiness’ past Christmas season. Data like that is why Massey has the tech team at Beall’s, which celebrates 100 years in business in 2015, making mobile shopping trends a high priority. The department has hosted innovation days, and Massey might set up something like a hackathon to generate more ideas. “We will have to innovate differently,” says Massey, “and be faster and more agile.” One mobile focus at Beall’s is on socalled personal marketing. That’s when a business knows where a customer is in a given store, based on smartphone technology, and can instantly zap coupons or offers. Walking past the shoe racks on your way out the door? Here’s a coupon to your phone for 15% off. But even with an overall tech sense of urgency, Beall’s, with strong customer satisfaction rankings, will move with caution on that front. To some, personal marketing is more big brother than big sale. “Customer creepiness is a core concern,” says Massey. “There are numerous examples of how the data has been misinterpreted.”

HSN’s tech guru makes national list Karen Etzkorn, chief information officer at St. Petersburg-based multichannel retailer HSN, has been named one of the Top 10 Women in Tech by Chain Store Age magazine. Etzkorn, named CIO and an executive vice president at the firm in January 2013, is part of ETZKORN a list of retail industry rockstars, including Wal-Mart Executive Vice President and top technology officer Karenann Terrell; Barbara Sanders, chief architect of IT at The Home Depot; Sephora Chief Marketing Officer and Chief Digital Officer Julie Bornstein; and Kohl’s Department Stores Chief Digital Officer Krista

Berry. Executives from Nordstrom, Sears and Walgreens also made the list. Etzkorn previously held senior technology positions at The Home Depot, Williams-Sonoma, Gap and The Limited. At HSN she oversees IT for the firm’s two operating segments, HSN and Cornerstone. She also runs the firm’s Boundaryless Retail initiative, according to Chain Store Age, which is a focus on the four screens HSN uses to engage consumers: TVs, tablets, PCs and smartphones. Etzkorn, the article states, has “played a pivotal role in the ongoing strategic transformation of HSNi’s core processes and technologies.”

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Connecting customers to a business seamlessly, from a smartphone to walking through the door, is the drop-everything quandary retailers face in 2015. In industry lingo it’s called omnichannel retailing, and it involves every potential way a customer can interact with a brand. That includes brickand-mortar, mobile devices, social media, direct mail and even old-school catalogs. “It’s not sexy,” Beall’s Chief Information Officer David Massey says, “but omni-channel is the state of where retail is today.” Massey, also a senior vice president at the Bradenton-based retailer, with $1.29 billion in 2013 sales, was part of a Suncoast Technology Forum luncheon panel on emerging technologies held in January. Paul Hoffman, president of Sarasota-based managed IT services firm SouthTech, and PGT Inc. IT Director Terry Mitchell joined Massey on the panel. Massey opened the discussion with a jarring nugget: Customers who make their first entry to Beall’s through a mobile engagement reached 40% this

ARE YOUR TRADE SECRETS ESCAPE PROOF?

See COFFEE TALK page 5

2015: FOURTH-BEST VINTAGE The Naples Winter Wine Festival’s live auction is always the highlight of the luxurious Bacchanalian weekend in late January — and this year didn’t disappoint. The live auction last weekend raised $12.32 million for children’s charities in Collier County. In addition, the first-ever online auction raised another $231,000. The total $12.55 million raised was the fourth-best year in the 15-year history of the festival, eclipsed only by the $15.7 million raised in 2007, the $14 million raised in 2008 and the $13.5 million raised in 2014. The largest single bid at the live auction this year was $500,000 for a multi-day visit to the Krug Champagne estate in France and a complete collection of the winemaker’s most notable bottles. Other winning bids this year included: $450,000 for a Lamborghini Huracan; $440,000 for a 23-day trip around the world; $340,000 for a private tour of Gettysburg with docu-

LOUIS VENNE PHOTOGRAPHY

Auctioneer HUMPHREY BUTLER encourages bidders at the Naples Winter Wine Festival’s live auction. mentary film maker Ken Burns; and $330,000 for tickets to the Golden Globe awards and after-party with Harvey Weinstein. The names of the winners were not disclosed. The Naples Children and Education Foundation, the festival’s organizer, will award the weekend’s proceeds to Collier charities March 9.

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BUSINESS OBSERVER | JANUARY 30 – FEBRUARY 5, 2015

BusinessObserverFL.com

topstories from BusinessObserverFL.com Tampa REIT pays $77M for buildings Carter Validus Mission Critical REIT II Inc. acquired three new medical facilities for nearly $77 million. The Tampa-based real estate investment trust purchased the Baylor Surgical Hospital and the Baylor Surgical Hospital Integrated Medical Facility in Fort Worth, Texas and New England Sinai Medical Center in Stoughton, Mass. The total combined purchase price was $76.8 million. The Baylor Surgical Hospital and medical facility make up a 5.84-acre campus. The hospital is fully leased to Fort Worth Surgicare Partners Ltd. New England Sinai Medical Center has 180,744 square feet in net rentable area and sits on a 27.9-acre campus. The medical center is leased to New England Sinai Hospital.

RV firm to relocate to Hillsborough Cody Talbert Distribution, a wholesale supplier of parts and accessories for recreational vehicles, plans to move its headquarters from Kissimmee

quote of theweek

“”

Someone told me the only way to make money and keep it is in real estate or oil wells. I don’t know much about oil wells. Harvey Vengroff | Entrepreneur, on his latest venture. SEE PAGE 10

what do you think?

to Plant City in east Hillsborough County. The firm will hire up to 30 people and make a $200,000 capital investment in the project. The company is also receiving business assistance from the Tampa Hillsborough Economic Development Corp. and workforce training assistance from Career Source Tampa Bay. Cody Talbert seeks to hire people for technology and warehouse/distribution jobs in Plant City. CHARLOTTE-LEE-COLLIER

Man charged with executive ID theft

A federal jury indicted Jeffrey Ihm, 47, of Naples, for allegedly impersonating three Roper Industries executives to obtain more than $1 million in wire transfers from Wells Fargo Bank. According to a statement from the U.S. Attorney, Ihm assumed the identities of three Roper Industries executives. He then allegedly created fraudulent emails and other documents from Roper and Kynetic Technologies to obtain $1.06 million from Wells Fargo. In addition to seeking a

return of the funds, federal prosecutors plan to seek the forfeiture of Ihm’s home at 3343 Pacific Drive in Naples.

Hospitals earn top grade

Healthgrades ranked two Fort Myers hospitals among the top 5% in the nation based on clinical performance. Healthgrades, which evaluates clinical performance of 36 procedures at 4,500 hospitals around the country, awarded Lee Memorial Hospital and HealthPark Medical Center in Fort Myers with the 2015 Distinguished Hospital Award for Clinical Excellence. They were among 261 hospitals nationwide to receive the award. SARASOTA-MANATEE

Restaurant group expands to Manatee Tampa-based Ciccio Restaurant Group, which operates five popular restaurants on South Howard Avenue in Tampa, is expanding to the SarasotaManatee market. The firm plans to open a Daily Eats and a Fresh Kitchen location in east Manatee County, across the street from The Mall

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at University Town Center, by the end of 2015. Fresh Kitchen, according to Ciccio Restaurant Group partner Matt Lanza, is a quick service build-your-own bowl concept. Daily Eats, says Lanza, is a full-service restaurant that serves breakfast all day and is like a Northeast-style diner with a modern twist.

Roper acquires Chicago tech firm Roper Industries, a conglomerate in everything from software to transportation, has acquired Strata Decision Technology, a Chicago-based cloud-computing analytics firm with a focus on health care clients. Terms of the deal weren’t disclosed. Strata handles financial planning, decision support and cost improvement for the health care industry. More than 1,000 hospitals in the United States use Strata’s products, under a software as a service model. The firm was founded in 1996. Strata’s management team, led by CEO Dan Michelson, will continue to lead the business from its Chicago headquarters. Strata will operate under Roper’s medical business segment.

Do you agree with giving companies economic development incentives?

67% Yes 33% No

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TAMPA BAY

JANUARY 30 – FEBRUARY 5, 2015 | BUSINESS OBSERVER

BusinessObserverFL.com

CoffeeTalk

FROM PAGE 3

St. Petersburg: Tampa’s cooler cousin Miami attorney-turned-real estate developer Frank Guerra aims to bring a new kind of multifamily project, with green space and apartments in a resortstyle setting, to a neighborhood outside downtown St. Petersburg. The project marks the Gulf Coast debut for Guerra’s firm, Miamibased Altis Cardinal. GUERRA Guerra says St. Petersburg, specifically the Kenwood Historic District west of downtown, is a perfect spot to give this side of Florida a shot. That’s mostly because of the recent job growth and projections for more in the urban core, a magnet for a younger demographic. “We like St. Petersburg’s vibrancy and growth,” Guerra tells Coffee Talk. “It’s been like the cooler cousin of Tampa.” Getting in on the cool doesn’t come cheap. The firm bought the Skyline Fifth apartment complex, with 178 one- and two-bedroom units, in late 2012 in Kenwood for $19.5 million, according to Pinellas County property records. That’s about $110,000 a unit for what Guerra calls the first phase of the project, which sits on two acres. The firm acquired 10.5 acres adjacent to the Skyline late last year for the second phase. Guerra says that will be a $55 million investment, including the land and other costs. The firm

will develop additional apartments on the land, up to around 400, to add to the overall total at Skyline Fifth and reduce operational costs per unit. Skyline Fifth was built in 1962 and renovated in 2009. The vision with the overall development is to have elements like dog parks and green space mix with traditional high-rise amenities like swimming pools and a gym. Guerra says the land purchase gives him enough space to execute the plan in a way that maintains price points and profitability. “We want to offer something in St. Petersburg that doesn’t currently exist,” he says. “I’m not aware of a multifamily site larger than 13 acres.” Altis Cardinal is currently in the design and permitting phase of the project, and Guerra hopes to break ground later this year. A onetime real estate attorney in Miami, Guerra has been on the development side of the business for several years. A previous firm he founded built three high-rise condo buildings along the Miami River that totaled more than 1,100 units. Altis Cardinal is an acquisition, development and real estate consulting firm Guerra founded in 2009. While Miami will remain the focus, Guerra hopes to find more projects in St. Petersburg and on the Gulf Coast. “We see a lot of great potential,” says Guerra. “We are certainly looking to penetrate that market further.”

Credit union scores naming deal There’s no denying the sponsorship appeal of college sports. The latest example: Tampa-based Suncoast Credit Union agreed to a $5 million deal to name the new basketball arena at Florida Southwestern State College, formerly known as Edison State College in Fort Myers. The 75,000-square-foot Suncoast Credit Union Arena will be the centerpiece in the revival of sports at the state college. The arena will seat about 3,300 fans and will include six skyboxes and a hospitality event center. In addition to basketball, the arena will host other sports such as volleyball and events such as graduations and concerts. So far, the college has raised $17.5 million needed to build the $20 million arena. Construction is scheduled

FOR SALE WAREHOUSE & OFFICE

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FOR SALE $1,400,000 Ron Struthers, CCIM 941-769-3316

FOR SALE OR LEASE WAREHOUSE AND SHOWROOM

23240 Bayshore Rd Port Charlotte With 4,080 SF of dock-high warehouse Space and 2,400 SF of office/showroom Space, this property has a multitude of Possible uses. Features 9 loading docks And excellent visibility from Tamiami Trail.

For Lease $7.00 SF or Sale $750,000 Ron Struthers, CCIM 941-769-3316

FOR LEASE MURDOCK VILLAGE HEALTH CENTER

19621 Cochran Blvd Port Charlotte This complex is in close proximity to area hospitals. 10,420 SF suite is available for $13.00 SF. Very well suited for 1800 2nd Street, Suite 104, Sarasota, FL | 941.925.8586 | CBCWorldwide.com Medical use. Also available are two grey shell units Office/Industrial | Retail | Multi-Family | Property Management | Site Selection | Investment and Corporate Advisory Services

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to begin later this summer and be completed by fall 2016. As of Dec. 31, Suncoast reported assets of nearly $6 billion and total loans of $4.2 billion. Suncoast is the largest credit union in Florida and the ninth in the U.S. based on assets. Chartered in 1934 as Hillsborough County Teachers Credit Union, Suncoast has 57 branches and serves more than 600,000 members in 17 Florida counties.

Rents start at $1,700 a month. Ron Struthers, CCIM 941-769-3316

FOR LEASE CITY CENTER BUILDING

BOAT FIRM SWIMS IN THE BIG-TIME

1620 Tamiami Trail The 1st & 2nd floors are broken up into 8 separate suites ranging from 233 SF to 3,308 SF. The entire 3rd & 4th floors are available for single tenants.

Rental rates vary by floor. Ron Struthers, CCIM 941-769-3316

The ongoing comeback at Clearwater-based boat retailer MarineMax got a national plug recently: Executives, led by longtime Chairman, CEO and President William McGill, rang the NYSE opening bell Jan 21. Firm officials were in the Big Apple for both the ceremony and the 110th New York Boat Show. The five-day event is one of the longestrunning tradeshows in the boating industry, and MarineMax, the largest recreational boar retailer in the country, was a key participant. MarineMax posted $624.69 million in revenues in fiscal 2014, up

6.9% from $584.50 million in fiscal 2013. The firm has 55 retail locations, from Alabama to Texas and California to Tennessee, and sells boats and yachts from more than a dozen high-end brands and manufacturers. Shares of MarineMax, traded under the symbol HZO, hit 52-week highs twice in January, once on Jan. 8 at $20.89 and again on Jan. 13 at $21.13. Shares closed at $21.04 on Jan. 26. The company, scheduled to release fiscal 2015 first quarter earnings Jan. 29, was a “strong and under the radar” stock pick from thestreet.com last November.

RON STRUTHERS, CCIM

Since moving to Florida from Canada 30 years ago, Ron has been 100% committed to Real Estate Services and actively involved in New Construction, Property Management, Leasing and the Selling of Real Estate in SWF. Ron earned his CCIM designation in 2002. He has served The South West FL CCIM District in the capacity of a board member, directorship, and is currently the president elect for 2016. Ron joined Coldwell Banker Commercial NRT in 2012 and services most facets of commercial brokerage in Charlotte and South Sarasota Counties. Helping hundreds of clients buy, sell and lease commercial real estate, Ron has become one of the top agents in The Coldwell Banker Commercial NRT Florida market place.

You can contact Ron Struthers at 941-769-3316.

Operated by a subsidiary of NRT LLC. 7789FL_1/14

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BUSINESS OBSERVER | JANUARY 30 – FEBRUARY 5, 2015

BusinessObserverFL.com

BY THE NUMBERS

economicsnapshot

1 Employment

The North PortBradenton-Sarasota area posted the biggest annualpercentage increase in employment in December of any area in the state, up 4.6%.

Three areas of the Gulf Coast posted higher annual-percentage increases in employment in December than the state’s 3% growth: North Port-BradentonSarasota (4.6%), Punta Gorda (4%) and Naples-Marco Island (3.7%).

Two areas of the Gulf Coast lagged the state’s 3% annual growth in December: Cape Coral-Fort Myers (1.6%) and TampaSt. Petersburg (1.2%).

8.0 million (Florida statewide) 7.9 7.8 7.7 7.6 7.5 Dec. 2013 Jan. ’14

Feb. ’14 March ’14 April ’14

May ’14

June ’14

WHAT THE DATA SHOW Total nonagricultural employment estimates in the major metropolitan areas of the Gulf Coast in December. The data are not seasonally adjusted.

July ’14

Aug. ’14

Sept. ’14

Oct. ’14

Nov. ’14

Dec. ’14

DECEMBER EMPLOYMENT AREA

WHAT IT MEANS Annual-percentage growth in employment continued in December in areas such as Sarasota and Naples where homebuilding and tourism have rebounded strongly. In fact, the North Port-Bradenton-Sarasota area posted the highest annual-percentage growth in employment in December of any area in the state, up 4.6%. The Tampa-St. Petersburg area continued to generate the most number of new jobs, but its 1.2% annual-percentage growth trailed the state’s 3% growth in December. The Tampa-St. Petersburg area also trailed other large metropolitan areas in Florida in December, including Orlando-Kissimmee-Sanford (4.3%), Miami-Fort Lauderdale-Pompano Beach (3%) and Jacksonville (3.7%).

EMPLOYMENT

TampaSt. PetersburgClearwater North PortBradentonSarasota

1,212,800 1.2% 273,200 4.6% 46,300 4.0%

Punta Gorda Cape CoralFort Myers

FORECAST The strong tourism and construction rebound this spring in areas such as Sarasota and Naples will continue to fuel employment gains there through early summer. Meanwhile, expect moderate employment gains to continue in more diversified areas such as Tampa and St. Petersburg. Improving economic conditions will spur hiring across a variety of industries, though it will be hampered by labor shortages.

NaplesMarco Island

% ANNUAL CHANGE

228,000 1.6% 135,000 3.7% Source: Florida Department of Economic Opportunity

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JANUARY 30 – FEBRUARY 5, 2015 | BUSINESS OBSERVER

infocus | real estate |

esidential real estate data for several pockets of the Gulf Coast point to an alluring projection: Investment firms backed by Wall Street money and private equity could seek to cash out in 2015 on bulk purchases made in the downturn. If that happens, say several area agents, equilibrium could return to many markets that are exceedingly low on inventory, especially in the $300,000 and under category. “We are anticipating a lot of these homes coming back to the market,” says Stafford Starcher, recently named president of the board of directors of the Realtor Association of Sarasota and Manatee. “It will help our market this year.” Entities that might sell homes, from Cape Coral to Ellenton to New Port Richey, include Invitation Homes, which is backed by private equity giant Blackstone Group; American Homes 4 Rent; and Colony American Homes. These firms, according to data from Irvine, Calif.-based research firm RealtyTrac, could see equity gains of at least 20% on sales of homes bought in 2012. A large chunk of these homes are on the rental market. “The takeaway is the big, singlefamily operators were smart to buy when they did,” says Darren Blomquist, a vice president with RealtyTrac, which recently released two comprehensive national surveys on the topic. “Probably would have been smart for other people to buy then, too.” One RealtyTrac study is titled “Where Wall Street is Most Likely to Cash Out of the Single Family Rental Market. The other is “Where Wall Street is Most Likely to be Your Landlord.” “These guys were buying like crazy in 2012, and they were buying sight unseen on certain properties,” says Premier Sotheby’s International Realty agent Craig Cerreta, who is based in Manatee County but didn’t work with any of the firms directly. “They bought when prices were really low and as soon prices started to creep up they stopped buying.” Several agents say they heard most of the institutional investors were on a five-year buy-and-hold plan. But with price appreciation growing faster than many anticipated, those five years could be cut to take profits. That scenario is an elixir for agents who can’t find enough houses to show clients, given the tight inventory. “I bet a lot of Realtors would love that,” says Bradentonbased Keller Williams On the Water broker Greg Owens. “Anything with four walls and a roof that’s hospitable is hot right now.” Yet there’s a flip side to an inventory increase in that it could bring a wild supply and demand swing. “If it happens too rapidly,” says Cerreta, “it will push down prices.” Institutional investors are likely wise to that issue, says Blomquist. So some might exit by selling a portfolio in bulk to another firm that believes the market has more upside. And not every firm even wants to exit the Gulf Coast real state market just yet. Blackstone, for example, includes Tampa on a list of five cities where it continues to make singlefamily home purchases, according to a recent Bloomberg News report. The other four are Atlanta, Miami, Orlando and Seattle. “There are still a lot of markets where prices are very appealing,” says Blomquist. “(Some firms) are still looking to acquire properties when they can make the math work.” Follow Mark Gordon on Twitter @markigordon

BusinessObserverFL.com

BY MARK GORDON | DEPUTY MANAGING EDITOR

Smart money Several residential real estate markets on the Gulf Coast might soon get an inventory jolt. This could be a good thing — with a caveat.

LORI SAX

STAFFORD STARCHER says institutional investors that bought homes in 2012 on the Gulf Coast might sell properties this year.

WHERE ARE THEY BUYING? Real estate data firm RealtyTrac analyzed locations of where institutional investors bought homes across the country from January 2012 through October. The firm defines institutional investors as an entity that buys at least 10 properties in a calendar year. In total, according to RealtyTrac data, institutional investors bought 460,840 homes nationwide from January 2012 through October. That’s 4.92% of all single-family sales. Here’s a glance at what institutional investors bought on the Gulf Coast during the same time frame.

HIGH HILLSBOROUGH 5,022

Ellenton

5,022/313,177 2,218/270,755

PINELLAS

LOW CHARLOTTE 531

1.47%

2,221/151,365

HILLSBOROUGH

MANATEE

1.60% 0.82%

1,148/97,242

SARASOTA

909/139,133

CHARLOTTE

0.65%

531/70,303

LEE

0.76%

698/85,277

1.18% *Chart is based on percentages

2,502/217,752

COLLIER

SCALE

Gibsonton

Of all the total single-family homes in each county, institutional investors bought ... PASCO

Total single-family homes bought by institutional investors:

1.15%

0.82%

HOW MUCH DID THEY PAY? $700,000 $600,000 $500,000

2012 average price paid by institutional investors 2013 average price for a single-family home

$400,000 $300,000 $200,000 $100,000 Pasco Hillsborough Pinellas

Manatee Sarasota

Charlotte

Lee

Collier

Two Gulf Coast zip codes made RealtyTrac’s list of the top 50 with the highest percentage of institutional investor purchases. One zip code, 33534, for Gibsonton, in western Hillsborough County, ranked ninth on the list with 1.77% of all purchases. Another zip code, 34222, for Ellenton, in northeastern Manatee County, ranked 32nd on the list with 1.20%.

Sources: RealtyTrac, Florida Housing Data Clearinghouse at the Shimberg Center for Housing Studies at the University of Florida

Anything with four walls and a roof that’s hospitable is hot right now. Greg Owens | Keller Williams On the Water broker, Bradenton

8 infocus | strategy |

BusinessObserverFL.com

BUSINESS OBSERVER | JANUARY 30 – FEBRUARY 5, 2015

BY TRACI MCMILLAN BEACH | TAMPA CORRESPONDENT

MARK WEMPLE

CHRIS HARVEY was offered $1 million in 2007 to sell his insurance comparison tool in England. He declined the offer and let the site go for nothing. “It gave us the opportunity to focus big time on the core market” in the United States, he says.

travel TRENDS St. Petersburg-based Squaremouth provides a website to compare travel insurance options online. The company’s CEO says he’s learning as it grows.

hris Harvey’s travel insurance software company Squaremouth is known as a cool place to work in St. Petersburg. With unlimited paid vacation, free flowing beer, and mandator y birthday bonuses that must be spent at a bar or restaurant, Harvey has managed to make what some may assume is a boring industry into something fun. Every time Harvey posts a job opening he receives more than 300 applications. But building the 26-employee, $14 million “cool” company didn’t happen overnight. In fact, the company spent its first five years virtually penniless, according to Harvey. In an industry that’s growing, it’s tough to predict what’s around the corner, other than just assuming the same 10% to 15% growth that it has experienced in the past. Squaremouth provides a comparison tool for travel insurance products. There are 100 different product offerings, from 20-something insurance companies, and Squaremouth receives a commission based on the product sold. Over the last 30 days, the site has had about 90,000 visitors. With steady growth in sales and staff,

Harvey says his goal is to reach $1 million in revenue per employee. When they started the company, Harvey and his founding partner had experience in building and selling billing software for insurance. But they wanted to find a product that didn’t require an 18-month sales cycle, which is how they came up with travel insurance. “Travel insurance is the easiest insurance you can imagine,” Harvey says. That’s because unlike other insurances, when you make the decision to buy, you don’t have to wait for underwriting. Travel insurance has no postsale underwriting. “You just take the credit card and complete the sale,” Harvey says. When the company was founded in 2001, there were only about six major travel insurance companies. The duo spent the first two years writing the software. In 2003, they launched Quotetravelinsurance.com. By 2005, they scrapped the whole thing and launched a new site, Squaremouth, with their personal finances. Despite earning $1 million in sales in 2006, Harvey found himself within one month of running out of money. Luckily, March 2007 was the first

month the company broke even. In 2009, the company grew to three people and they opened an office. “It took a long time to reach that tipping point,” Harvey says. The company relies mostly on word of mouth as a form of advertising. It also invests in Google Adwords and search engine optimization. “It takes a long time for word of mouth to spread and SEO to kick in,” he adds. Other forms of advertising would be a waste of money, according to Harvey, because the market the firm is trying to hit is so well defined. It targets only those people who purchased a big trip in the last few weeks. The company’s target market is over age 50, with a hot spot between 60 and 70 years old. People in this group tend to see the value in travel insurance because they know there’s a possibility of a medical emergency or potential mishap. “The younger you are the more invincible you feel,” Harvey says. Plus, usually the travelers who purchase a policy from Squaremouth are going on a more expensive trip, so there is more investment to protect. The company also uses data from its systems to design new

products. Last year it introduced its first insurance offering (Tinleg), designed from 10 years of data of what people were looking for in travel insurance. It became the top-selling product in one year. Part of what makes the company unique is its work environment. “We strip away rules and regulations” that most big companies have, Harvey says. For pay raises, employees pick someone to be their pay raise committee. Everybody knows how much everybody earns and everybody votes on the raise. “All of our books are wide open,” he adds. One of the company’s core values is “f*** it up.” When someone makes a mistake, they announce it, Harvey says. “You embrace it, laugh it off, move on and learn.” The company does enforce some rules, though. For example, you can never sit in the same desk two days in a row, Harvey says. This helps promote a close-knit team. As the company continues its climb, Harvey’s biggest challenge is managing growth. “Every year it’s new,” Harvey says. “I’ve never run a $14 million company; I’m stumbling in the dark.”

It took a long time to reach that tipping point. Chris Harvey | Squaremouth

JANUARY 30 – FEBRUARY 5, 2015 | BUSINESS OBSERVER

infocus | commercial real estate |

BusinessObserverFL.com BY JEAN GRUSS | LEE/COLLIER EDITOR

BRIAN TIETZ

RANDY THIBAUT, the CEO of Land Solutions, and WILLIAM ROLLINS JR., senior broker, formed an agriculture land division of the real estate brokerage firm.

FARMING

opportunity

A prominent land-brokerage firm in Fort Myers is launching an agriculture land division as interior areas of the state get renewed interest from developers, investors and industry consolidators.

andy Thibaut’s passion for real estate started early on his grandfather’s farm. Thibaut, the CEO of Land Solutions in Fort Myers, says his grandfather made more money buying and selling farms in Ohio than milking his own cows. “That wore off on me,” he says. “Both sides of my family were farmers.” The family eventually got out of farming, and Thibaut moved to Florida, where he worked for real estate developers and homebuilders in the Southwest Florida region. He was division president with Beazer Homes before launching Land Solutions in 2000. Today, Florida farms are hot commodities again. Investors, land developers, homebuilders and agriculture companies are scouting the interior of the state again as the economy recovers and popula-

tion growth resumes. “That’s where the growth has to head,” Thibaut says. L a nd Solut ions recent ly launched an agriculture division with the help of Senior Broker William Rollins Jr., a thirdgeneration Floridian and former Pasco County citrus farmer. “The future opportunities are going to be in the B and C locations,” says Thibaut. From the seller side, the transfer of farms to the next generation is fueling some of that trend. In some cases, Florida ranch families are deciding that the next generation isn’t interested in farming and they’d rather sell now that buyers are back. Large agriculture companies are among the buyers. For example, Fort Myers-based agribusiness giant Alico recently announced the acquisition of three citrus growers with thousands

of acres for $363 million. These acquisitions will make Alico the largest citrus producer in the U.S., according to the company. But agriculture companies a ren’t t he on ly ones buy ing farmland. Institutional investors like pension funds see opportunity for both income and safety of principal over the long term, Thibaut says. Looking out, there are fewer land opportunities in Florida’s coastal areas, and that scarcity is making new housing more costly. Developing residential communities further inland is one way to make Florida more affordable for people with modest means. “In a lot of cases, we’ve priced them out” of coastal areas, says Thibaut. One significant residential development has already proven the fact that housing can be successful in remote areas of Florida. The

Villages, a retirement community near Ocala, is the best-selling master-planned community in the country with 2,601 sales in 2014, according a national ranking by John Burns Real Estate Consulting. There are still more opportunities with the proposed creation of inland ports, vast industrial complexes in places like Clewiston where goods arriving at Florida ports such as Miami can be shipped through the center of the state traveling northward. A road dubbed the “Heartland Expressway” that would parallel Interstate 75 and Interstate 95 through the center of the state could help fuel those commercial projects if it’s built. “We have an abundance of land,” Thibaut says. “You have to think long term.” Follow Jean Gruss on Twitter @JeanGruss

That’s where the growth has to head. Randy Thibaut | Land Solutions

BUSINESS OBSERVER | JANUARY 30 – FEBRUARY 5, 2015

BusinessObserverFL.com

COMMERCIAL REAL ESTATE

BY MARK GORDON | DEPUTY MANAGING EDITOR

MARK WEMPLE

HARVEY VENGROFF owns more than 1,400 apartment units in the Sarasota-Bradenton region. He recently started a new business line to convert rundown motels into efficiency apartments for homeless people.

PROFIT with purpose

Seeking to raise $100 million to convert rundown motels into profitable housing for the homeless sounds a tad bizarre. But longtime entrepreneur Harvey Vengroff might be onto something.

uccessful debt collection industry executive Harvey Vengroff wasn’t sure how bad things really were when he bought an apartment complex in a gritty Sarasota neighborhood in 2000. One telltale sign: Paramedics who arrived for emergency calls at the complex, on Old Bradenton Road, weren’t allowed to exit their ambulance until two police cars arrived. One set of officers escorted the EMTs into the apartment. The other officers guarded the ambulance from would-be thieves who sought to steal medicines and supplies. Vengroff says he used a combination of his “own guys” and law enforcement to fix up the com-

plex. “Now it’s clean and safe,” says Vengroff. “It’s just like any other neighborhood.” It’s also one of multiple apartment buildings Vengroff owns in the Sarasota-Manatee area that offer mostly one- and two-bedroom units for the professional working crowd. Vengroff owns more than 1,400 apartments, part of a small empire of residential and commercial properties. Now, at 74, Vengroff has added a new dynamic to this already colorful portfolio: He converts old motels into workforce and transitional housing for homeless people. He currently has about 300 studio apartments under this conversion model, and seeks to add hundreds more. He doesn’t participate in federal, state or local government hous-

ing affordability programs. While the move sounds more like charity than real estate, and it’s certainly life-changing for many tenants, Vengroff says this is, above all else, a shrewd business move. He says he makes a profit of at least 40% on each unit he leases for $575 a month. A waiting list of 200 prospective tenants validates the demand. Vengroff realizes most commercial real estate developers stick to high-end projects. But to Vengroff that merely means greater opportunity with his own model. “There is more money in low-end,” Vengroff says. “But nobody wants to be there.” Vengroff wants to be there so much he’s part of a team putting together a $100 million capital raise effort to expand the mod-

el. Area commercial real estate broker Stan Rutstein, who helps Vengroff scout and buy properties, says one avenue to raise the funds could be through a private real estate investment trust. Another could be through a more traditional investment fund. The Vengroff-led team, in an investor prospectus, says it has five motels totaling 350 apartments ready for purchase and conversion. Although Rutstein declines to name specific sites, motels that fit this model, in general, are about 25-40 years old. The properties tend to need renovations and have outdoor entrances to rooms — a big turnoff to major hotel brands in a potential sale. Rutstein says the team is focused on Florida, for now, but would like to expand

EXECUTIVE SUMMARY Entrepreneur. Harvey Vengroff Industry. Multifamily real estate Key. Vengroff is in rare space, converting rundown motel rooms into studio apartments.

JANUARY 30 – FEBRUARY 5, 2015 | BUSINESS OBSERVER

out of the state eventually. Rutstein says the deals help a variety of sides: For starters, people in dire need of shelter get a place to live. Property owners get to cash out. Municipalities get people back on the tax rolls and off the streets. And Vengroff and his partners get a tidy profit. “We are definitely interested in finding more properties,” says Rutstein. “The intent is to take this past (Manatee and Sarasota) counties.” ‘A GOOD DEAL’ Vengroff currently operates three former motels on U.S. 41 between downtown Sarasota and downtown Bradenton under the conversion model. One is University Row Apartments, a building with 120 units on the Manatee County side of 41, near the University of South Florida Sarasota-Manatee campus. Vengroff has owned that building for seven years, and in addition to apartments there’s also office space that houses employees for his debt collection business, Vengroff Williams. Another building in the conversion portfolio, the most recent addition, is the former Sarasota Airport Hotel, with 117 units. Vengroff paid $2.25 million for that building, on the Sarasota County side of 41, in September, according to county property records. That’s about $19,000 a unit. The converted apartments, with kitchens and bathrooms, are about 300 square feet; these are former motel rooms, after all. The $575 monthly rent includes utilities and cable TV. Says Vengroff: “It’s a good deal when the alternative is living

in your car.” Vengroff has added amenities to the complexes, including a pool, and he tries to install a sense of community. There are Saturday night potluck dinners, yoga classes three times a week and, coming soon, a hydroponic vegetable garden. Vengroff provides nighttime security for the buildings and residents aren’t allowed to drink alcohol or use drugs. “We try to keep it clean and safe,” says Vengroff. A successful tenant, in return, will do more than pay rent. He or she will also get and maintain employment, something Vengroff’s team monitors the old-fashioned way: His people knock on doors at 8 a.m. to roust anyone in bed. “If they are not out there working we will take them out to places with help wanted signs,” says Vengroff. “If they don’t want to work, they can’t stay here.” Tenants come mostly from local nonprofits, such as the Salvation Army and Jewish Family & Children’s Services. Those organizations help find tenants with the best chance of succeeding in the apartments. “Harvey is filling a niche,” says former Sarasota County Commissioner Jon Thaxton, who is now director of community investment for the Gulf Coast Communit y Foundation, and helps on the tenant side of Vengroff’s model. “I’m unaware of anyone else doing anything like this.” WILD WEST Vengroff has been in business in some form since the 1960s, when he ran a small storefront janitorial services business on Long Island, N.Y. His first office was 300 square feet.

BusinessObserverFL.com

NEW MATH Sarasota-Bradenton area commercial real estate and debt collection entrepreneur Harvey Vengroff uses simple math to explain the profitability difference between the two types of apartment markets in which he’s invested. Says Vengroff: “It’s not that hard to figure out.” There’s the standard middle market, where rents for one- or twobedroom units start at about $800 a month. The other market, lowend, has studios that go for about $575 a month. The apartments that get $800 a month cost Vengroff, on average, $70,000 each to buy. The ones that get $575 cost about $20,000 each. Renovation costs differ for each project, but are sometimes more in low-end. Low-end, therefore, is the more profitable market, by far — given he A client ran up a $35,000 tab of unpaid bills, and the cumbersome process of tracking down the money led Vengroff to pursue a new venture in 1963, in debt collections. The early days of the industry, more than a decade before the 1977 federal Fair Debt Collection Practices Act passed, were the Wild West. That’s why Vengroff usually brought along his Great Dane on collection calls. Vengroff eventually shifted his focus to real estate, and he also relocated to the Sarasota area. In addition to his large portfolio of apartments, Vengroff has owned multiple commercial real estate properties in the Sarasota-Manatee region, including several industrial buildings. “A long time ago someone told me

gets a good deal. “You have to be careful with the price per unit,” says commercial real estate broker Stan Rutstein, who helps Vengroff scout and buy properties. “The keynote to this it to buy at the right price.” For example ... If you invest $70,000 in an apartment and charge $800 a month for rent, it would take about 88 months to recoup your investment. 88 months 35 months Whereas, if you invest $20,000 in an apartment and charge $575 a month for rent, it would take only 35 months to recoup your investment. the only way to make money and keep it is in real estate or oil wells,” says Vengroff. “I don’t know much about oil wells.” So Vengroff forges ahead with his latest ambitious real estate project. Rutstein says one challenge, in terms of rapid expansion of the model, is the sheer novelty. That could make it difficult to convince cautious or cynical investors that it’s a viable strategy. “It’s a model that’s young and untested,” Rutstein says. “It hasn’t exploded — yet.” Vengroff has little doubt it will soon, and in the meantime he combines profit with purpose. “It’s kind of cool to help people,” he says. “The challenge is all the people you can’t help. That’s disheartening.”

A long time ago someone told me the only way to make money and keep it is in real estate or oil wells. I don’t know much about oil wells. Harvey Vengroff

calendar

of FEBRUARY 2

ECONOMIC FORECAST: David Altig, executive vice president and director of research at the Federal Reserve Bank of Atlanta, and Mine Yucel, senior vice president and director of research at the Federal Reserve Bank of Dallas, will discuss monetary policy, the economy and energy at an event hosted by New College of Florida. The meeting will start at 5:30 p.m. at the Mildred Sainer Pavilion, 5313 Bay Shore Road, Sarasota. Cost is $25. For more information visit donate.ncf.edu/events or call 941487-4888. BANK LEADERSHIP: John Barrett, president and CEO of First Citrus Bank, will discuss leadership at a meeting presented by the University of Tampa. The event will begin at 4 p.m. at the Sykes College of Business building, 401 W. Kennedy Blvd., Tampa, Room 134. RSVP at BARRETT leadershipspeaker-fcb. eventbrite.com. There is no cost. For more information contact McKala Mason at mmason@ut.edu or 813-257-3782.

FEBRUARY 5

AG CHIEF: Commissioner of Agriculture Adam Putnam will be the keynote speaker for the Gulf Coast Builders

Exchange’s annual meeting. The event will run from 5:30 p.m. to 9 p.m. at the Hyatt Regency Sarasota, 1000 Boulevard of the Arts, Sarasota. Cost is $135 for members and $185 for others. For more information visit gcbx.org.

FEBRUARY 7

OUTLOOK CONFERENCE: Rick Baker, the former mayor of St. Petersburg and president of The Edwards Group, will be the keynote speaker at the commercial real estate CCIM Tampa Bay Outlook Conference. The event will run from 8 a.m. to 1 p.m. at the Wyndham Westshore, 700 N. Westshore Blvd., Tampa. Cost is $99 for members and $139 for others. For more details and to register, visit tampabayoutlook.com.

FEBRUARY 10

STARTUP MARKETING: Art Fyvolent, CEO of marketing company SyncPointe, will present marketing tips for early stage entrepreneurs at the Tampa Bay Innovation Center’s February Tech Talk program. The event will start at 8:30 a.m. at Microsoft FYVOLENT Headquarter offices, 5426 Bay Center Drive, Suite 700, Tampa. There is no cost. For more information visit techtalkfeb2015. eventbrite.com or email weitlaufd@tbinnovates.com.

events

CHAIRMAN SPEAKS: Brian Hamman, chairman of the Lee County Board of County Commissioners, will discuss the county’s priorities at a lunch meeting of the Real Estate Investment Society. The event will start at 11:30 a.m. in the Osprey Room at Pelican Preserve’s Clubhouse a portion of Treeline Avenue at Colonial Boulevard, Fort Myers. Cost is $30 for members and $40 for others. Reservations are required by Feb. 4 at reis-swfl.org.

FEBRUARY 11

ETHICAL SUCCESS: Frank Bucaro, senior ethics adviser and content provider for the Automotive Institute of Ethics, will be the speaker at the February Gulf Coast CEO Forum. The event will run from 7:30 a.m. to 9 a.m. at The Francis, 1289 N. Palm Ave., Sarasota. There is no cost. For more information visit gulfcoastceoforum.com.

FEBRUARY 13

FUTURIST SPEAKS: Futurist David Houle will be the keynote speaker at the Greater Sarasota Chamber of Commerce’s annual breakfast. The meeting will run from 7:30 a.m. to 9:15 a.m. at Polo Grill, 10670 Boardwalk Loop, Lakewood Ranch. Cost is $38 for members and $50 for others. For more information visit sarasotachamber.com.

MARCH 10

REAL ESTATE TRENDS: John

Jung, head of BB&T Capital Markets, will discuss current economic trends at a lunch meeting of the Real Estate Investment Society. The event will run from 11:30 a.m. to 1 p.m. at the Pelican Preserve Clubhouse, Treeline Avenue at Colonial Boulevard, Fort Myers. Cost is $30 for members and $40 for others. For more information visit reis-swfl.org.

MARCH 25

TECHNOLOGY AWARDS: David Trimm, the executive vice president and chief information officer at Hertz, will be keynote speaker for the Southwest Florida Regional Technology Partnership’s awards gala. The event will run from 5:30 p.m. to 9 p.m. at the Pelican Preserve TRIMM Clubhouse, 9802 Pelican Preserve Blvd., Fort Myers. Cost is $75 per person. For more information visit swfrtp.org.

APRIL 8

ENGAGING EMPLOYEES: Bob Kelleher, author of the book Louder Than Words, will be the presenter for the April Gulf Coast CEO Forum. The event will run from 7:30 to 9 a.m. at The Francis, 1289 N. Palm Ave., Sarasota. There is no cost. For more information visit gulfcoastceoforum.com.

BUSINESS OBSERVER | JANUARY 30 – FEBRUARY 5, 2015

BusinessObserverFL.com

LEADERSHIP

BY MARK GORDON | DEPUTY MANAGING EDITOR

fter 45 years in show business, Feld Entertainment CEO and Chairman Ken Feld is rarely surprised.

That changed when a pair of princesses, Anna and Elsa, came into his life. The sisters are the stars of the blockbuster Disney movie “Frozen,” and more recently, “Disney on Ice Presents Frozen.” The live ice show is produced by Feld Entertainment, which operates a $30 million global production headquarters in Manatee County. The show is a smash hit: More than 1 million people have seen it since it debuted last year. “I’ve never seen anything like it,” says Feld, both on ticket sales and the audience frenzy. “This is the greatest thing I’ve ever seen, and I was around for the Beatles.” Feld, 66, chatted about “Frozen” and many other aspects of his career during the second annual USF Sport & Entertainment lecture series held Jan. 13 in Tampa. He talked about the company’s history, the extensive process behind making a show and how the use of analytics has transformed the live entertainment industry. Feld also talked about the joys and challenges of overseeing a business where his three daughters are top executives. “Every day is take-yourdaughter-to-work day for me,” quips Feld. Feld has been in the live entertainment industry since he was a young boy, when he sold circus books at shows promoted by his father, Irvin Feld. The younger Feld scouted acts in Eastern Europe when he was in college, and he later ran the business behind the shows. Today Feld Entertainment is a billion-dollar live show business juggernaut, with performances in more than 75 countries. About 30 million people attend one Feld’s 5,000 shows held every year. Feld, in a rare one-on-one media interview, spoke with the Business Observer before his USF presentation. Here are edited excerpts of the conversation: What were some obstacles you faced when you were a young executive? My dad died suddenly when I was 35 years old, and I had this whole company. One day, literally overnight, I had to figure out how to run this thing. It probably took me 10 years to figure out what to do, what to restructure and to take it to a place where we could really grow and expand.

COURTESY

KEN FELD has been with Feld Entertainment since 1970.

What did you learn about leadership back then that helped shape the core of what Feld Entertainment is today? You have to be able to get smart people, but it’s more important to give them authority, responsibility and more than anything else, trust. Once you can trust people, then you can sleep at night. I had that relationship with my dad, and having my daughters in the business gives me a great feeling. It’s the most gratifying thing ever for me to work with my daughters.

See FELD page 15

just for

FUN

Billion-dollar entertainment executive Ken Feld says his company never shies away from change — especially when things are going well.

EXECUTIVE SUMMARY Company. Feld Entertainment Industry. Live entertainment Key. Chairman and CEO Ken Feld says trust is the most important element in employees.

JANUARY 30 – FEBRUARY 5, 2015 | BUSINESS OBSERVER

BusinessObserverFL.com

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BUSINESS OBSERVER | JANUARY 30 – FEBRUARY 5, 2015

THE SPEAKERS

The Sport and Entertainment Management M.B.A. program at USF brought in four speakers for its second annual USF Sport & Entertainment lecture series earlier this month. Sponsored by Fox Sports Florida and the Tampa Bay Lightning, the speakers included an agent, a pro sports team owner, a show business CEO and a college professor who integrates technology with entertainment. Each speaker chatted with students about their careers, setbacks, overcoming obstacles and lessons learned. The following are some of their nuggets of wisdom.

DAVID FALK EXECUTIVE: David Falk, CEO and founder of Falk Associates Management Enterprises (FAME), a Washington, D.C.-based sports management firm. Over the last 41 years, Falk has represented more first-round draft picks in the NBA than anyone else in the business. CAREER MILESTONES: Falk represented Michael Jordan throughout his basketball career, helping him score deals with Nike, McDonald’s, Chevrolet and Warner Bros. to create “Space Jam,” a movie starring Jordan that took in $230 million at the box office, $7 million in CD sales and $1 billion in retail. He’s also credited for coming up with the Air Jordan branding.

COURTESY PHOTOS

DON’T QUIT: While in law school, Falk was told to meet with Donald Dell, whose firm represented a

number of tennis players. He called the firm 17 times from the library payphone until it agreed to an interview. Offering to work for free late at night, Falk learned the business by sorting through contracts for things from rackets to shoes. BIG BREAK: Falk’s first major deal was for Patrick Ewing. At the time, top players made about $1 million a year. Falk asked the Knicks for $30 million for 10 years for the rookie, garnering a response of, “What are you smoking?” While waiting on a deal, the team put Ewing on the cover of the season ticket book and sold more than $6 million in tickets in 50 days. Falk told the team the sales showed Ewing was worth even more, and the Knicks agreed to $3.2 million a year, the largest contract of its time, complete with the first ever opt-out clause.

DO IT ALL: Falk says agents need to learn that no task is beneath them. Despite having a business degree from Wharton, the executive vice president of FAME, Danielle Cantor, was recently asked to help move Nike shoes around in Otto Porter Jr.’s closet. “Those kind of mundane things really bond you with people. You’re never too big for that.” GAME TIME: Falk is criticized for being greedy and cutthroat. He says like many of his athletes, people don’t know him outside of work. “When I put my uniform on, I’m very competitive and aggressive,” Falk says. It’s a fine line of balancing the interest of clients and owners, he adds.“I don’t think players need to hire friends or yes people, they need people to tell them, ‘no.’” — Traci McMillan Beach

DONALD MARINELLI SHEILA JOHNSON EXECUTIVE: Sheila Johnson, CEO of Salamander Hotels & Resorts. The Middleburg, Va.-based firm operates four properties, including Innisbrook Resort in Palm Harbor. Johnson, 65, also owns the Washington Mystics of the WNBA and is vice chairwoman of Monumental Sports & Entertainment, the company that owns the NBA’s Washington Wizards and the NHL’s Washington Capitals. CAREER MILESTONES: Johnson co-founded Black Entertainment Television in the 1980s, the first large-scale channel to cater to African-American programming. She’s also produced documentaries and movies, and founded a line of luxury scarves. She was a concert violist and music teacher in her first career. DON’T QUIT: Johnson says it takes a high degree of resiliency to get ahead — and stay ahead — in a business like sports management. That’s especially true in owning a professional team, she says, where there are few women. So Johnson,

even in what she calls Act III of her life, remains vigilant about never giving in and never accepting mediocrity. “The biggest obstacle is to keep myself convinced I could do anything,” she says. “Never listen to the outside voices.” HIRING ADVICE: When hiring someone, Johnson aims to avoid people with outsized egos and hidden agendas. “I call them energy vampires,” says Johnson. “They will ride your coattails and suck you dry.” KEEP FIGHTING: Johnson learned how to never take no for an answer from her mom, her mentor. Her father was a neurosurgeon for the Veteran’s Administration, and the family moved frequently when she was a young child. Her mom kept the family together and never let the racial tensions of the time become a hindrance to accomplishing goals. “I grew up during the civil rights era, a tough era,” says Johnson. “I had to swim upstream.” — Mark Gordon

EXECUTIVE: Donald Marinelli, executive vice president of Vissman Management, a Pittsburgh-based merger, acquisition and venture capital firm. Marinelli provides creative and technical advising for the company’s portfolio. Marinelli was the cofounder of the Carnegie Mellon Entertainment Technology Center (ETC) and worked as a professor at the school for 31 years. CAREER MILESTONES: In 1998, Marinelli cofounded the ETC with the late Randy Pausch, a computer science professor most known for “The Last Lecture.” In 2010, Marinelli published “The Comet and the Tornado,” a book about the duo’s partnership and the ETC, commonly referred to as the “Dream Fulfillment Factory.” DIGITAL NATIVES: Marinelli says companies and institutions need to keep up with the 21st century digital natives, who embrace the intersection of art and technology. This generation likes the non-linear narrative in video games, where they get to make a choice from infinite possibilities in a different world. They also feel they have deistic powers — they are connected

all the time (omnipresence) and the Internet allows them to know the answer to any questions (omniscience). “They expect the world and institution to reflect these attributes,” Marinelli says. SPORTS ADOPTION: The sports world has been good at recognizing this generation, Marinelli says. It has embraced user-generated content, doing things like displaying audience tweets in real time during games. Sports teams are also working to provide more metrics than ever before. They’ve even played into the generation’s attraction to augmented reality, viewing the world with a computer-generated layer on top of it, for example when a person can look through his phone at the football field and see the yellow first-down line. FLIP THE MODEL: The final key for sports is to enhance the audience’s ability to make other choices. Marinelli says the audience wants heightened immersion into the game, a way to feel as if they are a part of it. Embracing technology to accomplish this is essential to success, he says. — Traci McMillan Beach

JANUARY 30 – FEBRUARY 5, 2015 | BUSINESS OBSERVER FELD from page 12 Why is trust so important? Trust and being right are two different things. If you trust people, you know they will make the best decision to get to the similar goal. None of us is always right. Has trust helped you navigate the dynamics and challenges of running a family business? You navigate every day. You are on the ship and in the ocean every day. There’s no dry-dock time on this thing. You talk about stuff, and it gets heated. Every CEO of every company spends a disproportionate amount of time figuring out what the truth is. I have to tell you: When you are there with your three daughters there isn’t one thing you can get away with. No punches are pulled. They are absolutely honest and tell me things no one else on the planet would tell me. What did you learn about hiring talented people when you scouted circus entertainment in Eastern Europe in the late 1960s and early 1970s? I went with a gentleman who was in the circus business and spoke seven languages. We would sit and watch acts, and he would tell me this person is really good. I would say a flip is a flip. But it’s also technique — you don’t want people who do something right one time, then get hurt. We would watch circus acts for three days, eight hours a day. They would bring in an audience and the

best band you ever heard. But the biggest thing I learned is you can get fooled by the audience and the surroundings. So I never hired an act I maybe loved in the show before I saw the act with no music or anything. I didn’t even care if they had costumes. I wanted to see the act. If I still liked it in that atmosphere, then I knew it was a good act. What are some keys to making good hires on the business side of Feld Entertainment? When you hire somebody, and you are looking at resumes, you never know. It’s a gamble we all take. But the one thing you have to assume is you are hiring people who are smart. So if you make the assumption smart people will be right nine out of 10 times, that’s a given. The problem is if they are afraid to make a decision, no one will ever know they are even smart. What defines your approach today to running a business with such a large and complex array of shows and business interests? I view everything as a connection. Every deal that I make today is to set up the deal I will make tomorrow. Every show we have is to figure out what’s the one after that. People ask me all the time what my favorite show is. My answer is always the same: the next one. And that’s the real key to growth and the key to our success. We are always looking ahead and we are always looking to be better and improve on what we do.

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RUNNER RUNNER A conversation Ken Feld had with a friend about getting old more than 25 years ago changed his life: The friend told Feld, CEO and chairman of Feld Entertainment, that what you are like physically in your 40s is what you will be the rest of your life. Feld, 66, says that was his epiphany to live a healthier life. He quit smoking. He started eating better. And Feld, who has a home in Tampa and Sarasota, took up running. He loved running so much he eventuHow do you top a big show the next time around? When the end product turns out the way you envisioned it years before, it encourages you take the next step. And in life, nobody goes backwards. So the next one will be more complicated, but we will be better prepared and better educated because of the last one. What are some characteristics that make for a good leader? Someone who can listen. Someone who embraces change and is willing to change direction if they realize there is a better idea in the room. It’s very important to give people credit, to encourage them and make them feel like they own the process. Why is embracing change a key characteristic? Change is so important. I’m always looking to find the new thing, the next

ally became a marathoner. He ran his first long distance race, the New York City Marathon, in 2004 — when he was 55. He has since run in several others, including the Chicago Marathon with two of his three daughters. Running is a cathartic experience for Feld. “Some of my best thinking comes when I’m running,” says Feld, speaking at a recent event at USF in Tampa. “It’s something that no one else can do for you.” thing, to change whatever we have. If something is great, that’s the time to figure out how to change it and make it better. It’s not when you have a big problem, because then you probably missed your opportunity. What decisions have you made in your career that you would like to have back? I don’t look back. It’s not about that. But what I learned, and it took me a long time because my dad and I were so close, is I would think ‘what would my father do?’ Biggest single mistake I ever could have made. I wasn’t my father, and I could never be him. We are completely different types, different styles. I had to do what I thought was best for the company, not what I thought he thought was best for the company. Once I understood that, that was the game-changer in how I went forward and I restructured everything.

If something is great, that’s the time to figure out how to change it and make it better. It’s not when you have a big problem, because then you probably missed your opportunity. Ken Feld | Feld Entertainment CEO and Chairman

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HEALTH CARE

BY JEAN GRUSS | EDITOR/LEE-COLLIER

BRIAN TIETZ

ANDREW JAFFE grew Riverchase Dermatology and Cosmetic Surgery from a solo practice in Naples to 16 offices stretching from Sarasota to Marco Island.

SKIN in

the game

Andrew Jaffe grew his solo dermatology practice to 16 offices by seizing opportunities created by changes in the health care industry.

hen Andrew Jaffe opened his solo dermatology practice in Naples in 2000, he visited six banks before one finally agreed to lend him a small sum to open his business. Fresh out of medical residency, Jaffe had relocated with his young family to Naples from New Jersey. A small bank eventually lent him $80,000 to get started. “I started in a very small office,” he recalls. “I started out with three employees.” Today, Riverchase Dermatology and Cosmetic Surgery has

16 offices from Sarasota to Marco Island with about 250 employees. “I always had that motivation to work for myself,” says Jaffe, who still spends mornings with patients despite the demands of the growing business and family with four children. But Riverchase’s growth says as much about Jaffe’s entrepreneurial skills as it does about the government and insurance environment in which health care operates today. Increased government mandates and falling insurance reimbursements are forcing solo practitioners to join forces with larger groups to earn a living. “Consolidation appears

inevitable,” Jaffe says. In April, for an undisclosed sum, Riverchase acquired West Coast Dermatology, whose eight offices spread from Sarasota to Lehigh Acres. Candy Steiding, the former CEO of West Coast Dermatology who is now regional director at Riverchase, agrees that the consolidation trend among health care providers is well underway. But Riverchase isn’t just growing by acquiring offices. Jaffe has added services such as psoriasis and cosmetic skin treatments, and he’s launched an online service called DermConnect that enables doctors to diagnose cer-

tain conditions online. To fuel the growth, Jaffe turned to Chicago-based private equity and venture capital firm Prairie Capital. Prairie’s fifth fund, called Prairie Capital V, raised $300 million and invested an undisclosed portion in Riverchase in December 2012. “I wanted a partner who believed in the vision,” says Jaffe, who says he retains an undisclosed but “significant” stake in the business. “We could look at doubling in size in the next three to five years,” he says. Jaffe confides that he didn’t have a grand vision for Riverchase when he initially started

EXECUTIVE SUMMARY Company. Riverchase Dermatology and Cosmetic Surgery Industry. Health care Key. Entrepreneurial doctors are adapting to changes in health care.

JANUARY 30 – FEBRUARY 5, 2015 | BUSINESS OBSERVER

the practice, but he grew it by seizing opportunities when they came. “I never think like I have it all down,” he says. “I never rest easy.” His advice for other entrepreneurial doctors: “Trust your gut.” A SHINGLE IN NAPLES Jaffe’s story is classic entrepreneur. The New Jersey native completed a post-residency fellowship in Tampa learning skin-cancer surgery technique using a microscope called Mohs surgery in 1999. While in Tampa, Jaffe learned that Naples only had one Mohs surgery expert. “I heard Naples was an up-andcoming area,” says Jaffe. Despite his family’s reluctance to leave friends and extended family in New Jersey, Jaffe moved to Naples with his wife and two young children in 2000. “We kind of took a gamble where we knew nobody,” he says. But despite the fact that there were few skin-cancer surgeons in Naples when he opened the practice, Jaffe didn’t want to be known only for Mohs surgery. “It was a great advantage, but I didn’t want to be only a referral business,” he says. His business philosophy was simple and remains the same today: “If you provide quality care, the business would follow,” Jaffe says. Jaffe grew the business by judiciously adding a mix of doctors with physician assistants who could triage cases according to their sever-

ity. He opened satellite offices that could refer more serious cases to a central location, much like the airline industry’s hub-and-spoke system. That system allowed Jaffe to offer more specialized services such as plastic surgery, psoriasis and laser treatments. Cosmetic centers branded as Spa Blue offer aesthetic treatments such as Botox injections. What’s more, offering both cosmetic and medical and surgical dermatology helped the practice with patient retention because Riverchase didn’t have to refer them to other doctors. GROWING THE PRACTICE A confluence of events hit the medical industry at the turn of the decade: The recession reduced elective surgeries, new government regulations mandated expensive medical-records technology and government and private-insurance reimbursements started falling. Consolidation hasn’t been restricted to dermatology practices. Medical groups in all specialties are banding together to be more cost-efficient. “I felt that it was inevitable,” Jaffe says. So Jaffe faced a choice: Grow Riverchase or sell it to a larger practice. “I saw the writing on the wall,” says Jaffe, choosing the former. “We’re ripe for consolidation,” he says. To do that, Jaffe beefed up his management staff, led by Chief Operating Officer Sara Ritacca, so that quality could be maintained even

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CONNECT THE FUTURE The virtual doctor’s visit is here. Telemedicine has long been the stuff of science fiction, but Andrew Jaffe, the founder and CEO of Riverchase Dermatology and Cosmetic Surgery, says it’s now possible to diagnose some patients online. “I feel that’s the future,” he says. Riverchase recently launched DermConnect, an online service that allows you to take a photo of a skin ailment for a doctor to review online. “We’ve worked over a year on this,” says Jaffe. For simple cases such as rashes and eczema or a follow-up appointment to check on a patient’s progress, Riverchase can prescribe a remedy without the time and effort it entails to make an office visit. “People are busy now,” as the firm was growing. “We could be a quality alternative to some of the other dermatology practices,” Jaffe reasoned. With the help of investment bankers who specialize in mergers and acquisitions, Jaffe sought equity partners to invest in Riverchase. “It wasn’t something I could do alone,” he says. In late 2012, Prairie Capital agreed to invest an undisclosed sum in Riverchase. Jaffe says Prairie doesn’t discuss its investments publicly, but the private-equity firm says it targets companies with annual recurring revenue of $20 mil-

says Jaffe. For example, busy parents don’t have to take their children out of school for an appointment at the dermatologist visit for a simple case of acne. “I think it’s a huge market,” says Jaffe. Jaffe acknowledges that some physicians are leery of diagnosing patients online, but he says it’s a question of access. “The reality is not everyone can get a visit with a dermatologist,” he says, noting that anyone in Florida can visit DermConnect. A virtual visit on DermConnect costs $59, less than an office visit that might cost between $75 to $115, depending on the service. “We priced it so it’s slightly more than a co-pay,” Jaffe says. lion and annual cash flow of $4 million. Riverchase’s April acquisition of West Coast Dermatology launched Riverchase’s expansion into the Sarasota area. Jaffe says future acquisitions won’t necessarily be dictated by geography as much as opportunities, which may include practices outside the state and new technology that offers virtual office visits. “We’re poised for significant growth,” hints Jaffe, declining to cite annual revenues for competitive reasons. “Our goal is to grow every year.”

Consolidation appears inevitable. Andrew Jaffe | Riverchase Dermatology and Cosmetic Surgery CELEBRATING 90 YEARS: 1924 – 2014

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Cassidy family of Winter Haven buys 70 acres in Ruskin for home development BUYER: Wyn Group LLC (manager: Albert Cassidy), Winter Haven SELLER: B&P Tree Farm LLC PROPERTY: 1102 N.E. 18th St. and an additional portion of northeast 11th Avenue, Ruskin PRICE: $2.12 million PREVIOUS PRICE: $900,000, January 2011 BUYER: Wyn Investors LLC (manager: Albert Cassidy), Winter Haven SELLER: B&P Tree Farm LLC PROPERTY: 880 N.E. 18th St. and 1725, 1915 and 1917 N.E. 11th Ave., Ruskin PRICE: $880,000 PREVIOUS PRICE: $900,000, January 2011 BUYER: Wyn Investors LLC (manager: Albert Cassidy), Winter Haven SELLER: Clifford and Carol Anderson PROPERTY: 819 N.E. 18th St., Ruskin PRICE: $450,000 LAW FIRM ON DEED: Straughn & Turner PA, Winter Haven

The Cassidy family purchased 70 acres east of U.S. 41 and south of 19th Avenue Northeast in three transactions for a combined $3.45 million. The price equated to $49,300 per acre. The property is zoned for about 360 residential units. The new ownership expects to develop a single-family community on the property and sell the home lots to homebuilders. Bill Short of Southeast Land Consultants Inc. (SLC) represented the seller, B&P Tree Farm LLC, in two of the three transactions, which covered 60.6 acres. “The buyer sees the Ruskin area as a growing opportunity for workforce housing, considering the recent employment growth in the area,” Short says in a press release. “The Amazon distribution center and St. Joseph’s Hospital have spurred economic development and growth in this area, and solidified in buyers’ minds that it’s a good idea to buy land for residential development here.” The Cassidy family is well known as real estate investors and homebuilders. The family recently purchased 369.5 acres of former farmland on a portion of McGrady Road east of U.S. 301 in Wimauma for $4.5 million. It plans to create a new residential community there as well.

California’s Carolyn Artis Trust buys Homes of Fountainview BUYER: Fountain View Estates LLC (The Carolyn Artis Trust), Encino, Calif. SELLER: Fountainview Estates Tampa Ltd. PROPERTY: 9092 Sheldon Road also known as 8800 N. Sheldon Road, Tampa PRICE: $34.89 million

BUSINESS OBSERVER | JANUARY 30 – FEBRUARY 5, 2015 BY SEAN ROTH | REAL ESTATE EDITOR

PREVIOUS PRICE: $2.1 million, September 1979 LAW FIRM ON DEED: Johnson Pope Bokor Ruppel & Burns LLP, Clearwater PLANS, DESCRIPTION:

The Carolyn Artis Trust of Encino, Calif., purchased The Homes of Fountainview mobile home park for $34.89 million. The price equated to $63,777 per home lot, or $474,120 per acre. The 73.58-acre mobile home park backs up to the Upper Tampa Bay Trail and has 547 home lots. The gated community features tennis, bocce ball and shuffleboard courts, two swimming pools, an exercise and rehearsal room, laundromat and two clubhouses. The community is age restricted allowing only residents 55 and older. The property features four built-inplace structures: the two clubhouses, a 266-square-foot office building and a 2,400-square-foot prefabricated metal building. The Carolyn Artis Trust is an active mobile home owner investor nationwide. Cal Am Properties Inc. manages all of the trust’s properties.

MQ Development Partners buys spec Waters Avenue retail site BUYER: Waters Retail TPA LLC (manager: Donald Silverman and Helmut Landwehr), Dallas SELLER: Tampa Waters LLC PROPERTY: 3602 W. Waters Ave., Tampa PRICE: $3.78 million PREVIOUS PRICE: $10.7 million, June 2006 LAW FIRM ON DEED: Carlton Fields Jorden Burt PA, Tampa

commercial real estate | SARASOTA–MANATEE |

PLANS, DESCRIPTION:

Robert Lesser of Sarasota purchased a 33,704-square-foot retail development for $2.35 million. The price equated to $70 per square foot. That figure is lower than the twoyear average price per square foot for retail space ($129) in the Tampa Bay area, according to the CoStar Group. Located along State Road 41/Eighth Avenue, the property features a main L-shaped building and an adjacent roughly 10,000-square-foot square building. Tenants include Top Shop, Subway, a sushi restaurant, nail salon, two thrift stores and Amscot. The property had a single 5,000-squarefoot vacancy at the time of the sale. Chuck Thomas of Maxim Commercial Real Estate LLC represented the seller, and Sue Orton of H3 Management LLC represented the buyer. The purchase entity, Palmetto 737 LLC, mortgaged the property to Insignia Bank for $1.35 million.

Sarasota investor Vorbeck buys Clark Road Square BUYER: Mick Vorbeck, Sarasota SELLER: Stephenson Anderson and John

Anderson Jr. PROPERTY: 3240 Clark Road, Sarasota PRICE: $1.78 million PREVIOUS PRICE: $350,000, March 1999 LAW FIRM ON DEED: The Law Office of Chris M. Vorbeck PA, Sarasota PLANS, DESCRIPTION:

Mick Vorbeck of Sarasota purchased a 10,164-square-foot retail strip center for $1.78 million. The price equated to $175 per square foot. That figure is higher than the two-year average price per square foot for retail space ($129) in the Tampa Bay area, according to the CoStar Group. The retail center, called Clark Road Square, features Richard’s Foodporium, Dairy Queen, a restaurant and a therapeutic massage business. It was fully leased at the time of the sale and two of the larger tenants had been there since the building was constructed in 2001. Temp Hamilton of Good Life Realty represented the buyer and Barry Seidel of American Property Group of Sarasota Inc. represented the seller. The property was sold as an investment. The purchase price equated to a payoff ratio based on income [capitalization rate] of between 7% or 8%. Vorbeck mortgaged the property to Hancock Bank for $686,000.

Ronto Group, Wheelock Street buy lot for Echelon on Palm BUYER: WSR-Sarasota LLC (WSREF II NRT LLC), Greenwich, Conn. SELLER: Timothy and Kristen Beury PROPERTY: 624 S. Palm Ave., Sarasota PRICE: $1.3 million PREVIOUS PRICE: $690,000, May 2004 LAW FIRM ON DEED: Foley & Lardner LLP, Tampa PLANS, DESCRIPTION:

Dallas-based MQ Development Partners purchased a 16.06-acre vacant parcel west of North Himes Avenue for $3.78 million. The price equated to $235,056 per acre. The site features roughly nine acres of developable land and a large pond. “We like infill sites and we have a number of tenants that are always looking for these types of sites,” says Donald Silverman, managing partner of MQ Development Partners. “We bought it on spec. Now we have to figure out what we’re going to do with it.” Primarily a retail developer in Texas over the past year, the company has purchase a half dozen properties along the west coast of Florida. It owns land in Zephyrhills, North Port and Charlotte, according to Silverman. “A couple of our existing tenants asked us to take a look at sites and both of them ended up looking on the west side of the state,” he says. “We saw it as an opportunity to diversify geographically.” The developer has one more sale scheduled to close for land in Florida this month. MQ Development Partners participated in the ownership or development of more than 4 million square feet of retail space. Andrew Sexson, Dolores Seymour and Edward Miller of Colliers International represented the seller.

ETC. • Michael Mele in Marcus & Millichap’s Tampa office and Stacey Gorman in the firm’s Atlanta office handled the sale of Seagrove Beach Self Storage, a 577-unit self-storage facility in Santa Rosa Beach for $10 million. The price equated to $153 per square.

BY SEAN ROTH | REAL ESTATE EDITOR

Sarasota investor Lesser buys Palmetto retail buildings BUYER: Palmetto 737 LLC (manager: Robert Lesser), Sarasota SELLER: Treasure Cove Development Corp. PROPERTY: 705, 707, 709, 713, 721, 731, 733, 735 and 737 W. Eighth Ave., Palmetto PRICE: $2.35 million PREVIOUS PRICE: $3 million, May 2005 LAW FIRM ON DEED: Law Offices of William G. Morris PA, Marco Island

PLANS, DESCRIPTION:

Naples-based The Ronto Group Inc. and equity partner Wheelock Street Capital LLC of Greenwich, Conn., purchased the former La Palme Royale Bed & Breakfast property for $1.3 million. The Ronto Group plans to combine the parcel with an additional adjacent lot at 621 Gulf Stream Ave. to create a 1/3 acre of land to develop an 18-story condominium tower called Echelon on Palm.

The tower will house a total of 17 units, including a two-story townhome unit. Units will contain more than 4,000 square feet of living space and will sell for an average of more than $3 million. Amenities include a swimming pool, social room, fitness room and rooftop terrace. “We should be opening a sales office within a week or so,” Anthony Solomon, executive vice president of The Ronto Group, says in a press release. “We’ve already been out to the market with advertising for reservations. There has been a ton of interest. We’ll be converting those to contracts and plan to begin construction toward the end of the year.” Construction of the building is expected to take 18 months. Solomon says, the site offered the dual benefits of unobstructed views of the Gulf of Mexico and a desirable address on Palm Avenue. Randy Thibaut and Doug Meschko of Land Solutions Inc. represented the buyer, and Steve Horn of Ian Black Real Estate represented the seller.

ETC… • Sarasota Veterinary Neurology and Imaging Center LLC leased the space at 7005 S. Tamiami Trail, Sarasota from Thomas and Christine Pinson. Barry Seidel of American Property Group of Sarasota Inc. represented the landlord, and Adam Seidel of American Property Group of Sarasota Inc. represented the tenant. • AGR Property Management LLC purchased the property at 2831 Ringling Blvd. Unit 106, Sarasota from John Flanagan and J.C. Group USA Inc. for $100,000. Ken Hoskinson of Hembree & Associates represented the seller, and Marcia Cuttler of American Property Group of Sarasota Inc. represented the buyer.

JANUARY 30 – FEBRUARY 5, 2015 | BUSINESS OBSERVER

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commercial real estate | CHARLOTTE-LEE-COLLIER |

Western Global Airlines affiliate buys Estero Park Commons BUYER: 9260 Estero LLC (manager: Summit Holdings GP LLC), Miami SELLER: The United States Life Insurance Co. in the City of New York PROPERTY: 9260 Estero Park Commons Blvd., Estero PRICE: $2.5 million PREVIOUS PRICE: $2.51 million, November 2002 LAW FIRM ON DEED: Coleman Yovanovich & Koester PA, Naples PLANS, DESCRIPTION:

A company affiliated with air-cargo carrier Western Global Airlines LLC purchased a 22,480-square-foot office building for $2.5 million. The price equated to $111 per square foot. That figure is in line with the twoyear average price per square foot for office space ($112) in Southwest Florida, according to the CoStar Group. Known as Estero Park Commons, the building is currently half leased to Lane Pediatrics and McGarvey Development Co./McGarvey Construction Co. of Florida. Both of the tenants occupy space on the bottom level. The top floor, about 11,000 square feet, is currently vacant. Western Global

Airlines is expected to operate from that space. The building features keyless entry, a specialized safety system and energy-efficient and impact-resistant glass. It was built using concrete tiltwall construction. Matt Frederickson and Tim Schneider of Trinity Commercial represented the seller, The United State Life Insurance Co. Randal Mercer, Brandon Stoneburner and Nicole Gray of CRE Consultants represented the buyer. “This is a great place to call home for a 10,000-square-foot tenant,” Mercer says. “The prior owner put a lot of money into the building, so aside from remodeling their own space, the building is in great shape.” Western Global Airlines, which started operations in August, is led by CEO Jim Neff, who founded and was CEO of Southern Air Inc. from 1999 until 2010. Neff is also acting CEO and chairman of Helsinki, Finland-based Nordic Global Airlines Ltd.

Illinois car wash owner moving business to Southwest Florida BUYER: Ultimate Express Car Wash LLC (manager: Chad Dubbs), Belvidere, Ill. SELLER: A. Grover Matheney as trustee of a land trust PROPERTY: 5302 Useppa Way, Naples PRICE: $1.95 million LAW FIRM ON DEED: Conroy Conroy & Durant PA, Naples

BUYER: Garrison Naples Hotel PropCo LLC (managers: Brian Chase and Robert Feeney), New York City SELLER: OpRock Naples Fee LLC

PLANS, DESCRIPTION:

Illinois businessman Chad Dubbs purchased 1.15 acres of vacant land in the Gaspar Station Planned Unit

BY SEAN ROTH | REAL ESTATE EDITOR

Development for $1.95 million. The price equated to $1.7 million per acre. The property is located next to a new Chase Bank building and a Walmart Supercenter. Dubbs, who has been in the car wash business for more than 15 years, plans to sell his 25-employee car wash in Illinois to open a new location in Naples. “I’m tired of the cold weather,” he says. “I have one location up here, but I’ll be doing more [locations] down there. I’m hoping to get started on the construction [of the first location] by the end of February or the first of March.” The new express wash car wash will have 5,000 square feet of total space with offices and bathrooms. Dubbs expects to invest close to $1 million on the equipment for the facility. Construction will likely take five to six months. Dubbs is currently looking at sites in Fort Myers and Cape Coral with the goal of owning several car washes from Cape Coral to Sarasota. “With multiple properties you hope to avoid getting rained out everywhere in the same day,” he says. Craig Timmins of Investment Properties Corp. represented the transaction.

Garrison Investment Group buys Naples Courtyard by Marriott

PROPERTY: 3250 Ninth St. N., Naples PRICE: $12.3 million PREVIOUS PRICE: $17.91 million, August 2007 LAW FIRM ON DEED: Gunster Yoakley & Stewart PA, Miami PLANS, DESCRIPTION:

New York City-based Garrison Investment Group purchased the 102unit Courtyard by Marriott in Naples for $12.3 million. The price equated to $120,588 per unit. The four-story hotel features 98 rooms and four suites. Amenities include a fitness center, outdoor swimming pool with a whirlpool and 782-square-foot meeting room. The Naples hotel was recently renovated and features a redesigned lobby and hotel rooms. The seller, a partnership of San Francisco, Calif.-based Rockwood Capital and Mark Walsh of Delray Beach, purchased the hotel near the top of the market in 2007 just prior to the real estate collapse and recession. Another Rockwood Capital affiliated company, OpRock Coral Springs Fee LLC, recently sold an 110-unit Courtyard by Marriott in Coral Springs to Garrison Investment Group for $7 million. Garrison Investment Group had not replied to a request for comment as of deadline.

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Intrepid Powerboats and Carmel Kitchen and Wine Bar hire Tampa ad agency EraserFarm Tampa creative and strategy-based agency, EraserFarm, was selected as the agency of record for Intrepid Powerboats and Carmel Kitchen and Wine Bar. EraserFarm will provide each client with strategic and brand planning, social media management and creative development.

Hertz Equipment Rental expands with Sanford facility Hertz Equipment Rental Corp., a wholly owned subsidiary of Naples’ The Hertz Corp., has opened a new location in Sanford to serve northern Orlando, Daytona Beach and the surrounding area. The 27,000-square-foot facility provides rental equipment to support road and general construction as well as earth moving, environmental and aerial-related projects. “Florida is an exciting market for us, especially given the steady comeback of its construction industry,” Robert Cowing, Hertz Equipment Rental’s division vice president for sales in North America, says in a press release. “We opened our new Sanford location to support our expanding operations in Orlando.... ” The new location, at 1501 W. First St., Sanford, will also offer training, equipment services, parts and 24-hour emergency service. Hertz Equipment Rental has about 340 locations in the United States, Canada, China, France, Spain and Saudi Arabia in addition to international licensees.

BY SEAN ROTH | RESEARCH EDITOR

GRILLiT reaches deal with franchisee for Tampa restaurant Miami-based Latin-Caribbean fusion restaurant firm GRILLiT Inc. (symbol: GRLT; recent price: $0.01) reached a franchise agreement with Greg Mitchell to create a GRILLiT restaurant in Tampa. Mitchell is still in the process of securing the location, which is expected to be in the Trinity area of northwest Tampa. “We are delighted to add a new franchisee in the state of Florida,” Ghazi Hajj, GRILLiT CEO, says in a press release. “I believe he is in an ideal area for our brand of fast-casual, healthy dining.” The new Tampa franchisee expects to secure the location within the

Computer security firm Malwarebytes locates new office in Clearwater Prominent anti-malware/virus company Malwarebytes has opened a new office in Clearwater. The company provides software to protect consumers and businesses from advanced computer security threats. Founded in 2008, Malwarebytes is headquartered in San Jose, Calif., and operates another office in the Republic of Estonia.

Skyway Capital Partners brokers sale of InStep to Schneider Electric Skyway Capital Partners, a Tampabased investment-banking firm, handled the sale of InStep Software LLC, an industrial big data company, to Schneider Electric SE.

next several weeks, with the goal of launching the restaurant in the third quarter. GRILLiT opened its first location in Miami in 2011. It specializes in rice bowls, pastas and wraps as well as salads. Headquartered in Chicago, InStep offers real-time performance management and predictive analytics software products. “We felt InStep’s eDNA software strongly complemented Schneider Electric’s Wonderware Historian software, and similarly believed that InStep’s PRiSM software would enhance Schneider Electric’s other industryleading information and asset management software offerings,” Bryan Crino, president of Skyway Capital Partners, says in a press release.

The purchase marks Service King’s first location in the Fort Myers area and its 11 location in Florida. “The Fort Myers area is growing at a rapid pace and continues to be one of the leading destinations for retirees,” Scott Ward, Service King regional vice president of Southeast operations, says in a press release. “We are excited to be part of the Fort Myers community and are proud to welcome the Jack’s Collision Center team to the Service King family.” Jack Lipscomb and his son Kevin opened Jack’s Collision Center in 1990. Today, the 18,000-square-foot facility employs 24 people. It has the capacity to repair more than 160 vehicles each month. Service King operates more than 220 locations in 21 states.

Blalock Walters principals chairing Manatee Chamber, Bradenton EDC

FLEECE

Texas’s Service King buys Jack’s Collision Center Service King Collision Repair Centers, a Richardson, Texas-based multistate operator of collision repair facilities, acquired Jack’s Collision Center in Fort Myers.

BARNEBEY

The board of directors of Manatee Chamber of Commerce and Bradenton Area Economic Development Corp. elected chairs from the same company, law firm Blalock Walters PA. Jonathan Fleece, managing partner of Blalock Walters, was elected as the 2015 chair of the Manatee Chamber of Commerce board of directors. The Bradenton Area Economic Development Corp. named Mark Barnebey, principal at Blalock Walters, chairman of its 2015 board of directors.

With coverage from Tampa to Naples, we go beyond the “what” and help you see “how.”

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BY JAMES R. GREGORY | CONTRIBUTING COLUMNIST

The benefits of being responsible Although ‘Corporate Social Responsibility’ may sound like something too abstract for small businesses to worry about, embracing its principles can boost your brand. Corporate Social Responsibility (CSR) is often confused with other terms such as sustainability, good corporate citizenship, ethical business practices, environmental responsibility, philanthropy, charitable giving, etc. Although each of these is a form of CSR, they are collectively a set of tools available to convey a leadership mindset focused on managing a corporation as part of a larger social fabric. Even the term itself, “Corporate Social Responsibility” sounds like a nuisance that those who are too busy with running a small business may prefer to avoid if possible. But when CSR is woven into your corporate DNA, you will find it one of the best ways to build your corporate brand and customer loyalty. In an excellent article entitled, “The path to best in class CSR: Deloitte” published in the Jan. 10 issue of Business & Leadership, Deloitte managing partner Brendan Jennings captures the essence of the issue. “What I don’t want is for our staff to hear CSR and just think of volunteering or something relating to the environment. Those things are all very important, and our people want to do them, but CSR is a much broader concept than that.” For Jennings, Deloitte’s CSR positioning is a key component of its busi-

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ness strategy. “Organizations that are clear in their purpose achieve more. Our purpose is to be a quality provider of services … one that does its best for its clients, its people and the wider community, and one that can stand over everything it does.” Jennings goes on to say, “In relation to the clients we serve, it means doing our very best, for a fair fee. When it comes to our people, who are our greatest and, indeed, only asset, if they believe in doing things the right way, good corporate governance is easier to ensure.” To identify the kind of CSR projects that bring measurable ROI to your company, you need to give it the same kind of thought that goes into building a marketing plan or a media strategy. You need to be certain that it fits within your larger business strategy. Think about the essence of your company. What does it stand for? What do you believe in? Do some CSR programs resonate better than others? Is there one that clearly fits your business model? If you are lucky enough to find the perfect CSR fit, then you need to develop a plan to create differentiated positioning — after all the key to branding your company is differentiation. Consistency, commitment, and communications are also important to getting the most value back for

the effort you make in CSR. I worked with The Reader’s Digest Association prior to its initial public offering and reviewed its many and generous CSR activities. One example is, the company provided funding for the massive beautiful vase of flowers at the entrance of the Metropolitan Museum of Art in New York — but it never attached its name to the action. I pointed out that while an anonymous gift is admirable, it is also somewhat selfish. Even a small unobtrusive plaque in my opinion is generating goodwill among key audiences such as employees who would also like to share in the good feeling achieved by your company’s CSR program. CSR BENEFITS TO REMEMBER: • Employees care about your CSR programs and want to be involved; • Include CSR activities as part of your recruitment package to help to attract the most desirable candidates; • Consumers are increasingly aware of sustainable business practices; • Consistent CSR practices lead to customer loyalty; • If possible, you should own (brand) your signature CSR activity; • Know your suppliers and their CSR policies to avoid issues that could reflect poorly on your company;

James R. Gregory is chairman of Tenet Partners, a brand innovation and marketing consultant. He has written four books on creating value with brands. Contact him directly at (203) 979-7914 or JGregory@ tenetpartners.com

• Monitor social media to understand how your company’s CSR policies are seen by others; and • Train your management and employees how to speak about your CSR programs to maximize the goodwill created by these activities Deloitte’s strategy was summed up: “When your people know why they are doing what they do, that helps protect not just the organization but the brand and the client, too. That is what makes CSR so hugely powerful, and about far more than fundraising or volunteering.”’ Corporate Social Responsibility is a key component of the best long-term business strategies for companies of any size. Corporations must be ever mindful of the impact they have on the world in which we live. Understanding the immediacy of communications today and the impact that they can have on your corporate brand means that CSR needs to be a fundamental part of your communications platform and your corporate DNA.

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the

BY MARK GORDON | DEPUTY MANAGING EDITOR

REAL thing

MARK WEMPLE

BOB TUFTS retired from a corporate executive career at Coca-Cola in 2007.

Bob Tufts sometimes looks back with surprised awe at a career filled with accomplishments. One key: Be patient.

rom high school football to the higher echelons of Corporate America, Bob Tufts says one theme stands out in the story of his life: He overachieved. He was told he was too slow and skinny to excel at football, then he went on to start at a Division I college team for three years. He grew up in a blue-collar home, and began his corporate life driving a soda truck. But he capped his business career in a senior executive position with a direct line to the CEO of a global business icon, Coca-Cola. “I always overachieved,” Tufts says. “I always found a way. It’s been an amazing life.” Tufts retired from Coca-Cola in 2007, after 27 years. Tufts and his wife now split time between two residences on the Gulf Coast, including a Lido Key condo, and a home in New Hampshire. Tufts, 65, recently sat down with the Business Observer to talk about his humble childhood and career. HUMBLE BEGINNINGS: One of eight children, Tufts was born in West Point, N.Y., the son of a career military man who later became an entrepreneur. “We were a blue-collar family,” says Tufts. “We moved around quite a bit.” FOOT SPEED: Tufts got into sports in high school, when the family settled in Salem, Mass.

He earned a football scholarship to Northeastern University in Boston, where he played tight end for three years. The first person in his family to go to college, Tufts had a few calls to try out for the National Football League after he graduated. But the difference in speed between the levels caught up to him. Says Tufts: “I was dead on arrival.” HARD WORK: Tufts was a football coach/teacher/painter for the first seven years of his post-college life. In 1973, for example, the year after he graduated college, he was an assistant coach at Northeastern, taught fifth and sixth grade at a local elementary school and painted houses over the summer. He made $13,000 that year. “The coaching life was killing me,” says Tufts. “It was too much time away from home, and I wasn’t making any money.” EARLY GOING: When Tufts turned 30 in 1980 he made good on something a fellow coach told him about getting into business. “He was always telling me, ‘Bobby, you are a born salesman,’” Tufts recalls. Through contacts with that coach, Tufts landed an interview with the regional office of Coca-Cola in Boston. The hiring manager told Tufts the only way to advance at the company was to start at the bottom and drive a truck. Tufts took the

job, thinking he would stay five years.

better. By managing this way, I always got promoted.”

FAST RISE: Tufts discovered he was so good at connecting with people and building a book of business, that in three years he was named vice president of sales and marketing of the Boston office. He was given a company car and other perks, such as tickets to take clients to Celtics, Red Sox and Patriots games. “It was crazy,” says Tufts.

STAY CALM: Tufts says he was a patient manager, and he tried to avoid knee-jerk decisions without knowing all the facts about a situation. That also helped defuse stressful times. He remembers younger employees would sometimes rush through something just to say they finished it. “I wasn’t trying to do anything quick,” says Tufts. “People knew our projects would get done.”

FREQUENT FLIER: Tufts was on the corporate fast track by 1990, when he moved to Atlanta to work at the Coca-Cola headquarters. He worked his way up to division president of global sales, where he oversaw a few multibillion-dollar accounts, such as Wal-Mart and 7-Eleven. He flew all over the world, supervised vice presidents, oversaw a floor of employees and reported directly to Coca-Cola CEOs, including Douglas Daft and E. Neville Isdell. Says Tufts: “No one has ever gone that far at Coke starting on a truck.” SHELVED EGO: Tufts says his management philosophy was to combine hiring smarter people, ones he calls brainiacs, with giving people space to make their own mistakes — and successes. “I was always interested in getting my people promoted,” says Tufts. “I wanted everyone around me to do

GOOD WORKS: Tufts has followed several life passions since he retired, including golf, tennis and boating. For a time he considered running for office. He’s also volunteered for a wide range of organizations, from going to Cambodia multiple times to work with children’s assistance groups to a scholarship committee for Ringling College. “I’m the type of guy who takes a board position seriously,” says Tufts. “I don’t just give money. I give sweat equity.” STEP UP: Tufts has also volunteered for Big Brothers Big Sisters. He was paired up with a young boy from a broken home in Sarasota. Tufts has had weekly dinners with his “little,” now 18, for years. They’ve played pool together and gone to baseball games. Says Tufts: “I feel like I’ve really made a difference in his life.”

I don’t just give money. I give sweat equity. Bob Tufts | retired Coca-Cola executive

JANUARY 30 – FEBRUARY 5, 2015 | BUSINESS OBSERVER

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