M AY 16 - M AY 22 , 2014 | T H R E E D O LL A R S
FLOR IDAâ€™S NE WSPAPER FOR T HE C - SUI T E
Winner | The recession hurt Scott Fischer, but it only made his company stronger. PG.16 P A S C O â€˘ H I L L S B O R O U G H â€˘ P I N E L L A S â€˘ M A N AT E E â€˘ S A R A S O TA â€˘ C H A R L O T T E â€˘ L E E â€˘ C O L L I E R
OF THE YEAR
inside King of Beer
Joey Redner grew his love for craft beer into a $9.7 million brewery. Now heâ€™s looking to build a legacy in the industry. PAGE 10
Banking doesnâ€™t have to be boring. Thatâ€™s the mantra Trevor Burgess follows to make C1 bank fun. PAGE 11
SPECIAL ISSUE PAGES 7 THROUGH 20
Three-time Entrepreneur of the Year Pat Nealâ€™s path to the top came with lots of lessons â€” and lots of great mentors. PAGE 12
Celebrity Auto Group was cruising along, but it took a unique connection to push it into the fast lane for growth. PAGE 14
Beyond FEARLESS A St. Petersburg digital advertising firm embraces the spirit of the honey badger to achieve unprecedented growth and an enviable client list. PAGE 8
To shake off the recession, Mark Stevens focused his construction firm on helping doctors improve their facilities. PAGE 19
TOP DEALS Los Angeles investors buy Oak Creek apartments for $13.4 million. 22 Venice land purchased for future development brings $5 million. 24
Greg Murtagh | TRIAD RETAIL MEDIA
Publix buys Shoppes of Pelican Landing for $12.59 million. 26
15 One firmâ€™s niche success comes with growth challenge. PAGE
After growing their business alone, two U.S. immigrants sell a majority stake to move their tech firm to the next level. PAGE 18
MAY 16 – MAY 22, 2014 | BUSINESS OBSERVER
EOY ENTREPRENEUR OF THE YEAR 2014
Entrepreneurship isn’t for the faint of heart. Although some envision it as a chance to work for yourself, make your own hours and have the freedom to do things your way, anyone who has done it knows it doesn’t quite look like that most of the time. That’s the rosy side. The dark, thorny side of entrepreneurship looks more like few hours of sleep, sometimes lousy and uncertain paychecks and continual worries, questions and stress. Will I make payroll? Should I expand to pursue a new opportunity, or focus on my core product? Where will I find the capital I need to grow? And the biggie: How can I get help without losing control of what I’ve built? Entrepreneurship is lots of questions and few answers; at least not the kind that come easily and definitely not the kind that come from a book. Instead, answers usually come in the form of success and failures. The former can be extremely lucrative, while
BusinessObserverFL.com the latter can be life-changingly costly. Which is why entrepreneurship takes guts. As a nation, we tend to glorify entrepreneurship, and perhaps rightly so. After all, it’s the epitome of the American Dream — you can start with nothing and build a business as vast as you can imagine. If you are successful. If. At the Business Observer, we celebrate those who have taken that risk and found success. Particularly in this issue, for which we search from Tampa to Naples for the best entrepreneurs on the Gulf Coast. For each region, we have chosen a winner, along with two finalists. We look for three consecutive years of exceptional revenue growth to help us decide. This year’s overall winner, Greg Murtagh of St. Petersburg-based Triad Retail Media, nearly doubled his firm’s revenues during that time, to $249.6 million (see
page 8). In t his year’s w inners, we found great stories of the people behind the businesses. Like how Pat Neal learned the power of density on earning power with his first newspaper route. Or how Mark Stevens, after he graduated college, turned down a great job offer at Disney to work for a firm with five employees in Cape Coral so he could learn and do more. Our entrepreneurs also shared some great lessons. Like how Scott Fischer trades some of his profitability to invest in training and staff development, and why he believes it’s a competitive advantage in the end. To gain more insight into how they think, we asked our top entrepreneurs what they would do if we gave them $1 million to invest in their businesses. See below. We hope the stories on the following pages give you a few ideas. And maybe even a few answers. – Kat Hughes
If I had a million dollars ... To see how the top entrepreneurs on the Gulf Coast think, we asked this year’s Entrepreneurs of the Year: If you had $1 million to invest in your business, what would you do with it? MARK STEVENS, STEVENS CONSTRUCTION: He would bank it. That kind of liquidity on the balance sheet of Stevens Construction could boost his bonding capacity, allowing him to take on more construction projects instead of opening up an office in another location. “I want to grow what we’ve got,” says Stevens, president and founder of the Fort Myers-based construction company.
TREVOR BURGESS, C1 BANK: If he didn’t use the money to increase his new loans or look
for new locations, Burgess says he’d use it to fund his newest toy — a disaster-recovery vehicle that the company is building, called the C1 Bank Mobile. “An amazing 40-foot bank on wheels unlike anything you’ve ever seen before,” Burgess says. “Again, more ways we can serve our clients, or ways we can differentiate our brand and meet the needs of Florida.” Burgess says the C1 Bank Mobile will make its way around various local sporting events, community festivals or fundraising events throughout the year. It will also be available for disaster recovery, if the state loses power or there’s a hurricane, it will be there to help with disaster response. The bus is supposed to be ready by September, just in time for the Buccaneers’ opening game.
FELIX LLUBERES AND HONG LONG, POSITION LOGIC: The duo say they would spend that sum on sales and marketing to boost awareness of their GPStracking software company, Position Logic. “We have a product that works,” Lluberes says. The company would hire more people to manage sales and grow its presence throughout the 80 countries and the U.S. where it has customers.
LARRY LESZCZYNSKI, CELEBRITY AUTO GROUP: “We would buy a Bugatti for $1 million
and sell it for $1.3 million.”
GREG MURTAGH, TRIAD RETAIL MEDIA:
“I’d hire more new data engineers. Marketing has moved beyond ‘I hope that worked’ to ‘Did it work or not?’ The only way to answer the question and make sure doing activity X really equated to result Y is via thorough analysis of data — ecommerce sales, in-store sales, etc. That is what leaders like Amazon, Google and our clients eBay and WalMart are doing. If you can prove what you do works, your business will thrive. Proof of ROI via hard data is the new currency of business success in the 21st century.”
PAT NEAL, NEAL COMMUNITIES: “I would
add new modules to our current operating system. The operating system manages our team’s actions in design, estimating, purchasing, estimate scheduling, completion, and warranty operations. The new operating system would generate estimates and unit costs for our new home designs, maintain our construction standards, allow the customer to use a tablet on all customer selections, and enable the scheduling portal to reduce the time of construction by tracking all construction activities on the critical path. Importantly, the system would track customer warranty calls by vendor and material supplier and maintain the warranty system. The result would be even more consistent and enhanced quality, faster construction, happier customers, increased efficiency and improving the productivity and morale of the team.”
SCOTT FISCHER, SCOTT FISCHER ENTERPRISES: He says he would spend that money on employees with more training and benefits. When pressed, he says he would rather spend it in this way than use it to build another dealership. It’s part of Fischer’s organizational culture to help develop people, improve morale and reduce turnover. It reinforces the corporate vision: to make peoples’ lives better. Fischer reasons that happy employees will translate to happier customers, too. WALT AUGUSTINOWICZ, IDENTITY STRONGHOLD:
“I would use the funds to build an expandable 15,000-square-foot facility in the Paul Morris Industrial Park (in Englewood).” Augustinowicz cites several reasons, mostly out of current need and future projections. The building, he adds, would streamline production; reduce air conditioning expenses with less exterior walls; eliminate recurring monthly lease payments; reduce insurance costs with a secure design that takes advantage of insurance discounts; and expand without losing any current employees due to a change in location.
JOEY REDNER, CIGAR CITY BREWING: “We’re almost maxed
out here, so I’d start trying to refine how we’re doing things.” Because the brewery has perfect eastwest exposure without any trees blocking sunlight, Redner says he’d invest in solar for creating hot water and he’d look into a biodigester to use wastewater for the methane that runs the boilers. He’d also retrofit the brewhouse to automate the process for brewing higher alcohol content beer.
BUSINESS OBSERVER | MAY 16 – MAY 22, 2014
BY MARK GORDON DEPUTY MANAGING EDITOR
GREG MURTAGH founded Triad Retail Media in 2004. The online ad firm now has $250 million in sales and more than 450 employees.
Greg Murtagh, with a visionary approach to online advertising, has built a business on the verge of $300 million in sales in a decade. One secret: He targets the biggest of big clients.
orget zero to $250 million in sales in a decade. Forget zero to 450 employees, too. Even forget that the online advertising niche didn’t really exist when Greg Murtagh founded Triad Retail Media in 2004.
What really drives Murtagh’s passion these days is a honey badger. Not just any honey badger, but the star of a frantic YouTube satire video with 67 million views. Or, says Murtagh: “The most fearless animal in the world.” The honey badger is also the St. Petersburg-based firm’s mascot. Triad, run out of a three-story building in the Carillon Office Park, has a stuffed honey badger that’s a roving trophy of sorts. A sales team can win it for a few days with a big account victory. Other departments lay claim to it with work that outdoes the competition. A few even take the honey badger and play pranks on colleagues with it. But beneath the beast is a company with unprecedented growth and a client list of global giants that would make a Madison Avenue executive blush. Names like Wal-Mart, eBay, CVS and Best Buy. Teams of Triad employees work behind the scenes of those clients, enhancing e-commerce sites and finding new
ways for clients to sell products and generate traffic. The firm has seven offices in addition to its headquarters, including locations in Orlando, New York City, Chicago, Austin, Texas, and Los Angeles. Sales at Triad have grown 96.5% since 2011, from $127 million to $249.6 million last year. That comes on top of a 677% increase from 2005 to 2008 that landed the firm on the Inc. 500 list of fast-growth companies. Murtagh projects the firm will surpass at least $320 million in 2014 sales. “This 10-year ride has been a bottle rocket,” says Murtagh, named an Ad Age magazine Media Maven in 2011 for his pioneering work in online advertising. “It’s almost like we haven’t had time to take a breath.” Murtagh, 51, is the Business Observer’s 2014 Entrepreneur of the Year. According to people who know him and have worked with him, Murtagh is a rare combination of hard charging and exceedingly
nice. He’s a born doer who’s not a screamer. He’s also stubborn and a visionary, a big-picture thinker who doesn’t shy away from risk. Putting all those traits together is how Murtagh took the relatively simple concept of enhancing retailers’ websites so the companies can sell more stuff as a global business. “He has the tenacity of a ferret,” says Chris Hoyt, a Scottsdale, Ariz.based marketing technology entrepreneur and executive who has known Murtagh for 25 years. “He has done an unbelievable job carving out this niche. But he’s not driven by money. It’s a quest for meaningful change.” The investment capital industry has noticed Murtagh’s success. H.I.G. Ventures, a Miami-based venture capital firm that focuses on entrepreneurs, put a multimilliondollar investment in Triad in late 2009. The firm, at the time, called Triad a market leader in “the large untapped area of digital marketing.”
More outside investment came in early 2013, when Rockbridge Growth Equity, a Detroit-based private equity firm co-founded by Cleveland Cavaliers owner Dan Gilbert, bought a stake in Triad. “Triad can benefit from our family of more than 60 diverse companies – from Quicken Loans to Fathead to the Cleveland Cavaliers,” Rockbridge Managing Director and Partner Kevin Prokop says in a release that announced the deal. “We can also benefit from Triad’s extensive online expertise of converting shoppers into buyers.”
‘MOST BORING GUY’
A Rhode Island native and lifelong Boston Red Sox fan, Murtagh retained his leadership position and an equity stake in the firm with both investments. That gives Murtagh a decade in the business, stability that contrasts the first phase his career. Murtagh moved frequently early on, when he worked in sales and marketing
2012 $171.3 million
2013 $249.6 million
Source: Triad Retail Media
MAY 16 – MAY 22, 2014 | BUSINESS OBSERVER at consumer packaged goods companies, including Procter & Gamble. He also was a brand manager for Dial Corp. Stops included Atlanta, Boston, Dallas, Phoenix and Pittsburgh. In the mid-1990s, when he lived in Scottsdale, Murtagh saw an opportunity in online commerce to build websites for packaged goods businesses. He lacked the skills, he recalls, but he went for it anyway. He used $20,000 from a 401(k) to get started. “I knew nothing about building websites,” say Murtagh. “I hired kids who did.” Murtagh also remembers his startup made him “the most boring guy at the Starbucks.” Others had flashy Internet businesses, like grocery delivery. But Murtagh made up for boring with a business that grew to $5 million in annual sales and 25 employees. Yet business dropped dramatically after the Sept. 11, 2001 terrorist attacks, and Murtagh and his family soon moved to Tampa. They sought a change of scenery, but wanted to stay in a warm climate. That’s where the idea for Triad, originally named Triad Digital Media, came together. Armed with $100,000 in angel funding from industry contacts, Murtagh, in 2004, put his vision to the test at the top of the retail world: He pitched the idea to Wal-Mart. It sounded simple enough. Murtagh’s position was that targeted online advertising works best when the retailer, in this case Wal-Mart, behaves like a publisher. So the retailer could charge brands for ads on websites, just like a publisher does. Even better, those ads could then drive customers to buy products on that very website. This happens, for instance, when a teeth-whitening ad shows up during a search on WalMart.com for oral care products.
This 10-year ride has been a bottle rocket. It’s almost like we haven’t had time to take a breath. Greg Murtagh | Triad Retail Media
Wal-Mart was Murtagh’s first big client win. He keeps the original proposal in a binder in his office, where he thumbs through it occasionally for visitors.
Triad, which makes money on a revenue-share basis with clients when it sells sponsored content on websites and mobile apps, basically exploded from there. Multiple big brands followed Wal-Mart, and in early 2011 the firm hit another jackpot: It won the account to manage online advertising for eBay and eBay Motors. The online marketplace giant had used Yahoo for online advertising. But Murtagh says eBay was wowed by Triad’s ability go high-end and ‘beyond the banner’ — industryspeak for allowing customers to view content without clicking off the page. Yahoo was more generic and one-size-fits-all. “If you can provide a retailer something special,” says Murtagh, “it’s a tiebreaker for you as a salesperson.” The eBay win didn’t surprise Henri Lellouche, senior vice president for News America, a coupon business run by News Corp. Lellouche has worked on partnerships with Murtagh, and he closely follows the firm — News America considered buying Triad a few years ago. “Greg brings a lot to the party when he
comes to a meeting,” says Lellouche. “He walks in and has a burst of energy and ideas.” Lellouche almost worried if Murtagh was too good for his own good. Lellouche and his colleagues, doing due diligence on a potential offer for Triad, worried that the Wal-Mart business could come to an end. Not because of anything Triad did, says Lellouche, but because Wal-Mart traditionally only uses outside vendors for a limited time. When the retailer gets the system right, it tries to bring it in-house. News America never made an offer for Triad. But a decade later the Wal-Mart contract is intact, which Lellouche says is a credit to Murtagh and his team. About 100 Triad employees work the account, both in the main office and in an office in Bentonville, Ark., near Wal-Mart’s headquarters. “After all this time, Wal-Mart still opts to have Triad service them in a big way,” Lellouche says. “Triad has gone through the gauntlet with them and come out the other side.”
Murtagh went through his own sort of personal gauntlet growing up. He was the sixth of six kids, which taught him to fend for himself. “You have to be self-reliant and scrappy,” he says. “That’s where my business sense comes from.”
He brings that scrappiness to Triad. While he has dream-big goals for more growth — Europe is a relatively new target, for one — he also guards against getting too big, or more importantly, too corporate. He delivers that message to every group of new employees during orientations, when he gives a “welcome to Triad” speech. “I tell them I was in corporate life for 15 years and at least five years were miserable,” Murtagh says. “I learned the nuts and bolts of corporate life and how to build a business. But the culture frustrated me like crazy. They didn’t value risk-taking and entrepreneurial behavior. That’s why I left.” Triad, on the other hand, remains nimble enough to move quickly on the online advertising industry’s shift to data-driven metrics. The firm has gone from four employees in its business analysis and intelligence department to about 20 over the past year. Murtagh says the company also seeks to acquire other data-driven businesses in the near future. The department, he projects, could triple in size within a year. Another reason Murtagh wants Triad to retain its flexibility is to battle competitors. Many businesses take a shot at doing what Triad does, but it’s the big players with deep pockets that he really watches. That list includes Amazon, sometimes Google and a few other firms backed by investments from venture capital stars like Bain and Sequoia. One of Triad’s competitive edges, says Murtagh, is its hunger to win big accounts. Triad even recently targeted Facebook, to see if the social media firm needed help doing online advertising the Triad way. “It takes just as much effort to land a mid-size client,” says Murtagh. “So why not go after big ones?”
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BUSINESS OBSERVER | MAY 16 – MAY 22, 2014
TAMPA BY TRACI MCMILLAN BEACH TAMPA CORRESPONDENT
JOEY REDNER says making good business decisions is all about sticking to his roots as a beer geek.
In five years, Joey Redner has built his brewery from scratch to one of the largest in the state, with $9.7 million in sales. Now the 41-year-old CEO thinks about his legacy in the craft beer industry.
oey Redner was just a beer geek who wanted easier access to craft beer in Florida. Opening a brewery was never part of the plan.
In the early 2000s, Redner tried to educate himself as much as possible about the craft beer industry to make himself a more attractive candidate once someone opened a brewery in Tampa. He owned his own bar, worked in sales for Dunedin Brewery and imported craft beer on the side. He also wrote a beer column for the Tampa Bay Times and frequently tagged along with a beer distributor friend. Redner waited for a new brewery to open for several years before writing an opinion paper about why there wasn’t a major craft brewery in the area. “Is the equipment too expensive? Are the raw ingredients too hard to get? Is the market not there?” he asked. After answering all of his questions on paper, Redner realized he had a business plan. He raised $850,000 in family funding to cover a salary for a brewer, licensing, permitting, marketing, and extra runway. In 2008, he started to build Cigar City Brewery in Tampa. The brewery has grown from two employees producing 1,000 barrels in its first year to 66 employees and 34,000 barrels last year. This year Redner expects to produce about 55,000 barrels. Redner thinks he’s lucked out as far as getting good employees. “Because there weren’t a lot of breweries in the area, we got the
pick of the litter,” he says. Five years in, Redner says he never imagined outgrowing his 32,000-square-foot warehouse. “I thought that would be 50 years of space.” Demand for the beer exploded within six months of opening the brewery, Redner adds. “Growing is what we are; it’s part of our DNA.” At times, the fast growth has been hard to manage. A few years ago, some of Cigar City’s beer was crosscontaminated during the canning process, a flub that caused the brewery to recall beer off shelves. A few months ago, the brewery made headlines for a botched beer release event. “You can’t buy back that negative experience,” Redner says. He tells his brewers and assistants, “Let’s make sure that when this beer meets the person’s lips, it’s exactly the way the brewer intended it to be.” In the last two years he invested hundreds of thousands in equipment that focuses on yeast handling, pitching properly, attenuating beer, and spectrophotometry. He also spent more than $1 million on a canning machine that speeds up the process from 60 cans a minute to 170 cans a
minute. At first, Redner says he lost money on cases of beer because the labor it took him to produce was more costly than what he made after selling it to distribution. He had to pass the 7,000- to 10,000-barrel production mark to find economies of scale. Now the company sells 95% of its beer to distributors and 5% directly from the brewery. Distributors include J.J. Taylor in Tampa Bay, Goldring Gulf to the Panhandle and Brown Distributing for the rest of Florida. The company also distributes to Georgia, Alabama, Northern Virginia, Philadelphia and New York City. Redner says they are focused on covering the Southeast and moving up the east coast. Florida doesn’t make expansion easy, according to Redner. Other states tout lower taxes, incentives for breweries and the ability to self distribute. Now that Cigar City is tapped out on space, Redner is considering expanding to the Northeast. Redner estimates a new brewery with the same equipment would cost $10 million to $15 million. He’s bought time on making t hat decision by pa r t ner i ng
with Brewhub, an independent production facility that is scheduled to open this month in Lakeland. Brewhub will be brewing at least 20,000 barrels of Cigar City in the first year, with the potential to increase to about 70,000 barrels. Redner says he still won’t be meeting demand. “If we could brew the beer, I think we could sell 175,000 barrels.” He’s not worried that his brewery has become a “feeder program” for the other breweries popping up in the area. Every new small brewery helps the craft beer industry grow. Craft beer makes up just 6% of beer sales in Florida, with 129,946 barrels of craft beer produced in the state in 2013, according to the Brewers Association. That’s why Redner is actively fighting legislation to protect smaller breweries. “The ripples reach the whole pond,” Redner says. “I know it’s weird five years in to running your business to be thinking about what my legacy will be when I leave, but it’s really what is craft beer in Florida is going to look like in 20 to 25 years. That’s my primary concern.”
2013 Source: Cigar City Brewing
MAY 16 – MAY 22, 2014 | BUSINESS OBSERVER
TAMPA BY TRACI MCMILLAN BEACH TAMPA CORRESPONDENT
TREVOR BURGESS says his best business decision was not listening to people who told him he was crazy for investing in banks during the worst recession since the Great Depression. He credits Warren Buffett’s advice to buy when out of favor.
New Color BANKING’S
Trevor Burgess has led C1 Bank to $1.4 billion in assets, with $418 million in loans in a little more than four years. Countering industry traditions is his secret sauce.
revor Burgess does not want C1 Bank to be mistaken for the average bank.
Walking into C1 Bank, you’ll immediately notice there are no mahogany walls, no offices and no secretaries. The modern design and artsy flair looks more like an office you’d find at a big tech company in Silicon Valley than what you’d expect from a community bank in Florida. Employees follow a strict dress code of either a suit or a C1 Bank shirt. Burgess, C1 Bank’s 40-year-old chief executive officer, says he wanted the bank’s office to be open like his previous stomping grounds — the trading floor on Wall Street. The openness not only speaks to the company’s culture, but also improves productivity and accountability, he insists. “If you do the same thing as everyone else, you’ll have the same results as everyone else,” Burgess says, “and the average bank hasn’t fared too well.” Going against the grain works for Burgess, who’s seen his bank grow from $270 million in late 2009 when he bought his first bank with backing from investors, to $1.4 billion in assets with 28 branches in Florida. The bank is the 18th largest in Florida and is in the top 1% of fastestgrowing banks in the country, according to company releases. Inspired by companies like Apple, C1 accounts are kept simple. You can choose from two options: a value account or a complex account. Customers can work with associates to
2011 $32.3 million 2012 $53.3 million
open a new account through an iPad application in less than a few minutes. The company also is implementing ATMs that resemble selfservice check-in kiosks at airports. The bank even has its own technology development department to help improve efficiencies, called C1 Labs. “Materially we are 40% larger, with the same amount of people,” Burgess says. With 219 employees, the company focuses on hiring through its Management Training Program, a partnership with University of South Florida with a $500,000 annual price tag. The sixmonth program allows six to nine graduates each year to work at the bank and earn a chance at full-time employment. Focusing on businesses looking to borrow between $2 million and $20 million, C1 addresses a market that doesn’t have many community bank options in the state of Florida. Burgess says his biggest competition comes from “nameless, faceless” banks such as Regions, Wells Fargo, BB&T and Bank of America. C1’s new loans have grown from $83.9 million in 2010 to $418 million last year. Burgess believes his experience on Wall Street raising money for more than 100 companies gave him the
$80 million 60 40 20 2011
$70.1 million 2012
exposure he needed to see different business plans, executives and styles. “I felt if I was given the right opportunity, I could really make something of it.” So between him, his business partner, Marcelo Lima, and two other former clients, they raised $70 million, and attracted $30 million from friends and family to start a bank during the recession. They bought four banks, “all with severe or extremely severe problems,” Burgess says. He learned by “cleaning up” the mistakes of others, he says. Burgess says he’s also learned a lot about business from his friend and mentor, Steve Ells, Chipotle’s CEO. The No. 1 lesson he’s taken is the importance of paying attention to details. He’s said he’s seen Ells clean the front window of a Chipotle location to show employees the importance of every piece of the customer experience. Burgess says he does the same, trying to take as much time as possible visiting his 28 branches. “I’m no 30,000-foot guy,” Burgess says. “We can have a contest here and I’ll know more on every client than anybody else.” C1 has made headlines multiple
219 Source: C1 Bank
times in the past few years for its untraditional policies. Last month Burgess enacted a company-wide minimum wage of $14 an hour, almost double that of Florida’s minimum wage. He bumped pay for 26 employees, saying it not only was the right thing to do, but it’s a good way to attract and retain talent and improve service levels. For a few employees, that meant a $6,000 salary raise overnight. Despite the additional expense, Burgess says the company probably came out ahead with the move because it received a number of new clients after announcing the change. He also opened a bank branch in Wynwood in Miami, featuring Andy Warhol prints and a funky layout that can be converted into event space. It’s a move that Burgess says he’d like to make in additional locations to stand out from the rest, along with his other ideas like building a bank on wheels, the C1 Bank Mobile, to travel around festivals and sporting events. It’s all about differentiating the bank from its competition, Burgess says. “We’re trying to make banking a little more fun again.”
BUSINESS OBSERVER | MAY 16 – MAY 22, 2014
rouble found Pat Neal in the seventh grade in the early 1960s, back when he and some buddies pulled some shenanigans in Ron Givens’ English class.
EOY WINNER SARASOTAMANATEE BY MARK GORDON DEPUTY MANAGING EDITOR
PAT NEAL has run Neal Communities since 1970. The firm had $230.3 million in sales in 2013.
The Pat Neal of today is well known as a singular success in homebuilding. But the Neal of yesterday, of teenage jobs and lessons learned, tells a compelling story of resilience and determination. REVENUES Year
2011 $110.94 million
2012 $139.4 million
2013 $230.3 million
Source: Neal Communities
Neal and three other boys would hijack their teacher’s flowerpots and move them to the roof. They poured salt in his plants. When Givens turned to write on the blackboard, the foursome would stand up out of their chairs. But one day Neal’s history teacher, Edward Johnson, lectured the young man about excess energy and messing around. The teacher called Neal an “unguided missile.” Neal listened to Johnson. He focused his energy on school and becoming an entrepreneur and small business owner. A half-century later the shenanigans are gone, and now Neal, 65, is widely considered one of the leading homebuilders on the Gulf Coast, with projects in four counties and 16 communities. His firm, Lakewood Ranch-based Neal Communities, has built more than 9,000 homes since 1970. A onetime state representative and senator and maybe-someday again politician, there are multiple factors behind the hows and whys of Neal’s success. Timing, guts and savvy land deals play a big part. But it was those days with friends and mentors and first jobs in Des Monies, Iowa, and later Manatee County, working with his dad, that shaped his career. There’s also Neal’s pure will, his ability to outwork everyone on every deal. His oldest son, John Neal, says the elder Neal would often get up at 3 or 4 a.m. on a Saturday, work five hours, then come home for family time. He’d be back at work by late evening. “The difference between Pat and everyone else is preparation,” says John Neal. “He never procrastinates.” One sign of Neal’s star power: Homebuilders in the Lee-Collier market took sharp notice in early 2013, when Neal Communities announced it would begin to build homes in places like Estero and Fort Myers. Longtime area real estate consultant Russ Weyer says Neal’s presence in town is like stamp of validation in the market’s viability. “Pat is real good at finding niches in the market,” says Weyer, president of Naples-based Real Estate Econometrics. “He’s done very well here.” There’s also some serious growth to back up the anecdotes and accolades. Sales at Neal Communities, with about 125 employees, have more than doubled since 2011, from $110.9 million to an all-time, 44-year high of $230.3 million in 2013. There’s also the 77.3% growth in sales over three years starting in 2009, when the company was at $62.52 million. Neal was named Entrepreneur of the Year in the Business Observer in 2012 and 2005. Longtime area homebuilder Carlos Beruff, with Medallion Home, says the best thing about Neal, beyond sales figures, is his integrity — thoughts echoed by many others in the industry and the developer community. “When he agrees to something you can count on it,” says Beruff, who has partnered with Neal on several deals. “He has built that reputation over the years.”
But what makes Pat Neal Pat Neal goes back, in many ways, to the relationship with his father, Paul Neal Jr. They started the business together. The duo’s first five projects were on Longboat Key and Holmes Beach. Paul Neal was a born salesman, his son says, a life-of-the-party kind of guy. The elder Neal was also a lawyer and site selection executive for a Holiday Inn franchisee in the Northwest. “He didn’t sweat the details, so we were a perfect match,” says Neal,
See NEAL page 20
BUSINESS OBSERVER | MAY 16 – MAY 22, 2014
SARASOTAMANATEE BY MARK GORDON DEPUTY MANAGING EDITOR
CONOR DELANEY and LARRY LESZCZYNSKI co-founded Sarasota-based Celebrity Auto Group in 2006. The firm had $21 million in sales in 2013, up 121% from $9.5 million in 2011.
Celebrity Auto Group has gone from less than $500,000 in annual sales to more than $20 million in four years. Secrecy is an integral part of the business model.
onor Delaney redefined product placement success soon after he cofounded a high-end car dealership in Sarasota in 2006. Delaney, who had just launched Celebrity Auto Group, sought to get his firm’s name in front of a superselect clientele: NBA stars. A friend introduced Delaney to a music video director. The director agreed to display the firm’s name on a license plate in a video for a few seconds in exchange for use of the cars. The arrangement was a big-time success. “People still see those videos now and say they saw our cars, all these years later,” says Delaney, a London-born onetime professional tennis player. “It made the business look 400 times bigger.” Now the business really is bigger. Sales at the firm, run out of a 24,000-square-foot facility near the Sarasota-Bradenton International Airport, have increased 121% since 2011, from $9.5 million to $21 million in 2013. Amplifying the growth spurt: the business had $334,985 in sales in 2010. The company has six employees, including Larry Leszczynski, the operations director who co-founded the firm with Delaney. The partners started the business by pooling together about $85,000 from their savings, in addition to some help from investors.
“We really didn’t know what we were doing in the beginning,” says Delaney. “But we ended up growing at a fast pace.” Past product placement, a big step toward fast growth came in 2010, when the firm opened its business to other high-end folks worldwide, not just pro athletes. Now clients include a Nigerian oil tycoon and the California-based son of a Saudi prince. Celebrity Auto Group has shipped cars nationwide and everywhere from Italy to Japan. Prices range from $20,000 to more than $275,000 per vehicle. The service Celebrity Auto Group provides to these high-end clients is like a standard dealership — with one major twist. The firm searches other dealerships and private sellers across the world for vehicles. It’s not beholden to one brand, and Delaney and Leszczynski say they are more than brokers who simply find cars, resell and make a fee. Their pitch, instead, and what
they say makes the firm unique, is a concierge service — not sign and drive. They sell everything from Lamborghinis and Ferraris to Bentleys and Aston Martins. Range Rovers and rare BMWs, too. On an average day, says Leszczynski, the Celebrity Auto Group showroom has $6 million in inventory. A large component to the company’s business model, in addition to rare finds and luxury service, is secrecy. The entrepreneurs say that builds client’s confidence. Leszczynski, 44, and Delaney, 33, never publicly name names of clients. Delaney simply says the professional athletes the firm works with are “A-list.” One name that slipped out, in an article in the November issue of Automotive News, is Detroit Pistons All-Star Chauncey Billups. The article adds that at least 100 NBA players have been Celebrity Auto Group clients. One day-to-day obstacle the company encounters is one similar to
2012 $16.2 million
just about any other dealership: customer acquisition and retention. Says Leszczynski: “There are plenty of dealers who sell high-end cars.” Celebrity Auto Group partially addresses that challenge through technology. For example, the firm uses the FaceTime video call feature on iPhones to hold virtual test drives. So a Celebrity Auto Group salesman might drive around Sarasota in a Ferrari, while a passenger holds the phone in the car for a client thousands of miles away to see. Another challenge befits Celebrity Auto Group’s growth rate: The need for more space. The firm, says Leszczynski, is considering leasing or buying space that would be 40,000 or 50,000 square feet, roughly double its current location. “We are finding the right pace to grow and get bigger,” says Delaney. “Finding that right balance is hard. It’s a good problem, but you have to be cognizant of it.”
Source: Celebrity Auto Group
MAY 16 – MAY 22, 2014 | BUSINESS OBSERVER
SARASOTAMANATEE BY MARK GORDON DEPUTY MANAGING EDITOR
WALT AUGUSTINOWICZ founded Englewood-based Identity Stronghold in 2005. The firm had $8 million in sales last year.
Walt Augustinowicz captured a boom for a niche business. His next challenge is to keep it going.
trip Walt Augustinowicz took to Washington, D.C., last year to meet with patent officers was a dream-come-true entrepreneur moment.
There he was in a waiting room at 9 a.m., watching U.S. Patent and Trademark Office employees shuffle into work. Many of those employees, it turns out, use ID badge holders made and sold by Augustinowicz’s company, Englewood-based Identity Stronghold, to access the building. “That,” says Augustinowicz, “was so cool.” Augustinowicz has had many other pinch-me-like moments in the nine years he’s spent turning Identity Stronghold from a homebased startup to a thriving, filledto-the-brim firm. Sales are up 142% since 2011, from $3.3 million to $8 million last year, and Augustinowicz projects the firm will surpass $10 million in 2014 sales. The firm has 16 employees, plus another 30 who work on order fulfillment on a parttime basis. “When I was running this thing out of my bedroom,” says Augustinowicz, “I never thought I would be so big one day that there would be no space big enough in all of Englewood.” That’s no joke: Commercial real estate agents told Augustinowicz
$8 million 6 4 2
the space he seeks, 15,000 square feet in a standalone office/light industrial building, doesn’t exist in Englewood, a small south Sarasota County town that borders Charlotte County. The firm is currently run out of the Paul Morris Industrial Park in Englewood, where it occupies two buildings with a total of 8,000 square feet. The space challenge stems from Identity Stronghold’s core products: ID badge holders, wallets, purses and credit card sleeves that create a secure buffer on anything from driver’s licenses and passports to credit cards and employee office entrance cards. Identity Stronghold’s concept is based on federal laws and security guidelines that require many forms of ID and plastic payment to have Radio Frequency Identification (RFID) technology codes. But the data inside those codes and related tiny chips are vulnerable to identity theft, which is where the firm’s products come into play. Identity
$8 million 2012
10/1 full-time/ part-time
Stronghold has four patents on its products and a fifth is pending. The Identity Stronghold line of products, which range in price from $5 to $40, are sold online through its own website. Amazon also sells the line, and the firm has a large presence on QVC, where Augustinowicz goes on live TV once a month to cohost a product display show. Augustinowicz launched the business in 2005 from a combination of savings, maxed out credit cards and a second mortgage. Before that he had worked in IT for a trucking insurance firm, and while he was a novice business owner, he had a lot of experience in technology. That dates back to when he developed his own software for a TRS-80 computer in the seventh grade. He later worked at Radio Shack — his favorite teenage job. He was awarded his first patent in 1995, for a moisture-activated automatic window closure device for cars. The product never got going due to regulatory hurdles.
full-time/ part-time Source: Identity Stronghold
A New Hampshire native who moved to the Venice area with his family when he was young boy, Augustinowicz says he’s learned a lot about being an entrepreneur over the last decade. One standout lesson is to make quicker decisions. Says Augustinowicz: “I’ve learned to cut down on the amount of input you need to make a decision.” Another key lesson, one that took years to grasp, he says, is being careful about taking on partners because the funds could come with a lot of headaches and distractions. Augustinowicz has bought out at least five minority partners in recent years. Now he runs the business with his wife, Sue, and is the majority owner and CEO. Yet Augustinowicz says he will take lessons learned, even painful ones, any day over working for someone else. “I would encourage anyone to start your own business,” he says. “You don’t have to wait for perfect idea or invention. You can control your own destiny.”
BUSINESS OBSERVER | MAY 16 – MAY 22, 2014
t’s a good thing Scott Fischer got fired from his first job.
He was 16 years old and a customer on a test ride at the motorcycle dealership where he worked in Columbus, Ohio, complained that he drove too fast. “I was devastated,” Fischer recalls. After all, Fischer’s dream had always been to work in a motorcycle store. “I started a shop boy,” he says. “I didn’t care about getting paid.” But life has a funny way of turning setbacks into opportunities. Fischer quickly landed another job at a dealership across town where he met Mary, his wife of 31 years, and became general manager and president of the Ohio Motorcycle Dealers Association by age 21. Today, Fort Myers-based Scott Fischer Enterprises manages the largest group of Harley-Davidson stores in the country, and the company he founded is about to unveil a $10 million HarleyDavidson entertainment destination complex fronting Interstate 75 in Fort Myers with restaurants, a concert venue and riding track. Fischer’s ride has taken detours along the way to success. Fischer’s company shed four of its nine dealerships during the recession and he pared back his staff. Just as the early setback he suffered as a 16-year-old, Fischer, now 54, says the recession made the company stronger and it made him a better entrepreneur and leader. Indeed, Scott Fischer Enterprises posted revenues of $105 million in 2013, a 30% increase from the prior year. It’s what earned him the 2014 Business Observer’s Entrepreneur of the Year Award for Lee and Collier counties.
WINNER LEE-COLLIER BY JEAN GRUSS EDITOR/LEE-COLLIER
Roar BACK WITH A
SCOTT FISCHER is building a Harley-Davidson destination near Interstate 75 in Fort Myers that will have restaurants, a concert venue and a motorcycle test track. He’s standing in front of the project now under construction and scheduled to open in the fall.
Scott Fischer had to shrink his motorcycle-dealership empire during the recession, but he says the result is a better company today. REVENUES
$105 million 2011
Source: Scott Fischer Enterprises
Friends and business associates who know Fischer say humility helped him weather the recession. “Sometimes successful people say, ‘I don’t need any help,’” says John Greene, partner and chief branding officer. “There’s a degree of humility about him and a lack of ego that allows him to really reach out and ask questions, ask for help and input.” In 2008, Fischer started working with business coach Iain Macfarlane, who was previously CEO of five companies. “He’s a fantastic student,” says Macfarlane, executive coach with Action Coach. “It’s sometimes very difficult for people who started a business to step back and say, ‘wow, I need to know a bit more and learn.’” For example, Fischer had no formal financial education, but after seeking help and insight into the fiscal reasons for the drop in sales in 2008, Macfarlane says Fischer realized he needed to shake up his accounting department to improve financial reporting. Armed with the right financial data and analysis, Fischer decided to close four dealerships in 2009 that sold Honda, Yamaha, Suzuki and Kawasaki motorcycles, keeping only the Harley stores. “We went through a major education on the cash and asset management side of our business,” Greene recalls. “You learn the most from the tough times.” Indeed, that decision likely saved Scott Fischer Enterprises from a worse fate. That’s because sales had collapsed at the import dealerships and the costs of keeping those open were threatening to swamp the rest of the company. But even now as sales rise again, Fischer and his team are focused on developing the talent they already have. The company hasn’t added staff in the last three years while sales have rebounded, a clear sign of increased productivity. “We came out as fiscally much better managers,” says Greene. While Fischer made the tough decisions to close stores, he’s surprisingly indecisive about seemingly trivial matters. Mary Fischer recalls a recent trip to Publix when it took her husband a half hour to select a hair gel, much to their daughter’s amusement. “How hard can that be?” she says, saying it takes him just as long to pick a shirt to wear in the morning. “He can’t make up his mind,” she laughs.
MAY 16 – MAY 22, 2014 | BUSINESS OBSERVER
To be great, you have to be smart and healthy. Scott Fischer | Scott Fischer Enterprises
to help him buy the dealership. “I bought them out a year and a half later,” Fischer says, earning them nine times their investment. The first years in business weren’t easy. Landlords were unforgiving, forcing the business out within a month of Fischer taking over. “In a five-year period, we relocated four times,” he says. “I was scrambling to keep the doors open.”
TEAM-BASED MANAGEMENT STYLE
Because Fischer knows the motorcycle business intimately, you’d think he would be tempted to micromanage. But employees and colleagues say don’t expect him to swoop in to try and fix things. For example, Sean Delaney, the general manager of Thunderbird Harley-Davidson in Albuquerque, N.M., recalls a lesson he learned early from Fischer while he was trying to sell tires. “For about six months I tried this and that,” he says. So Delaney picked up the phone and called Fischer. “I just can’t sell tires,” he lamented to his boss. Fischer suggested Delaney shorten the length of time people had to wait to get new tires. Sales immediately rose after Delaney instituted a policy to change customers’ tires while they waited instead of waiting two days. Delaney asked Fischer why his boss didn’t suggest that to him earlier. “You didn’t ask,” Fischer replied. Delaney says he likes to tell this story to new hires. “He wasn’t a jerk about it,” Delaney says. “He lets you learn from your mistakes.”
That management style extends outside of Fischer’s business, too, says Sarah Owen, president and CEO of the Southwest Florida Community Foundation, a nonprofit organization that’s worked with Fischer. “A lot of times in philanthropy, [donors] feel as though that gives them the ability to tell an organization how to do their business,” she says. By contrast, Owen says Fischer lets charities take entrepreneurial risks with the funds he gives them. “I feel like he comes alongside as a trusted adviser,” Owen says. “That’s why it’s so fun to solve problems with him.”
Despite the early challenges, Fischer added motorcycle dealerships in Naples, Huntsville, Ala., and Hilton Head, S.C. By 2005, the company had 450 employees and more than $150 million in annual revenues. Fischer is blunt about the go-go years. “Customers didn’t like us,” he says. “We had the money and we wanted to grow, but we didn’t have a strategy.”Employees were stressed, turnover was high and Fischer wasn’t happy. Fischer also made mistakes by getting involved in ventures he knew nothing about, including a hair salon and a business that sprayed mulch on public right of ways. “When things are good, you think you can do anything,” he says. In 2005, Fischer hid out in a cabin in North Carolina, armed with some management books he says changed
his perspective. Fischer says he came to the realization that great companies work on the people side of the business. He explains it this way: “To be great, you have to be smart and healthy,” he says. By smart, he means the systems that companies set up to operate. All good companies are smart, he says. But the best companies are those that focus on training and benefits to boost morale, reduce turnover and encourage teamwork. That’s the healthy side of the business and it’s how Fischer came to develop the corporate vision: Scott Fischer Enterprises exists to make peoples’ lives better. Fischer says spends more than $1 million on training and other employee benefits, taking a leap of faith that it’s the right thing to do. “You can’t measure it,” he says. For example, shortly after he closed the four dealerships in 2009, Fischer hired a human-relations director. And he realized he wasn’t going to live forever. “I’ve got to develop people so I have a succession plan,” Fischer says, noting he has three partners now and will have more in the future. If the recession left any scars on Fischer, you’d be hard pressed to find one. Friends say he hasn’t lost his fun-loving enthusiasm. The 5’7, 181-pound entrepreneur had doubleknee replacement and still hits the gym five days a week at 6:30 a.m. “He has a unique balance between hard work and having fun,” says Greene. “He can kind of switch gears.” Fischer acknowledges that other Harley-Davidson dealers of similar size are more profitable because they don’t spend as much on training and benefits. “I don’t know if my model is better than theirs,” he says. But Fischer is more satisfied today than he was during the boom: “I like the business,” he says.
May Membership Meeting A Discussion on Form Based Code with
Casey Colburn, ERG Law Firm and
Chris Gallager, Hoyt Architects May 20, 2014 8:00 a.m. - Networking 8:30 a.m. - Meeting at
Sarasota Association of Realtors
2320 Cattlemen Road Sarasota, FL 34232 Presentation will be followed by a property pitch session This meeting is for CID members. Guests are welcome to attend 2 meetings per year. Questions? Contact Marc Mansfield at 941.952.3410
Commercial Marketplace Share your listings, wants, needs and information. Enjoy networking with your fellow professional commercial Realtors®. 1st, 2nd and 4th Fridays at Sarasota Association of Realtors® and the 3rd Friday of each month at Manatee Association of Realtors®. Visit our website for upcoming dates and location information.
EDUCATION • NETWORKING • PROFESSIONALISM Is your Commercial Realtor® a CID Member? Insist on it for the highest level of market knowledge, education and professionalism. To inquire about joining CID as either a Realtor® or Affiliate Business Member, please call Marc Mansfield at (941)952-3410.
C O M M E R C I A L S A R A S O T A R E A L T O R S.COM
Fischer grew up around engines. His father raced stock cars and owned Fischer’s Garage in Columbus, Ohio. “At Christmastime we got things with engines,” Fischer says. With golf carts and mini bikes the elder fixed up and put under the tree for his kids, it’s no surprise Scott Fischer became an enduro motorcycle racer at a young age. “My high school was kind of a blank,” Fischer says. Outside of school, you could find Fischer at the motorcycle store, sweeping floors and doing anything he could to be on the inside of the business. Fischer considers himself lucky to have found something he loved at an early age, a passion that continues today. “I live and breathe our business,” he says. He met his wife, Mary, who worked in the parts department and helped customers. ““He was definitely full of himself and thought he knew everything,” Mary recalls. “He thought he was going to boss me around and tell me how to do stuff.” On their first date, they rode to a Charlie Daniels concert. “He rode fast,” Mary says. But Mary quickly recognized her future husband’s leadership skills. “I always knew he was going to make something of himself,” she says. The couple moved to Fort Myers in 1986 after Fischer was offered the general manager’s position at a Kawasaki dealership in town. For his part, Fischer says he couldn’t have accomplished what he did without Mary’s support. He says he’s seen other skilled executives entrepreneurs hobbled by their spouses. “Their spouses won’t let them be committed to their work,” he says. Two years after he arrived in Fort Myers, commercial real estate broker Paul Sands helped Fischer find two wealthy investors who were willing
UP FROM THE SHOP FLOOR
BUSINESS OBSERVER | MAY 16 – MAY 22, 2014
hen he was 7 years old, Hong Long emigrated to the U.S. in 1975 with his family from Laos. His father had fought in the French Foreign Legion in Vietnam and later worked for the U.S. State Department in Laos, but they arrived here penniless.
LEE-COLLIER BY JEAN GRUSS EDITOR/LEE-COLLIER
FELIX LLUBERES and HONG LONG came to the U.S. with little more than a dream, joining forces to create a company that ranked on the Inc. 500 for the last two years.
America COMING TO
Felix Lluberes and Hong Long grew Position Logic without outside investors. Choosing the hard way to build the company paid off when they sold a majority stake to RacoWireless last year.
$8 million 6 4 2 2011
$6.8 million 2012
Source: Position Logic
They settled with other Asian refugees in Cedar Falls, Iowa. “We were on food stamps,” says Long, whose Chineseborn parents didn’t speak any English. Meanwhile, in 1990, Felix Lluberes came to Iowa from the Dominican Republic with $50 in his pocket on a scholarship to study at Maharishi University of Management. The grant was a reward for being the top student in his high school class. The two computer-science wizards met at a seminar Long was giving at the University of Iowa, beginning a friendship that would eventually lead to the creation of Position Logic, a Naplesbased company whose growth landed them on the Inc. 500 list two years in a row. “These guys are special and unique,” says Michael Reagen, retired president and CEO of the Greater Naples Chamber of Commerce. Reagen has a special connection with Long because he worked for the administration that welcomed Asian refugees in the 1970s in Iowa. “They’re part of the American Dream,” says Reagen, who attributes their success to their humble roots. “They’re very intellectually creative,” he says. “That’s what they look for in the people around them.” Lluberes and Long agree that their drive comes in part from their challenging upbringings. “America is the dream land,” says Lluberes. But the duo also attributes their success to the fact that they get along at both work and at play. Long’s strength is the development of software from abstract ideas, while Lluberes is the one who can sell it. “We are best friends and buddies outside of work,” says Lluberes, who loves to race his Lamborghini at the Homestead track. Long likes fast cars, too, and owns an Audi R8. Lluberes was in Naples for a conference and responded to an employment ad from Media Brains in Naples during the tech boom in 2000. Eventually, Long joined him in Naples. “I was bugging Hong all the time,” Lluberes laughs. Together they formed Position Logic in 2007, a company that provides GPS software to resellers of security and transportation tracking in 80 countries, including the U.S. The software is device agnostic, so it can track any GPSenabled device anywhere in the world. Position Logic doesn’t grant anyone an exclusive territory, letting entrepreneurs resell the service at markups they choose. However, the company helps entrepreneurs get established in business by extending terms so that they can build a customer base. Lluberes and Long have a soft spot for entrepreneurs because they built their company during the recession, when venture capital was scarce. In fact, they’ve funded three other ventures in town, providing help and advice to budding entrepreneurs. The duo now has the resources to do that thanks to the fact that they sold a controlling interest in Position Logic last year to RacoWireless, a privately held firm based in Cincinnati formed by alumni from T-Mobile. Terms of the deal weren’t disclosed, but Lluberes says RacoWireless boosted Position Logic’s technology spending by $1.3 million within 90 days of the deal. “The company just went to another level,” says Lluberes. “Part of our plan was to build the business and exit,” says Lluberes. Initially, Lluberes and Long figured it would take them five years, but it took about one year longer than that. Both men are staying with the combined companies and will remain in Naples. “There comes a point when we have to provide more,” Lluberes says. “We love what we do.”
MAY 16 – MAY 22, 2014 | BUSINESS OBSERVER
LEE-COLLIER BY JEAN GRUSS EDITOR/LEE-COLLIER
MARK STEVENS stands in front of the DeVoe Cadillac dealership in Naples that his firm, Stevens Construction, is building on U.S. 41. The construction company survived on health care projects during the downturn, but Stevens sees more diverse commercial building opportunities like this one today.
Mark Stevens’ firm, Stevens Construction, survived the downturn because of its health care specialty and expansion to Tampa and Orlando. The economic recovery is creating new opportunities.
resh out of the University of Florida with a degree in construction, Mark Stevens turned down what seemed like a graduate’s dream job.
“I almost took a job with Disney World,” says Stevens. It was 1990 and the company was going to send Stevens to California and Europe to work on designs for its theme parks. “It sounds sexy, and the pay was awesome,” he recalls. Instead, Stevens came home to Cape Coral and went to work for Compass Construction, which had just five employees at the time. “I was never one for big bureaucracies,” he explains. “At Compass I had the opportunity to do everything.” But even as a young graduate, Stevens had his eye on a prize that Disney’s magic could never produce: “I knew I wanted to create my own business,” he says. Stevens helped build Compass to a $30 million company by the time he left in 2004. “I always wanted to own Compass Construction,” he says. But the owners weren’t ready to sell, so Stevens started his own company, Stevens Construction, in Fort Myers in 2004. At the time he started his own firm, Stevens was 36 years old and had three children, ages 5, 3 and 2. He took out a home equity loan for $400,000 from Bank of America. “I liquidated everything I had,” he says. Because he had signed a noncompete agreement with the owners of Compass, Stevens launched his company with zero clients. But Stevens had developed a good reputation at Compass, particularly in the heavily regulated area of health care. So when he launched
his business, he built a stunning modern building for eye specialist Alexander Eaton’s Retina Health Center in Fort Myers. “That was the first building,” Stevens says, earning him a reputation among physicians who regard Eaton as a savvy entrepreneur. “That single job exploded my health care practice.” Retired banker William Valenti recalls being the only one to lend to Stevens when he first started out. “I remember when Mark came in the bank,” says Valenti, who was then CEO of Florida Gulf Bank. “He was very determined; he knew where he was going.” The biggest risk to lending to construction firms is that they won’t get paid when they complete the job. But Valenti knew of Stevens’ work with Compass. “Was it a little bit of a risk? Yes it was,” Valenti says. “But he’d had a lot of experience in the area supervising many kinds of projects.” Mother Nature helped, too. After Hurricane Charley blew through Southwest Florida, Stevens landed a plum job rebuilding South Seas Resort’s pool complex. “That gave me a leg up on commercial,” he says. But helping doctors plan for expansion became Stevens’ trademark. He designed buildings so that patients could flow more easily through the practice, allowing doc-
tors to see as many as 30% more patients because of the way their space was designed and built. “You learn from every one of those,” says Stevens, 47, who keeps tabs on how the buildings have performed over time. “Mark is a sponge,” says Jack Neu, managing partner with Nielson Wojtowicz Neu & Associates in St. Petersburg. Neu met Stevens four months after he started his construction firm and has provided him surety bonding. “When there’s somebody around with an opinion of value, he listens.” Neu says Stevens’ skill is hiring the right people and not micromanaging. “Mark has the ability to select good people and train them in the way he believes,” Neu says. “But he accepts opinion. He lets them do their work. He can’t do everything himself.” That was critical during the downturn, when Stevens pared down his firm to just a dozen key employees, down from 40 during the boom, and asked them to do more with fewer resources. By then, most of his business except health care had faded. “Health care construction was the only thing that had a pulse,” Stevens says. In part as a reward for sticking out the tough times, Stevens added two longtime employees as partners in the business, allowing them to pur-
chase shares in Stevens Construction at book value. A third partner will join them soon. “They stuck with me through the low point,” Stevens says. But Stevens was determined not to let the recession take him down like so many others, and he took a gamble by expanding to Orlando in late 2008. Friends and associates told him it was too risky to hire people and open an office in Orlando during the recession. “I was in a Vistage group at the time and they told me I was crazy, too,” says Stevens. Vistage is a peer group of CEOs in unrelated industries who counsel each other confidentially. After Orlando proved to be a success, Stevens Construction subsequently expanded to Tampa. Those expansions during the downturn have helped boost the company’s revenues by double-digit percentages in the last few years. “Tampa carried us last year,” says Stevens. But construction has rebounded in the Fort Myers and Naples areas, too. Last year, Landmark Hospital of Southwest Florida selected Stevens to build a new 50-bed acute-care hospital in Naples. Stevens says building a hospital from scratch has always been on his bucket list of projects. That’s an opportunity even Disney couldn’t have given him.
2012 $15.3 million
2013 $21.6 million
Source: Stevens Construction
BUSINESS OBSERVER | MAY 16 – MAY 22, 2014
BusinessObserverFL.com NEAL from page 12 known for his hyper-focus on every fine point of a project. “We could communicate without talking.” The Neals also discovered two sha red t ra its : A n unrelent ing persistence to complete a project and an instinctive mathematical mind, which came in handy for land deals. “My dad,” Neal says in a written response to questions about the firm’s early years, “was the best land buyer of all time.” Paul Neal, the son of parents who went broke twice, once in the Great Depression, also refused to risk big sums of his money in the fledgling homebuilding business. He instead cultivated partnerships and other relationships to secure financing. That lesson rubbed off on Pat Neal. He says low-debt projects have keyed Neal Communities’ long-term success. Neal Communities borrows some money through the Community Development District (CDD) process. But it mostly finances communities on an as-itbuilds basis. Neal is the sole majority owner in the company with one minority investor, his longtime business partner Frank Cassata, now retired. Neal cites many other mentors in his life, people he admires and emulates, usually without their knowledge. One is his mom, Patricia Neal, an English teacher at Des Moines Technical High School and an avid reader. Other mentors range from morally upright teachers like Johnson, who taught Neal the skill of engaging in others, to Sgt. Kalehici, his commander in the U.S. Army. Kalehici, says Neal, excelled at being able to turn mundane tasks into fun competition and games. That, says Neal, included low-crawls on
The difference between Pat and everyone else is preparation. John Neal | Neal Communities
the dirt in Fort Leonard Wood, Mo., in the late 1960s. “I learned that life was just a game,” Neal says. “Zoning, for example, can be considered as a test of wills, skills and patience. If you look at it as a game to be won, just like a ping-pong game, you can see that winning is fun.”
The mentors helped shape Neal’s business acumen, but it was two jobs in Des Monies that formed his entrepreneurial spirit. His first job was delivering newspapers for the Des Moines Register and the Des Moines Tribune. He quickly figured out the only way to make the job worthwhile was density: more papers and a shorter route. His first route was a lot of walking for only 58 papers, but he talked his way into a route that include an apartment building. “I have always been able to keep track of time and costs,” says Neal, “to assure they were always considerably less than the income.” More ambitious jobs followed. Neal sold Swipe laundry detergent and Fuller vegetable brushes doorto-door. He started his first business that had employees, Youth Power. The firm, Neal and up to eight employees, all fellow teens, started with mowing lawns. Then, in a foreshadowing moment of Neal’s future ability to quickly seize market opportunities,
the startup soon added all sorts of services. Neal and his crews would clean out garages and sell scrap. They sold railroad ties and set up fair booths at the Iowa State Fair for churches. They painted homes for a short time. Neal learned another lesson at Youth Power that served him well decades later: the value of good and loyal employees. The first time he encountered the issue was when he realized some Youth Power employees cut him out to work directly for customers. Neal paid them anywhere from the minimum wage at the time, 85 cents an hour, to $1.25 an hour. But they bolted anyway. Neal realized he could pay better and still make a profit. He put that theory into practice at Neal Communities with employees and especially with subcontractors.
An important facet of Neal’s success, how he deals with setbacks, is something he learned later in life. In his 30s and 40s he internalized any real or perceived failure, he says. He often took it too personally. But Neal says he began to incorporate an Eastern philosophy to overcome setbacks, where he focuses on the positives. “It’s how you frame it,” says Neal. “I wouldn’t call it a setback. It’s a challenge and something you need to overcome. I taught myself to use that concept.”
While Neal is currently focused on the long-term growth of the company, he’s at an age where logical “what’s next” questions arise. That goes both for his plans for public office, if any, and the succession plans at Neal Communities, where both his sons, John and Michael Neal, are employees. Neal is coy about his future plans for public office, and he’s only a little more open about succession. The firm works with a leadership consultant about the transition to the next generation. Yet retirement doesn’t seem like a word, or a concept, Neal will easily embrace. “I told my sons,” Neal quips, “ that I will be around long enough to be a problem for them.”
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