GC 500 special section by Kat Hughes

GULF COAST

AUGUST 12 – AUGUST 18, 2011

Business Review GULF COAST www.review.net August 2011

500 Largest Companies 4

Companies Ranked by Revenue & Industry 40

Companies Alphabetically 47 50 Largest Employers 53

50 Fastest Growing Companies 52 50 Companies with Greatest Decline 54

TWO DollarS

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TECHNOLOGY:

See this year’s ranking of the largest firms on the Gulf Coast.

SEE PAGE 7

STORY ON PAGE 13

Insuring Service

Growing TOP 500 COMPANIES apples Insert inside

A Mac retailer readies for competition from its corporate supplier.

Companies • Trends • Entrepreneurs • CEOs

COFFEE TALK

Insurance contracts keep an appliancerepair company in expansion mode.

The Weekly Newspaper for Gulf Coast Business Leaders

GULF COAST 500: After slowing down in 2009, Walker Ford passes the competition as the fastest-growing car dealership in the Gulf Coast 500.

GULF COAST BUSINESS BUZZ

+ Apartment deals lead the way

Commercial real estate brokers in the Tampa Bay region have been saying the apartment market is the most active segment of the market. Recent data based on deals for properties and portfolios worth more than $10 million confirms that. Data compiled by Real Capital Analytics shows that 19 apartment complexes traded hands in the first half of 2011 in the Tampa Bay area, representing $435 million worth of deals. That’s nearly half the total commercial real estate deals of more than $10 million in the Tampa Bay area in the first half of the year. Compared to the first half of 2010, deal volume is up 27% so far this year, totaling $933 million. The 52 properties worth more than $10 million that changed hands in the Tampa Bay area so far this year represents a 136% increase over the same period in 2010. Besides the apartment deals, in the first half of 2011 in the Tampa Bay area there were 18 retail deals totaling $286 million, 12 office deals totaling $187 million, two hotels worth $15 million and one industrial building worth $11 million. There were no land deals more than $10 million.

+ HMA stock takes a beating in the market

It’s hard to say whether the recent stock-market downturn caused Health Management Associates’ stock to lose more than a quarter of its value in five days. But it didn’t help that the company revealed federal investigations into some of its practices in the quarterly results it filed on Aug. 3 with the Securities & Exchange Commission. Among other issues, HMA disclosed that the U.S. Department of Health and

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+ Scammers are everywhere, with a blog to prove it Seems like there are blogs for everything these days, from immensely popular subjects to the thoroughly arcane. But Tampa attorney Jordan Maglich was surprised to learn no one, far as he could tell, monitored Ponzi schemes nationwide. So Maglich, who focuses on securities and financial services litigation at Wiand Guerra King, launched his own Ponzi watch blog. He launched the website, ponzitracker.com, earlier this summer. Maglich’s firm, through lead attorney Burt Wiand, is the court-appointed receiver in the case of Arthur Nadel, a Sarasota financier who pleaded guilty to a $162 million Ponzi scheme last year. Maglich worked on that case, which is when the Ponzi tracker blog idea was born. “It became apparent that these (scams) weren’t random incidents in Florida,” Maglich tells Coffee Talk. “And there was no one out there tracking these.” Maglich started his quest when he set up a Google news alert for Ponzi schemes, which are essentially fraudulent investments that pay back investors from other investor’s funds, not profits. The scams are named after Charles Ponzi, who used the technique in the early 1920s. Schemes quickly poured in, once Maglich began to look.

Magnetic business continues strong

• Local Market Expertise • Regional Market Knowledge A Sarasota-based men’s accessories firm that has successfully bent with the times has hired another stiff, err, employee. The company, Würkin Stiffs, hired industry veteran Ken Griffin to run sales. Griffin previously helped rebuild a brand and business model for a young men’s collection at several national retailers, including Nordstrom’s and Saks Fifth Avenue. Griffin is also the first large outside hire for Würkin Stiffs, founded in 2006 by Sarasota entrepreneur Jonathan Boos. The company’s flagship product is a Power Stay, a magnetic device that connects collars to shirts. Power Stays are now sold in more than 150 upscale department stores. (See Business Review, May 11.) “Since 2005, I’ve worn many hats to lay a solid foundation for Würkin Stiffs,” Boos says in a release. “To capitalize on the current growth spurt we’re experiencing, however, requires an experienced sales professional.” Boos projects the company will surpass $1 million in sales in 2011. Now with six employees, Würkin Stiffs is also poised to add a new line of products, such as leather goods and magnetic stays for polo shirts. Scammers who use promissory notes to reach victims are prominent on the list, but Maglich says he sees so many, there’s a different and new method every week. “It’s exceedingly interesting to see how these people work,” says Maglich.

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1335 2nd Street Sarasota, FL 34236 7267 Delainey Court Lakewood Ranch, FL 34240 Phone: 941-951-1776 Fax: 941-957-3900 www.hembreeco.com

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Human Resources had sent subpoenas to the company regarding physician referrals, hospital ownership joint ventures and emergency room management. This is important because joint ventures with physicians and improvements in the emergency rooms at the company’s 60 hospitals have been a bright spot for the company. Joint ventures give physicians a stake in improving the performance at hospitals while emergency room efficiencies boost patient revenues. Indeed, HMA continues to outperform its peers on many levels. It recently reported a 13% jump in revenues and a 25% increase in diluted earnings per share in the second quarter compared with the same quarter a year ago.

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ECONOMIC SNAPSHOT

GULF COAST BUSINESS INVESTMENT What the data show: Taxable sales in the business-investment category include office equipment, computers, industrial machinery, hotel and restaurant supplies, transportation equipment, paper and packaging materials, and medical and optical supplies. The latest available data is for May.

MAY BUSINESS INVESTMENT Area Business investment Tampa-St. Petersburg $530.7 Cape Coral-Fort Myers $107 $17.6 Punta Gorda Naples $57.7 Sarasota-Bradenton $125.3

% Annual change 5.2% 4.4% 3.7% 0.7% 0.3%

Source: Florida Legislature Office of Economic & Demographic Research

Forecast: Uncertainty about future economic activity may blunt business investment. Flat business-investment levels seen in May in some areas of the Gulf Coast might be the trend in the months ahead as business owners become more cautious. Still, real estate and tourism activity are improving, suggesting businesses will have to invest to keep up with the growing demand.

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What it means: Tampa and Fort Myers were the two areas of the Gulf Coast that exceeded the 4.1% statewide increase in business investment in May on an annual percentage change basis. While other areas of the Gulf Coast saw increases in business investment, Naples and Sarasota were soft in May. Business investment was strongest in the Panhandle, with Fort Walton posting a 19.7% annual increase and Pensacola posting 18.1% growth. Those areas are recovering from last summer’s BP oil spill, benefiting from that company’s payouts and a rebound in tourism.

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GULF COAST WEEK

Impact fees under review Sarasota city officials will review impact fees at meetings this fall to see which ones can be reduced or eliminated. City staff will analyze each impact fee, including fees connected to Sarasota County. Staff will then make a recommendation to city commissioners on the necessity of the impact fee. Sarasota city commissioners suspended sewer and water impact

REGIONAL BUSINESS NEWS AT A GLANCE

tampa bay Housing starts down 9.6%

New construction of singlefamily homes in Tampa-St. Petersburg-Clearwater fell 9.6% over the year in the second quarter, down to 1,038 new starts, according to Metrostudy. At the same time, new-home construction picked up in Sarasota-Bradenton (up 3.1%, to 404 units), and in Lee and Collier counties (up 11.1%, to 401 units). Closings on sold homes fell dramatically in Tampa Bay and Lee-Collier, down 29% in each market, Metrostudy estimates. In Sarasota, closings fell 8.4%. Metrostudy’s latest estimates of housing inventory are between six and eight months for each metro area. Tampa Bay has the

EXECUTIVE

DECISION Do you think the U.S. economy will experience a “double dip” before the end of 2011?

largest supply, at 8.4 months, while Lee County maintains a 5.9-month supply of homes, unchanged from last year.

Frontier expands TIA flights

Business travelers needing to check in on operations in the Midwest will have a few more nonstop options out of Tampa International Airport through the rest of this year. Frontier Airlines will provide nonstop service from Tampa International Airport to Des Moines, Milwaukee and Omaha later this year, the company says in a release. Service to all three cities will be offered on Thursday and Sunday, plus an additional flight on Tuesday for Milwaukee service. Frontier, which first began flying through Tampa International in 2002, also offers daily nonstop service to Denver.

Lee-Collier Lee foreclosures slow

The number of real estate properties in foreclosure fell to 438 in July, a 50% drop from the same month a year ago and a 6% To vote in this week’s poll decline from June, according to question, visit: review.net/decision. the Southwest Florida Real Estate Investors Association. Results from last week’s poll: The top five lenders filing foreclosure actions were BAC Home Do you support the back to Loans Servicing, Wells Fargo school sales tax holiday? Bank, Fannie Mae, Deutsche 90% Bank and Suncoast Schools FedYES 10% eral Credit Union, according to NO data compiled by the association.

Fannie Mae remains the top lender with the most real estate owned through foreclosure with 478 properties, according to the association’s calculations of data from the Lee County Property Appraiser. Since July 1, 2007, lenders have filed 73,276 foreclosure actions in Lee County.

HMA investigated

fees for 10 years after a vote last month. That move prompted Commissioner Shannon Snyder to suggest the city look at all impact fees.

The effort will be the first residency program south of the Tampa Bay area, and it will admit is first class of residents in July 2013. Medical school graduates are required to complete a residency program in their chosen specialty to gain board certification and practice independently. Lee Memorial has identified a shortage of family medicine practitioners based on projected population growth. Studies show most physicians establish their practices in the same area where they trained as residents.

Naples-based hospital operator Health Management Associates revealed several federal investigations into its practices in its most recent quarterly report to investors. HMA disclosed that the U.S. Department of Health and Human Resources had sent subpoenas to the company regarding physician referrals, hospital ownership joint ventures and emergency room management. HMA also disclosed it had received a letter from the U.S. Department of Justice indicating an investigation into whether certain HMA hospitals filed improper claims for implantable cardioverter defibrillators. In its quarterly filings, HMA says the company is cooperating with the government and is investigating these matters.

Sarasota-Manatee Firm adds jobs

Voalté Inc., a Sarasota firm that provides high-tech communications systems for nurses and other health care providers, says it will hire 50 employees over the next three years. Sarasota County approved $250,000 in performance-based incentive grants to facilitate Voalté’s job creation efforts. “Market demand for our proven healthcare communications technology is driving this expansion,” CEO

FSU residency program

Florida State University’s College of Medicine recently announced plans to start a family medicine residency program at Lee Memorial Health System in Fort Myers.

Rob Campbell says in a release. Voalté, derived from the communications word-trio of voice, alarm and texting, currently operates out of a 3,500-square-foot facility on Bee Ridge Road. It plans to expand its space there by an additional 1,500 square feet. The 50 hires will more than triple Voalté’s employment total. The firm currently has 22 employees.

County privatizes golf

Manatee County officials are close to a decision to privatize two county-owned golf courses, the Manatee County course and the Buffalo Creek course. Sarasota-based Pope Golf would manage and operate the courses under a tentative agreement with the county. Pope Golf currently operates one public course and one private course in Sarasota County. Manatee County officials say the move is part of an effort to cut expenses from the annual budget, which has already been reduced by $122 million since 2007. County commissioners are expected to vote on the Pope Golf bid in a meeting later this month.

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+ Wynn unleashes rant on Obama administration

First there was the much-publicized rant of Steve Wynn, the Las Vegas casino mogul. In a conference call with investors July 18, Wynn went off on the “current political environment” created by President Obama. Some highlights: • “I’m saying it bluntly, that this administration is the greatest wet blanket to business and Bloomberg progress and Steve Wynn job creation in my lifetime. And I could prove it and I could spend the next three hours giving you examples of all of us in this marketplace that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right, a president that seems — that keeps using that word redistribution.” • “The business community in this country is frightened to death of the weird political philosophy of the president of the United States.” • “My customers, and the companies that provide the vitality for the hospitality and restaurant industries in the United States of America, they are frightened of this administration. And it makes you slow down and not invest your money.” • “Everybody complains about how much money is on the side in America. You bet. And until we change the tempo and the conversation from Washington, it is not going to change. And those of us who have business opportunities and the

Ford hangs tough with its Gulf Coast commitment The Tampa commercial real estate market is mushy as a melted ice pop, yet a hardened success story formulates every now and then. The latest victory: A commercial landlord secured a decade-long lease extension for a tenant that occupies a 120,500-square-foot building in east Tampa. The tenant, Ford Motor Credit Co., has been in the building, Sabal Pavilion, since 1999. Newport Beach, Calif.-based KBS, a non-traded real estate investment trust, owns the building. “This will likely be the largest lease transaction for the KBS southeast portfolio in 2011,” says KBS senior vice president and asset manager Allen Aldridge. “And more importantly it will provide stability to our occupancy and revenue for many years.” Ford Motor Credit Co., a subsidiary of Ford Motor Co., previously extended its lease in the building to 2017, with a termination option for 2015. The option was eliminated from the latest lease agreement, which lasts through 2021. The lease extension is also a pushback against market doldrums. Indeed, the Class A vacancy rate in Tampa was 17.3% at the end of the second quarter, according to Aldridge, although the vacancy rate in the east Tampa sub-market was only 14.6%. The extension includes a commitment from KBS to upgrade parts of the four-story building. The exterior was repainted and sealed last year, and this year the building will get a new chiller and the parking lot will be resurfaced. Even better news, says Aldridge: “We’re told that Ford has plans to expand their employee base for the building in 2012.”

Florida’s Long-Term Care Ombudsman Program needs volunteers to join its corps of dedicated advocates who protect the rights of elders who live in nursing homes, assisted living facilities and adult family care homes. The program’s local councils are seeking additional volunteers to identify, investigate and resolve residents’ concerns. Special training and certification is provided.

All interested individuals who care about protecting the health, safety, welfare and rights of long-term care facility residents – who often have no one else to advocate for them – are encouraged to call tollfree 1-888-831-0404 or visit the program’s website at http://ombudsman.myflorida.com. 62182

Some examples of Ponzi schemes nationwide the blog has tracked include: • An Arkansas lawyer who pleaded guilty to a $47 million scam that was considered the largest financial fraud in state history. The scheme involved paperwork for false rural improvement bonds to several Arkansas banks, the site reports; • A husband-and-wife team in Hawaii admitted to a scam that took investors for $4 million — a scam the husband coordinated while he served time in prison for a previous Ponzi scheme; • A Delray Beach man pleaded guilty to a scheme that bilked investors out of $30 million through several precious metals firms he runs. Authorities say that case had at least 1,400 victims. Maglich hopes the site will be a warning for potential investors to do their research, not just a news feed on the ways of the criminal mind. “If anything,” he says, “this will help people be more vigilant.”

capital to do it are going to sit in fear of the president.” • “This is Obama’s deal. And it is Obama that is responsible for this fear in America. The guy keeps making speeches about redistribution and maybe we ought to do something to businesses that don’t invest, they are holding too much money. You know, we haven’t heard that kind of talk except from pure socialists... until he is gone, everybody is going to be sitting on their thumbs.”

Personal incomes rise

It may not have felt like it, but personal incomes rose in every area of the Gulf Coast last year. According to the U.S. Bureau of Economic Analysis, total personal incomes on the Gulf Coast rose from a high of 2.1% in the Tampa Bay area to 0.8% in the Sarasota area. That

compares to the 2.9% rise nationally in all metro areas. Despite the increase in personal incomes, all areas of the Gulf Coast scored in the lowest quintile of the nation’s 366 metro areas in terms of annual percentage change from 2009 to 2010.

Total Personal Income Area Tampa-St. Petersburg-Clearwater Punta Gorda Cape Coral-Fort Myers Naples-Marco Island North Port-Bradenton-Sarasota

2010 income $105,596 $5,738 $24,271 $19,344 $33,660

% Annual change 2.1% 2% 1.5% 1.1% 0.8% Source: U.S. Bureau of Economic Analysis

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($ in millions of dollars)

GULF COAST BUSINESS REVIEW AUGUST 12 – AUGUST 18, 2011

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Gulf Coast

overview

Winners and Losers of the Gulf Coast 500

The trends that shaped the economic landscape of Gulf Coast companies mirrored those affecting the nation.

eviewing the revenues of the largest 500 companies on the Gulf Coast (See Gulf Coast 500 insert), a few themes emerged. Unsurprisingly, the winners and losers among companies headquartered on Florida’s Gulf Coast represent larger trends impacting the economy of an entire nation. Below are a few trends we noted in the list.

very recently, when Washington cast another layer of uncertainty over a struggling national economy. Even Veredus, a successful company with rapidly increasing revenues, is being forced to reconsider its growth strategy, which currently includes expanding to three new markets a year. (Rodriguez has his eyes on Dallas and Minneapolis for 2012.)

1.) Hiring is slow.

2.) Government projects pay.

Companies are hesitant to add full-time staff before demand rises. In the meantime, however, those firms are bringing on part-time help to fill gaps. All six of the staffing firms on our list — including KForce, A-1 Contract, and Veredus Corp. — saw revenues increase in 2010. KForce’s 9% gain pushed the company’s revenues to the verge of $1 billion in business for the year. Dan Rodriguez, CEO at IT staffing company Veredus (No. 141 with $43 million in 2010 revenues), is hesitant to celebrate his industry’s success. He recognizes that many capable employees are struggling to find work. Still, companies’ reluctance to hire full-time staff has been a boon to companies like Veredus, which expects to generate $60 million in revenues in 2011. In fact, providing a flexible staffing option can help firms get to a stronger growth position in the short term. By providing short-term IT assistance to smalland mid-sized firms, Rodriguez says Veredus is helping small businesses “get over the hump,” and get closer to solid growth. Rodriguez says markets had been improving since 2009, even in Tampa, where strong demand for IT staff exists, until

GULF COAST

Even as new assessments of the United States’ fiscal disarray shock markets, government clients have still been able to pay the bills. Two of our top five fastestgrowing companies are government contractors: FedTech Services Inc., which saw revenues increase 471%, and Crystal Clear Technologies, which enjoyed 230% growth. Crystal Clear (No. 248 with $16.38 million in 2010 revenues) is owned and operated by Crystal Culbertson, a former contract specialist at Kendall Air Force Base who started her company in 2002. Now she’s working with the Department of Defense to provide staffing, communications equipment and engineering services on a number of projects. She says what’s driving her business’s growth is simple: “the war.” But don’t assume that Crystal Clear will be out of business once operations in Afghanistan and Iraq wind down. In fact, Culbertson says as deficit negotiations put more pressure on the nation’s defense spending, Crystal Clear’s services will become more important as project managers search to identify places where cuts can be made while maintaining functionality.

#208

Conditioned for Success Unscrupulous operators plague the air-conditioning contracting industry, but Theodore Etzel III is raising the bar. Revenues grew 35% last year.

o understand why there are so many fly-by-night air-conditioning repairmen out there, consider Theodore Etzel III’s dilemma. Etzel is a man who plays by the rules. The president and CEO of Conditioned Air of Naples recently won the Business Ethics Award from the Uncommon Friends Foundation in Fort Myers. But the regulatory environment is so difficult in places such as Collier County and enforcement is so lax that executives like Etzel who abide by the rules get unnecessarily penalized. That’s because competitors routinely skirt the rules to avoid regulatory costs — and they get away with it. For example, Etzel has had to hire an additional full-time person just to manage local permits, while some operators never pull the required permits for work. Conditioned Air has to provide a ladder for inspectors to check on their work because the municipalities refuse to buy one for their own inspectors. One employee is charged with dropping off and picking up

by the numbers Conditioned Air Revenues % Change Year $17.1 million 2008 $18.1 million 6% 2009 2010 $24.5 million 35% inspection ladders from various job sites, if it hasn’t been stolen in the meantime. “I’m expecting permit fees to go up again” in Collier County, he says. They’ve already doubled from $75 to $150 to change out an air-conditioning unit. When he asked why they doubled the fees recently, bureaucrats told him because permit volumes had declined and they needed the money. Etzel knows some of his competitors won’t abide by the laws. “Fair is where you get a hot dog,” he quips. But, he adds, “All I want is an even playing field.” Still, Etzel doesn’t sit around complaining about his competition. Conditioned

Mark Wemple

As companies hold back on permanent hiring in the face of economic uncertainty, staffing firms like Veredus Corp. — led by CEO Dan Rodriguez — are growing. Plus, even if the solutions to the nation’s deficit problems aren’t clear, Culbertson is confident that there will always be work for defense contractors. As she puts it: “The U.S. government’s going to be a business as long as we’re a country.” As for the industries hurt most over the course of 2010, the results are clear.

3.) Real estate is still hurting.

Each of the five firms that saw the largest percentage losses in revenues does business in the real estate industry, whether it specializes in brokering (Fred M. Starling Inc.), building (Hammer Construction), or Air has become more efficient by equipping his 120 service vans with GPS systems so dispatchers can track their whereabouts and assign them the closest next job. “The marketplace will not pay for inefficiency,” he says. “Here’s the No. 1 social goal: Stay in business.” Revenues rose 35% last year to $24.5 million. Conditioned Air has developed a loyal following because of the way his employees are compensated. Unlike many competitors, Etzel’s technicians don’t work on commission. So instead of trying to sell customers a new air-conditioning unit, they’re focused on fixing existing ones. A service call by Conditioned Air costs $99 while a rival might cost $29, but you can bet the lower-priced service call will make the hard sell. During the real estate boom, Etzel planned to expand to Sarasota, but he put off those plans when the downturn started to take hold. He remembers national homebuilder Pulte telling him in July 2006 it wasn’t building more speculative homes. “Let’s focus on our own backyard,” Etzel remembers thinking at the time. Now, Etzel says he’s seeing some improvement in the new-homes market in Sarasota. “What we hear is that they’re mainly cash buyers,” he says. In particular, Europeans and Canadians have been aggressive homebuyers because of the relative strength of their currency. In Sarasota, Etzel says he’s planning “several hundred” installations of new airconditioning units out of about 2,000 in total for his company this year. Roughly half the company’s revenues this year came from new installations and the other half from service and maintenance of exist-

contracting (Merit Electric Co.). Furthermore, some of the largest companies on the Gulf Coast in the real estate industry saw the largest losses. Stock Development, No. 56, lost more than $150 million in 2010. W.G. Mills, No. 60, lost more than $110 million. Although some real estate-related businesses fared well, like No. 371 Extreme Remodelers, which posted 100% growth to $6 million in revenues in 2010, it’s clear that industries involved in Florida’s boomand-bust construction economy are still waiting for the upswing. —Alex Walsh

Nancy DeNike

Theodore Etzel III, president and CEO of Conditioned Air in Naples

ing units. Conditioned Air now has about 9,000 individual maintenance contracts. Until recently, Etzel’s main business in Sarasota has been with new homebuilders. Now that he has established a foothold in Sarasota, Etzel plans to expand service and maintenance for residential and commercial customers there, just like he does in Fort Myers and Naples. “The market area resembles what we find in the Collier and Fort Myers markets,” he says. “This has been in the works for a long time.” —Jean Gruss

Gulf coast Business Review AUGUST 12 – AUGUST 18, 2011

GULF COAST

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#325

Them Apples A hyper-focus on one company’s products could be a death sentence for a retailer. But one Gulf Coast computer store has made it work.

he Blunden family runs one of the largest computer stores in Florida that deals only with Apple products, a unique 20-year-old business that defies the traditional model of retail product diversity. The Apple-only approach has led to a growth surge, even while computer stores and sales nationwide suffered in the recession. The company, Sarasota-based Computer Advantage, reported $8.6 million in 2010 revenues, up 52.5% from 2009, when it had $5.64 million in sales. (The Observer Group, parent of the Business Review, has a contract with Computer Advantage to service computers.) But now the Blundens are braced for what could be their biggest competitive threat yet: more apples. Strangely enough, these apples will likely come straight from the corporate entity, Cupertino, Calif.-based Apple Inc.,

BY THE NUMBERS Computer Advantage Year Revenues % Change 2008 $5.34 million 2009 $5.64 million 5.6% 2010 $8.6 million 52.5%

which supplies Computer Advantage with its products. That’s because rumors have percolated for years that the corporate Apple will open one of its big-draw Apple Stores in a mall in the SarasotaBradenton market, possibly by 2012. “Apple makes a product people want,” says Spencer Blunden, son of the company’s founder, Ron Blunden, and a sales manager at the store. “That’s the difference a Mac makes.” On the Gulf Coast, Apple already has stores in Tampa, at the International Plaza mall; in Brandon, at the Brandon Town Center; and in Estero, at Coconut Point. And while Apple computers are sold in Best Buys, Computer Advantage has had a distinct local edge for two decades because of its exclusive Apple focus. If an official Apple Store opens nearby, though, that edge could certainly soften. “Apple coming to town will be different than anything before,” says Blunden. “But if you’re a good store offering good service, you can still survive and thrive with an Apple store nearby.” Computer Advantage is an authorized independent Apple dealer, one of about 250 such stores in the country. It’s not an Apple corporate retail store, of which there are more than 300 nationwide. Corporate Apple Stores cater to a large swath of computer buyers, from techies

Mark Wemple

Spencer Blunden, left, works with his dad, Ron Blunden, middle, and his brother, Troy Blunden, right, at Computer Advantage in Sarasota. The store is one of the largest computer stores in Florida that deals only with Apple products. to novices. Some stores open after $3 million build-outs. Computer Advantage and corporate Apple Stores have similar service components, says Blunden. That includes oneon-one training and a repair shop. Ron Blunden founded Computer Advantage in 1991, long before Apple Stores were even a seed. Blunden wasn’t a computer geek or techie, but in the early 1980s his brother suggested he check out a Mac, a new kind of computer. Blunden liked the machine so much, he took a sales job at a computer store on Tamiami Trail in north Sarasota County, not far from the Sarasota-Bradenton International Airport. That store closed in January 1991. A month later, Blunden opened Computer Advantage in the same spot. Growth came quickly, mostly because the store was literally one-of-a-kind. There were no Apple Stores, and the Internet wasn’t around to promote the brand. The corporate office instead relied on stores like Computer Advantage

to reach customers. Blunden grew geographically in 2008. He bought two independent Apple stores in Georgia, one in Savannah and another south of Atlanta. Those stores have done well, Spencer Blunden says, and could provide a buffer against any lost business if and when an Apple Store opens in Sarasota. The Blundens have made other moves to carry on, too. The Sarasota store, for example, will undergo an extensive renovation. The goal is to look sleeker and sharper. Still, Spencer Blunden concedes business might slip the first six months Computer Advantage operates in the shadow of an Apple Store. But the hope is Apple’s presence will ultimately translate to more Apple buyers. Blunden has seen that happen in other markets with a similar situation. “We’ve found that when Apple comes to town, they bring another pie,” says Blunden. “They don’t take our piece.” — Mark Gordon

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Mark Wemple

Wes Walker, left, and Mary Avedisian, right, have led the resurgence at Clearwater-based Walker Ford, where revenues were up 33.1% last year. Walker’s grandfather founded the company in 1957. Avedisian is the dealership’s controller.

Rev it Up GULF COAST

#116 by Mark Gordon | Deputy Managing Editor

The auto industry has seen its share of hard times. But one Gulf Coast dealership turned the trouble into a terrific year.

alker Ford, like many other auto dealers nationwide, took a big sales dip in the recession. But the family-run dealership, on U.S. 19 North in Clearwater, is now into rebound mode despite a ream of obstacles, from high unemployment to a construction quagmire that clogs its entrance. The firm, founded in 1957, reported $62.65 million in 2010 revenues, a 33.1% jump over 2009 revenues of $47.08 million. Sales were more than $100 million a year as recently as 2006. The bounce back stems from a combination of factors, Walker Ford executives say. And Walker Ford isn’t an aberration

by the numbers WALKER FORD Year Revenues % Change 2008 $54.1 million 2009 $47.08 million -12.9% 2010 $62.65 million 33.1% when it comes to Gulf Coast auto dealerships that had a strong 2010. Others that posted big gains include Sarasota-based Gettel Automotive, which was up 32%, and Johan Marazzi Nissan in Naples, which was up 28.8%. (See chart below.)

A big factor in Walker Ford’s success is the 2010 Ford Motor Co. resurgence. Moreover, Walker Ford says its fleetservices unit, a big revenue driver, has finally returned after a recession-forced hiatus that lasted three years. “Our fleet business literally almost stopped,” says Mary Avedisian, the dealership’s controller. “But this year it has come back strong.” Walker Ford’s fleet clients buy everything from hybrid cars to trucks. Clients now include Bright House Networks, several local public utilities and Enterprise Rent-A-Car. The dealership’s new trucks division has been especially good

Gulf Coast Dealership rankings Company Location Rank 2009 revenues Larry Morgan Family Enterprises Tampa 42 $365.01 million Gettel Automotive Family of Dealerships Sarasota 45 $240.43 million John Marazzi Nissan Naples 107 $56.96 million Jerry Ulm Dodge Chrysler Jeep Tampa 110 $64.55 million Walker Ford Clearwater 116 $47.08 million Audi Jaguar Land Rover Fort Myers 434 $3 million (John Marazzi owns the Audi Jaguar Land Rover dealership in Fort Myers.)

2010 437.67 $318.97 million $73.36 million $66.94 million $62.65 million $3.42 million

% change -16.6% 32.70% 28.80% 3.70% 33.10% 14%

Gulf coast Business Review AUGUST 12 – AUGUST 18, 2011

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Mary Avedisian, Walker Ford, Clearwater: ‘We became more efficient. We pay a lot more attention now to how we hire and who we hire.’ for fleet-services, says Avedisian. New truck sales for fleet services made up 40% of Walker Ford’s total new truck sales last year. A third factor in the robust 2010: the dealership says it has refused to turn into a high-pressure sales operation, even in the recession, and that has led to repeat and referral business. “When it comes to selling cars,” Avedisian says, “we don’t do the nightmare.” Family patriarch E.B. “Doc” Walker founded Walker Ford. Two of his sons now work there; Gary Walker runs the parts and service department, while Frank Walker oversees the entire dealership. Frank Walker’s son, Weston Walker, has worked at the company for about four years. The employee count grew steadily for the dealership’s first few decades, then ballooned to 160 people by 2007, before the auto industry crashed. Avedisian says the work force now hovers between 102 and 108 employees, a 30% drop. The recession has forced the company to become more careful about hires, like a lot of other businesses. Avedisian says the company has begun to focus on cross-training employees, to help ease the crunch of a smaller staff. “We became more efficient,” says Avedisian, who has been in the auto sales business since 1977, and with Walker Ford since 1997. “We pay a lot more attention now to how we hire and who we hire.”

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control. But Walker balked when the dealers charged a price over invoice. Walker Ford isn’t the only Ford dealership to report big growth numbers, both in 2010 and the first half of 2011. In fact, Ford Motor Co. sales rose in the 2011 second quarter, the company says in its most recent earnings report, from 1.4 million vehicles in 2010 to 1.5 million this year. But the uptick in sales came at a price. The company’s profit fell 7.7% for the quarter, from $2.55 billion to $2.4 billion. Ford pinned the slide on an increase in the cost of materials; higher expenses to build better cars; and a decrease in international sales. While certainly challenging, Walker Ford executives don’t believe those issues will be insurmountable on the way to another big growth year. “You do have to pay attention to everything that’s going on,” says Avedisian. “But I don’t anticipate it slowing down.”

B:12”

Finally, a looming challenge for Walker Ford is inventory — or the lack thereof. It’s the flip side to a stellar year: the dealership sold so many vehicles, the corporate office struggled to meet the demand at times, says Avedisian. For cars, the Fusion and Focus sold especially well last year, while the F-150 was tops for trucks. The inventory problem is somewhat out of Walker Ford’s control. The system, says Avedisian, utilizes several zones in regions throughout the country. So, for example, if all the dealers in the Northeast Zone sell a lot of Fusions, all the dealers get more Fusions in the next delivery. The Southeast Zone, which includes Walker Ford, struggled last year. That means Walker Ford gets less vehicles in 2011, despite its strong 2010. Avedisian says the dealership considered buying some B:7.5” new Fusions and FoT:7.5” to take back some cuses from other dealers

S:11”

Efficiency aside, a repeat performance of last year could be difficult in 2011. For one, the dealership location, once an advantage, has turned into a thorny problem. Walker Ford has been in its current home, in a high-traffic area of U.S. 19, since 1991. The five-mile radius that surrounds it is home to several other auto dealerships. The trouble, however, began in 2009, when the Florida Department of Transportation began work on a five-year, $162 million construction project on U.S. 19. The project will turn U.S. 19 from a limited-access highway to a freeway. The goal is to ease congestion, but the day-today impact has crippled many businesses on the road. That includes Walker Ford, which is right now in the thick of the construction. “This project has created an interference on our business,” says Avedisian. “Some people just don’t have the desire to come in here and buy a car because it’s so difficult.” Walker Ford has taken some steps to combat the issue. For instance, it rented a huge billboard at the foot of the entrance, where it advertises the dealership on both sides. That costs about $3,000 a

month, says Avedisian. Another challenge is how to generally reach customers, not just U.S. 19 travelers. That process has gone through several changes in the past few years. Walker Ford used to advertise through a lot of newspapers, and some TV. Now it advertises mostly through the Internet, some TV, but very little in newspapers. Walker Ford was also heavy in the local Yellow Pages phone book. It took out big ads on the automotive pages for several thousand dollars a month through the end of 2010. “That wasn’t generating any business,” says Avedisian. “We cut that out all together.”

In the zone

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GULF COAST

#201

The Heartbeat of Technology Fox Electronics makes essential parts for microprocessors, staying ahead of the competition by investing heavily in research and development through good and bad times.

by the numbers FOX ELECTRONICS Year Revenues % Change 2008 $25 million 2009 $23 million -8% 2010 $25 million 8.7%

.L. Fox Jr. always has a good read on what’s ahead for the technology industry. That’s because his company, Fox Electronics, makes oscillators that regulate the heartbeat of microprocessors in countless computer devices, from cell phones to servers and computer networks. When orders start to slow, as they have started to recently, Fox knows it’s time to reevaluate every expense and keep a watchful eye over inventory levels. “You learn to look for the signals,” says Fox. Today, Fox says he’s starting to see signs that this most recent technology business cycle may have peaked. “You can see a softening,” he says. “It doesn’t go up forever.” Consumer spending has flattened, China is raising interest rates, Europe is embroiled in a debt crisis and revolution is stirring in the Middle East. “There’s an obvious change in the market,” Fox says. For Fox, one of the key indicators that signals a slowdown is the book-to-bill ratio, when the company is billing more than it’s booking new orders. Also, Fox pays particular attention to how far in

GULF COAST

JimJett.com

E.L. Fox Jr., president of Fox Electronics, helped steer the family company through the tech bust and recovery.

E.L. Fox Jr., Fox Electronics: ‘You can see a softening.’ advance customers order key products, a sign of business confidence. Fox learned to follow these signals after nearly being wiped out by the tech bust in the early 2000s. Today, inventories are lean, expenses are routinely examined line by line and every manager prepares a quarterly forecast. “The first day of each quarter it becomes gospel,” Fox says. “It

takes three months to make a trend.” Still, Fox isn’t certain how long a downturn might last. “It could last six months or a year and a half,” he says. But a downturn isn’t stopping Fox from doing the things he needs to do to build the business and take share from the competition, such as boosting sales efforts in key markets and investing in research and

development. These kinds of investments help power companies through downturns and put them in good position when the inevitable rebound occurs. “We’re going to open up an office in San Jose,” Fox says. Despite woes in that state, California still accounts for 22% of the domestic technology market. “You’ve got to be in the field and close to the customer,” he says. “It’s tough to service from Fort Myers.” For example, the current Fox manager, whose territory includes California, visits customers 20 days a year. With an office in San Jose, the same manager will be there 250 days a year. Fox also has increased its presence overseas, with offices in China, Canada and the United Kingdom. Europe and Canada have seen good growth, but Fox says Asia has been difficult to break into because of strong ties among well-established companies there. Fox also says investing in research and development is preferable to spending money defending patents on existing technology. “We’re more focused on the next generation,” says Fox. “The idea is to stay ahead.” —Jean Gruss

#53

That’s a Lot of Hot Dogs Now that the NFL lockout is over, Ovations Food Services can go back to projecting $250 million in revenues for 2011.

egotiations over the nation’s debt ceiling have dominated headlines lately, but another set of negotiations settled just a few days earlier arguably captured a larger segment of the national interest. Even today, long after a deal was struck, it frightens many to think about what might have been — had the National Football League undergone a work stoppage, there would be no gridiron games on Sunday. That prospect was especially scary to Todd Wickner, chief operating officer of Lutz-based Ovations Food Services. Ovations provides food and beverage service at concession stands for a number of professional sports teams, including the Jacksonville Jaguars, so an NFL lockout could have been devastating for his business. “It’s great to hear that they were able to come to an agreement,” Wickner says with a slight laugh, nervously acknowledging the stakes of the league’s decision. But now the worrying is over, and Ovations can go on growing like it has been for the past 11 years — from $25 million in revenues in 2000, to $170 million in 2009, to $200 million in 2010. Wickner estimates the company will reach $250 million in business by the end of this year. The secret to his company’s success,

what brought him to the Tampa Bay area in 1992, when he opened a family restaurant with his brother, Robert, called Aunt Chelada’s Café. The restaurant did well enough, but in 1995 Todd Wickner chose to return to food service on a larger scale, the industry in which he began his career, first with Aramark in 1976. Wickner had worked for Aramark for 16 years, gaining valuable experience as a regional general manager, and at one point ran the show behind England’s famed Wembley Stadium Complex. Now Aramark, a $12 billion corporation with global reach, is in some ways one of Ovations key competitors. But rather than butt heads with giants like Aramark, which handles everything from dorm food at colleges to cafeterias in hospitals, Wickner says Ovations stays focused on its key competencies, specifically food service for stadiums, arenas and convention centers. “We really specialize in our markets,” Wickner says. Mark Wemple Clients include the Jacksonville JagTodd Wickner mastered food services manuars, Portland Trailblazers and a numagement over a decade as a regional manager ber of minor league baseball teams, such with Aramark. Now his company, Ovations Food Services, competes with Aramark on a as the Norfolk Tide. daily basis. Ovations also generates a substantial amount of business from its relationWickner says, is encapsulated by Ovaships with several casinos in the West. tions’ mantra: “everything’s fresh.” If Wickner says a few key partners in Caliyou’ve ever been to a baseball game you fornia, Arizona, and Oklahoma generknow the difference between a hot dog ate “a nice segment” of Ovations’ overall served inside a wrapper from inside a business. box, and one that comes straight from But even a healthy dose of focus isn’t the grill. “Our hot food is hot, and our deterring Wickner from expecting big cold food is cold,” Wickner says. things for Ovations. “Our plan,” WickAnd Wickner knows fresh food. It’s ner says, “is to continue to experience the

same type of growth that we did for the first 11 years.” Of course, the firm will have help from its corporate parent. Ovations is a subsidiary of Comcast Spectacor, and that relationship has been in place since the firm’s founding. (Wickner says Peter Luukko, Comcast’s president, was a key contact in getting the two businesses partnered.) Through its relationship with Comcast, Ovations often partners with Global Spectrum, the corporate family’s facility management subsidiary, which operates a number of major U.S. attractions, including the Wells Fargo Center in Philadelphia, and University of Phoenix Stadium in Glendale, Ariz. Wickner says roughly 40% of Ovations’ business overlaps with Global Spectrum. But that means most of Ovations’ revenues — the other 60%, specifically — come from Ovations’ own clients. And Wickner says he is always looking to add to that list, fueling the growth he projects in the coming years. Indeed, if Ovations does what Wickner hopes, Florida’s Gulf Coast could soon have another $1 billion dollar company based on its shores. —Alex Walsh

by the numbers OVATIONS FOOD SERVICES Year Revenues % Change 2008 $165 million 2009 $170 million 3% 2010 $200 million 17.6%

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GULF COAST

#359 by Mark Gordon | Deputy Managing Editor

Weathering the Storm

The recession nearly killed Lee Wetherington’s homebuilding firm. But his resolve — and a lot of money — saved it. ‘I wasn’t going to give up,’ he says.

or a man who runs a company that lost a substantial chunk of revenues in the recession, Lee Wetherington is surprisingly content, if not downright cheerful. The sales plunge at Lee Wetherington Homes has nonetheless been undeniably painful. The company sat at $112.74 million in annual sales in 2006. By 2010 the figure was $6.69 million — a 94% drop over five years. On a percentage basis, the largest drop of the five-year period occurred last year, when sales fell 64.7%, from $18.95 million in 2009 to the $6.69 million figure. But a sales collapse only a plays a supporting role in the Lee Wetherington Homes story. In fact, the story is more about survival and perseverance. “I just feel really good to be sitting here with a company that still exists,” says Wetherington. “It doesn’t get any better than that.” Back in 2008, though, Wetherington

by the numbers Lee Wetherington Homes Year

Revenues

% Change

2008 2009 2010

$39.93 million $18.95 million $6.69 million

-52.5% -64.7%

faced a mortal crisis. For starters, the days of 400 home sales a year, like the firm did earlier in the 2000s, were long gone. Not gone: the debt the company owed to banks on multiple land deals in the Sarasota-Manatee region. “We bought the land for what we thought was good, conservative prices,” says Bill Hager, CEO of Lee Wetherington Homes. The recession shattered the land values. And at the same time, potential

See storm on page 17

Stayin’ Alive

Jeff Charlotte’s construction company changed strategies amid the recession.

The list of Gulf Coast firms that saw the largest percentage drop in revenues is filled with construction-related firms — no surprise there. In total, 36 of the top 50 firms on the list are in construction, contracting or development. Several others, including four banks and one self-storage firm, are heavily connected to the construction industry. But most of the companies on the list also share another characteristic: survival instincts. Like Venice-based J. E. Charlotte Construction Corp. The five-employee firm suffered a 46.2% drop in annual revenues, from $6.5

Mark Wemple

Lee Wetherington, left, has been in the homebuilding business for nearly 40 years, but has spent the past two years mostly in survival mode. CEO Bill Hager, who has been with Lee Wetherington Homes for a nearly a decade, is next to Wetherington. million in 2009 to $3.50 million last year. Still, founder and President Jeff Charlotte says he shifted strategies, rather than shut down the company. “I’m not out there chasing $5 million jobs anymore,” Charlotte says. “I’m just more nimble now.” The main shift, says Charlotte, is construction work from the ground up for small firms like his has virtually dried out. Instead, he looks for renovation work, which pays significantly less. “I’m working awfully hard,” says Charlotte, “but not making a lot of profit.” There is good news, past the fact that he’s still in business. Charlotte says he recently picked up a few jobs in the $300,000 to $400,000 range, work he didn’t get last year. Other construction firms that appear on the

largest percentage drop in revenues list have shifted focus to survive, too. Tom Wessel Construction Corp., for instance, now works primarily with churches. The firm’s revenues dropped 68.8% in 2010, from $8 million in 2009 to $2.5 million last year. Naples-based Stock Development, meanwhile, has returned to the new-homes market in Collier County. The firm’s revenues fell 41.1%, from $323 million in 2009 to 170.94 million in 2010. But CEO Brian Stock says the company wants to capitalize on low prices for land. It recently bought 118 lots in north Naples at a 70% discount from market-peak prices.

— Mark Gordon

top 10 decliners, ALL INDUSTRIES Company Name

Location

GC 500 Ranking

Gross Revenue 2010

Gross Revenue 2009

Employees 2010

Change%

Fred M. Starling Inc. Hammer Construction Merit Electric Co. Inc. Fowler Construction and Development Inc. Tom Wessel Construction Corp. Lee Wetherington Homes LLC Suddenly Slender International Inc. Stock Development J. E. Charlotte Construction Corp. QGS Development Inc.

Sarasota Cape Coral Largo Fort Myers Sarasota Sarasota Clearwater Naples Venice Lithia

420 499 384 480 461 359 494 56 429 223

$3.90 $1.45 $5.30 $2.00 $2.50 $6.69 $1.50 $170.94 $3.50 $21.00

$20.08 $6.3 $18.60 $6.50 $8.00 $18.95 $3 $323 $6.50 $38.70

10 7 80 5 5 12 22 149 5 120

-80.6 -77 -71.5 -69.2 -68.8 -64.7 -50 -47.1 -46.2 -45.7

Gulf coast Business Review AUGUST 12 – AUGUST 18, 2011

GULF COAST

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#260

Insurance Fix

REVIEW SUMMARY Company. Home-Tech Industry. Insurance Key. Strong customer service backing service agreements translates to success.

Steve Marino, the chairman and CEO of Home-Tech, and his daughter, Sonya Sawyer, the company’s chief financial officer, are overseeing the company’s expansion into Sarasota.

Brian Tietz

Home-Tech is expanding to Sarasota, fueled by sales of its appliance-repair service agreements and its employee owners.

See insurance on page 17

53000

ay Kroc, the founder of McDonalds, used to tell people he was in the real estate business and sold a lot of hamburgers. Likewise, Steve Marino is in the insurance business and repairs a lot of appliances. In 1985, four years after starting the Home-Tech appliance-repair business in Fort Myers, Marino realized that his customers were willing to pay for more than a quick fix. So he started selling them insurance against their appliances breaking down, betting that they wouldn’t call him more than a couple times a year. While he doesn’t claim to have created the concept of service-agreement insurance, Home-Tech grew because of Marino’s attention to following through with great service. Rivals such as Sears, which sold service agreements on specific appliances they sold, couldn’t match Marino’s efficiency and reliability. Today, roughly 90% of Home-Tech’s service calls are for customers who have such service agreements. Although he declines to cite customer numbers, Marino says Home-Tech made it through the recession because “thousands and thousands” of people sought certainty about appliance costs by buying service agreements.

GULF COAST BUSINESS REVIEW AUGUST 12 – AUGUST 18, 2011

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GOVERNMENT WATCH BY JAY BRADY | Government Editor

Tony Alves, vice president of operations at the Seminole Casino Immokalee, encourages Gulf Coast businesses to register with the Seminole Tribe of Florida as vendors.

Nancy DeNike

Contracting with Seminole Nation Though it’s a sovereign government, contracting with The Seminole Tribe of Florida doesn’t require ‘an Act of Congress’ — in fact, it’s a straightforward process.

ith millions of poChamber of Commerce. tential business in REVIEW SUMMARY He attended in an attempt their backyards, to remove any perceived What. Doing business Tony Alves thought local veil of secrecy surroundwith the Seminole Tribe companies would be lining ing the tribe’s vendor proof Florida. up to work with the Semicess and encourage local Issue. Businesses must nole Tribe of Florida. What firms to pursue deals with register, but opportunithe vice president of opthe tribe. ties abound. erations for Seminole CaFor example, Alves Impact. Gambling sino Immokalee found out, says after reaching out to expansion fuels business though, is they just didn’t the aforementioned Gulf for tribe’s vendors. know how. Coast dealers, he was able It’s a situation Alves disto shift the casino’s vehicle covered when contacting purchases from the east local car dealerships to ask why they coast to closer dealerships. Now, the caweren’t doing business with the casino. sino buys vehicles from Sam Galloway “They all pretty much said, ‘We’d love Ford in Fort Myers and Estero Bay Chevto do business with you,’” Alves recalls. rolet both for its fleet and for its monthly “Well, why aren’t you?” he asked them. prizes. To which several replied: “I don’t know Alves says the casino is also pushing how.” to work with more local companies, inAlves recounted the story at a recent cluding hotels, bus companies and drybreakfast meeting of the Eastern Collier cleaners. “We do want to support the lo-

cal businesses as much as we can,” says Alves, who took his job with the casino three years ago after working a dozen years in Las Vegas. “We’re just looking for quality service at a reasonable price.”

Dispelling the ‘mystery’

According to Alves’ story, there’s been a bit of mystery surrounding what it takes to contract for work with the Seminole Tribe of Florida. But the process those companies that already provide an array of goods and services to the tribe’s various enterprises, including its seven casinos, find the sovereign nation relatively easy to work with. The first step is for businesses to register with the tribe as vendors. For any vendor providing nongaming-related good or services, the Tribal Gaming Office requires submittal of a two-page vendor registration form and a nonrefundable vendor registration fee of $250. To

maintain the registration, there’s an annual fee of $250. Seminole Tribal members with majority ownership in companies conducting business with Seminole Gaming or Seminole Gaming operations are exempt from both fees. Utility companies, charities, entertainers, major freight carriers, Seminole tribal member employees conducting business as a vendor and certain professional services may also be exempt from fees. The Seminole’s Hollywood headquarters manages purchase orders, which follow a competitive bid process. Alves says the bid process is based on price, quality and service. “In our business, just like your own businesses, we have to keep our costs down and our profits up. It’s a simple business formula,” Alves says. John Fontana, president of the Seminole Hard Rock Hotel & Casino-Tampa, agrees there’s no mystery to the process.

Gulf coast Business Review AUGUST 12 – AUGUST 18, 2011

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Government Digest Policyholders protest sinkhole rates

“For folks that have had any experience with it, our vendor registration process it isn’t anything extraordinary,” he says. “You can do it online; it’s not an especially onerous process.” Fontana also notes that it’s even easier for smaller companies, who don’t have to provide as much information. In fact, he says that once a smaller company gets its vendor license, it adds to its credibility in the eyes of other potential clients because it survived the tribe’s background checks. A vendor application takes about six to eight weeks to get approved, according to the central purchasing office. After that, Seminole staff put vendors in contact with a buyer for that commodity or service. Interestingly, the tribe doesn’t advertise for bids. Instead, when the tribe seeks to select a vendor, the buyer contacts the vendors that provide the product or service, typically by email, or by phone, and provides the specifications, bid date, and necessary details.

Big business

Jack Johnson, president of Jack and Ann’s Feed and Supply, Inc. in Immokalee, says he has had the Seminole Tribe of Florida as a client for 22 years, and appreciates the tribe for more than just its expanded casino. “They have many different enterprises that have certain needs, and we had a business that met some of those needs,” says Johnson, who has bid on and won numerous contracts. “They’re instrumental to the local economy.” The Seminole Tribe of Florida purchases $870 million of goods and services from Florida vendors annually, pumping much needed revenue into the Florida economy. And with a new state gambling compact and expanding casinos at near opposite ends of the Gulf Coast — the Seminole Hard Rock Casino-Tampa and the Seminole Casino Immokalee in eastern Collier County — the sovereign nation’s needs for area vendors’ offerings continues to grow. The Immokalee property consumes more than $22 million of goods and services annually, and the Hard Rock purchases nearly $118 million worth each year, according an unreleased economic impact study the tribe undertook late last year, relayed by tribe spokesman Gary Bitner. The Johnsons’ company provided hardware and plumbing material for the nearby casino when the tribe built the original 31,900-square-foot facility in 1994. The husband-and-wife-owned company also contracts with other tribe enterprises, including the youth ranch and the rodeo arena. Johnson says the business provides anything that’s livestock or farm and ranch related, as well as lumber and building materials. But it’s the expanded casino — now 75,600 square feet — that makes the largest impact on the Southwest Florida economy from florists to landscape contractors to car dealerships. Naples-based Kraft Construction was the general contractor for the expansion. That more than doubling of floor area in 2009, at a cost of $22 million, and the potential for more, draws the attention of vendors looking to initiate or further a business relationship. Alves, who reports to General Manager Tony Sanchez, says a future hotel on the property is part of the tribe’s long-term plan for the casino. Already, the casino claims bragging

rights as the No. 1 tourist destination in southwest Florida, according to Alves. The Everglades comes in second. The casino attracts 1.7 million visitors a year, says wildlife photographer Fred Thomas, chairman of the Eastern Collier Chamber of Commerce, who has also done work for the casino. The Hard Rock’s not standing still, either. “This year we’re about to launch 1,300 parking spots in a garage, and more casino and slots and a new restaurant,” says Fontana. “That’s beginning almost any day now.” The tribe also has plans for a future hotel tower at the Hard Rock. “What people can actually do is going to be much more in the gaming space and the governmental space, generally,” says Bitner about future opportunities for vendors. Government opportunities, he says, includes police, health and education — “ … all those things that a typical local government would spend.”

Communication is key

Vendors like Jack Johnson and others all appreciate the opportunities and say the process is simple and fair. Johnson describes his business relationship with the tribe as “excellent.” He’s done work for other government agencies, and says its “ … probably easier actually. It’s a large governmental agency. It’s just a process — probably not as complex as county government or state government.” Bernadette and Benny Starling, owners of B-Hive Flowers and Gifts Inc. in Immokalee, have been operating for 38 years and vendors to the casino since it opened in 1994. “I try to be helpful and give them extra,” says Bernadette Starling. “They’ve been very supportive of us.” Landscape contractor Armando Ayala, owner of Immokalee Landscape Inc., registered as a vendor with the casino and the tribe roughly five years ago. He just completed another job laying three pallets of sod. “They’ve been excellent to work with,” says Ayala, who adds that not all work is awarded to the lowest bidder. It’s also based on performance. “I’ve never had a problem. They’re really good with their communication.” Interestingly, Ayala also says: “A lot of people overbid. They think they just have a ton of money.” It’s not hard to see why. According to an annual study of Native American gaming revenues by state, Florida tribes handled more than $2 billion in 2009, the vast majority coming from the Seminole’s seven casinos. The Miccosukee Casino in Miami-Dade accounts for a portion. Johnson, who’s worked with several of the tribe’s business enterprises for most of the past two decades, has seen the revenue growth first hand. “They’re a vital part of our overall business and success,” he says. And Johnson may have the best perspective to give advice to companies looking to do business with the Tribe. “There’s a process involved and you’ve got to learn the process,” he advises. “Once you learn the process it’s all great, it’s all good.”

TO REGISTER To obtain a vendor registration form from Seminole Gaming of the Seminole Tribe of Florida, contact Maria Morel-Ruiz at 954-585-5703 or maria.morel-ruiz@stofgaming.com.

FDOT to focus on freight, ports

MARCO ISLAND — Keeping with Gov. Rick Scott’s emphasis on development of the state’s ports to create jobs, the Florida Department of Transportation has created an Office of Freight Planning and Logistics. FDOT Secretary Ananth Prasad made the announcement speaking at the Florida Transportation Builders’ Association’s annual convention Aug. 5 in Marco Island. “This office will include the Seaports Office, the Rail Office and will also focus on cargo movement by air and truck,” according to Prasad’s prepared remarks. “The creation of this office will play a key role in advancing Governor Scott’s initiatives to transform Florida’s economy by becoming a global hub for trade, logistics and exportoriented manufacturing activities.”

Benacquisto named to Senate leadership TALLAHASSEE — Senate President Mike Haridopolos, R-Merritt Island, appointed Sen.

shift business

Lizbeth Benacquisto, R-Wellington, to serve as deputy majority leader of the Senate. Elected in 2010, upper chamber freshman Benacquisto will serve as deputy to Senate Majority Leader Andy Gardiner, ROrlando. “In her inaugural session, Senator Benacquisto’s energy was unmistakable,” says Haridopolos in a statement announcing the appointment. “She treats her constituents with respect and is devoted to serving Floridians. Senator Benacquisto embraces her role as state senator wholeheartedly, and I know her colleagues in the Senate majority will benefit from her characteristic focus and drive.” Before her election to the Senate, Benacquisto served as a councilwoman for the Village of Wellington from 2002 to 2010.

EDC Forum

NAPLES — The Collier County legislative delegation will discuss the upcoming legislative session and redistricting at the Economic Development Council of Collier County pre-legislative luncheon from 11:30 a.m. to 1:30 p.m. Aug. 18 at Vergina Restaurant, 700 5th Ave. S., Naples. To register, visit http://edcevents. info.

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Tony Alves, vice president of operations, Seminole Casino Immokalee: ‘It’s a simple business formula. We do have a competitive bid process based on price, quality, service.’

PASCO COUNTY — A group formed by Merlin Group — a Tampa Bay law firm that fights insurance companies on behalf of policyholders — plans to protest against a proposed rate increase by Citizens Property Insurance Co. for sinkhole coverage. Citizens’ officials recommend an average increase of 428% statewide because of abuse and fraud by sinkhole claimants. Policyholders of Florida, recently organized by former state Insurance Advocate Sean Shaw, now an associate of the firm, scheduled the protest for 4-6 p.m. Aug. 16, in front of the Pasco County Government Center in New Port Richey. State Sen. Mike Fasano, R-New Port Richey, an opponent of the rate increases, plans to speak at the event. The coalition seeks to have the current insurance consumer advocate and the Legislature intervene with the Office of Financial Regulation to lower or stretch out the rate increases. Last year, Citizens collected roughly $32 million in sinkhole premiums, but paid out claims exceeding $245 million in claims. That,

and a new law allowing Citizens to make sinkhole rates actuarially sound, prompted the rate increases.

GULF COAST BUSINESS REVIEW AUGUST 12 – AUGUST 18, 2011

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MARKETPLACE OF IDEAS

‘The real crisis is not, nor has it ever been, the debt ceiling. The crisis is the debt itself.’

By Peter Schiff

Debt Deal: a Blank Check House and Senate members didn’t change a thing with their grand debt deal. Inflation, and even hyperinflation, are the most likely outcomes.

y supposedly compromising to raise the debt ceiling, Congress and the president have now paved the way for ever higher levels of federal spending. Although the nation was spared the trauma of borrowing restrictions, the actual risk of default existed solely in the minds of Washington politicians. But the real crisis is not, nor has it ever been, the debt ceiling. The crisis is the debt itself. Economic Armageddon would not have resulted from failure to raise the ceiling, but it will come because we succeeded in raising it. This outcome falls along the lines that I had forecast (See my commentary, “Don’t Be Fooled by Political Posturing” from July 9). Both parties are now pretending that the promised cuts in spending outweigh the increase in the debt limit. But the $900 billion in identified cuts are spread over a decade and are skewed toward the end of that period. There are an additional $1.4 trillion in cuts that the plan assumes will be identified by a bi-partisan budget committee. But similarly empowered panels in the past have almost never delivered on their mandates. More important, none of these “cuts” are actually binding. There is plenty of time for future Congresses to reverse what was so laboriously agreed to over the past few weeks. My guess is renewed economic weakness will be used to justify ultimate suspension of the cuts. In addition, most of the spending reductions were already scheduled to take effect before this agreement. So what did we really get? The Congressional Budget Office currently projects that $9.5 trillion in new debt will have to be issued over the next 10 years. Even if all of the reductions proposed in the deal were to come to pass,

which is highly unlikely, that would still leave $7.1 trillion in new debt accumulation by 2021. Our problems have not been solved by a long shot.

More talk, little change

Essentially, the structure recently announced allows both political parties to talk about reform without actually changing anything. To underscore that point, the deal involves less than $25 billion in immediate cuts. This is less than a rounding error in a $3.8 trillion dollar budget. This is politics as usual. Even these estimates are based on rosy economic assumptions that have no chance of coming to fruition. For example, for the current fiscal year, Washington estimates GDP growth at 4%. But actual growth for the first half of 2011 is below 1%! If our government is overestimating our current year’s growth by a factor of four, how accurate could its forecasts be 10 years into the future? A more honest assessment of likely economic performance would reveal future

budget deficits spiraling out of control. Some might say that the primary goal of this deal was to avoid the dreaded credit rating downgrade. Unfortunately, the deal addresses none of the ratings agencies’ stated grievances. The debt ceiling itself merely represents a self-imposed limit on U.S. borrowing. Because Congress can vote to raise the limit, its existence has been more of a political nuisance than an actual barrier. The operative factor is not how much we allow ourselves to borrow, but how much our creditors are willing to lend. That type of ceiling can’t be raised by an Act of Congress. Once our creditors come to the conclusion that they have lent beyond our capacity to repay, they will be very reluctant to lend more. As trillions in short-term Treasuries mature, the dwindling pool of buyers will demand higher rates of return to compensate them for the risk. But our government is in no condition to afford those higher rates without gutting the rest of the budget.

Real risk with lenders

During the debt-ceiling negotiations, it was revealed that despite Obama’s warnings that a default would immediately occur if the debt ceiling were not raised, the administration had already agreed to prioritize interest payments to avoid default. Such preferential treatment is only possible because current interest rates are so low and debt service represents only about 10% of total revenue. When the pool of willing lenders evaporates, net interest payments could quickly consume more than 50% of federal revenue. This is particularly true since rising rates will also plunge the economy into a recession that will substantially reduce revenues — even as debt payments surge. At that point, prioritizing interest payments would mean deep sacrifices in the rest of the federal budget, including Social Security, Medicare and the Armed Forces. The question then becomes: Will U.S. politicians really be willing to take the political heat that would emerge from prioritizing interest payments to foreign creditors over payments to American voters? I expect that as soon as our creditors decide they are no longer willing to lend to us at ultra-low rates of interest, we will refuse to repay what they have already lent. Besides default or major cuts to domestic spending, inflation provides the only other means for the government to deal with this intractable crisis. Because of its political palatability, inflation is, in fact, the most likely outcome. Once we go down that path, we risk high inflation turning into hyperinflation, which would decimate the remainder of our economy. So, as our leaders congratulate themselves for saving the nation, the reality is that they may have just sold it down the river. Peter Schiff is an economist and president and chief global strategist of Euro Pacific Capital Inc., an investment firm headquartered in Connecticut and with a branch in Palm Beach. It specializes in investing in foreign securities.

FUNDRAISER by Courtney Frank | Contributor

Leadership Tampa Bay raises money for kids The 2011 class of Leadership Tampa Bay held the Concert 4 Hope July 14 to raise money for Kids Charity of Tampa Bay, Joshua House and LTB 11 Foundation. Leadership Tampa Bay helps educate a group of professionals each year on resources and issues special to the Tampa Bay region.

Holly Metzger, Tonertype; Lisa Chiv, Ferreri Search; Denise Clemence, HomeBanc; Jenn Tran, Tampa Bay Rays; Paul Christian, Comprehensive Physician Services Inc; Kim Thresher, Thresher PA (President LTB 11 Foundation); Kevin Ahrens, Skanska USA Building Inc; Shane Huff, McDill 927th Air Refueling Wing, J.Q. Quintero, Carlton Fields, Julie Benson, University of South Florida, Rob Bruns, University of Tampa

John Berger, Vulcan Materials Alice Bissette, Leadership and Kelly Bosetti, CEA Marketing Tampa Bay; Ali Carr, AC Group Advertising Specialties

Karen McDonald, Sembler Investments; Aakash Patel, Chamber.com; Brendan McLaughlin, ABC Action News; Denise Young, Williams & Company

Sandy McLaughlin, Crisis Center of Tampa Bay; Brendan McLaughlin, ABC Action News; Robert Bruns, University of Tampa; Paul Christian, Comprehensive Physicians Services

David Lair, Lair Services; Raj Patel, REMA Investments and Apaksha Patel, REMA Investments

Gulf coast Business Review AUGUST 12 – AUGUST 18, 2011

homebuyers were scarce, so less money was coming in. It wasn’t long before the banks came calling. “We had enough cash to last us a while,” says Wetherington. “But we didn’t expect land values to drop and to have the banks make a cash call.” Wetherington hired a group of consultants and attorneys in December 2008 to devise a strategy that would save the firm he started in 1981. A Jacksonville native, Wetherington, 64, has been in the homebuilding or construction business since the early 1970s. “We never considered bankruptcy,” he says. “That wasn’t in our game.” The game, instead, was Wetherington had to reach deep into his personal finances — money saved up over years of running a profitable firm. He also had to return some land to the banks. It was a trying time. “We went through the hounds of hell,” says Wetherington. “I wasn’t going to give up.” After two stressful years of meetings, paperwork and negotiations, Wetherington finally completed the mission late last year, just before Christmas. He reached confidential deals with three banks, Fifth Third, SunTrust and BB&T, to pay off debt and return land. Wetherington spent between $5 million and $10 million of his own money to cover the payment side of the deals. Costly, but the relief was so palpable after he signed the last deal, on Dec. 17, that Wetherington recalls he felt like a man who had just been cured of a terrible disease.

insurance from page 13 Essentially, Home-Tech helps homeowners hedge against the exorbitant cost of appliance breakdowns. “Our renewals go up during the downturn,” Marino says, citing insurance renewal rates up about 88% today compared with 83% during the boom years. Under the service agreements, HomeTech customers pay between $339 and $479 annually to ensure that a technician will repair broken home appliances. The service agreements represented about 40% of the company’s $14.8 million in revenues in 2010. So even if sales of appliances decline, Home-Tech has a steady source of insurance revenues that can carry it through economic downturns. In addition, Marino is exploring ways that technology can make Home-Tech more efficient. For example, the company is working on a plan to monitor appliances remotely, sending a technician to make small adjustments early rather than waiting for a problem to get worse. Besides, that has the potential to wow the customer, Marino says. Behind the agreements is a small army of 127 people, of which 55 are shareholders of the employee-owned company. They’re driven by common ownership of the company, not to mention those quarterly dividend checks they receive.

Sarasota expansion

Marino has been eyeing an expansion to the Sarasota area for years, in part because he’s had a successful foothold in the Venice area. Now, the company has invested $1.3 million in land and a new building further north in Lakewood Ranch that will house its growing operations. “We’ve been planning this for about five years,” says Marino. Home-Tech bought the land in Lakewood Ranch in 2009, but held off on the building until recently because of economic uncertainty. Marino says he’s moving ahead now despite tentative signs of improvement in the economy. The new building will be ready in January. “The world isn’t going to end,” he says. “You need to get on with it.” Marino says he prefers to expand this way than to acquire a competitor in the Sarasota area. “They either want too much [money] or the culture doesn’t mesh,” he says. “I’d rather take their customers than buy them.”

Lee Wetherington, proprietor Lee Wetherington Homes: ‘I just feel really good to be sitting here with a company that still exists, it doesn’t get any better than that.’ Ownership plan

Getting whole with the banks, it turns out, was only the first step in the recovery process. The second step was an employee ownership plan for Lee Wetherington Homes. Wetherington says the idea was to create an employee-owned company with no debt. A single man with no children, Wetherington also says employee ownership sets up a transition and succession plan for the company. The employee ownership process took about a year to complete. It helped that the firm had substantially fewer employees to work with, from around 100 at the peak to 13 now. The employee-ownership plan was officially launched Jan. 1. It provides an opportunity for six managers and top employees to buy into 20% of the company. Wetherington, at least in the beginning, will hold on to 80%. “It was a pretty easy sell,” Hager says, “because the employees now feel like they are part of something.” The program can change over time. If employees meet certain performance thresholds, they can buy more shares. But Wetherington will always remain the majority shareholder, says Hager. One twist to the program is some of the money Wetherington earns from selling

shares will go directly into a foundation he established in 2002. The organization, run through the Community Foundation of Sarasota County, awards grants and other funds to groups and residents in the Sarasota-Bradenton area, with a focus on youth. Wetherington has donated more than $3 million to the foundation in previous years.

‘High style’

The third step in the revival process is much closer to Wetherington’s heart: building homes. Wetherington comes from a family of contractors, people who worked mostly in drywall and painting homes. Wetherington served in the U.S. Marines in his early 20s, seeing combat in the Vietnam War. Soon after the war, Wetherington took over his uncle’s drywall contracting business. By 1981 Wetherington was in Sarasota, in business for himself. Within a decade, Wetherington had gone from a startup to one of the region’s most well known homebuilders. His company even spawned other businesses, including a pool construction firm. Wetherington’s true love, however, is the home design and build process. Even today, the best part of his workday is

Steve Marino, Home-Tech: ‘If people don’t have a stake, your key people are always looking somewhere else.’ What’s more, land costs and labor availability have improved since the boom years. For example, in 2009 Marino paid $4 a square foot for the land at Lakewood Ranch that was listed for $12 a square foot in 2004. “That’s the silver lining,” Marino says. Home-Tech now receives 500 applications for its apprentice program compared with 50 during the boom. If it was lucky, two or three of the 50 applicants would be good enough to keep. Today, by contrast, “the quality of people out there is like I’ve never seen before,” Marino says. Building a new facility tells customers in Sarasota that Home-Tech is committed to the area. What’s more, employees there will feel better connected to the company, rather than just a Roman outpost. “I plan on being there more,” Marino says. Marino says the Sarasota-Manatee area is similar to the Fort Myers-Naples market, with above-average-income households. “It has every possibility to be as successful as down here,” Marino says, with 10% to 30% annual growth. “We could double the business.” However, now that government stimulus — such as credits for new appliances — have expired, Marino says a clearer picture of the Gulf Coast economy has emerged. Many sales in 2010 robbed from 2011, and he expects this year’s sales to be flat. And Marino doesn’t expect the new Sarasota venture to be an overnight success, though funding it internally without debt takes off some of the pressure. “Business today is like drilling for gas in shale; it’s more work,” he says. While technicians get an incentive for selling service agreements to customers who call without one, it’s not an easy sell. “They take years to cultivate,” he says.

Barriers to entry

Marino says he’s not overly concerned about new competition emerging because the barriers to entry into the business are high. For example, the Florida Office of Insurance Regulation scrutinizes service-agreement policies such as the ones that HomeTech sells. That kind of scrutiny requires

by the numbers Home-Tech

audits and periodic reviews that would be cost-prohibitive for a startup, says Sonya Sawyer, 37, Home-Tech’s chief financial officer and Marino’s daughter. Although Marino is the founder, president, chairman and largest single shareholder of Home-Tech, ownership is spread among 55 employees, and a seven-member board elected by shareholders makes collective decisions. “I’ve been outvoted many times on the board,” says Marino, 58, an accomplished ballroom dancer and airplane pilot. That doesn’t bother him be-

Skip Kitchner, CLU, ChFC

when he visits a site and takes pictures of a work-in-progress on his cell phone. “We’ve always had little bit of a niche,” Wetherington says. “We build with a higher quality and a higher style.” Buyers who seek that kind of home are a dwindling lot these days, of course, which is partially why the business was in its debt-laden predicament. But Wetherington says the firm’s core strategy, to build higher-quality homes, remains intact. In doing so, the company made some internal changes to meet the new market. Wetherington renegotiated with vendors, for example, and accepted lower margins. The firm also kept its subcontractors, which paid off in terms of keeping consistent quality, says Wetherington. “We don’t have to be the biggest (firm) anymore,” Wetherington says. “We want to build a better house.” To that end, the firm has spread its price point. It now sells new homes that range in price from $300,000 to more than $1.5 million. It builds mostly in Lakewood Ranch, in east Manatee County. The firm’s target customer, says Hager, remains the younger side of baby boomers. “Now that we don’t have to deal with the banks,” says Wetherington, “we can focus on growth and strategy.”

Year

Revenues

% Change

2008 2009 2010

$13.1 million $13.5 million $14.8 million

3.1% 9.6%

cause he knows they have the same motivation he does. “Their life is invested,” he says. “If people don’t have a stake, your key people are always looking somewhere else,” he adds. Marino says he shares financial information with employee-owners and the company makes quarterly dividend distributions. Why the open book? “More eyeballs watching,” he explains.

Rich Pierro, CLU, ChFC

Kitchner Pierro comPany, inc. We are pleased to announce that Rich Pierro has earned the professional designation of Chartered Financial Consultant (ChFc) from the American College.

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commercial real estate SARASOTA-MANATEE by Sean Roth | Real Estate Editor

Sarasota’s Fox, Shoemaker buy The Beach Club on Siesta BUYER: FL Beach Club Siesta LLC (princi-

pals: Lawrence Fox and David Shoemaker), Sarasota SELLER: Beach Club at Siesta Development LLC PROPERTY: 6732 Sarasea Circle, Siesta Key PRICE: $6.26 million PREVIOUS PRICE: $6.77 million, March 2008 LAW FIRM ON DEED: Dunlap & Moran PA, Sarasota PLANS, DESCRIPTION: Sarasota investor Larry Fox and David Shoemaker, founder of the eyecare medical practice Center for Sight, purchased the 29unit The Beach Club on Siesta Key for $6.26 million.

Union, N.J., investors buy Tamiami Trail CVS land

BUYER: Simoes Property Group Florida LLC (principals: Bernardino and Maria Simones), Union, N.J. SELLER: Ramco-Gershenson Properties LP PROPERTY: 1200 and 1220 S. Tamiami Trail, Osprey PRICE: $2.63 million PREVIOUS PRICE: $5.95 million, May 1998 LAW FIRM ON DEED: Honigman Miller Schwartz and Cohn LLP, Bloomfield Hills, Mich.

Investors Bernardino and Maria Simones of Union, N.J., purchased 1.3 acres of land housing a 15,143-square-foot CVS/pharmacy building for $2.63 million. CoStar Group reports CVS Caremark has a 21-year ground lease on the property that started in 2009, when the drug store PLANS,

DESCRIPTION:

The price equated to $215,517 per unit. The 2-year-old property features a heated swimming pool, hot tub and private beach access. While the sale was described as distressed, the former owner sold it, not the lender. “We like the location and the fact that it was the only new construction on Siesta with weekly rentals,” Fox says. “It sits right next to the new Hyatt [Siesta Key Beach]. We also think the purchase price was a good bargain.” RVA, a ResortQuest Affiliate, will manage the property for the new ownership. was built. Lori Schneider of Marcus & Millichap represented the buyers. “The reason that it was of market appeal was the management-free nature of the investment and the good location with a strong tenant,” Schneider wrote explaining the buyer’s attraction to the property.

Sarasota manufacturer Octex buys building for expansion

BUYER: Octex Holdings LLC (principal: James

Westman), Sarasota SELLER: J&S Weaver Enterprises Inc. PROPERTY: 901 Sarasota Center Blvd., Sarasota PRICE: $1.9 million PREVIOUS PRICE: $154,200, August 1998 LAW FIRM ON DEED: Icard Merrill Cullis Timm

Furen & Ginsburg PA, Lakewood Ranch

PLANS, DESCRIPTION: Octex LLC purchased its 33,116-square-foot manufac-

turing building for $1.9 million. The price equated to $57 per square foot. Octex, which previously leased the building, purchased it with plans to develop a 25,910-square-foot addition, says Dan Mallon, chief financial officer at Octex. The company, which manufactures plastic parts using injection molding, wants to create additional manufacturing and warehouse space that would include a laboratory and a specialized cleanroom for creating certain plastic medical products. Octex also plans to remodel its existing facility once the shell of the addition is completed. “A big part of this is growing demand,” Mallon says. “There are many more items being built out of plastic. There’s also the growth of our existing clients.” Sarasota-based DooleyMack Constructors LLC has been hired as the project’s general contractor and The Schimberg Group is its architect. Construction on the $5 million expansion is scheduled to start in mid-August for a January completion. Much of the project’s costs comes from the purchase of new equipment and specialized injectionmolding machines. The company received a $200,000 performance-based incentive grant from Sarasota County government based on its commitment to add 80 jobs over the next five years. Octex LLC mortgaged the building to Branch Banking and Trust for $750,000.

Manatee Rural Health Services moving to Palmetto B of A building BUYER: Manatee County Rural Health Services

Inc. (principals: Walter Presha Sr., Juanine Lowery, Livia Leyva, Victor Young, Marc Lazarus and Garry Lowe) Parrish SELLER: 700 8th Avenue West (FL) LLC PROPERTY: 610 and 700 W. Eighth Ave., 625 W. Sixth Ave. and 701 W. Ninth St., Palmetto PRICE: $985,000 PREVIOUS PRICE: $1.25 million, August 2006 LAW FIRM ON DEED: Saul Ewing LLP, Philadelphia

PLANS, DESCRIPTION: Manatee County Rural Health Services Inc. purchased the 27,000-square-foot Palmetto Bank of America building for $985,000. The price equated to $36 per square foot.

The Parrish-based nonprofit plans to relocate its administrative offices to the Palmetto building. Bank of America has a lease to continue to occupy from the building for another four years. “We’ve been in portables for most our time in Parrish, and those have a limited life,” says Mickey Presha, president and CEO of Manatee County Rural Health Services. “We wanted to purchase something that would allow us something more permanent. We were also looking for a building with major tenants to help us defer some of the cost [of ownership.]” Having budgeted $300,000 for renovations, the nonprofit medical group plans to occupy 7,500 square feet. Bank of America leases the majority of the building, with 10,537 square feet and a 4,704-square-foot drive-thru. Presha says Manatee County Rural Health Services is still evaluating its options for leasing out the remaining vacant space. “We hope to be in there somewhere towards the first of the year,” Presha says. “We plan to be a good neighbor to Bank of America and make it a seamless change for both companies. We have a different entrance from the bank and health staff will not have to come into contact with Bank of America customers. We have a separate parking lot as well.” Ian Black and Steve Horn with Ian Black Real Estate represented the buyer and Lee DeLieto Sr. with Michael Saunders & Co. represented the seller. Manatee County Rural Health Services Inc. provides healthcare services primarily to the uninsured or under-insured. It currently operates 19 healthcare centers and two administrative sites.

Etc…

• Theodore and Cindy Wentzel purchased 5734 Swift Road, Sarasota from James and Better Pruitt for $280,000. Barry Seidel of American Property Group of Sarasota Inc. handled the transaction. • Wal-Mart Stores Inc. has unveiled its expanded and redesigned Walmart store at 8320 N. Lockwood Ridge Road, Sarasota. The store now features a full line of groceries and other additional products. The expansion, which added 44,000 square feet of additional space, has translated into 85 new jobs.

commercial real estate LEE-COLLIER by Sean Roth | Real Estate Editor

Cole REIT buys part of Forum at Fort Myers BUYER: Cole Mt Fort Myers FL LLC (Cole REIT

Advisors III LLC), Phoenix, Ariz. SELLER: Forum NAP LLC PROPERTY: 3330, 3230-3274 Forum Blvd. and 9322 and 9360-9390 Dynasty Drive, Fort Myers PRICE: $34.25 million PREVIOUS PRICE: $13.2 million, May 2005 LAW FIRM ON DEED: Graydon Head & Ritchey LLP, Cincinnati PLANS, DESCRIPTION: Phoenix-based Cole Credit Property Trust III (Cole REIT III) purchased 185,799 square feet of retail space in The Forum at Fort Myers for $34.25 million. The price equated to $184 per square foot. The purchase included a freestanding building, operated by SunTrust Bank, two centers and additional land. The company declined to comment on the purchase. Cincinnati-based North American Properties opened the 480,000-square-foot The Forum at Fort Myers center in mid2008. Anchor tenants in the center include Target, Best Buy, Ross Dress for Less, Bed Bath & Beyond, Books-A-Million, Staples, PETCO, Rack Room Shoes, Mattress Giant and The Home Depot. Earlier this year, Cole Real Estate Investments purchased three shopping centers in Florida totaling $48.5 million: the Nature Coast Commons in Spring Hill, Century

Town Center in Vero Beach and a portion of Riverside Centre in St. Augustine. As of June 27, Cole REIT III owns 541 properties in 42 states. Its portfolio covers 24.2 million gross rentable square feet, with an acquisition cost of $3.8 billion.

Grandtag Madison Realty LLC buys The Palms of Punta Gorda

BUYER: Punta Gorda Senior Living LP (Grandtag Madison Realty LLC), Pasadena, Calif. SELLER: Punta Gorda Acquisitions LLC PROPERTY: 2295 Shreve St., Punta Gorda PRICE: $4 million PREVIOUS PRICE: $3.4 million, December 2008 LAW FIRM ON DEED: Allison Nelson Esq., Denver

Pasadena, Calif.based Grandtag Madison Realty LLC purchased the 56-unit The Palms of Punta Gorda assisted-living and dementiacare facility for $4 million. The price equated to $71,439 per unit. Located on a 3.2-acre site, the 22,991-square-foot, single-story building also features a 60-space parking lot. The facility features 56 private-room Alzheimer’s care units. The property also included additional land that, based on its current zoning, could be used for a future expansion of another 40 units. The existing units were roughly 90% occupied at the time of the sale. Dawson Davenport, director of SpePLANS, DESCRIPTION:

cial Assets Group in Irvine, Calif., represented the seller. “The buyer intends to do some renovations and reposition it in the marketplace,” Davenport says. “It was in good condition, but they are going to do some upgrades to further improve it.” The site is also surround by a 23-acre parcel, which although not included in the initial sale, could be acquired for a larger future expansion, according to Davenport. Grandtag Madison is a partnership of Los Angeles-based real estate adviser Madison Realty Equities LLC and the investment resources of Hong Kong’s Grandtag Financial Group, which is a wholesale brokerage firm in insurance and investments. The buyer, Punta Gorda Senior Living LP, mortgaged the property to Encore National Bank for $2.2 million.

Etc … • SSS Real Estate LLC purchased a 790-square-foot building on 38,000 square feet of land at 1281 N. Tamiami Trail North, Fort Myers from Bayview Loan Servicing LLC. Frank Szelest of Re/Max Realty Group represented the seller and Stu Sliver of SSS Realty represented the buyer. • Vincent Mele leased 12,500 square feet of industrial space at 2559 and 2573 Willard St., Fort Myers from NMC Funding Group LLC. Jerry Messonnier, Bob Johnston and Derek Bornhorst of Grubb & Ellis | 1st Commercial handled the lease. • Alliance Design Group PA has completed its construction work to expand and

renovate the existing Lee County Animal Services facility. The shelter was originally designed by Alliance Design Group PA and constructed in 1999. With the completion of this latest project the shelter has expanded its capacity to provide services to the citizens of Lee County. • Gulf Coast Cowboy LLC purchased the former Saltwater Cowboys Raw Bar & Grill, a 1,064-square-foot restaurant building with a drive-thru at 4800 Golden Gate Parkway, Naples from Arcan Dev Inc. for $300,000. The buyer plans to convert the property to a Dunkin’ Donuts. Fred Kermani of CB Richard Ellis represented the buyer and Donald Arnold of Arnold & Arnold Real Estate represented the seller. • Lori and William Kimberlin purchased a 900-square-foot retail building at 4064 N. Access Road, Englewood from CNB Property Holdings 1 LLC for $165,000. Ron Struthers of CB Richard Ellis represented the seller, and Joseph McCarthy of Re/Max Hometown Properties represented the buyer. • IB Property Holdings LLC sold an office condominium at 912 S.E. 46th Lane, Cape Coral to Kurt Weichert for $49,000. Frank Szelest of the Re/Max Realty Group handled the transaction. • Gulf Shore Apothecary leased 2,814 square feet of retail space at Charleston Square, 1400 Gulf Shore Blvd. N., Suite 100, Naples from Charleston Square of Naples LLC. George Atkinson and Doris Taylor of CB Richard Ellis represented the tenant, and Paige Eber of Investment Properties Corp. represented the landlord. • The city of Fort Myers has chosen Fort Myers-based Sheeley Architects Inc. to

Gulf coast Business Review AUGUST 12 – AUGUST 18, 2011

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commercial real estate TAMPA BAY

by Sean Roth | Real Estate Editor

Nation’s largest law school buys Riverview building DeBartolo Development buys land in Chicago suburb

Costar

BUYER: Thomas M. Cooley Law School (princi-

pals: Don Leduc, William Schoettle, Cherie Beck, Kathleen Conklin, Brent Danielson and Lawrence Nolan), Lansing, Mich. SELLER: NW-Interchange LLC PROPERTY: 9410 Camden Field Parkway, Riverview PRICE: $4.9 million PREVIOUS PRICE: $5.1 million, December 2010 TRUST FIRM ON DEED: SFT&T LLC dba South Florida Trust & Title, Bonita Springs PLANS, DESCRIPTION: Lansing, Mich.’s Thomas M. Cooley Law School purchased a 131,278-square-foot warehouse/ distribution facility in the Interchange Center business park for $4.9 million. The price equated to $37 per square foot. According to the Hillsborough County Property Appraiser’s office, the single-story precast-concrete building was built in 2001 and features 25 units. The nation’s largest law school has announced it received approval to open a new campus on the property. The law school plans to have the new campus offering evening classes in May, followed by morning classes in September 2012, and afternoon classes in January 2013. The new Riverview location is roughly the same size as Cooley’s existing Auburn, Hills, Mich., campus. All Cooley students will be eligible to attend classes at the Tampa Bay campus. The Tampa Bay area only houses one law school, and Florida represents Cooley’s largest alumni location outside of Michigan.

Tampa-based DeBartolo Development LLC purchased 3.5 acres of vacant land next to the Tinley Park, Ill., convention center. Acquired on behalf of DeBartolo Opportunity Fund I LP, the developer says it purchased the land at an 83% discount to the previous owner’s original basis. The Chicago-area acquisition is the fund’s seventh asset. The site has five building pads, three of which are south of 183rd Street and east of Convention Center Drive. The remaining two pads are opposite the convention center. “The Tinley Park development benefits from a superior location within a regional commercial hub right off Interstate 80 and only a short drive or train ride to downtown Chicago,” Edward Kobel, president and chief operating officer of DeBartolo Development, says in a press release. “This acquisition ties into our distressed investment model and provides a high quality, ground up development opportunity in a growing suburban community with the competitive strengths of the Chicago market.” The convention center hosts 2,500 events and 780,000 people annually. The property at Tinley Park is the third DeBartolo acquisition in the Chicago area, joining Prairie Stone Crossing in Hoffman Estates, Ill., and Bradley Commons in Bradley, Ill.

Etc… PricewaterhouseCoopers signs lease for new MetWest building

PricewaterhouseCoopers LLP (PwC US) has signed a long-term lease with MetLife for a new 250,000-square-foot build-to-suit office building in MetWest International. Some 2,000 PwC partners and staff from the firm’s Tampa practice office and Tampa Enterprise Solutions Center will

Aventura investor group buys Villas of Venezia land, units BUYER: Larkspur Venezia LLC (principals:

David Bernstein, Howard Weinberg and Dolores Warren), Aventura SELLER: CRE Properties Inc. PROPERTY: 4101 Metro Parkway, Fort Myers, various units and additional addresses on Castilla Circle, Fort Myers PRICE: $2 million PREVIOUS PRICE: $4.93 million, April 2004 LAW FIRM ON DEED: Broad and Cassel, Miami

PLANS, DESCRIPTION: Miami-area investors David Bernstein, Howard Weinberg and Dolores Warren purchased 44 condominium units in the Villas of Venezia condominium and 11 acres of vacant land for $2 million.

design Americans’ With Disabilities Act changes to several city-owned projects. The properties include the Eastwood Country Club, The Imaginarium, Fort Myers Country Club, City of Fort Myers Yacht Basin, Golfview Pool & Recreation Center and the STARZ Sports Complex. The buildings will receive several design modifications to assist people with disabilities.

The price equated to $45,455 per developed unit. Jonathan Richards of CB Richard Ellis represented the buyer, and Juan Munoz of KW Property Management represented the seller, a company of BankUnited. The vacant property featured land for another 96 units. “[The buyers] are very active fractured condo buyers,” Richards says. “They are very active along the southeast. They plan to rent out those units. It made a lot of sense for its cash flow.” Richards says the investor group has no immediate plans to develop the vacant parcel. • Naples Nuvia Medical Weight Loss Inc. leased 2,000 square feet of office space at 55 Bryson Drive, Suite 301, Naples from K. and Krishnaveni Srinivasan. Clint Sherwood of Investment Properties Corp. handled the transaction. • Revolution Machining LLC leased 3,000 square feet of industrial space at 5718 Corporation Circle in Fort Myers.

move to MetWest Two during the second quarter of 2013. Currently, those operations are in separate locations at 4221 W. Boy Scout Blvd. and 3109 and 3111 W. Dr. Martin Luther King Jr. Blvd. The new building will be home to PwC’s Tampa client service professionals, an assurance delivery center and a number of the firm’s key internal functions, such as information technology, finance, human resources operations and systems. Taylor & Mathis, the development manager of the project, says construction of the new building will begin this week. Timothy J. Dempsey and Bill Obregon of CB Richard Ellis and Robert Reichman Esq. of Wilk Auslander LLP represented PwC. Hank Brenner and Angela Odell of Taylor & Mathis represented MetLife.

StreetLinks Lender Solutions leases Crosspoint building

The Indianapolis-based real estate appraisal management services provider StreetLinks Lender Solutions agreed to a long-term lease for the entire 36,000-square-foot building at Crosspoint, 9314 E. Broadway, Tampa. The lease will more than double the company’s space and add 250 new jobs in Florida. The firm plans to invest nearly $2 million in the new location with the goal of opening in September. Holly Duran and Jeff Mulder of Holly Duran Real Estate Partners LLC represented StreetLinks, along with co-broker Jimmy Johnson, a Tampa-based principal with CNL Commercial Real Estate. • Cherokee Associates purchased 6,000 square feet at 1915 E. Seventh Ave., Tampa. Joe Seidle of The Krauss Organization represented the seller. • Michael L. Walker P.A. purchased 5,745 square feet at 2744 Summerdale Drive, Clearwater. Ryan Lolkus of The Krauss Organization represented the seller. • Mattress Firm Inc. leased 3,120 square feet at The Shoppes at New Tampa, Phase III, Wesley Chapel. Dave Sarich of The Krauss Organization was the leasing agent. • Ready Installations LLC leased 6,070 square feet at 5102 Vivian Place, Tampa. Dave Sarich and Tom Gibbs of The Krauss Organization handled the property.

Bryan Myers and Bob Pekol of LandQwest Commercial handled the transaction. • Cape Coral Engineering LLC purchased an 871-square-foot office condominium at 1325 S.E. 47th St. in Cape Coral from Maureen Imanuel for $44,000.Theresa Blauch-Mitchell of the Boback Commercial Group handled the transaction. • SCP Distributors LLC leased 34,434 square feet of industrial space at 8030 Supply Drive, Fort Myers from Supply Drive LLC. Jerry Messonnier Bob Johnston and Derek Bornhorst of Grubb & Ellis | 1st Commercial handled the transaction. • Richard Milburn Academy of Florida Inc. leased a 4,950-squre-foot office at 9230 Brookwood Court, Bonita Springs from Bernwood Enterprises Inc. Jim Boback of the Boback Commercial Group handled the transaction. • Donald Yerger purchased a 9,000-square-foot industrial building at 1965 Custom Drive, Fort Myers from Bayview Loan Servicing LLC for $150,000. Frank Szelest of Re/Max Realty Group represented the seller and Jim McMenamy also of Re/Max Realty Group represented the buyer. • Goodwill Industries Inc. leased 15,000 square feet of retail space in Arcadia Plaza at 1701 E. Oak St., Unit 1B, Arcadia from Arcadia Properties LLC. Carlos Acosta, Chuck Smith and Richard Clarke of Grubb & Ellis | 1st Commercial handled the transaction. • Southwest Florida Recycle LLC leased 7,137 square feet of industrial space at 11350 Metro Parkway, Unit 117, Fort Myers from Corrion Enterprises LLC. Jerry Messonnier, Bob Johnston and Der-

TJM Properties buys, renovating St. PeteClearwater Airport Inn BUYER: Sette McCarthy Hotel LLC (Terence J.

McCarthy as trustee), Clearwater SELLER: Osprey Assets II Inc. PROPERTY: 3655 Hospitality Lane, Clearwater PRICE: $800,000 PREVIOUS PRICE: $400,000 November 1986 LAW FIRM ON DEED: Ford & Ford PA, St.

Petersburg

PLANS, DESCRIPTION: Clearwater-based real estate firm TJM Properties purchased the 118-room St. Pete/Clearwater Airport Inn for $800,000. The price equated to $6,780 per room. Located near the St. PetersburgClearwater International Airport, the property features a pool and fitness center and was previously owned by an affiliate of Bay Cities Bank. “It was originally a Hampton Inn and later a Best West Western,” says Malcolm Taaffe with TGM Properties. “The former owners let its flag go. Our goal is bring a flag back. We’ve also budgeted $350,000 for renovations. It has good bones. Our goal is to make it a premier hotel.” Taaffe say the new ownership plans to paint the property and replace all the furniture in the rooms. Along with attracting a Best Western or Quality Inn & Suites flag, TJM Properties expects to set its standard rate at $50 a night, well below the average in that corridor. Taaffe estimates that within three miles there are 20 hotels or motels and about 2,000 rooms. TJM Properties, which owns and operates 16 senior-focused facilities, recently expanded into hotel properties with the purchase of a Howard Johnson on U.S. 98 and Interstate 4. Plasencia Group’s Sun Hospitality division handled the sale. “Bay Cities was able to get a troubled asset off its books, and the buyer, who plans a full renovation on the property, was able to acquire an asset with strong upside potential in a strategic location,” Robert O’Leary, vice president of Sun Hospitality’s southeast region, says in a press release.

ek Bornhorst of Grubb & Ellis | 1st Commercial handled the lease transaction. • Equity One has appointed Cushman & Wakefield Commercial Property Southwest Florida LLC, a Cushman & Wakefield alliance member, to handle the leasing for its Southwest Florida portfolio, which includes four shopping centers. The 461,917-square-foot portfolio covers Marco Town Center on Marco Island, Midpoint Center on Cape Coral, Pavilion Center on Naples and Summerlin Square of Fort Myers. Doug Olson will lead the leasing team for the Equity One. • Infinite Windows LLC leased 4,600 square feet of industrial space in Westlinks at 12730 Commonwealth Drive, Unit 11, Fort Myers from Cambridge Associates of SW Florida LLC. Jerry Messonnier, Bob Johnston and Derek Bornhorst of Grubb & Ellis | 1st Commercial handled the transaction. • Substantiated Insanity Concepts LLC leased 19,420 square feet of industrial space at 2177 Andrea Lane, Fort Myers from the NJ and Kimberly Liddell Trust. Jerry Messonnier, Bob Johnston and Derek Bornhorst of Grubb & Ellis | 1st Commercial represented the landlord and Ryan Leffler of Leffler & Associates represented the tenant. • Less R Us Furnishings LLC leased 6,440 square feet of space at 1971 Dana Drive, Fort Myers from Coin Enterprises Inc. Carlos Acosta, Richard Clarke and Chuck Smith of Grubb & Ellis | 1st Commercial handled the transaction. • Ben Jones purchased 0.92 acres of vacant industrial land at 602 Fifth Ave. S., Naples from Everbank. Bill Gonnering of Investment Properties Corp. handled the transaction.

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