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Coffee Talk
Business Observer Friday, Jan. 18, 2008 14 years ago

Coffee Talk

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National hotel chain bets on Gulf Coast: Since the slumping housing market's bite is cutting into just about any industry that gets in its way, this might seem like a strange time to be hyping fractional condo ownership on the Gulf Coast.Bad economic predictions? Kill the messenger: Hank Fishkind's word may be golden among Florida developers and bond investors, but builders in Cape Coral were furious when the Orlando economist recently said it might take as long as four years for the Cape Coral-Fort Myers area to recover from the real estate downturn.John R. Wood trims Fort Myers operation: John R. Wood Realtors, the Naples-based residential real estate brokerage firm, closed its Fort Myers office and most of the 25 agents there will relocate to Bonita Springs.Bradenton Bank's downtown Tampa exposure: Add a new name to the downtown Tampa skyline: M&I.Locally created commercial gets second life: Sometimes the best kinds of publicity can't be bought.Lakewood Ranch grocer leaves field to Publix: Score one for Publix.Homebuilding land gone to the dog: Tampa-based real estate land broker Bill Eshenbaugh, a.k.a. "The Dirt Dog" on his Web site, is a busy man these days.ECONOMIC SNAPSHOT GULF COAST TOURISMBuchanan seeks advice from local executives

Coffee Talk

+ National hotel chain

bets on Gulf Coast

Since the slumping housing market's bite is cutting into just about any industry that gets in its way, this might seem like a strange time to be hyping fractional condo ownership on the Gulf Coast.

But that's exactly what Larry Shulman is doing. The sales and marketing executive for Hyatt Vacation Ownership, Inc. says the company's latest project, turning the former Sea Castle property on Siesta Key into fractional condos, is a winner.

The Review reported in June that the division of the global hotel chain had signed on to build and market the property, which is partially owned by Sarasota-based developer Brent Virkus.

Now, with demolition work about to begin and construction work to follow soon after, Shulman is turning to marketing the project, which is planned as 44 residences ranging in size from 1,600 square feet to 2,600 square feet and in price from $200,000 to $750,000. The company plans to open a sales office in downtown Sarasota by next month.

"We understand there are some markets that are distressed," Shulman tells Coffee Talk, specifically referring to the coastal condo markets in places such as Sarasota. "That might help us in a trickle down effect."

Shulman says his theory is that since the housing market has indeed tanked, people seeking a luxury vacation option might rather spend $500,000 on partial ownership, as opposed to $3 million for the full condo down the street. He adds that the project, to be called Hyatt Siesta Key Beach, follows the company's successful business model of only developing fractional condo projects in the highest of high-end areas, such as the ones in Bonita Springs, Aspen, Colo. and Sedona, Ariz.

+ Bad economic predictions?

Kill the messenger

Hank Fishkind's word may be golden among Florida developers and bond investors, but builders in Cape Coral were furious when the Orlando economist recently said it might take as long as four years for the Cape Coral-Fort Myers area to recover from the real estate downturn.

Speaking recently about a study he authored for Attorneys' Title Insurance Fund, Fishkind said only Miami-Dade's condo glut is worse and will take five years to recover. He likened Miami's current real estate woes to 1975, when the energy crisis decimated the real estate economy.

At a meeting of the Cape Coral Construction Industry Association recently, developers and builders lambasted the economist for perpetuating the gloom. They blame public comments like Fishkind's for delaying any recovery.

Critics included John Moran, president of Riverside Bank of the Gulf Coast, and Gary Aubuchon, president of Aubuchon Homes and a Republican state representative. Both men were among a group of panelists discussing the real estate outlook, but they criticized Fishkind for spreading bad news and prolonging the downturn. "If you laid all economists end to end, that would be a good thing," Aubuchon joked.

Fishkind wasn't there to defend himself, but he plans to make a presentation in Fort Myers on Jan. 22 at the Real Estate Outlook Conference (for details, visit http://chapters.ccim.com/floridasouthwest). Expect tough questions.

+ John R. Wood trims

Fort Myers operation

John R. Wood Realtors, the Naples-based residential real estate brokerage firm, closed its Fort Myers office and most of the 25 agents there will relocate to Bonita Springs.

"We're not pulling out of the Fort Myers market by any means," says Philip Wood, president and CEO. "It's a restructuring of our facilities." Wood says his firm will continue to list and sell homes in Fort Myers from the Bonita Springs office in south Lee County.

The firm closed the Summerlin Road office in Fort Myers as the residential market declined more sharply than expected. The Naples firm opened the office near the intersection with San Carlos Boulevard last year as well as another on Sanibel, which it plans to keep open with 15 agents.

"The Fort Myers market is far more difficult than the Naples market," Wood says. "The Lee County sales have been so low, unfortunately." He estimates it will take as long as two years for the Fort Myers residential real estate market to recover, though he noted that the market for properties over $1 million is holding up well, which is part of the reason the Sanibel office will remain open.

+ Bradenton Bank's

downtown Tampa exposure

Add a new name to the downtown Tampa skyline: M&I.

Marshall & Ilsley Bank said this week it will locate its Tampa Bay area headquarters at 501 E. Kennedy Blvd. in downtown Tampa sometime in the first quarter. The building will subsequently be renamed M&I Bank Plaza.

M&I will occupy about 26,000 square feet of the building. About 6,000 square feet on the first floor will be used for a retail and banking center, and another 20,000 square feet on the ninth floor will be designated for regional executive and operations staff. M&I is relocating from its offices at 601 N. Ashley Drive.

This will be M&I's 31st office along Florida's Gulf Coast and in central Florida. Its Florida headquarters are based in Bradenton.

Founded in 1847, Marshall & Ilsley Bank is the largest Wisconsin-based bank, with 192 offices throughout the state. Outside Florida and Wisconsin, M&I has retail banking offices in Arizona, Minnesota, Missouri, Kansas, Oklahoma, Nevada and Illinois. M&I also provides trust and investment management, equipment leasing, mortgage banking, financial planning, investments, insurance services and data processing.

The 19-story building at 501 E. Kennedy Blvd. was built in 1981 and includes more than 300,000 square feet of commercial space and an attached 400-space parking garage. Cypress Creek Capital plans capital improvements to the building starting this quarter. Improvements will include upgrades to the building common areas including the main lobby, elevator lobbies and restrooms. Building mechanical systems and elevators will also be modernized and upgraded.

Cypress Creek Capital became the asset manager of the building in June when 501 East Kennedy Associates, LLC acquired the property. CB Richard Ellis is the exclusive leasing and management company.

+ Locally created

commercial gets second life

Sometimes the best kinds of publicity can't be bought.

When Tampa-based advertising agency PeakBiety created a 30-second television commercial for Nokia Latin America, they never expected it to receive around-the-world viewing - especially seven years after its initial airdate.

Actually, the Nokia media plan included nine countries for the commercial's scheduled airing. YouTube visitors, however, had other plans.

To date, the spot featuring the Grammy Award winning singer/songwriter, Shakira, has been posted 15 times and viewed more than 60,000 times by various devotees of the YouTube Web site.

The spot opens with Shakira stuck in a traffic jam as her fans await her appearance at a concert. The enterprising Shakira hitches a ride with a passing motorcyclist and phones in her lyrics via her Nokia cell phone. At the time the commercial was produced, Nokia was promoting Shakira's Latin America tour, "The Power of the Human Voice."

The concert name and television spot were part of a multimedia campaign that included on-site merchandising at concerts and a limited edition Shakira faceplate for the Nokia cell phone featured in the ad - all created by PeakBiety in Tampa.

+ Lakewood Ranch grocer

leaves field to Publix

Score one for Publix.

The Jan. 15 announcement that Morton's Gourmet Market on Main Street in Lakewood Ranch would be closing means that Publix is free of its biggest competitor in the supersized master-planned community in east Manatee County. Indeed, Publix runs three large stores within seven miles of each other that serve Lakewood Ranch and the surrounding areas, including one that just opened in October.

But the Morton's closing has just as much to do with personal circumstances as pure market forces. The store was part of Epicurean Life, a Sarasota-based company put up for sale in October 2006 that was comprised of another Morton's Gourmet Market in Sarasota, as well as two restaurants.

Citing family reasons, Epicurean Life's owner, Sarasota entrepreneur Bill Griffin, initially tried to sell the entire business as one company for $31 million. But Griffin began selling it off in pieces last November to buyers including the Morton family that ran the original Sarasota grocery store until 1997.

The only entity Griffin and the sales team couldn't find a buyer for was the 10,000-square-foot Lakewood Ranch-based Morton's Market. The store is expected to close by March 1 and officials for Main Street's property management company, Casto Lifestyle Properties, had no comment on a potential replacement.

+ Homebuilding land

gone to the dog

Tampa-based real estate land broker Bill Eshenbaugh, a.k.a. "The Dirt Dog" on his Web site, is a busy man these days.

He keeps getting more vacant land from homebuilders looking to sell it.

"There's a big play coming on residential," Eshenbaugh tells Coffee Talk.

So far this year, Eshenbaugh has picked up $8 million in new land listings, bringing his total listings t4o more than $200 million.

National homebuilders are under economic pressure because of the residential slowdown. Big builders such as Lennar, MI Homes and Pulte have sold chunks of raw land.

Now, Eshenbaugh's phone rings with calls from California, Denver and elsewhere. All before noon.

"The vulture or opportunity funds are swooping around, and they've really revved it up," he says.

Most investors are hoping to do something with the land in five years. If it sits idle more than five, it's a bad deal, Eshenbaugh says. Because of the growing interest, he has had to be a little more discriminating, just to root out the real buyers from the pretenders. The dollar figures are growing.

"These guys call and it goes something like, 'Hi. Remember me? I'm from California and represent a fund with half a billion in it,'" Eshenbaugh says. "One guy said he represented $50 million. Fifty million doesn't go as far these days."

ECONOMIC SNAPSHOT

GULF COAST TOURISM

(Dollars in millions)

What the data shows: Sales in the tourism and recreation category were mixed in October versus the same month in 2006, the latest data available. This category includes taxable sales at hotels, bars, liquor stores, photo and art stores, admissions, sporting goods, rentals and jewelry stores.

What it means: Florida is still feeling the lingering effects of the hurricanes as group meetings continued to stay away during the storm season. The month of October falls in what is traditionally the slowest season for tourism in Florida, so the mixed results numbers aren't inconsistent with that. Some areas, such as Naples, did relatively well while others, such as Fort Myers and Sarasota, saw some softness in sales.

Forecast: Tourism growth is expected to continue into the spring as bookings appear to be holding up relatively well, but hoteliers are more guarded about prospects for this summer. Airport traffic is expected to grow in the spring, though at a slower rate than last year.

SALES IN OCTOBER

Taxable sales in year-over-year

Metro area tourism & recreation change

Fort Myers $146.2 ‑7.5%

Naples $112.1 4%

Punta Gorda $26 0.2%

Sarasota $138.5 ‑4.3%

Tampa $587.4 ‑2.7%

Statewide $4,966 1.4%

Source: Florida Legislature Office

of Economic and Demographic Research

Buchanan seeks advice from local executives

U.S. Congressman Vern Buchanan met with about two-dozen Gulf Coast business leaders Jan. 15 to hear what they think could solve the area's economic woes. Buchanan, a Republican representing Sarasota, Manatee and a part of Charlotte County, told the crowd gathered at the Sarasota Bradenton International Airport that he was seeking input so he could help Congress and the Bush Administration pass a meaningful economic stimulus package.

Still, in brief comments before hearing the group's suggestions, Buchanan, who was in the printing business in Michigan and the car business in Florida before entering politics, joked that government might not be the best place to look for help. "I hate to get the government into this," Buchanan said, "because many times they screw things up."

The comment was met with more head nods than laughs.

There was some serious discussion among the group though, a gathering that included homebuilder Lee Wetherington, Sarasota-area commercial real estate executive Ian Black and several bankers and mortgage brokers.

Advice for Buchanan included the following: Streamline the federal approval process for wetlands and U.S. Army Corp. of Engineer projects that impact homebuilding developments; cut business payroll and other taxes; give businesses a first-year tax write-off on new equipment purchases; pass a uniform tax rebate for all citizens; cut capital gains taxes; make the 2001 tax cuts passed by President Bush permanent and provide tax credits to all homebuyers, not just first-timers.

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