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Coffee Talk
Business Observer Saturday, Feb. 2, 2008 14 years ago

Coffee Talk

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Christmas Break is for the birds: This falls in the no-good-deed-goes-unpunished category.U.S. recession: It's all in our heads: The only way the U.S. economy slips into a recession is if we collectively talk ourselves into it. The underlying fundamentals are just too strong otherwise.Major hotel deal possible for Sarasota: The Sarasota-Bradenton business community could be on the verge of receiving some good news: Coffee Talk hears that the Waldorf-Astoria hotel is in the final stages of officially signing on to the Proscenium project.Mel's Diner slows, closes some restaurants: The economic downturn has hit the customers of affordable restaurants, forcing Chris Karakosta to close three of his Mel's Diner restaurants on the Gulf Coast recently.Score one for impact fee opponents: Despite the turbulent economy, impact fees imposed on developers and builders statewide have remained the tax du jour for county and local governments seeking ways to reel in more money.Wanted: Angel investors in Lee: The Lee County Economic Development office is exploring ways of creating an angel fund to invest in local companies.Clearwater firm builds CNN bus: When it came time for CNN to plan its coverage of the 2008 election campaign, the decision was made: Have Parliament Coach and Frontline Communications of Clearwater build a news bus.

Coffee Talk

+ Christmas Break

is for the birds

This falls in the no-good-deed-goes-unpunished category.

The developer of the Del Prado Boat Club in Cape Coral gave his building crew two weeks off for Christmas and when they returned a pair of ospreys had built a nest on the building's highest point.

Once ospreys build a nest, they can't be disturbed. So a 20-foot section of the roof will have to wait until the raptors' fledglings learn to fly and that probably won't be until May 1.

Although construction crews can finish the rest of the roof while the ospreys are there, the builders will have to bring a crane back in early summer to finish the missing 20-foot section, at a cost of thousands of dollars, says the club's general manager, Mike Morrison.

Despite the headache, Morrison says the publicity the birds generated in the local press offset the additional cost. And he's planning to build a platform for the birds when they return next year. "The facility itself will be the poster child for how to do a clean marina," Morrison says.

+ U.S. recession:

It's all in our heads

The only way the U.S. economy slips into a recession is if we collectively talk ourselves into it. The underlying fundamentals are just too strong otherwise.

That was the message to an exclusive gathering at Sarasota's Field Club Tuesday from Anne Mathias, director of policy research for the high-powered Stanford Group Co.

"It's really not as bad as people think it is," she says. People say it is bad, as evidenced by the fact that consumer confidence is down. But people act as though it is good, as durable goods shot up 5.2% in December. She says that slumping durable goods orders traditionally precede a recession, as people and companies pull back on those expenditures.

But housing declines also have frequently been a leading indicator for a recession. Mathias counters that by pointing out those usually were a result of the Fed tightening the money supply to fight inflation. This time the Fed is loosening its grip, dramatically, on the money supply and the housing woes were brought on by the sub-prime loan debacle and the ensuing mash-up in the credit markets.

Further, she points out that exports are a much larger portion of the economy than housing and they increased 13.5% the past year, primarily on the back of a weakening dollar.

So the Stanford Group - which manages $43 billion in assets from clients in 136 countries - is predicting a 1% annualized growth in GDP in the first two quarters of this year, and then modestly higher numbers after that.

"I think we will probably skirt a recession unless everyone thinks we are in a recession," she says.

One other prediction from Stanford via Mathias: 2008 is a Democrat year for the presidential election and Hillary Clinton is the most likely Democratic candidate.

+ Major hotel deal

possible for Sarasota

The Sarasota-Bradenton business community could be on the verge of receiving some good news: Coffee Talk hears that the Waldorf-Astoria hotel is in the final stages of officially signing on to the Proscenium project, a mixed-used redevelopment planned for two blocks of property just north of downtown Sarasota.

The hotel has long been rumored to be part of the ambitious project, although its lead developers, Gary Moyer and Zeb Portanova, as well as the hotel, have declined to confirm the speculation. While still declining to name names, Moyer told Coffee Talk Jan. 29 that "we have a document with a five-star hotel that has been negotiated and is ready for signature."

Officials with the Waldorf-Astoria, part of the Hilton Hotels chain, didn't return phone calls to the Review.

Moyer, head of Sarasota-based Lion's Gate Development, also declined to give a specific time for when an announcement on any hotel will be made, only saying it should be in days, as opposed to weeks.

Moyer says the project, which takes its name from a word that means a large archway near the front of a stage through which an audience can view a play, is moving ahead on some other fronts, regardless of the specific hotel. That includes officially presenting the plans for the project, comprised partially of an 800-seat theater, 130,000 square feet of retail and 230,000 square feet of office space, to Sarasota city officials Feb. 12.

+ Mel's Diner slows,

closes some restaurants

The economic downturn has hit the customers of affordable restaurants, forcing Chris Karakosta to close three of his Mel's Diner restaurants on the Gulf Coast recently.

"The volume is down from last year, costs are up and those stores were losing money," Karakosta says. He closed the Mel's Diner restaurants in New Port Richey, Bradenton and Sarasota.

"I had to stop the bleeding," Karakosta says. "Sometimes you fight longer than you should and you think the economy is going to get better, but it's not getting better."

Karakosta says eight Mel's Diner restaurants further south are performing better in well-established locations such as Naples and Bonita Springs. "The existing stores have positive cash flow," he says.

+ Score one for

impact fee opponents

Despite the turbulent economy, impact fees imposed on developers and builders statewide have remained the tax du jour for county and local governments seeking ways to reel in more money.

But top government officials in rural DeSoto County are working out the details of a rather unusual twist on impact fees: Not only did the county's five-member board of commissioners recently vote to suspend impact-fee collection for six months, the panel also unanimously voted to give back all the money it has taken in from the fees since it started collecting them in 2006.

The return tab, which will go to homeowners that paid the fees passed on to them by builders, is expected to top $200,000, DeSoto County government and building officials tell Coffee Talk. While that's mere crumbs compared to the millions of dollars in impact fees collected in more heavily populated Gulf Coast counties, such as Collier and Sarasota, the fact that any government entity is returning impact fee money to taxpayers is what has the development community buzzing.

"It's nice to see the commissioners do something like this," says Suzanne Graham, with the Charlotte/DeSoto Building Industry Association. "This is fantastic news for the DeSoto County community and our membership."

Adds Edie Ousley, a spokesperson for the Florida Home Builders Association, which lobbies against impact fees across the state: "What took place in DeSoto County is very welcome news. It is our hope that some other communities will take a look at it and follow in their footsteps."

Still, any footsteps are likely to be light, if not non-existent, at least when it comes to actually returning money collected from impact fees. Ousley and Graham haven't heard of any other county or jurisdiction in Florida even considering doing it and past that, the return amount would be so high in some places it would be virtually impossible to carry out.

What's more, the DeSoto County commissioners themselves aren't exactly the best marketing platform for an anti-impact fee revolt. Indeed, commissioner Ronald Neads, one of the chief proponents of both the six-month moratorium and the return of the impact fees, says the vote was more about returning some cash to local homeowners during the tough economic times than a message against the concept of impact fees.

"None of us (on the commission) are against impact fees," Neads tells Coffee Talk. "But we felt this was the right thing to do with the economy the way it is."

+ Wanted: Angel

investors in Lee

The Lee County Economic Development office is exploring ways of creating an angel fund to invest in local companies.

Called the Southwest Florida Regional Angel Fund, it would bridge the gap between individual and institutional financing for new and emerging growth businesses.

No word yet on how much money the fund will raise, what companies will benefit or who will be permitted to invest.

ECONOMIC SNAPSHOT

GULF COAST RETAIL

What the data shows: The index of retail activity is constructed to measure personal consumption and it aggregates the categories of autos, consumer durables, tourism and consumer nondurables. The index's base equaled 100 in December 1988. For example, an index of 300 today would have taxable sales equal to three times the base period in 1988, for a 200% increase. The latest available data from November shows year-over-year declines in every area of the Gulf Coast.

What it means: Because the index measures personal consumption, it shows consumers slowed purchases heading into the holiday season in November compared with the prior year. The declines were particularly strong in Lee and Charlotte counties, two areas hit hard by the construction downturn. Every area of the Gulf Coast fared worse than the state as a whole.

Forecast: Anecdotally, retailers reported a decline in sales for the holiday season and that's likely to continue until the real estate market recovers. In addition, declines in airport traffic in Fort Myers, Sarasota and Tampa may crimp spending by tourists. European tourists may help soften the blow because their currency is strong and they're likely to make more purchases than in the past.

November Index of Retail Activity

Index of % annual

Area retail activity change

Fort Myers 310.1 ‑9.1%

Naples 343.9 ‑4.5%

Punta Gorda 288.7 ‑9.2%

Sarasota 232.4 ‑7.1%

Tampa 226.4 ‑4.5%

Florida 259.0 ‑2.4%

Source: Florida Legislature Office of Economic & Demographic Research

Clearwater firm builds CNN bus

When it came time for CNN to plan its coverage of the 2008 election campaign, the decision was made: Have Parliament Coach and Frontline Communications of Clearwater build a news bus.

During the 2004 election, CNN experimented with Hank Williams' former touring bus, a 1980 Eagle. That coach required a separate satellite truck for linking to the network. It provided an opportunity to see whether a bus was a useful feature in the network's campaign coverage. The venture was a success, but it triggered thoughts of how it might be done better.

Enter David Bohrman, CNN Senior Vice President and Washington, D.C. bureau chief. He had a vision. Why not build the Ultimate News Bus, something that had never been constructed before? Why not a coach which would have four separate and unique functions: A newsroom, broadcast studio, a state-of-the-art editing suite and a transmission facility?

All these functions would be contained in a single, reliable coach which could operate anywhere in the United States.

Parliament Coach and Frontline Communications, both of Clearwater, were given the mission of building the Ultimate News Coach in the summer of 2006.

While working on the internal design and engineering details, Parliament "coved out" 10 inches of the rear roof of the shell. This area would provide room for the satellite dish to stow. Work can be done aboard the CNN Express whether it is parked or in motion, making it an indispensable tool for keeping up with busy presidential campaigns. The coach can be used as a stationary facility or be in operation going down the road.

Racks were installed in the rear of the coach to house transmission gear and a mammoth non-linear high-definition video server system. A state-of-the-art edit suite was constructed mid-way on the coach that taps into the server system's video library of political coverage.

While in newsroom mode, the coach houses more than 20 producers, engineers and support personnel. Parliament installed bathroom facilities and a small kitchenette area for the CNN staffers. Power is provided by two onboard 25Kw generators. Assuming there would be situations where one side of the coach would be blocked, two large patch panels were installed to allow for hookups on either the street or curbside of the coach.

The coach was designed to have four high definition uplinks. The idea here was to be able to create a news environment in the middle of a cornfield, if necessary for live transmission to the network.

The CNN Express was first put to the test during the July CNN/YouTube Democratic presidential primary debate in Charleston, S.C. Three thousand debate questions were submitted by the public through YouTube and then viewed by CNN staff working on the bus. Because of the bus' playback server, it was instrumental in that debate and in the Republican CNN/YouTube debate in St. Petersburg Nov. 28.

Besides its production capabilities, the CNN Express has been the site of numerous interviews with presidential candidates Sen. Hillary Clinton, Sen. John McCain, Sen. John Edwards and Gov. Mike Huckabee.

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