GULF COAST
NOVEMBER 18 – NOVEMBER 24, 2011
Business Review
THREE DollarS
FIRST UP:
BUYING LOCAL
A group of entrepreneurs uses the Groupon model to give back. Page 6
COLUMN ON PAGE 18
Take Action
destructors SEE PAGE 8
How to stop resisting change and address the tough issues in your business.
Technology innovations that create new markets by destroying old ones.
Companies • Trends • Entrepreneurs • CEOs
The Weekly Newspaper for Gulf Coast Business Leaders
3 STEPS TO SUCCESS
Five years ago, Tech Data was losing money. With a new leader and strategy, it’s more profitable than ever. PAGE 12
GULF COAST BUSINESS BUZZ
+ Tough year might end with happy news
This could be a good year for bonuses, despite the recession. In fact, 30% of executives with companies that gave a bonus in 2010 say they plan to give higher bonuses in 2011,
+ Elderly focused agency grows up fast
A Sarasota-based think tank that studies the impact of aging on businesses and the community is moving at speeds not normally associated with its subjects. To wit: The agency, the Institute for the Ages, which officially launched last spring, received a $1.2 million funding commitment from Sarasota County officials in July. And earlier this month the institute held a workshop, Innovation for the Ages, that drew a high-powered
group of nationwide researchers, executives and government officials to town. “The progress over the past few months has been extremely satisfying,” says Tim Dutton, the Institute’s interim executive director. “This is a marker of how big this has become.” The institute’s formation rests on the fact that Sarasota County, with 30.5% of its 369,675 people 65 or older, according to 2009 U.S. Census figures, is the oldest large county in the country. That’s out of 3,850 counties. Those demographics were a magnet for people who attend-
ed the two-day workshop Nov. 9-10. “The purpose was to bring these people together,” Dutton tells Coffee Talk. “The idea is to think about how they can do the work better, faster and smarter.” Attendees included cultural anthropologists; a representative from Hallmark; New York City Health Department officials; employees from chemical company BASF; and researchers with the Stanford Center on Longevity. Several other universities sent elderly experts to the workshop, along with RTI
See coffee talk on page 3
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COFFEE TALK
according to a new survey from Robert Half International. Only 14% of the respondents, meanwhile, expect to provide smaller bonuses. Human resource managers, at 42%, were the most optimistic about higher 2011 bonuses. Technology executives followed at 25%, the survey states. Menlo Park, Calif.-based Robert Half, a specialized professional staffing firm, polled more than 1,250 senior executives nationwide from companies that offered employee bonuses in 2010.
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Gulf coast Business Review NOVEMBER 18 – NOVEMBER 24, 2011
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COFFEE TALK
Creative Protection for Innovation in Technology Creative Protection for Architects and Engineers
CONTINUED FROM PAGE 1
+ Holiday party? Skip the mistletoe
This holiday season could be less jolly for some business leaders. That is if they don’t heed the advice on company holiday parties Alva Cross preaches. Cross, a labor and employment lawyer with the Tampa office of Fisher & Price, says that costly sexual harassment, discrimination and assault suits are more commonplace at firms’ holiday parties than business owners may think. Cross has represented managers accused of harassment at these events due to simple missteps — such as hanging mistletoe. She says it may be festive, but could lead to sexual harassment accusations. Other tips she has for business owners turned party planners include hiring a bartender instead of allowing an employee to shoulder drink-pouring duties. Also, to keep partygoers from becoming too festive, only beer and wine should be served, and an open bar is not a good idea. “You should have a cash bar or offer drink tickets,” she says. Also, food should always be included in party details. Cross explains that having a plethora of non-alcoholic beverages is another way to avoid any lawsuit-inducing drunken behavior by staff. Displaying these drinks in tubs of ice throughout the party helps stave off a tipsy employee from returning to the bar. Though some of Cross’ advice may seem obvious to business owners and managers, she says any oversight in consideration of harassment or discrimination in planning a holiday bash could lead to hefty — though avoidable — legal costs. “It seems so simple and common sense, but you would be amazed,” Cross says. “It’s really important for employers to review their anti-discrimination and anti-harassment policies on a yearly basis. And this time of the year is perfect.”
The uncertain economic and political outlook affects more than just business. A Naples gathering of intellectuals called Imagine Solutions won’t take place next year because of lack of sponsorship and the impact of the presidential election on attendance.
It’s easy to spend $295 million when it’s not yours. In the latest installment of a wide-ranging audit of Lee County’s land purchases, Lee County Clerk of Court Charlie Green detailed instances when government overpaid for conservation land despite the real estate bust. It’s a public-relations pickle for the environmental lobby and selfstyled “green” politicians who support the Lee County land-buying program, known as Conservation 20/20. Of course, one would have to be naïve to think that the government spends money as carefully as individual taxpayers. Problem is, we’re not talking small change here. So far, Lee County has spent $295 million of taxpayer money to buy just 24,039 acres for conservation. That’s a lot of cash for land that in many cases can’t be developed at all. You could build three Red Sox spring-training stadiums with that sum. But even as the real estate bust took hold, Lee County paid higher prices for land than it did in the years leading up to and into the boom, Green’s audit revealed. (The county’s response is that it bought costlier land with entitlements within municipal boundaries, a fact that raises more questions.) From 1997 to 2005, Lee County’s 20/20 program paid $7,247 per acre. From 2006 to the present, the county paid $16,978 per acre, or more than double, despite values plummeting. Of the total paid for conservation land, 72% was spent since 2006, a time when the county could have picked up land for much less money. Imagine Solutions is an annual conference organized by the Naples-based nonprofit Searching for Solutions Institute. Mirrored on the Aspen Institute, it brings together more than 40 nationally recognized speakers and experts on topics ranging from medicine to economics and environmental conservation.
See coffee talk on page 19
IP law impacts the intrinsic rightsof oforiginal originalideas ideasand and rights new technologies through new technologies through theapplication applicationof oftrademarks, trademarks, the copyrights,patents, patents,licensing, licensing, copyrights, trade secrets protection and trade secrets protection and infringementlitigation. litigation. infringement
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+ No solutions next year
Follow the ‘green’ money
69018
International, a Research Triangle Park, N.C.-based firm that partners with the institute on some projects.
GULF COAST BUSINESS REVIEW NOVEMBER 18 – NOVEMBER 24, 2011
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GULF COAST WEEK REGIONAL BUSINESS NEWS AT A GLANCE
Lee-Collier Radiation Therapy posts loss
Fort Myers-based Radiation Therapy Services, one of the nation’s largest operators of radiation treatment centers, reported a $231 million net loss in the third quarter. The loss in the third quarter, which compared to a net loss of $2.3 million in the third quarter of 2010, reflected an impairment charge of $237.6 million. The company took the significant charge because it lowered its financial forecasts due to projected declines in medical reimbursements and economic conditions in the U.S. that aren’t likely to improve.
EXECUTIVE
DECISION What do you think the best performing industry will be coming out of the recession? To vote in this week’s poll question, visit: review.net/decision. Results from last week’s poll: Are you concerned about the impact of the European debt crisis on your business? 35% Yes Somewhat No
Radiation Therapy, which operates 121 treatment centers primarily under the name 21st Century Oncology, reported $156.3 million in revenues in the third quarter, a 14% increase over the same quarter last year. The increase in revenues was due mostly to the acquisition in March of Medical Developers LLC, which operates 26 physician practices in Latin America.
Hotel revenues rise
Lee County hoteliers reported a 14% jump in room revenues in September compared with the same month a year ago, according to the Lee County Visitor & Convention Bureau. Despite the fact that September is one of the area’s slowest times of the year for tourists, hoteliers reported revenues per available room rose to $41.99, up from $36.62 in September 2010. Revenue per available room is an important financial gauge that is a function of the average occupancy rate and average daily room rate. In September, hotels in Lee County reported 41.4% average occupancy, up from 37.7% in September 2010. The average daily room rate rose 4.3% to $101.38 in that same period.
fraud and conspiracy, says a release from the U.S. District Court for the Middle District of Florida. The convictions against White stem from allegations that he accepted bribes from area towing companies in his time as a Hillsborough County commissioner. The bribes were in exchange for including the firms in question on the county’s list of approved towing services, according to the release. A sentencing hearing is scheduled for Feb. 27. White faces 10 charges that carry a combined 95 years in federal prison.
Masonite announces layoffs
tampa bay
Masonite International Corp., a Tampa-based door-manufacturing firm, plans to lay off 5% of its global work force, according to a company statement on its third quarter financial results. Despite a 12.3% growth in revenues and 60.8% growth in operating income for the first three quarters of 2011 compared with the previous year, the company cites the troubled housing market for its employment reduction. The firm’s statement did not disclose the geographical location of the layoffs, but it had announced intentions to hire 200 at its new facility in Denmark, S.C., earlier this year.
Former councilman convicted
SARASOTA-MANATEE
Kevin White, former Hillsbor40% ough County commissioner and Tampa City Council member, was 25% recently convicted on charges of lying to the FBI, bribery, wire
County selects administrator
Randall Reid, the top unelected official in Alachua County, is in line to be the next Sarasota
Mack challenges Nelson A Quinnipiac University poll showed U.S. Rep. Connie Mack, R-Fort Myers, in a statistical dead heat for the U.S. Senate seat currently held by Bill Nelson. The poll shows 42% support for Nelson and 40% for Mack, with a
County administrator. Sarasota County Commissioners chose Reid from a list of four finalists after a Nov. 15 meeting. County officials plan to begin contract negotiations in the next few weeks with Reid, who has run the administrative offices of Alachua County since 1999. Reid is expected to begin working in Sarasota by early next year, if an agreement is reached with the county. He would replace Jim Ley, the most recent permanent county administrator, who resigned in May amid a procurement scandal after 14 years in the position.
Union sues city
The Southwest Florida Benevolent Association, a union that represents Sarasota police officers, sued the city of Sarasota in an ongoing dispute over retirement and pensions. The union’s lawsuit claims the city reneged on a promise it made to officers hired before 1994 that it would fully cover medical and dental benefits for life. City officials, though, facing
2.9 percentage point margin of error. Mack is favored to win the Republican primary by a wide margin, the poll also found. “The entrance of Congressman Connie Mack into the Senate race changes what had been shaping up as an easy re-election for Sen. Bill Nelson into a tough fight that the incumbent could lose,” said Peter Brown, assistant director of the Quinnipiac University Polling Institute. a budget shortfall, made some changes to the pension plans for all employees earlier this year. The changes require retirees to pay at least 10% of health insurance premiums, a figure that could rise in future years.
Firm finds buyer
A team of private equity firms led by Fort Worth, Texas-based Ancor Capital Partners bought Sarasota-based WellSpring Pharmaceutical Corp., in a deal announced earlier this month. WellSpring owns a portfolio of pharmaceutical products, including an antifungal foot ointment. WellSpring is a multimillion-dollar company, but it doesn’t publicly disclose specific revenues. Ancor typically targets companies with between $5 million and $15 million in operating income. Ancor partnered with Sentinel Capital and Yukon Capital to complete the deal, a press release says. A WellSpring executive says the sale will allow the firm to achieve “aggressive growth opportunities” in the pharmaceutical market.
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Gulf coast Business Review NOVEMBER 18 – NOVEMBER 24, 2011
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FIRST UP
Up to Speed
Welcomes our new Commercial Real Estate Advisors
Linda Emery • 25 Year Commercial Real Estate Veteran • Specializing in Retail, Medical and General Office Sales and Leasing
Bruce Dilges • Extensive Background in Appraisal and Feasibility Studies • Sarasota Native in Real Estate Industry for 27 Years JimJett.com
Lee Paul and Derek Maciak help information technology departments at large companies write better software programs more quickly. Surround Technologies’ revenues will double this year and maybe again in ‘12.
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plications. Its Accelerator system helps software programmers write programs that can tie all kinds of devices together. “We see a lot of IT budgets coming back,” says Paul, Surround’s CEO. For example, Surround helped one retail-distribution company shift from keyboard commands on 20 separate computer screens to visual displays on a single screen. Now, with the click of a mouse, a user can move the icon of a truck from one location to another on a map and view and then move the merchandise inside each of these trucks. To do that, Surround has hired a graphic artist who enhances users’ visual experiences. Initially, Surround specialized in helping customers with IBM computers that operated on a specific sof tware-de velopment platform called Lansa. But since 2008 it expanded to include another platform called .Net, which is primarily for Windows software. For most companies, upgrading all its software or shifting from one software-development platform to another all at once is too costly and risky. So companies use Surround’s technology to gradually modernize their systems over time. For Surround, the pool of customers is potentially much larger now that it can help companies that use or want to shift to the .Net platform. Paul says the company’s revenues could double again in 2012. “Mobile [technology] really helped us,” says Paul. Surround has been able to grow debtfree and without outside investors. “The hard thing is prioritizing,” he says. “We want to make sure we don’t lose focus.” —Jean Gruss
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elinquent Nynex phone customers didn’t know it at the time, but Lee Paul and Derek Maciak were responsible for how fast the New York phone company was disconnecting their lines in the early 1990s. Before they joined Nynex, it could take as long as six months for the company to disconnect the lines of delinquent customers. The two engineers figured out how to do it faster by programming the company’s giant IBM computers. “We automated that process to 14 days,” says Paul. Today, Paul, 42, and Maciak, 37, bring that same problem-solving approach to their Bonita Springs business, Surround Technologies. They help the information technology departments of large companies with big computer systems gradually shift to new and better software. Clients have included Gannett, Verizon and GE Canada and the two business partners expect to double revenues this year to $2.6 million with 20 employees. Big corporations often have their own software developers who maintain older systems. Surround provides these developers with a tool called Accelerator that helps them write complex software faster and better. In addition, they provide consulting services to information technology departments. Typically, the Accelerator system costs $35,000 to $60,000, depending on the size of the customer and annual maintenance runs 18% of that price. Surround has benefited from the fact that many corporations have boosted their technology budgets because of the boom in mobile-phone and computer-tablet ap-
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Derek Maciak, left, and Lee Paul, help corporations keep up with information technology advances.
Lee Paul, Surround Technologies: ‘We see a lot of IT budgets coming back.’
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GULF COAST BUSINESS REVIEW NOVEMBER 18 – NOVEMBER 24, 2011
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FIRST UP
What a Deal
A trio of entrepreneurs in Naples launched BlocDeals a year ago as a local alternative to Groupon, the successful daily deal website. Their pitch: The money stays here.
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come from some of Naples’ wealthiest neighborhoods. BlocDeals already has 15,000 registered users in the Naples area and it has signed up about 90 retail customers who split the revenues on the deals sold online. BlocDeals splits revenues evenly with retailers and donates an additional 12% of each deal to 20 charities in Naples. Desiano says partnering with local charities such as the Naples Zoo and the Naples Philharmonic Center for the Arts gives customers more incentive to work with BlocDeals than with an outof-town competitor such as Groupon. What’s more, the charities also promote BlocDeals as a fundraising tool because website users select which charity benefits. Desiano pitches the local ownership and charitable contributions as the company’s edge over large competitors such as Groupon. That’s why he thinks franchising the concept to local owners is a better way to grow his company. To do that, Desiano and his partners are seeking bank debt or new investors who could provide the $500,000 in capital the company needs to grow. This isn’t Desiano’s first entrepreneurial venture. He once owned a successful mortgage company in New York City with 80 employees headquartered in the Empire State Building. He moved to Naples in 2007 when he foresaw the collapse of the real estate and mortgage business and
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obert Desiano and his business partners have built their onlinecoupon business on a simple fact: Everyone wants a deal. That explains why Groupon, the daily deal website, recently raised $700 million in its initial public offering of stock to the public. Desiano and business partner Dan Sexton launched a local version of Groupon called BlocDeals a year ago and it quickly garnered success in Naples because of its local ownership. Now, the entrepreneurs plan to franchise the idea so others can replicate the concept in other cities around the country. With the help of Ron Klein, who built and later sold a successful publishing company before retiring to Naples, sales have reached $150,000 for the year to date and could triple within a year, they say. “Groupon is doing seven figures in Naples,” Desiano notes. BlocDeals works like an online coupon book, which you buy at a discount and redeem with retailers. For example, when BlocDeals.com offered $10 worth of food for $5 at Toast of Naples restaurant, 400 people purchased the deal online using a credit card and printed the $10 certificate. The deals aren’t restricted to lowerpriced merchandise, such as restaurants, massages and car washes. BlocDeals recently sold eight $900 deals for laser fat removal. Klein says many deal-seekers
Robert Desiano, BlocDeals: ‘I didn’t know how well it was going to do.’
Nancy DeNike
BlocDeals partners Dan Sexton, Robert Desiano and Ron Klein plan to grow their online coupon company to other cities in the U.S. went to work for Allen Systems Group. There, he met Sexton, who was a software developer for the technology company. Desiano and Sexton estimate they’ve spent hundreds of hours on BlocDeals and another deal site, MySavingsPost.
What’s Your Score?
People crave an edge in the vast and vastly competitive world of online profiles. A new website aims to deliver just that.
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Mark Wemple
Bill Jula formed PROskore earlier this year. The website ranks professionals based on a compilation of online factors and off-line data.
hile Bill Jula’s business harnesses how people use modern technologies, the origins of the model are distinctly aged. In fact, the birth of Sarasota-based PROskore, a website that ranks business professionals’ online influence, stems from a well-worn axiom. That lesson: A business that strays from its mission, even with good intentions, risks diluting its original purpose and message. In Jula’s case, the company, initially, was a business-to-business networking website, fastpitchnetworking.com. The website, founded in 2006, was an offshoot of an in-person networking group Jula launched in 2003. Profitable after a few months, the website made money when members, who could access some features for free, paid for a premium membership that offered paid-only services — freemium, in Internet lingo. But to lure paid subscribers, Jula says the firm erred in providing too much, too soon. It had everything from a press release portal to a member-tomember advertising system. “We were all things to all people,” says Jula. “But it wasn’t entirely clear what we were trying to do.” So Jula and his lead software developer, local tech entrepreneur Rich Swier Jr., formed PROskore to bring clarity to the business model. The site, proskore.com, is essentially a revamped and enhanced
com, since they left ASG two years ago. Desiano estimates it would cost $60,000 to build a site like BlocDeals today. “I didn’t know how well it was going to do,” Desiano says. —Jean Gruss
fast pitch. It ranks members, professionals in any field, based on a compilation of online profiles and off-line data. A PROskore member’s tally, a fluid ranking, ranges from 1 to 100. Klout, a website that bills itself as “the standard for influence,” was one of the first companies to get into the nascent field of grading people’s online influence. San Francisco-based Klout has garnered national media attention, plus an investment from Kleiner Perkins, a top Silicon Valley venture capital firm. PeerIndex and Twitter Grader are other websites that offer score-based profiles of people’s social media influence. Jula, though, says PROskore is the only influencegrader that uses more than social networking. “In terms of measuring professional reputation, no one is doing that yet,” Jula says. “Our platform goes deeper than anything Klout has done.” PROskore does that through a three-tiered approach, says Jula. The first tier is real-world experience, which includes jobs and education. Social media, which includes everything from LinkedIn contacts and Twitter followers to a user’s Klout score and blogging prowess, is the second tier. The third scoring element is a user’s engagement on the PROskore network, which includes recommendations from other members. The average PROskore score is in the upper 20s. Some members have scores in the 50s, and a few have hit the 70s and 80s. PROskore itself recently scored major points, with stories on TechCrunch, Mashable and VentureBeat, three leading tech blogs. Jula says he’s confident he can leverage that exposure, and the website’s early success, into $2 million to $3 million in capital from local angel investors. But the firm, says Jula, might also seek venture capital funds, so it can get bigger, faster. Jula hopes to decide on a capital-raise plan by the end of 2011. “We see an opportunity to ride this wave,” says Jula. “We can grow to be a player.” — Mark Gordon
Gulf coast Business Review NOVEMBER 18 – NOVEMBER 24, 2011
www.review.net
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FIRST UP
House of Pain
The death of a beloved parent, and mentor, could cripple a small business owner. But tech entrepreneur Kathy Durfee found a way to battle back to success.
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Lori Sax
Kathy Durfee founded Bradenton-based TechHouse in 1995. Durfee launched a second business unit, TechHouse IT Staffing, earlier this year. “I decided I’m doing this because I love to grow companies,” Durfee says. “It’s a blast.” The comeback produced a blast in sales, too. TechHouse now has eight employees, and seeks at least two more. Revenues will be back up to about $1.1 million in 2011, says Durfee. Plus, a separate business unit Durfee founded, with a focus on staffing, will push total annual revenues to $2 million this year. Most of TechHouse’s IT clients are in the manufacturing, health care or service industries. The companies are small to mid-size, says Durfee, and stretch from Sarasota to Orlando. Durfee says the core of the firm’s IT work involves assistance and implementation of cloud computing, a system where software and data is maintained outside the central hardware. The rejuvenation of TechHouse, moreover, didn’t stop at the cloud. Following her long held desire to start and nurture
other entities, Durfee launched a second business earlier this year. That firm, TechHouse IT Staffing, recruits and places employees. Durfee first tinkered with IT staffing in 2009. That’s when she heard from clients who sought an employee to troubleshoot and deal with issues as they surface. The staffing business now has three employees and is closing in on $1 million in annual revenues, separate from TechHouse IT. “We’ve been super lucky,” Durfee says. Next up on Durfee’s wish list: to open a technical computer skills training center for local unemployed and underemployed people. There are already several job-training centers run by government and public-private groups in the area. But Durfee says the offerings lack cohesion. Says Durfee: “I think there is a ton of barriers for people in our local area to get the right training.” — Mark Gordon
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hen revenues slipped at least 40% at IT consulting firm TechHouse, founder Kathy Durfee easily could have blamed the recession. But the truth was more complicated, and more painful. Durfee’s father, William Edward Flaherty, spent two years in deteriorating health at the onset of the recession, first from Parkinson’s disease and later from an aortic dissection. “I really lost focus on the business, big time,” says Durfee. “I’d like to say it was the economy, but it was also my family. I was completely distracted.” TechHouse, based in east Manatee County, went from 12 employees and $1.5 million in annual revenues at its peak in 2006, to seven employees and barely $900,000 in revenues by 2008. Founded in 1995, the firm has mostly concentrated in two areas: classic IT support, where it’s a help-desk for clients, and systems integration, where it helps clients build and maintain software. But for a majority of 2006-2008, Durfee’s thoughts weren’t on the business. She traveled to Jacksonville, where her father lived, nearly every weekend. And she says she was in a fog at home during the week. Flaherty died June 27, 2008. His death was a low point for Durfee personally. But in retrospect, her father’s passing was a motivational spark to refocus on TechHouse. After a few months completely away from the business, Durfee, in fact, returned with vigor.
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www.review.net
GULF COAST BUSINESS REVIEW NOVEMBER 18 – NOVEMBER 24, 2011
destructors
To spotlight technology innovation,
the Business Review looked for innovations or applications of technology aimed at shaking up business. From new toilet technologies to inventive iPad usage to the search for the perfect tomato, the following are creative destructors who are betting they can disrupt markets and change the game with their ideas.
Reality Bites
Technology that allows users to transform themselves to another place often has a high cool quotient. An entrepreneur aims to turn the buzz into sales.
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tephen Barker is creatively frustrated. The creativity stems from augmented reality, a real-world view of something enhanced by computer-based technology and graphics. The ubiquitous yellow first down line on televised football games, for instance, is augmented reality. And some
fighter pilots have cockpit displays that utilize augmented reality. Barker didn’t invent augmented reality. But he was blown away by it when he saw it for the first time in 2005, while in graduate school in California. He believed augmented reality would trump virtual reality because augmentation delivers computer-generated views to the real world, not a simulation in a fake world. Virtual reality essentially flopped. “This is the future,” Barker thought back then. “I want to be part of this.” Barker got his wish. His Sarasota-based firm, Digital Frontiers Media, is one of the few companies on the Gulf Coast with a dedicated specialty in augmented reality. He uses the technology for websites and iPhone and smartphone applications. But therein lies the frustration. Barker laments augmented reality’s wow factor has yet to wow many clients. “Very few companies are doing much more than buzz with it,” Barker says. “It’s not yet in the business psyche how to use it.” Barker is determined to change that reality. Digital Frontiers Media, with nine freelance employees who regularly contribute work, has less than $500,000 in annual revenues, though Barker projects 33% growth next year. One recent augmented reality project Barker worked on was for the St. Petersburg/Clearwater Area Convention & Visitors Bureau. Barker used augmented reality to create a virtual tour guide for the CVB, in partnership with Miles Media, a Lakewood Ranch-based tourism publishing firm. The project, Two Treasures 3D Tour, requires users to print a specially designed marker they can place in front of their webcam. The marker, in the shape of a palm tree, then transforms into DeSoto Beach — not the computer screen, or smartphone screen. A tour guide comes along for the trip to point out other prominent vacation spots. Users can also look at an interMark Wemple active signpost. Stephen Barker is president of Sarasota-based Digital Frontiers The CVB augmented reality tour launched Media. The firm is one of a few on the Gulf Coast to use augmented in March. It requires the webcam, but no 3D reality technology.
Brian Tietz
Christopher Spiro says eBevSeeker.com could help beverage distributors’ customers generate more sales.
Entrepreneurs: Christopher Spiro of Spiro & Associates, and Tim Mitchell of Suncoast Beverage Sales, Fort Myers Application: Beer deal alerts. If you’re looking for six-pack specials or two-for-one brews at your favorite watering hole in the Fort Myers area, all you need to do is sign up for a new online service called eBevSeeker.com that alerts you to those deals in town. While deal websites aren’t new, the business arrangement between Suncoast Beverage Sales, a Fort Myers beverage distributor, and marketing firm Spiro and Associates is different. When Tim Mitchell, the president of Suncoast Beverage, started talking to Christopher Spiro about hiring his firm to launch an online marketing plan earlier this year, the two men decided instead to form a new company called eBevSolutions to handle the task. The idea was to develop an online-deal marketing system that could help beverage wholesalers drive traffic to their retailer customers. In addition, user information could help distributors and retailers know more about consumers and their preferences, tailoring specials to certain groups of people or geographic areas, for example. But because of the cost and effort involved, it didn’t make sense to develop the product for Suncoast Beverage only, so the two men created a separate company. “Our ultimate goal is to make this available to all wholesalers,” says Spiro. Spiro estimates he and Mitchell have invested more than $100,000 worth of time and resources to develop the eBevSeeker.com website, and they’ve signed on another beverage distributor on the east coast to help test it. Spiro and Mitchell hired code writers with the firm TayloeGray in Wilmington, N.C., who helped design the eBevSeeker.com site that can alert users to deals via email, text message or Facebook. They also hired Jeevy Computers in Sarasota to coordinate the site with applications for iPhone and Android cell-phone operating systems. The duo has hired patent attorneys and they’re investigating pricing the service for distributors of various sizes around the country. “That’s how much we believe in this,” says Spiro. They’re leaning toward a licensing system that would give distributors control over the deals they list. —Jean Gruss glasses. Barker says the project “engages and enchants,” and he adds that it was gratifying to put his augmented reality expertise to commercial use. Barker hopes to soon find more projects like the tour guide that bring augmented reality to a wide range of people. In the meantime, Barker aims to keep his creativity flowing, while the futuristic quality of augmented reality marinates in the business community. For example, Digital Frontiers Media uses Drupal, a free open source content management system, for most of its website and smartphone app projects. Drupal, says Barker, uses cutting edge technology to organize and manage content, but, like augmented reality, it’s not widely used. Overall, services at Digital Frontiers Media range from basic website development to 3D animation and graphics to photography. “We build websites that do something for people, not just business cards on the Web,” Barker says. “We want clients who want something different and bizarre. We do a lot of wild stuff.” — Mark Gordon
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Mark Wemple
Natasha Dedis and Spiro Verras both experienced frustration at the hands of Facebook. Instead of looking for a new social network, they’re starting one.
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hen Spiro Verras posted the link of a Huffington Post article on Facebook about a new social networking site he co-founded, there was a slight problem: It was taken off his Facebook page shortly after posting. “It was flagged as inappropriate,” the cofounder of the new site explains. Although Verras admits offensive content is subjective, he doesn’t think there was a valid reason for the link to be blocked — unless Facebook Big Brother was watching. “It was either the company itself or a fan of Facebook,” he says of his post being removed. Either way, it helped reinforce Verras’ motivation to create a social network to rival Facebook, which currently has 800 million active users. Verras and business partner Natasha Dedis plan to change the business model behind social networking in a way that draws users from other similar sites, effectively doing to Facebook what it did to MySpace: destroy it. Their firm? Unthink. The story behind the name is that Dedis wanted to start from scratch when designing a new social networking site, one that wouldn’t prey on volunteered demographic information from users like her son. Dedis is not new to entrepreneurship; prior to this endeavor she launched and eventually sold a European fitness firm called Dynamic Fitness. But when her son asked to sign up for Facebook, Dedis got the idea for a new entrepreneurial adventure, according to Verras. “When Natasha wants to know about something she’s the type of person that will learn absolutely everything there is to know about it,” he says. Dedis was disillusioned by the idea that her son’s information — including likes, friendships and interests — was being used to craft an advertisement package specific for the boy. The initial funds for the software design came from Dedis, Verras, who was a practicing attorney, and several Greek investors.
But Verras says he knew the company would need more funds to hire additional programmers. After shopping the idea for a new social networking around to venture capital funds, they settled on one located overseas: Douglas Bay Capital, a holding company located in the U.K. The firm invested $2.5 million into Unthink in fall 2010. This gave the firm the capital to hire 68 programmers working out of New Delhi, India, and roll out its beta test. The site is operational at unthink.com, but users need an invitation code to participate in the beta version. Verras says the test has been successful, already boasting 130,000 users. The decision to stay out of Silicon Valley was made out of concern for the secrecy of each component making up Unthink’s software. “We have created a synergistic whole,” Verras says. “Each piece is very important. Even a guy that came to install some RAM had to sign a DNA (do not disclose act).” The mystery behind Facebook’s business plan — or lack thereof — was chronicled in David Fincher’s “The Social Network.” But, Verras is quick to explain the sources of Unthink’s revenues. Unthink will include a “lifestyle” channel for each user that allows users to choose a brand to “endorse.” A business pays for the right to be included in the options of the lifestyle channel. For example, Verras says he is a member of Apple and therefore receives updates and specials from that company. “You control how often you want to get them,” he says of the promotions. Verras describes it as “virtual real estate.” He says Unthink is working with an undisclosed media conglomerate on a contract for this virtual land. Verras won’t forecast what Unthink’s revenues will be in one year, but he says the company will start out profitable, unlike other social networking sites. “It’s not just a startup,” Verras says, “its a whole philosophy.” —Alex Mahadevan
Spiro Verras, chief legal officer, Unthink: ‘It’s not just a startup. It’s a whole philosophy.’
Backyard gardeners know how hard it is to grow and successfully harvest tomatoes, so imagine doing that with 100 million seedlings every year. That’s the challenge Mark Barineau faces at Immokalee-based Lipman, Florida’s biggest tomato producer. Barineau heads the company’s research and development and seed production team at one of the company’s farms in Estero. In the farming business today, customers such as restaurants and grocery stores demand to know exactly where the produce they buy comes from. “They don’t just want to buy food, they want to know who the farmer is and how he’s growing it,” says Kent Shoemaker, the company’s CEO. “It’s not just how we’re growing, but how we’re treating the environment and how we work with our employees.” Lipman is one of the few tomato farmers in the state that controls the entire growing process, from seed to growing and packing. While it doesn’t disclose financials or other details of its operations such as acreage and volumes, it bills itself as the largest tomato grower in the state.
All from the only all-journalist public public relations agency hereabouts. We speak to editors in their own language, and know what they need, because we were editors ourselves. JournalistPR LLC, 855-388-8200. Or email mail@journalistpr.com.
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Innovation: Breeding a better tomato plant.
COO Rachael Vicari, Chief Legal Officer Spiro Verras and CEO Natasha Dedis plan to shake up the social networking sphere with their site Unthink.
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Lindell Capital Closes $1.5m Condo Loan TAMPA, Florida LINDELL CAPITAL, LLC, the newly formed lending arm of LINDELL INVESTMENTS, headed by long time business leader, Carl Lindell, has closed another $1.5 million dollar 1st mortgage loan on an area condo project formerly in foreclosure. Dennis Slater, Executive Vice President and CFO for Lindell, said that this is the second loan, in addition to a $1.8 million dollar loan to the same borrower, on a bulk condo purchase. “The borrower was introduced to us by a local business broker and we quickly became very comfortable with the acquisition price and the business model, obtaining 90% rental occupancy within the first 90 days.”
Brian Tietz
Mark Barineau is on the quest to develop the best tomato at Lipman. Barineau heads the farming company’s research and development and seed production.
Barineau, who holds a doctorate in horticulture from Texas A&M University, has been in the plant breeding business for more than 25 years. Seven years ago he joined Lipman to start its proprietary breeding business. Barineau’s goal is to develop new varieties of tomatoes that look and taste better while generating better yields in the fields, boosting their resistance to disease and requiring less water and fertilizer. “We have nine full-time people and several part-time people,” Barineau says. The facility where Barineau works includes a laboratory with analytical equipment as well as several greenhouses for testing and hybridization. A seed vault at another location contains 100 million seeds and is designed to withstand a Category 5 hurricane. Because the seeds need to remain at a constant cool temperature, the vault has its own power source. “This would be a great place to store wine,” Shoemaker chuckles. —Jean Gruss
Lindell said “the first deal went exactly according to their plan, so it made a lot of sense to partner with them on their next acquisition.” “We feel real good about the relationship.” Lindell added, “The majority of our loans have been real property and development related, but we have also advance over $2.1 million against accounts receivable and inventory for a couple of rapidly expanding local enterprises.” Slater confirmed the continued rise in the new loan package applications. “Many local business brokers are coming to us with solid acquisition and business models that most banks just won’t consider.” “We perform a business analysis and make immediate decisions. The capital is readily available and the transactions can be closed with in a short time.” Lindell added, “If the request makes good business sense, we consider the loan.”
LINDELL CAPITAL Email requests to: info@lindellcapital.com 813.286.3800
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Gulf coast Business Review NOVEMBER 18 – NOVEMBER 24, 2011
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GULF COAST BUSINESS REVIEW NOVEMBER 18 – NOVEMBER 24, 2011
www.review.net
Company: Stacy’s Gluten Free Goodies, Tampa Innovation: Using technology to turn cell phones into sales processors.
destructors VR Laboratories recently hired former Florida Lt. Gov. Jeff Kottkamp to be the company’s CEO.
Brian Tietz
Nature’s wonder drugs Robert Gow and a team of scientists have catalogued nearly a million botanical compounds over a decade. They could rock the pharmaceutical business if they can market those compounds to fight human ailments.
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or nearly a decade, Robert Gow and a team of scientists have been quietly amassing a massive library of botanical compounds. Gow, a successful real estate entrepreneur and Bonita Springs-based private-equity investor, has been trying to solve the mysteries that big pharmaceutical companies have been unable to unlock despite the fact they’ve spent billions of dollars in research. In many cultures, particularly in Asia, compounds from plants are widely used to treat a pantheon of ailments, from sprains to allergies and viruses. But scientists have been stumped by what makes those compounds so effective, how they work and how to make them consistently effective. “Everyone told me I was crazy,” says Gow, whose business ventures included a merchant bank in China. Of course, those are just the words that drive entrepreneurs like Gow to even greater lengths. So in 2002 he formed HerbalScience Group and recruited scientists to build a treasure trove of botanical compounds from common foods such as rice and broccoli. Today, Gow’s challenge to the pharmaceutical industry is proceeding with the formation of VR Laboratories, a Bonita Springsbased company that has licensed HerbalScience’s discoveries and is scheduled to start manufacturing botanical remedies next year. VR recently hired former Florida Lt. Gov. Jeff Kottkamp as its CEO and General Electric’s Senior Scientific Advisor for Biomedical Research James Rothman. VR’s chairman is Reginald Steele, senior vice president in charge of international sales for General Nutrition Corp. Gow says he expects VR’s sales to reach as much as $350 million in the third year. But success wasn’t evident in 2002. Faced with such odds, Gow had to invest his own money in the effort. He declines to say how much he has invested; HerbalScience employs nine scientists at a sophisticated laboratory in Bonita Springs and two outside scientific advisers. Gow had to invest his own money despite the fact that he’d successfully raised millions of dollars for Peak Capital, a private-equity firm he founded with other investors
after retiring to Southwest Florida in 1997. For example, the private-equity firm was one of the founding investors for Prestige Brands, with products such as Prell shampoo and Comet cleaner. It was while he was investigating the possible acquisition of Slim-Fast that Gow realized the potential for botanical medicine. Slim-Fast, the diet-products company, had a “nutraceutical” line of products, or foods marketed with health benefits. While analyzing that business, Gow says he realized how botanical compounds could compete with large pharmaceutical companies whose drug patents were gradually expiring. While Gow’s scientists could show that botanical compounds were effective, the challenge was to be able to show effectiveness consistently. “The consistency was just one problem,” Gow says. Scientists also had to figure out how these compounds alleviated or cured symptoms of diseases ranging from the flu to Alzheimer’s. “What’s in it and how does it work?” they asked. The experts Gow consulted early in the 2000s told him those secrets would take 20 to 30 years to unravel. “I did not know how long it would take,” he says. But Gow says his scientists have overcome those obstacles in the last 10 years of research, revealing some of their results in peer-reviewed medical publications. For example, their published research shows extracts from turmeric can help patients with Alzheimer’s disease and elderberry extract can alleviate flu symptoms. What’s more, because these extracts come from foods that the U.S. Food & Drug Administration already considers safe, the drug-approval process takes less than two years compared with 10 years or longer for other drugs. HerbalScience researchers been able to solve these scientific puzzles because Gow says he brought together scientists from different disciplines, from engineers to biologists, chemists and geneticists. The results are stunning: Gow says 600 extract ingredients are ready for product development with thousands more on the way. He estimates he has a five- to eight-year lead over potential competitors. “We have a time lead and cost barriers in our favor,” he says. —Jean Gruss
Robert Gow, chairman and founder, HerbalScience Group: ‘We have a time lead and cost barriers in our favor.’
With two sons suffering from food allergies, Stacy Hiles developed a unique way to make delicious — yet gluten-free — treats. And with the help of Square, a recent innovation that turns smart phones into credit card machines, she recently launched her small business, Stacy’s Gluten Free Goodies. Her sons’ dietary restrictions from gluten and corn pushed Hiles to get creative with meals and eventually desserts. “Christmas was the hardest part,” she says, Hiles had to find creative ways to make traditional Christmas treats without gluten or eggs. Hiles tested the demand for gluten-free baked goods at the Wesley Chapel farmers’ market, but she quickly discovered people didn’t carry cash. “I had to send them over the ATM and take whatever it charged,” she says. Then a friend introduced Hiles to Square, which see had seen at a trade show. The device is roughly 1-inch long and 1-inch wide, and is provided free of charge by its manufacturer. Square, which was founded by Twitter co-founder Jack Dorsey, charges a 2.75% fee on each transaction through its mobile application. Hiles has rented commercial space for her own bakery, but is still active at the market. The employee that is working the farmers’ market uses the Square, as does the employee in the bakery. Her iPhone is everything, she says. And Square turns her phone into an all-in-one business — making it a formidable tool for any burgeoning entrepreneur. Hiles’ business is just starting out, but she’s happy to say she is covering costs. “We make about $3,500 per month [in sales],” she says. “I don’t get a pay check yet, but I can pay for everything else.” — Alex Mahadevan
Company: Aqua Mizer, Sarasota Innovation: Water-saving toilet devices Potential breakthroughs created at Aqua Mizer are patently low-tech, but are nonetheless essential. The innovations revolve around one of the most used products in the world: the toilet. Aqua Mizer has developed a series of retrofitted toilet-based products it says can reduce water usage in toilet bowls without impacting performance. The retrofitted toilet tank has several patent-pending, specially engineered parts. One part is a Diverter valve, which regulates water that refills the bowl after a flush. That valve reduces water use by at least two quarts per flush, the firm says. Other components of the retrofitted tank are designed specifically to prevent and reduce leaks. Aqua Mizer executives say a key aspect of the system is its simple design and easy installation. No special tools are required, and the system fits into an existing toilet. The retrofitted toilet tank package will likely cost about $50, retail. The firm plans to sell the products through the wholesale plumbing industry, says Aqua Mizer executive Mike Sisti. It envisions clients everywhere from homeowners to condo complex property managers to office building landlords. The products should be ready for distribution by early 2012. Sarasota resident Erwin “Rocky” Rachwal, a retired engineer, invented the Aqua Mizer products. The idea came to Rachwal, now 84, a few years ago, when he was disgusted with a $295 monthly water bill. Rachwal, Sisti and Aqua Mizer President David Seaman have invested well into the six figures in startup costs to get Aqua Mizer going. Seaman and Sisti plan to meet with outside capital investors by the end of the year for more capital. — Mark Gordon
Gulf coast Business Review NOVEMBER 18 – NOVEMBER 24, 2011
www.review.net
Mark Wemple
Entrepreneur: Brad Kanter, Kanter & Associates PA, Tampa Innovation: Using the iPad to go paperless and boost efficiency.
Brad Kanter, of Tampa-based Kanter & Associates PA, is one of the many business leaders in the Tampa Bay area finding ways to transform their work with the help of the ever-expanding multitude of technical gadgets. Kanter’s go-to device: his iPad. He claims the tablet has increased his firm’s efficiency by more than 30%. “I got an iPad three to six months after they came out,” Kanter says. “The big reason I got it was to read books and journals.” But when he found a program that enables him to run his computer from a distance, it became a Kanter & Associates mainstay. “I’m able to go out to our clients without all these loose-leaf binders anymore,” Kanter says. A perk he says is key when meeting with 10 clients per day. Kanter’s location on the technological edge is a pitch he uses to snare clients, as well as make his firm run more efficiently. Kanter & Associates’ revenue is up 15% so far this year, says Kanter. And the firm has six employees servicing clients from Tampa to as far away as Hawaii. He says the device has helped his firm change the perception of an accounting firm. He wants businesses to see Kanter & Associates as a company that handles the books and consults on efficiency. “One of the operational things you need is to be more efficient,” Kanter says. “(The) iPad certainly helps that.” — Alex Mahadevan
Robert Dodd and Joseph Solano
Mark Wemple
Company: XL Technologies, Sarasota Innovation: Email tracking software. Robert Dodd and Joseph Solano, principals at Sarasota-based XL Technologies, have an ambitious goal: to put an end to the oft-heard phrase, “did you get my email?” Their method: Zendio, an add-in software program for Microsoft Outlook users the firm created. The software, says Dodd, CEO of XL Technologies, allows people to track emails and enclosed attachments with details about when and where it was read. XL Technologies, a seven-employee firm founded in 2001, began to test Zendio in the summer. It launched Zendio in September, and Dodd says more than 130,000 emails went through the system in October. One key to Zendio, says Dodd, is it doesn’t work through the firm’s internal servers. Some competitors use internal email servers to track messages, which Dodd says is less secure. Zendio, instead, allows email senders to use their own Internet service provider. Moreover, Dodd says Zendio provides a date-time stamp, which allows users to see when a recipient read an email. Zendio also tracks how many links a recipient clicked through, and the recipients’ IP-based location. Zendio is currently only available for Outlook Express, though Dodd says he hopes to eventually expand to other email platforms. XL Technologies started with Outlook because with an estimated 400 million users, it’s a large target. One early challenge, says Dodd, is to educate potential clients about the Zendio advantages. Says Dodd: “We are defining a problem that people don’t even know they have to a certain extent.” — Mark Gordon
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Lori Sax
Joe Grano, president of Sarasota-based Next-Mark
Company: Next-Mark, Sarasota Innovation: A mobile socialnetworking app that connects users. The burgeoning iPhone and smartphone application industry generates roughly 600 new offerings a day, some estimate. That’s more than 217,000 a year. The frenzied competition, though, doesn’t daunt Joe Grano and his team at Sarasota-based Next-Mark, a marketing and business strategy firm that recently entered the app market. “You have to have something that people will integrate into their daily life,” says Grano. For Grano, integration lies in Yoddle. Pronounced like “yodel,” it’s a new social networking app that uses GPSbased location mapping to create real-time scenes for users, both strangers and friends, to connect. The “scenes” could be college fraternity parties, high school football games or lunch at a busy restaurant. Once a user is on the Yoddle network, he can communicate in real-time with other users, via texts and pictures. For example, people at a concert can check in with each other on Yoddle and chat online about the music, or where they will meet up after the show. Scenes can be public or private. But Grano and Next-Mark Marketing Associate Ross McLeod insist Yoddle isn’t Foursquare, the popular app that lets users check in at their location. Foursquare, says Grano, doesn’t have the layers of communication options Yoddle has. The Yoddle app, which launched in October, is free. The business model is to eventually sell ads to businesses that want to get in the scene, say bars or nightclubs. “We’re not in a rush,” to make money, says Grano. “We have to get our users down first. This isn’t a quick buck.” — Mark Gordon
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GULF COAST BUSINESS REVIEW NOVEMBER 18 – NOVEMBER 24, 2011
www.review.net
CEO Robert Dutkowsky sits in Tech Data’s showroom, which displays its product diversity. The room contains a mock hospital room with products the firm distributes and a massive data storage unit, which kept Tech Data on the edge of the tech market.
get aggressive
Mark Wemple
Bob Dutkowsky arrived as CEO of Tech Data as it recorded losses of more than $100 million. A more aggressive business plan led the firm to three years of record profits.
By
Alex Mahadevan | Tampa Bay Editor
W
en talking to Robert Dutkowsky, examples seem to always come in threes. “Let me give you an example,” he says, crossing his legs and leaning back in a chair at a modest conference room inside Tech Data’s Clearwater headquarters. Then, with the air of a college professor more than a CEO, he launches into three clearly articulated illustrations of whatever he may be explaining — whether it be the Tampa Bay Rays or the strategies he has employed as CEO of the $24 billion firm. The fixation on threes makes sense. After all, Dutkowsky, 56, used a three-pronged approach in the turnaround effort he launched when he came to Tech Data REVIEW SUMMARY five years ago. Back then, the company was comCompany. Tech Data ing off a second quarter in Industry. Technology which it lost $130 million product distribution in operating income. Key. Using diversificaFive years and 13 acquition to grow margins sitions later, the company
is not only back in the black, but posted $333.9 million in operating income in the fiscal year ended Jan. 31, a 29% gain over the previous year. The increase is significant compared with the $4.17 million loss in operating income it had in its 2006 fiscal year. In addition, the firm has bought back roughly $800 million worth of its stock in the past five years. Tech Data’s stock, which is traded on the Nasdaq, recently was trading for roughly $50 per share. While working in Japan with Egenera Inc., Dutkowsky learned a bit of wisdom on thinking in threes, which he applied to Tech Data, as reflected in its company statements. “The Japanese believe the human mind can’t focus on more than three ideas at once,” he says. So when he arrived as CEO of Tech Data Oct. 1, 2006, he organized the firm’s strategy into three pillars: execution, innovation and diversity. The focus would prove key in getting Tech Data back on track toward profitability.
Out of the family, back in the black
The familial feel Dutkowsky experienced when he entered Tech Data was not surprising. Steve Raymund, whose father founded the firm, served as CEO previously.
Raymund admits the shift was bittersweet, and Dutkowsky was a little apprehensive about being the first person from outside the family — and the company — to tackle firm strategy. But the firm had slipped in the red, and it was time for a fresh perspective, which Dutkowsky brought with him in his move from Boston to Clearwater. For Dutkowsky, it was an opportunity to cross an item off his bucket list: being the CEO of a Fortune 100 company. The location didn’t hurt, either. “I went home and said to my wife, ‘Don’t say no, but if I said Tampa, Florida, what would you do?’” Dutkowsky recalls. “She ran to the closet and got her suitcase.” With a resume that includes 20 years at IBM and a stint as president and CEO of J.D. Edwards from 2002 to 2004, Dutkowsky knew the technology industry — he just didn’t know distribution. Tech Data hired consultants to assist Dutkowsky in improving the firm’s financials because of what he refers to as his lack of “deep domain knowledge.” He had no experience with the pick, pack and ship execution of the firm. It didn’t take long though, before Dutkowsky pinpointed the problem: the company’s lack of diversification in the products it distributed. “I saw HP and I thought it meant servers and storage and networking
Gulf coast Business Review NOVEMBER 18 – NOVEMBER 24, 2011
and software,” says Dutkowsky of the vendor that is responsible for about 27% of the company’s sales. “No, it meant HP PCs.” His surprise about the company’s narrow product offering was shared by the consultants. Although he doesn’t give them all the credit for Tech Data’s recovery, Dutkowsky notes that the consultants gave some important advice: Companies should stay within three steps of their core strengths. Tech Data’s core strength lies in its expertise in distributing products efficiently. But Dutkowsky says Tech Data was stuck in “the desktop era” of selling products that confine a person to the office. He planned to take steps away from that.
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to make the company more efficient. He says the firm does more business than eBay or Amazon over the Internet, so IT efficiency is just as important to Tech Data as it is to its customers. The third pillar in Dutkowsky’s strategy parallels the focus on efficiency targeted by innovation. Execution is arguably the most important of his manifesto of threes, says Dutkowsky: “We’re maniacally focused on execution.” It’s Tech Data’s greatest focus for good reason: the firm distributes $100 million worth of goods in one day, and netted 1.22% operating margin off those sales in its second quarter ended in July. The strategy sometimes includes turning down products that could be profitable. Tech Data refused to carry battery racks that served as energy backups for large computer systems because of their size. “They wouldn’t fit in the elevator,” Dutkowsky says. Hiring is another area that affects the firm’s execution, and Dutkowsky says he is pleased with the talent pool in the region. “(Clearwater) isn’t bad,” Dutkowsky says of area’s tech culture, “if we get somebody here they’re probably good.”
Robert Dutkowsky, CEO Tech Data: ‘We’re maniacally focused on execution.’
One step away
Tech Data serves as the conduit between technology vendors like HP on one side and smaller firms that purchase and then directly sell or apply the products. It’s a business that requires close attention to demand for technology and is characterized by low margins and high volume. “We make about one penny on the dollar,” Dutkowsky states. With such thin profit margins, the smallest mistake can cost millions, and careful cost-watching is a must. This was a change for Dutkowsky, for the company he worked for previously, Egenera Inc., made roughly 50% in profit, he says. “Our business cards were printed on gold,” he jokes. One of the first strategies he laid out for the company to increase its margins was to follow the technology community out of the desktop era. Dutkowsky says to diversify, Tech Data added some new vendors, but its customers’ needs helped it make the transition toward selling more products. For example, one of the company’s customers requested Tech Data sell monitors for digital signs, like the ones hanging in public locations with advertisements. The success of digital signage, and Tech Data’s acumen in its distribution, led Sony to submit another offer: to sell its consumer TVs. “In 2006 we sold 10,000 TVs,” Dutkowsky says. “We sold 300,000 last December.” The way Tech Data sold Sony’s TVs is another example of diversification. Dutkowsky explains that as the depth of services involved in TV distribution increases, so do profit margins. In another “step,” Tech Data offers to deliver the TV to a customer’s home and even install it in what he refers to as “white glove service.” Tech Data also expanded into consumer electronics when it positioned itself as the leading mobile phone distributor in Europe. “We saw that one more clearly,” Dutkowsky says while lifting his phone. “It was clear that this was going to replace the laptop.” The relationship Tech Data developed with Brightstar Corp., a Miami-based mobile phone distribution company, helped the latter firm expand into Europe while skyrocketing Tech Data’s presence in the mobile market. The firm will sell about $2 billion in mobile phones this year, Dutkowsky says. “Here’s what the ‘old’ Tech Data would have done: we would’ve kind of danced around each other,” Dutkowsky says of the relationship, “And what the ‘new’ Tech Data did is we started a joint venture.” The joint venture was the company’s first in its 37-year history. Mobile phones and TVs are two notable examples of the diversity ushered in Dutkowsky’s era, but the firm also began selling medical devices, components for data centers and even dishwasher components. The steps into new markets led Tech Data to experience record profits for the previous three years, and also allowed it to keep pace with competitors. Its top competitor, Santa Ana, Calif.-based Ingram Micro Inc., posted similar operating margins in 2010 to Tech Data — around 1.4% — with an operating income of $484.43 million on roughly $34.6 billion in annual revenues. There’s a lot of overlap in the products each sells, Dutkowsky says, “Exclusivity is a fleeting thing.” But he points out that each company has its strengths. He says Tech Data leads in mobility, while Ingram leads in electronic data collection, such as capturing information from grocery store UPC scanners. Tech Data leads the European market, while Ingram leads the U.S and also operates in Asia. “If you took Asia away, we’re about the same size,” he says.
Growing while shrinking
The company’s next pillar, innovation, has allowed the firm to increase its revenues but reduce its size. At least considering its corporate headquarters. Tech Data once occupied the entirety of its eponymous street in Clearwater. Now it’s corporate headquarters is located in a single building. Dutkowsky says the firm has spent millions of dollars
Challenges and opportunity in the Old Country
It doesn’t take a skilled macroeconomist to see the rippling effects of the debt crisis in Europe. And Tech Data, which ropes in roughly 57% of its revenues from the continent, is exposed to that risk. However, Dutkowsky is confident of Tech Data’s ability to weather the inclement European economy. He cites the healthy economies in Northern Europe, and fervor over the products Tech Data distributes as allies during the downturn. “It doesn’t matter about the Greek debt crisis — if you’re in Sweden when the iPad 2 comes out, you’re going to buy one,” Dutkowsky says.
13
But Raymund, who serves as chairman of the board, is more reticent about trouble in overseas markets. Says Raymund: “(The European economy) is our biggest short-term challenge.” Though the European economy may have an effect on Tech Data’s financial future, Dutkowsky is certain the firm is nimble enough to flow where the technology market takes it — despite its large size. “We’re like a duck on the surface of the water,” Dutkowsky says of the steady, yet massive revenues Tech Data records, “but underwater its feet are moving a million miles per hour.”
at a glance Company: Tech Data Corporation CEO: Robert Dutkowsky Compensation: $4,979,640 Headquarters: Clearwater Annual revenues (2010): $24.3 billion Stock symbol: TECD 52-week stock price (low/high): $38.21/$52.25 Recent stock price: $49.36 Diluted Earnings Per Share, third quarter: $1.1
giant connections Tech Data is one of the largest company in terms of revenue in Florida. But, CEO Robert Dutkowsky laments his firm’s obscurity. While attending events in the area he responds to inquiries about his firm with humility. Says Dutkowsky: “Oh, we’re this little company in Clearwater.” The $24 billion firm works with more than 400 vendors, some of which that may be more visible than Tech Data, including: • Apple • Cisco • Dell • HP
• HTC • Intel • LG Electronics
• McAfee • Samsung • Toshiba • Xerox
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Fiscal Year Ended Net sales Cost of sales Gross margin Selling, general and administrative expenses Income from operations Interest expense Other expenses, net Income before income taxes Income tax (benefit) expense Net income Basic net income per share Diluted net income per share
1/31/11 $24,375,973 $23,092,685 0.052% $949,303 $333,985 $29,926 $444 $303,615 $84,752 $218,863 $4.14 $4.63
1/31/10 $22,099,876 $20,947,522 0.052% $892,878 $259,476 $27,639 $(3,303) $235,140 $53,940 $181,200 $3.75 $3.54
% change 10.3% 10.2% –% 6.3% 28.7% 8.2% 113.4% 29.1% 57.1% 20.7% 10.4% 30.7%
Weighted average shares outstanding: Basic Diluted
$48,587 $49,085
$50,517 $50,938
(3.8)% (3.6)%
1/31/11
1/31/10
% change
$839,934 $2,896,671 $2,205,294 $6,972 $270,831 $6,123,146 $94,315 $270,831 $6,488,292
$1,165,579 $2,593,919 $1,704,658 $(2,514) $167,881 $5,571,604 $90,634 $167,881 $5,830,119
(27.9)% 11.6% 29.3% 377.3% 61.3% 9.8% 4% 61.3% 11.2%
$3,816,600 $(434,435) $4,221,035 $60,076 $6,972 4,349,865 $2,138,427 $6,488,292
$3,255,314 $(65,860) $3,321,174 $338,157 $(2,541) $3,735,586 $2,094,533 $5,830,119
17.2% 559.6% 27% (82.2)% 373.4% 16.4% 2% 11.2%
CONDENSED CONSOLIDATED BALANCE SHEET (in thousands) Fiscal Year Ended Current assets: Cash and cash equivalents Accounts receivable, net Inventories, net Deferred income taxes Other current assets Total current assets Property, plant and equipment, net Other assets, net Total assets Liabilities and shareholders’ equity Current liabilities: Accounts payable and accrued expenses Current portion of long-term debt Total current liabilities Long-term debt Deferred income taxes Total liabilities Total shareholders’ equity Total liabilities and shareholders’ equity
14
GULF COAST BUSINESS REVIEW NOVEMBER 18 – NOVEMBER 24, 2011
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commercial real estate LEE-COLLIER
by Sean Roth | Real Estate Editor
Kentucky investor buys hotels for $5 million BUYER: Charlotte Host LLC (principal: Phil
Greer), Lexington, Ky. SELLER: Hotel Enterprises of Port Charlotte PROPERTY: 24440 Sandhill Blvd., Port Charlotte PRICE: $2.5 million PREVIOUS PRICE: $370,000, April 1999 SELLER: Hotel Management of Port Charlotte PROPERTY: 24480 Sandhill Blvd., Port Charlotte PRICE: $2.5 million PREVIOUS PRICE: $413,400, June 1996 LAW FIRM ON DEED: Wellbaum & Emery PA,
An investment group led by majority shareholder Phil Greer of Lexington, Ky., purchased two adjacent Port Charlotte select services hotels for $5 million. The price equated to $35,461 per room. The acquisition included the 69-room Holiday Inn Express, which offers a meeting room and outdoor pool, and the 72-room Hampton Inn, which was built in 1997. The new ownership has hired NorthStar Hospitality LLC of Lexington, Ky., to manage the hotels. “This was a step out of the box for us,” says Bill Kirk, director of operations for NorthStar Hospitality LLC. “Our experience has really been in the northern states. We are really excited; it’s a great location. We are looking forward to becoming a part of the business community.” The new ownership plans to invest $1.5 million in the two hotels on renovations and upgrades. It plans to upgrade the Hampton Inn room bathrooms, carpeting, and air-conditioning systems. To meet the latest brand standard, the ownership will also renovate the Hampton Inn’s lobby, exterior, and pool, and add a fitness facility. The Holiday Inn Express, which was renovated two years ago, will receive a new PLANS,
DESCRIPTION:
taurants. Its restaurant brands include Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze and Seasons 52.
Darden Restaurants buys land for new town center Olive Garden BUYER: Florida SE Inc. (principals: William
White, Joseph Kern and Colleen Hunter), Orlando SELLER: Lee County Real Estate Holdings LLC PROPERTY: 10020 University Plaza Drive, Fort
Myers
BUYER: Port Partner LLC (principals: The Sasson
PRICE: $1.4 million PREVIOUS PRICE: $6.25 million, January 2009
Kassab Living Trust and Shraga Grad), Aventura
(includes 11 other parcels) LAW FIRM ON DEED: Douglas R. Krause Esq.,
Cleveland, Ohio
Two Aventura investors buy dental office building
PLANS, DESCRIPTION: Orlando-based restaurant group Darden Restaurants Inc. purchased 1.99 acres of vacant commercial land on Alico Road near Gulf Coast Town Center for $1.4 million. The price equated to $703,518 per acre. The new ownership has hired Haley Construction Inc. of Daytona and started some initial work on the site to develop a new Olive Garden restaurant. The new restaurant, known as Olive Garden #1895, is scheduled to open in late April. The restaurant group already operates four Olive Gardens, located in Estero, Cape Coral, Fort Myers and Naples. John Mounce of LandQwest Commercial represented the buyer. Darden Restaurants is the world’s largest full-service restaurant company; it owns and operates more than 1,900 res-
SELLER: US Acquisition Property V LLC PROPERTY: 19240 Quesada Ave., Port Charlotte PRICE: $1.1 million PREVIOUS PRICE: $1.27 million, June 2010 LAW FIRM ON DEED: Paul Feldman PA, Aventura PLANS, DESCRIPTION: The Sasson Kassab
Living Trust and Shraga Grad of Aventura purchased the 6,666-square-foot Panther Hollow Dental Lodge for $1.1 million. The price equated to $165 per square foot. The dental practice has nine years left on its building lease. The triple-net lease requires Panther Hollow Dental Lodge to maintain the 6-year-old building and pay all taxes and insurance costs associated with the property. The purchase price represents a capitalization (payoff) ratio of more than 10% based on income. John Mounce of LandQwest Commercial represented the seller and Land Rich Real Estate Inc. represented the buyer.
Mounce says the buyers were private investors who like to invest in medical space.
Etc…
• Medical Anesthesia and Pain Management Consultants leased a 4,454-square-foot space at 4048 Evans Ave., Fort Myers from FLT Two LLC. Gary Tasman and Michael Ciccarello of Cushman and Wakefield Commercial Property Southwest Florida LLC handled the lease. • The Restoration Church agreed to lease 6,000 square feet of space at 2320 Vanderbilt Beach Road, Naples from PF Naples LLC. Gary Tasman and Doug Olson of Cushman and Wakefield, Commercial Property Southwest Florida LLC handled the lease. • Fort Myers-based LandQwest Commercial has joined the CORE Network, a national member-owned organization of commercial real estate firms. • Three Partners LLC purchased retail space at 1585 Pine Ridge Road, unit 25, Naples from Mission Square Property LLC for $515,000. Clint Sherwood of Investment Properties Corp. represented the buyer. • TR Big’s LLC, which operates as the Paddywagon, purchased a 3,810-squarefoot space at 2681 Tamiami Trail, Port Charlotte from Creating Masterpieces LLC. Nick DeVito II with Ian Black Real Estate and Ron Struthers with CB Richard Ellis handled the transaction. • Race Trac Petroleum Inc. purchased 1.74 acres of land at the northeast corner of U.S. 41 and Edison Avenue in Fort Myers for $800,000. Tom Strauss with LandQwest Commercial represented the buyer.
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lobby and carpets, and have its interiors and bathrooms renovated. Kirk says the two hotels are already performing well. Greer-led investment groups own five other hotels in Ohio, Virginia and Kentucky. The purchase entity Charlotte Host LLC mortgaged the properties to Central Bank & Trust Co. for two loans totaling $5.2 million.
Gulf coast Business Review NOVEMBER 18 – NOVEMBER 24, 2011
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commercial real estate SARASOTA-MANATEE
Focus Hospitality Group buys DeSoto Village BUYER: Focus Bradenton LLC (FL-TX MF 1
LLC), La Jolla, Calif. SELLER: Bradenton Apartment Properties LLC PROPERTY: 3810 E. Fifth St., Bradenton PRICE: $4.65 million PREVIOUS PRICE: $5.6 million, July 2007 LAW FIRM ON DEED: Macfarlane Ferguson & McMullen, Clearwater
PLANS, DESCRIPTION: La Jolla, Calif.-based
Focus Hospitality Group purchased the 92-unit DeSoto Village Apartments for $4.65 million. The price equated to $50,501 per unit. The seller, an investment firm led by Benjamin Mallah of Largo, also sold Sterling Lakes, Cedar Trace and Ashley Oaks in Tampa, and Brandon Palisades in Brandon, to the California firm. Calls to the firm were not returned prior to publication. The 100,926-square-foot, low-rise garden apartment complex was built in 1975, according to real estate research firm the CoStar Group. It includes 84 two-bedroom, two-bathroom units and eight twobedroom, 1.5-bathroom units. Amenities include a pool, and laundry facilities. The purchase entity Focus Bradenton LLC mortgaged the property to Centerline Mortgage Capital Inc. for $3.12 million.
DRI proposed in Manatee County for Parrish Lakes mixed-use project
Bradenton farmer Claude Melli has filed a development of regional impact proposal for a large-scale development project on his 1,155-acre property in northern Manatee County. The Parrish Lakes DRI calls for a two-phase, mixed-use development on the property less than a mile east of Interstate 75 between Moccasin Wallow
Road and Erie Road. The first phase of the project will create 1,500 residential units and 250,000 square feet of retail space, scheduled to be built by no later than 2020. The second phase would add another 1,800 residential units, 150,000 square feet of retail space and 50,000 square feet of office space, and would be completed by 2030. King Engineering Associates Inc.’s Tampa office is acting as the planner and engineer for the project. If the DRI is eventually approved, however, future development will still require rezoning the property and building permit approval. The regional impact economic statement in the DRI proposal suggests the project would create 1,481 jobs at buildout, and generate $64 million in impact fees. Scott Sheridan with King Engineering hopes to have the DRI proposal in its final form before the Manatee County planning commission in the next several months.
Etc…
• Menchie’s, a frozen yogurt franchise, leased 2,875 square feet in University Walk at 2875 University Parkway, Sarasota for five years. Ashley Thornburg of Crossman & Co. handled the transaction. • Boro Building & Property Maintenance leased 2,650 square feet of office flex space at 6321 Porter Road, Sarasota in Sarasota Business Center II. Joe C. Hembree and Ken Hoskinson, Jr. of Hembree & Associates Inc. represented the tenant and Debbie Anglin and Nick DeVito II of Ian Black Real Estate represented the landlord.
15
by Sean Roth | Real Estate Editor
• Donna Simmons leased 3,352 square feet at 1700 S. Osprey Ave., Sarasota from Alena Enterprises LLC. Ian Black and Steve Horn of Ian Black Real Estate and Gail Bowden of Sperry Van Ness handled the transaction. • Fair Foods leased 2,045 square feet at 330 S. Pineapple Ave., Suite 201, Sarasota from JDM Realty. Debbie Anglin, Jag Grewal and Michele Fuller of Ian Black Real Estate handled the transaction. • Clark & Washington leased 2,750 square feet at 135 W. Central Blvd., Suite 480, Orlando from Metropolitan Life Insurance Co. Nick DeVito II of Ian Black Real Estate and Paul Reynolds of CB Richard Ellis handled the transaction. • Oyster House leased 6,296 square feet in Main Plaza at 1991 Main St., Sarasota from Paragon Management Group LLC. Steve Horn of Ian Black Real Estate handled the transaction. • Kirk Pinkerton leased 10,104 square feet in the M&I Bank Building, 240 S. Pineapple Ave., Sixth Floor, Sarasota for 95 months from 240 S. Pineapple Office-Sarasota LLC. Ian Black and Steve Horn of Ian Black Real Estate and Michael Fisher and Kim Rogers of CB Richard Ellis handled the transaction. • FitLorenzo LLC leased 7,500-squaefoot office/warehouse building at 1731 12th St. E., Palmetto from Richard Cary. Jeff Button of Richardson Kleiber Walter Kleiber Button Inc. handled the transaction. • Augustin Cruz of Bradenton purchased a 1.3-acre property containing four industrial buildings at 4907 15th St. E. in Bradenton from Regions Bank for $120,000. Michael Gallatin of Sperry Van Ness Commercial Advisory Group handled the transaction.
Arizona investment trust buys two local Popeye’s
BUYER: Store Master Funding I LLC,
Scottsdale, Ariz. SELLER: Katielle LLC PROPERTY: 3390 W. First St., Bradenton PRICE: $1.08 million PREVIOUS PRICE: $943,000, December
2008 PROPERTY: 820 N. Washington Blvd.,
Sarasota PRICE: $1.22 million PREVIOUS PRICE: $943,000, December 2008 LAW FIRM ON DEED: Kutak Rock LLP, Denver
PLANS, DESCRIPTION: Scottsdale, Ariz.-based STORE Capital purchased Popeye’s Chicken & Biscuits buildings in Sarasota and Bradenton for a total of $2.3 million. The price equated to $517 per square foot. One of the properties included in the acquisition, a 27-year-old, 2,121-square-foot drive-thru restaurant, occupies 0.62 acres of land in Bradenton. The other — a 2,326-squarefoot Sarasota restaurant — was built in 1981 and occupies a 0.54-acre site north of Eighth Street. The seller, Interfoods of America, is the largest U.S. franchisee of Popeye’s restaurants, with roughly 160 locations. It has leased back the properties from the Arizona real estate investment trust through at least 2031.
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GULF COAST BUSINESS REVIEW NOVEMBER 18 – NOVEMBER 24, 2011
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commercial real estate TAMPA BAY by Sean Roth | Real Estate Editor
National hotel joint venture buys Crowne Plaza Tampa East Etc… • Impact Properties refinances Westin Tampa Bay
BUYER: VWI-Tampa East LLC, Minneapolis SELLER: Hospitality Receiver LLC on behalf of
Columbia Properties Tampa LLC PROPERTY: 10221 E. Princess Palm Ave., Tampa PRICE: $10.15 million PREVIOUS PRICE: $15.5 million, August 2001 LAW FIRM ON DEED: Roetzel & Andress LPA, Orlando
PLANS, DESCRIPTION: A joint venture of Interstate Hotels & Resorts, Waramaug Hospitality LLC, and Värde Partners purchased the 265-room Crowne Plaza Tampa East hotel for $10.15 million. The price equated to $38,302 per room. Located at Princess Palm Avenue across the street from Sabal Business Park, the 215,000-square-foot Crowne Plaza features a restaurant, outdoor swimming pool, business center, recreation and sports court, and 30,000 square feet of meeting space. It was originally built in 1987, and renovated in 2001. Interstate Hotels & Resorts, the largest independent hospitality management company, has taken over operation of the hotel and started on an $8.5 million renovation. “The Crowne Plaza Tampa East represents a compelling investment opportunity, and we fully expect to deliver superior results,” says Jim Abrahamson, Interstate’s president and COO, in a press release. “The hotel’s location, adjacent to a thriving business park and close to a number of leisure [amenities] demand generators, greatly enhances the long-term potential of this investment.” Interstate Hotels & Resorts Inc. is a subsidiary of a 50/50 joint venture between subsidiaries of Thayer Lodging and Jin Jiang. The company and its affiliates manage and/or have ownership interests in 331 hotels with more than 60,000 rooms. Minneapolis-based Värde Partners is an investment management firm that works with foundations, endowments, pension plans, insurance companies and others.
American Realty Capital trust buys VA clinic, retail building
BUYER: ARC GSNPRFL 001 LLC (American
Realty Capital II LLC), New York City SELLER: Heidorn Development FL Inc. PROPERTY: 9912 and 9934 Little Road, New
Port Richey PRICE: $8.59 million PREVIOUS PRICE: $880,000
PLANS, DESCRIPTION: American Realty Capital Healthcare Trust Inc., an affiliated company of American Realty Capital II LLC, purchased a 38,219-squarefoot healthcare rehabilitation center and a nearby 1,545-square-foot retail building for $8.59 million. The price equated to $216 per square foot.
The larger of the two buildings is leased to the U.S. Department of Veterans Affairs and is used as an outpatient clinic of the VA. State Farm Insurance anchors the 46-year-old retail building. The two buildings occupy a total of 9.18 acres. “It was an attractive opportunity to buy a high-quality asset with a tenant on a long-term lease,” says Tony DeFazio, a spokesman for the company. “They are buying medical office facilities all over the country.” American Realty Capital Healthcare Trust is a Maryland-based public real estate investment trust that owns a portfolio of real estate properties focused around medical office buildings, hospitals, assisted living facilities and skilled nursing facilities.
Tampa-based hospitality firm Impact Properties reports it has refinanced the Westin Tampa Bay hotel with a new fiveyear $45 million loan. A syndication of banks led by Community Bank & Co. of Lakewood Ranch funded the loan. The Westin Tampa Bay is a four-diamond hotel with 255 rooms, a restaurant (Aqua Bar and Grill), and a Starbucks. It was recently named the second-best Westin hotel in the United States from across the entire Starwood Hotels system. The hotel employs 150 people. Impact Properties owns and operates a number of other hotels across the state including the Marriott Springhill Suites Tampa Brandon, Hampton Inn Bartram Park Jacksonville, and the Castillo Real on St. Augustine Beach. • Paradigm Learning leased 7,472 square feet in City Center St. Petersburg at 100 Second Ave. S., St. Petersburg. Peter Bursik of Ranier Realty represented the tenant. • Perconti Data Systems leased 2,386 square feet in City Center St. Petersburg at 100 Second Ave. S., St. Petersburg. David Culligan and Jon Slater of Studley Inc. represented the tenant. • Michael Strober with CBRE’s Debt & Equity Finance Group in Tampa arranged the acquisition financing for H&R REIT on Two Gotham Center, a 670,000-square-foot, 22-story office building in Long Island City, N.Y. The borrower received a $250 million loan with a 10-year term and a 4.25% interest rate.
Integritas Assets buys note to Palma Sur Apartments
MORTGAGE BUYER: TMF11 LLC (Integritas Assets LLC), St. Petersburg SELLER: Sovereign Bank CURRENT OWNER: Rubio Investment Properties LLC, Jupiter PROPERTY: 3729 W Tyson Ave., Tampa MORTGAGE PRICE: Unknown PREVIOUS PRICE: $2.4 million, May 2005 LAW FIRM ON ASSIGNMENT OF MORTGAGE:
Akerman Senterfitt, Miami
PLANS, DESCRIPTION: Integritas Assets LLC, the St. Petersburg-based multifamily investor, purchased the note and mortgage covering the 48-unit Palma Sur Apartments in Tampa. Terms of the mortgage note sale were not released. As of deadline, it was unknown how Integritas Assets plans to take ownership of the apartment complex. Built in 1973, Palma Sur Apartments is comprised of three two-story buildings. The 29,340-square-foot community features 36 one-bedroom, one-bathroom units with 550 square feet space each and 12 two-bedroom, one-bathroom units with 795 square feet. The development also has a pool and a laundry facility. Kevin Kelleher, Bob Goldfinger and Darron Kattan of Franklin Street handled the transaction. “We sold the note as collateral for a 48unit complex, and the sale took place while the borrower was in bankruptcy,” Kelleher says in a press release. “A note transaction is complicated in itself, but completing the transaction while the borrower is in bankruptcy can be a challenge. This property was an excellent opportunity to obtain a concrete-block asset in the highly desired sub-market of South Tampa.” A few months ago, Integritas Assets purchased the 132-unit Marbella Apartments in Tampa for $2.05 million, equal to $15,530 per unit.
Creative Contractors has completed the new Donald R. Tapia School of Business, a $12 million, 47,921-square-foot building. Lunz Prebor Fowler Architects designed the four-story project for Saint Leo University. The building is currently undergoing final reviews for a U.S. Green Building Council LEED designation. • LCM Group leased 5,000 square feet on the 21st and 22nd floors of the Wells Fargo Center at 100 S. Ashley Drive in downtown Tampa. Tampa-based Kreher Architects has been retained to upgrade the space to serve as the investment management firm’s new headquarters. Claire Calzon of Colliers International Tampa Bay represented the landlord, USAA Real Estate Co. John DeLaVergne of DeLaVergne & Co. represented the tenant. • Dynamet Inc. has broken ground on an expansion project to increase the company’s Clearwater facility by 23,000 square feet and bring 15 new jobs to the area. Dynamet, a subsidiary of parent company Carpenter, manufactures titanium products for a wide range of applications, including aerospace fasteners, artificial joints and high performance motorsports. • Barcelona Equipment purchased 3.9 acres of industrial land at 10260 U.S. 19, Pinellas Park from BB&T for $300,000. Bill Eshenbaugh and Ryan Sampson of Eshenbaugh Land Co. in Tampa handled the transaction. • Doctors Express leased 2,800 square feet in Citrus Park Shops, 6182 Gunn Highway, Tampa. Susanne Stovall with
ICORR Properties International represented the landlord and Justin Boudreau with Gulfcoast Commercial represented the tenant.
• Embassy Crossing loan extended, Trepp says
Trepp, a provider of commercial real estate finance data and analytics, reports that the $33.7 million Embassy Crossing loan was granted a two-year extension according to October remittance data. The data surrounding the extension was released almost a year after the note originally was set to mature. Embassy Crossing is a 336,000-squarefoot mall in Port Richey. Built in 1985, the mall is anchored by The Sports Authority and Bed Bath & Beyond. The loan was originally slated to pay off in November 2010. Servicer data indicates that the loan had been extended two years to November 2012. The property was appraised for $43 million in 2005 and the loan remains current.
• Bauer Foundation Corp. building dam barrier wall
Odessa-based Bauer Foundation Corp. was awarded a $106 million contract by the U.S. Army Corps of Engineers to install a barrier wall at Center Hill Dam in Cookeville, Tenn. “Bauer is excited to utilize our latest Cutter technology at Center Hill Dam,” Charles Puccini, president and CEO of Bauer, says in a press release. “Our technology will significantly improve the integrity of the dam and create a higher level of safety for the surrounding communities.” The barrier wall will extend from the top of the dam down through the earthen embankment and 120 feet into the foundation rock, forming a continuous barrier wall at least two feet thick throughout. The project is scheduled to start later this year and continue into 2014.
• Ed Morse Cadillac Tampa finishes dealership expansion
Ed Morse Cadillac Tampa has completed improvements to its nearly 20,000-square-foot dealership. Located at 101 E. Fletcher Ave., Tampa, the dealership had its showroom expanded, upgrades to the customer service waiting area and the addition of a community conference room. “Our new expansion will allow us to showcase more newer models expected to roll out in the near future and help us accommodate what we project will be a dramatic growth in sales over the next few years,” Carmine Colella, vice president/ COO of Ed Morse Automotive Group, says in a press release. “The upgrade in our waiting area amenities has been elevated to meet the needs of our clientele and our anticipated increase in service business.” • Greater Seminole Chamber of Commerce leased 2,987 square feet of office space in Seminole Mall Office Center at 7985 113th St. N., Seminole. Linda West and Elliott Ross of The Ross Realty Group Inc. represented the landlord. • Robert Cline and Bjorn Erickson purchased a 2,144-square-foot office condominium in Signature Place at 147 S. Second Ave., St. Petersburg from Gulf Atlantic Communities for $182,240. Alan Feldshue and Melanie Jackson of Colliers International Tampa Bay represented the seller. • Amerilife leased 70,706 square feet of office space in Prestige Place II at 2650 McCormick Drive, Clearwater. Alan Feldshue and Melanie Jackson of Colliers International Tampa Bay represented the tenant. • Intelimedix LLC leased 4,806 square feet of office space in Net P@rk at 5701 E. Hillsborough Ave., Tampa. Jim Stuckey of Colliers International Tampa Bay represented the tenant. • Resource Property Management leased 4,159 square feet of office space in Coastal Palms at 28100 U.S. 19 N., Clearwater. Alan Feldshue and Melanie Jackson of Colliers International Tampa Bay represented the landlord. • Pinellas Federal Credit Union leased 2,606 square feet of office space in Roosevelt Park at 15201 Roosevelt Blvd., Largo. Carol Warren of Colliers International Tampa Bay represented the tenant.
Gulf coast Business Review NOVEMBER 18 – NOVEMBER 24, 2011
CORPORATE REPORT
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by Sean Roth | Real Estate Editor
General Dynamics Ordnance awarded aircraft ammo contracts
Two subsidiaries of Daytona Beachand Tampa-based Brown & Brown Inc. have bought two firms recently. Brown & Brown of Northern California Inc. acquired the assets of the Northern California firm Sitzmann, Morris & Lavis Insurance Agency Inc. A newly created Brown & Brown subsidiary has completed the purchase of the assets of Industry Consulting Group Inc. in Dallas and Wichita Falls, Texas. Gary Sitzmann founded Sitzmann, Morris & Lavis in 1980. It provides employee benefits, life insurance, estate planning and business continuity services. With annual revenues of $18 million, the company is the largest independent insurance brokerage and consulting firm in northern California. The operation will continue to be run from its offices in Oakland, Lafayette, and Santa Rosa, Calif., and will be led by Matthew Sitzmann. Industry Consulting Group, which gen-
erated annual revenues of $7.1 million, provides property tax services. Brown & Brown’s new subsidiary will change its name and operate as Industry Consulting Group Inc.
Comprehensive Care Corp. hires ProCare Rx president
Robert Kulbick, former president of ProCare Rx Inc., has been hired as the new president of Tampa-based Comprehensive Care Corp. When he was president of ProCare Rx, Kulbick is credited with reducing drug spending 37% for employer groups and health plans through partnerships with
Thomas Fedor
the only licensed producer of the 20mm PGU family that can sell all three rounds internationally. The contract represents a growing market for our medium-caliber business.” The rounds are used in training and combat by the U.S. Air Force and Navy fixed-wing aircraft, including F-14, F-15, F-16 and F/A-18 fighters and the U.S. Marine Corps AH-1 Cobra attack helicopter.
Wal-Mart, Kmart and Target. Previously, he also served as chief marketing officer of Cypress Care Inc., where he helped to spearhead the company’s growth in revenue from $60 million to more than $250 million. He also held senior leadership positions at ACE, AIG and other national companies. “We held this position open for over a year making sure that when we selected someone it would be the right ‘someone,’” Clark Marcus, company chairman and CEO, says in a press release. “Bob Kulbick is perfect for this job. With his business acumen and robust track record of growing businesses profitably, Bob has an unparalleled reputation and industry expertise.”
TBSS International awarded pipe contract
Tampa-based TBSS International Inc. has won a $400,000 contract for trenching and installing an oil pipe. The contract is for the installation of 7,500 feet of highdensity polyethylene pipe to an oil separation unit. The work is currently scheduled for completion in mid December. TBSS International assists companies with construction issues involved in gold mining and oil drilling.
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Brown & Brown subcompanies buy firms in Texas, California
he U.S. Army Sustainment Command, Rock Island, Ill., has awarded General Dynamics Ordnance and Tactical Systems of St. Petersburg the major share of a multi-year contract to produce the three specialty ammunitions. The company has been hired to produce 20mm PGU-27A/B Training Practice, the PGU-30A/B Training Practice with Tracer and the PGU-28A/B Semi-Armor Piercing High Explosive Incendiary tactical rounds. In addition, the company was awarded a contract from an international customer for the production and delivery of 20mm PGU-28A/B combat ammunition. The combined contracts are valued at $64 million. All work will be performed at the company’s Marion, Ill., operations. “We developed all three [20mm PGU ammunition] rounds at the request of the U.S. Navy to replace the aging M50 series, and we are proud to continue to support our customers in providing this superior combat and training ammunition.” Tim McAuliffe, vice president and general manager of medium caliber ammunition programs, says in a press release. “We are
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Hann Powerboats Inc. of Sarasota, has launched its new Blue Lightning 32 Catamaran. The new catamaran has a 10-foot, 2-inch beam and is 32 feet long. It comes standard with twin Mercury Optimax 300 horsepower engines. In its initial sea trials, the boat showed a top speed of 73.3 miles per hour and burned 39 gallons per hour at its 65 mile per hour cruising speed. Hann Powerboats builds center console boats ranging in size from 18 to 50 feet.
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Hann Powerboats introduces Blue Lightning 32
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GULF COAST BUSINESS REVIEW NOVEMBER 18 – NOVEMBER 24, 2011
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BOTTOM-LINE BEHAVIOR
Why don’t we do what we know we should? What makes so many of us resistant to making changes in our behavior that we intuitively know could lead to greater success in our lives? Think about it — quitting smoking, losing weight, exercising, earning additional educational credentials, developing better relationships with our spouses, children, coworker or clients — all of these are ideal behaviors that should logically lead to greater health, success and happiness in our personal and professional lives. Yet, most of us are resistant to making the necessary changes needed to achieve these behavioral goals.
The Problem
Why is that? The fact is, doing things differently requires changing your approach, and change is hard. Furthermore, learning the skills to maintain these behavioral changes over time is even harder. It often takes getting to a breaking point to ignite the necessary desire to push us into action. Unfortunately, this reactionary approach of waiting until things are untenable to initiate a response can result in you not only feeling out of control, but it may also diminish your role as a leader in your organization. The key to empowering DENISE yourself in difficult situations FEDERER is to learn the skills needed to confidently behave proactively.
We often experience the same type of resistance when faced with making difficult decisions at work requiring us to adopt behaviors that are out of our comfort zone. For example, how many of you have ever been in a business relationship that you knew wasn’t really working and probably didn’t have a future, such as an employee not living up to your expectations or a partnership that wasn’t a good fit? You are reluctant to confront the problem for fear of an awkward or negative outcome. Just when you finally decide you have had enough and are ready to address these issues, the situation appears to resolve itself: your sales rep meets her quota, your assistant is more consistent in his attendance and your partner brings in a large new account. Everything seems improved and you begin to wonder why you were upset in the first place. So you avoid potential conflict and opt to do nothing. The situation just doesn’t seem bad enough to go through the discomfort that would result from having a difficult conversation, replacing someone on your team or dissolving a partnership. You are leery that things will continue to remain positive, but you are temporarily relieved and hopeful the situation will resolve itself.
IN THE COMMUNITY
The Solution
There are two essential steps in the process of initiating difficult behavior change: preparation and action. In the preparation phase we focus on thinking through the decision to engage in a new behavior. In the action phase we focus on learning the complex behaviors that are necessary to successfully accomplish our objective.
Preparation Phase
The goal of preparation is to anticipate and analyze the impact of our actions on ourselves and others. Asking yourself the right questions can give you insight into your own perspective and possible resistance to changing your approach. By shifting your thinking from certainty to curiosity you can cognitively prepare yourself to make the adjustments required to effectively resolve a difficult business situation. Take a moment to answer the following questions. They can serve as a guide as you assess your willingness to experience the distress that typically results from en-
gaging in behaviors that are out of your comfort zone. 1. What do I want? 2. What are my choices? 3. What assumptions am I making? 4. What am I responsible for? 5. What is the other person thinking, feeling, needing and wanting? 6. What am I missing or avoiding? 7. What is possible that I haven’t thought of before? 8. What action steps make the most sense? 9. What can I do differently and what am I willing to do differently to resolve the situation? 10. How can I turn this into a win-win situation for everyone?
Action Phase
In the action phase we focus on learning the complex behaviors that are necessary to accomplish our objective. There are three critical elements required to successfully make this type of behavioral change: desire, determination and dedication. You have to want to make the change, be willing to do the hard work involved in change, and be consistent in your changes over time. Once you have assessed your cognitive attitude, it’s time to be proactive in your interactions. A key to consider in this process is we can never directly modify another person’s behavior; however, they are forced to act differently in response to our changed behavior. For example, in a leadership role you need to be predictable, consistent and accountable in your behavior. If you always avoid conflict and never give feedback to employees, they will probably not respond to your requests — because there are no consequences for their behavior. Conversely, if you start to regularly hold people accountable and have discussions with them about their performance, they will learn to take you seriously and react accordingly. Another important concept to keep in mind is that all complex behavior is simple behavior combined. In order to embrace change you must drill down a new behavior into as many simple steps
necessary for you to feel comfortable. For example, if you want to assertively confront an employee and that is not typical behavior for you, you need to prepare for each specific step required. Such as: • Write down your concerns so that you can clearly communicate them. • Identify what your ideal outcome of the conversation would be. • Rehearse the conversation internally. • Determine the best setting to have this conversation (i.e. place, time, who should be present). Additionally, the following are some communication tools to consider when crafting a behavioral response that is uncomfortable for you to initiate. • Use “I” messages-such as “I feel concerned…when you…” Express your feelings and reactions, but don’t assume you know the other person’s feelings or motives. • Describe behavior, provide objective data, and do not attack the person. • Be prepared to listen non-defensively and hear the other person’s perspective. • Acknowledge the other person’s feelings and perspective — even if you don’t agree with it. • Avoid using global generalizations like, “you always” or “you never.” By incorporating these behavioral principles and communication tools in your action plan, it will increase the likelihood of a successful outcome. Remember, the goal is to minimize your discomfort, not eliminate it. Being uncomfortable might not be such a bad thing. As a matter of fact, experiencing discomfort is often the first step in making the changes necessary to achieve the next level of success. Denise P. Federer, Ph.D., founder and principal of Federer Performance Management Group, has 27 years of experience working with key executives, business leaders and Fortune 500 companies as a behavioral psychologist, consultant, coach and trainer. She specializes in working with professionals in the financial industry, as well as family-owned and closely held businesses. She can be reached at: dfederer@fpmg.info
| By Kat Hughes, Managing Editor
Florida Shores Bank celebrates its chief In honor of the U.S. Marine Corps.’ 236th birthday Nov. 10, employees at Florida Shores Bank in Venice celebrated with their president and CEO, Jim Kuhlman, who served in the Marine Corps. for 21 years. Bank employees did an informal march in the bank to show appreciation for Kuhlman and honor the Marine Corps. Members of the Marine Corps. Junior ROTC from Venice High School also replaced the bank’s worn American flag with a new one in a traditional colors ceremony. The march has been an annual tradition at the bank for 15 years, says Debbie Stockinger, who helped organize the “troops.”
Florida Shores Bank employees march in honor of the Marine Corps.’ birthday, and Jim Kuhlman, the Venice bank’s president and CEO.
Top: Jim Kuhlman thanks his employees: “Everything I’m proud about being a Marine I feel about you guys,” he told them. Above: Kathy Castellano, Matthew DePalma and Carol Weber, with Florida Shores Bank.
Members of the Venice High School Marine Corps. Junior ROTC raise a new flag for the bank.
Gulf coast Business Review NOVEMBER 18 – NOVEMBER 24, 2011
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COFFEE TALK
Keep it short, get something sweet
CONTINUED FROM PAGE 3
The two-day gathering, which costs $2,300 per person to attend, was scheduled for March at the Ritz-Carlton Golf Resort in Naples. This would have been the group’s third annual conference. Instead, organizers say they will use next year to reorganize the program. “We chose not to proceed with this year’s program in part because of the financial uncertainty we all are facing today,” says Tom Everist, chairman of the group, in a statement. “These new economic realities changed the assumptions we had made in March and April as we planned for the 2012 conference. To move forward may have risked our longterm financial sustainability.”
+ Investment in renovations pays off
Downtown Sarasota commercial real estate, at least for some local brokers, remains a beacon in what’s a larger morass of inactivity in the region. The downtown office space vacancy rate, 13% in the second quarter, according to local economic development data, approaches the 10% vacancy figure many brokers consider normal for any economy. And one recent downtown Sarasota success story can be traced back to a classic business maxim: Spend money
to make money. That’s what New York City-based iStar Financial did with the M&I Bank Building on Pineapple Avenue, a few blocks south of Main Street. The firm took ownership of the 128,389-squarefoot building in September 2008, after the previous owner defaulted on a $40 million loan connected to the property. (See Business Review, May 13.) iStar has since spent more than $1.4 million on a renovation project, says Kim Rogers, an associate with CBRE Group, the building’s property manager and leasing agent. The overhaul covers the interior and exterior, and ranges from new carpets to replaced elevator cabs to improved landscaping. The 11-story building “hadn’t been maintained,” Rogers tells Coffee Talk. “This was something that was necessary.” Plus, the renovations drew the interest of Kirk-Pinkerton, a law firm with more than 30 employees in downtown Sarasota, in an office on Central Avenue. Kirk-Pinkerton, which sought new space for a few months, recently signed a lease for the entire sixth floor of the M&I Bank Building, 10,104 square feet. “They are pumping a lot of money into it,” says Kirk-Pinkerton attorney Tim Shaw. “We think this move will be very good for the firm.” Kirk-Pinkerton is the first new tenant to sign a lease in the building since the initial phase of renovations was completed earlier this year. The building, adds Rogers, is now 76% occupied. “Even though we spent a lot of money on the building, we still have a great value,” says Rogers. “We think it made sense for Kirk-Pinkerton, and we think it will make sense for additional tenants.”
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Tampa area technology entrepreneur Tony Duda has an affinity for concise writing, and it recently won his firm a chance at some unexpected venture capital funding. Duda, CEO of Talent Sprocket, a Largo-based human resources firm, read a tweet Nov. 4 from Raleigh, N.C.based Southern Capital Ventures. The message: “Looking for a startup to pitch at Duke Entrepreneurship and Venture Capital Conference on Sat 11/5. Best 140 characters wins.” Duda tweeted back: “@jcaplin Talent Sprocket is a self-funded ready to rock hiring analytics tool actively spreading corporate hiring bliss. Ask our clients.” The brief tweet conversation — messages sent over Twitter are fewer than 140 characters — was a hit. Duda and his firm won the coveted spot at conference, which gives startups an opportunity to deliver elevator pitches in front an audience of 400 investors and students. Talent Sprocket is run out of the Tampa Bay Innovation Center, a business incubation outlet formerly called STAR TEC. Founded in 2009, Talent Sprocket uses a patent-pending online system to help clients create a database of the most qualified candidates for a given position.
+ Watch that bed tax
Hoteliers in Lee County are right to be concerned about how the bed tax they collect will be spent by politicians. Readers might recall the Review’s recent interview with Jim Larkin, the general manager of the Crowne Plaza hotel in Fort Myers who recently helped form the Lee County Hotel Association. Larkin says hoteliers need to be vigilant about politi-
Tony Duda earned his right to present to investors with a tweet. “We aren’t a placement firm,” says Duda, an executive recruiter for five years before he launched the firm. “We are more of a complement to firms’ existing hiring practices.” As far the last-day tweet to win the conference slot, Duda tells Coffee Talk he didn’t have high expectations. “I was amazed that they tweeted me back that afternoon,” he says. Duda had four minutes to speak before investors at the conference. He hasn’t heard from any venture capital firms yet, but he says the exposure and networking was worth the trip, and the tweet. Adds Duda: “The weirdest things can happen to you to get you traction.” cians grabbing some of that money for projects unrelated to tourism. Larkin is right. While county revenues have fallen, the bed tax has risen thanks to a boost in hotel traffic this year. The Lee County Visitor & Convention Bureau recently announced that the bed tax generated $24.2 million in the fiscal year ended in September, a record. That’s a temptation few politicians can resist.
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