Monday's Daily Pulse

Will Short Gorham | 5/23/2011

BankAtlantic banking on a recovery

It's been a rough few years for BankAtlantic. As the economic downturn dealt a brutal blow to the Florida banking industry, the Fort Lauderdale-based bank took hit after hit: problem loans, devalued real estate collateral, financial losses, regulatory pressure to boost capital, shareholder class-action lawsuits, a falling stock price and potential delisting. Now, after four years of fighting, a smaller, leaner BankAtlantic — with a little more than a third of its former staff — is emerging from the recession. When the bank sells its Tampa operations next week, it expects to generate a $39 million gain, which would lead to a profitable quarter — its first since the second quarter of 2007. That, and a $30 million stock offering to existing shareholders, to be completed by late June, is expected to put its capital ratios in line with regulatory requirements. And last month, one class-action lawsuit was won, and another settled. It appears that BankAtlantic is beginning to turn the corner. Alan B. Levan, chairman and chief executive of the bank's parent, publicly traded BankAtlantic Bancorp, said he never doubted the bank would make it, despite many who questioned its survival. "Our philosophy then and now was very simple: That each time you get knocked down, if you stand tall, after a while you're the only one standing,'' Levan said. "And if you look at all the criticism, it's hard to imagine how wrong so many could have been — because as we come out of this, we have strong capital, strong core earnings and credit which is improving as the Florida economy improves. And victory is very sweet.'' [Source: Miami Herald]

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Florida Trend Exclusive
Company Profile: Bijoux Terner

In the 1960s, Cuban refugee Salomon Terner and his family founded a handbag factory in Miami. Later, they added costume jewelry to their product line. In 1974, they separated the two businesses, with Terner running the jewelry company, which he named Bijoux Terner. For decades, Bijoux Terner sold mostly to small retailers through merchandise marts, operating only a few retail locations, including a small kiosk in Miami International Airport. In 1997, serendipity created a new business plan. With sales lagging at the kiosk, company lore has it that Rosa Terner, Salomon's daughter, priced all its merchandise at $10 in a last-ditch effort to clear inventory. Everything sold within a matter of hours — and the company realized that the single price point was perfect for travelers in a hurry. Bijoux Terner began focusing on the travel retail industry, opening stores in airports, cruise ships, resorts and casinos. Today, there are more than 650 locations in 60 countries — most owned by licensees or franchisees. The stores carry trendy accessories, jewelry and travel goods. At any given time, Bijoux Terner offers its operators around 30,000 items. Everything is priced at $10. Continue reading Fashion Fast: Bijoux Terner.

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Powerful interests checkmated growth management agency

In its 35 years, the state Department of Community Affairs has irritated some of Florida's most powerful people, including developers, lawyers, the Florida Chamber of Commerce, the Florida Farm Bureau and a coalition of the state's biggest landowners.

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Yet since its inception in 1986, state officials have mostly regarded the DCA as an essential safeguard against the runaway growth that damaged the state in the 1960s and '70s — the traffic cop pulling over reckless drivers on the highway to Florida's future. Not anymore, though. Unless Gov. Rick Scott intervenes — which seems unlikely — the budget that the Legislature approved this month abolishes the DCA. No more would it oversee and sometimes intervene in the efforts of Florida's 67 counties and 410 municipalities to prepare plans for development. Instead, its remnants would be swallowed up by a new agency that promotes growth, the Department of Economic Opportunity. What's left of the DCA would exist as the Division of Community Development, where its duties would mostly be limited to "local government planning assistance." In other words, no more traffic cop. Instead, the division would be more like the people who hand out maps to travelers. [Source: St. Petersburg Times]

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Creating a plastic alternative

The winner of the 2011 Cade Prize for Innovation hopes to replace plastic grocery bags, cups, milk jugs and other plastics with their degradable plastics and has had talks with major companies such as Wal-Mart, PepsiCo and Procter & Gamble. Florida Sustainables has licensed a polymer invented by University of Florida graduate student Ryan Martin and associate chemistry professor Stephen Miller, the company's technical team who accepted the award May 12. They have devised a way to synthesize polymers called polyesteracetals, providing the strength of petroleum-based plastics lacking in other "green" plastics made from PLAs — or polylactic acid, according to Martin. The research was funded as part of a $383,000 grant from the National Science Foundation. Martin said their plastics stand up to heat better than current "green" plastics. They are not brittle and noisy such as the bag SunChips abandoned due to consumer complaints. They also degrade within five to 10 years of their usable life compared to 1,000 years for petroleum plastics, and they do not require the composting conditions of PLAs to break down. "It would be a breakthrough, game-changing technology," said Steve Sesnick Jr., who is part of Florida Sustainables' business team. [Source: Gainesville Sun]

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Charter school movement exploding in Florida

Mornings at the Charter School of Excellence are an all-out attack on reading. At 9 a.m. sharp, the children divide into small groups, spread out across the Fort Lauderdale campus and spend 90 minutes studying phonics, vocabulary and reading comprehension.

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To keep the student-to teacher ratio low, every instructor in the building — the P.E. coach, fine arts teacher and teachers-in-training included — is assigned to a group. The strategy is working. Despite a 71 percent poverty rate among students, the school has received eight consecutive A grades from the state. This is exactly what Florida's charter school pioneers envisioned when they launched the movement in the early 1990s. They argued that public schools set free from school board politics and big district bureaucracies could tailor their programs to pupils' needs, helping students to achieve. Since then, the movement has exploded. More than 58,000 children now attend charter schools in Miami-Dade and Broward — nearly a tenth of all public school students in South Florida. That number is almost certain to balloon. State legislation passed last week will make it easier for new charter schools to open and existing ones to expand. Another new law will allow for the creation of virtual charter schools, which will enable students and teachers to connect over the Internet without brick-and-mortar buildings. [Source: Miami Herald]

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ALSO AROUND FLORIDA:

› Gerdau's Tampa chief sees opportunity in an evolving steel market [St. Petersburg Times]
As head of North America operations for Brazilian steelmaker Gerdau, Mario Longhi is often on the road, spending fewer than 10 days a month at the company's Tampa headquarters. But he made sure to be in town this past week as Gerdau marked its 110th anniversary by unifying its units around the world under the Gerdau brand name. For the Tampa operation, Gerdau Ameristeel, that meant dropping "Ameristeel" from its name. The switch plays up Gerdau's Brazilian heritage and emphasizes that it's a single, global company supplying structural steel products to customers in 14 countries. Some countries stand out. Gerdau counts on North America for about half its revenue, and how well it does here is key to the company's future, Longhi said. After some anniversary festivities, Longhi talked with the St. Petersburg Times about why the name change was made, how Gerdau shifted focus after the meltdown in commercial real estate, and why he thinks the federal stimulus didn't work.

› Would Jackson Lab spawn other job-creators? [Sarasota Herald-Tribune]
In theory, the real payoff for Southwest Florida's economy from Jackson Laboratory's proposed biomedical village would be the jobs sprouting from and around the project's spinoffs. For the lab's proponents and other biomedical experts, there is no real question of whether there will be both direct and indirect companies grown from Jackson's genetics work in Sarasota County. But a big question for government leaders is whether the life sciences cluster that could follow Jackson is worth the $200 million public investment that the Maine-based nonprofit seeks. In its business plan, Jackson projects seven successful spinoff businesses, another five still in the research phase and four that fail during its first 20 years. Supporters say there already is strong evidence that companies will come to partake of the lab's work, bringing new, high-paying jobs with them.

› Florida's budget cuts stir job fears [Palm Beach Post]
The $69.7 billion state budget now before Gov. Rick Scott will send tremors through Florida's struggling economy, with school districts, hospitals and other big employers soon cutting jobs and programs because of a sharp drop in taxpayer dollars, economists say. Scott has generally praised the spending plan for shrinking government, cutting regulations and reducing taxes. He says it will spur private business expansion and fulfill his campaign pledge to create 700,000 jobs over seven years. Many analysts aren't so sure. More certain, they say, is that state government's pullback will lead to at least a short-term reduction in dollars coursing through Florida. It could add to the state's 10.8 percent unemployment rate, they warn. "A reduction in state spending? Well, first, that's just going to reduce jobs," said David Denslow, head of the University of Florida's Bureau of Economic and Demographic Research.

› Don't get burned by solar energy pitches [St. Petersburg Times]
Joseph McCullough runs All Solar Power Services Inc. He is not licensed to do solar work. David Beers runs Guardian Solar & Energy LLC, yet says: "I don't sell any solar at all. I want nothing to do with it." That's good, because he too lacks a solar contractor's license. In fact, neither Beers nor McCullough is licensed to do any kind of work in Florida. Charles Waterhouse of Plant City knows neither man. But he does have some new solar exhaust fans. He got them after a pitchman claiming to work for "Guardian Solar" sold him equipment from "All Solar Power Inc." Waterhouse says the workmanship was shoddy. He complained, leading to a consumer investigation with McCullough at its center. Along the way, a licensed businessman was surprised to find his company's name caught up in the dispute. McCullough, based in Hillsborough County, and Beers, based in Pinellas, are two of a growing list of businesspeople scrutinized by local and state authorities.

› State now checking if jobless are looking for work [Orlando Sentinel]
When out-of-work Floridians apply for unemployment, they are required by law to look for a job to maintain their eligibility. If they stop looking for work, they risk having their jobless benefits of up to $275 a week cut off. But until recently state officials had been so swamped processing claims and making payments, no one had been checking to ensure that unemployment recipients really were looking for work Claimants were instructed to record their job-hunt activity, but, generally, no one from the state ever asked to see that information. And when they did, representatives never tried to verify it independently. That changed in March when the Agency Workforce for Innovation — the department that administers unemployment — announced it would begin randomly checking on claimants, asking them to submit material about their job search. Armed with that information, the agency is trying to contact employers to verify people are looking as hard as they say they are.

› Revitalizing Coleman Park: Where are the buyers? [Palm Beach Post]
Ebonye Huggins was just what the city was looking for when it started a program to lure upwardly mobile West Palm residents back to the downtrodden Coleman Park neighborhood with the promise of new half-price homes. Huggins, a recent graduate of Palm Beach Atlantic University, set her sights on a house on 22nd Street that cost the city $153,517. Under the program, the city would sell it to her for roughly half that amount. But when the bank said the house was worth only $52,000 - and would lend her only two-thirds of that - the deal died. A year and a half after the city announced with great fanfare that it would build and rehab 60 homes in Coleman Park, only three sales have closed. Nine more homes are under contract but don't appraise out. The city has spent more than $3 million in federal stimulus money to buy five dozen lots and 19 new manufactured houses, most of which remain empty.

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