Forbes Publisher Rich Karlgaard recently reminded his readers of Wriston’s Law of capital. Wriston is the former chairman and chief executive officer of Citicorp, back when it was a decently run bank.
Wriston’s Law: Capital (money and ideas) “will go where it is wanted and stay where it is well treated.”
This immutable law is a cogent reminder for us as the days of reckoning approach for many important Longboat Key properties — the Longboat Key Club and Resort, the Colony Beach & Tennis Resort, Whitney Beach Plaza, Publix’s Avenue of the Flowers, to name a few of the many aging commercial properties on Longboat Key.
The owners of the Longboat Key Club have spent more than $1 million on three plans to renovate and expand their resort over the past five years. Add to that the $13 million invested in renovations including the resort, spa, Harbourside courses, the Tennis Gardens and Portofino.
You could say these are indicators Longboat Key is friendly to capital. But here are other yardsticks: In fiscal 2005-2006, the height of the Federal Reserve/Barney Frank boom, building permits generated $1.36 million for the town. Two years later, as the recession took hold, the town’s building-permit fees dropped to $660,524. When the new fiscal year begins Oct. 1, the town is forecasting permit revenues to climb back to $750,000, a little more than half of what they were in 2005.
To be sure, the recession affected investment everywhere. Moreover, you could say attracting less capital to Longboat Key would be expected in proportion to the island’s buildout. Yet anecdotally, think about the largest commercial capital investments made recently on Longboat Key, other than those at the Key Club.
Not a long list — the Positano, La Firenza, the new deck cover at MarVista Pub and Dockside Restaurant and the Gulf-front Benedict property, which sold for $18 million in 2006 (again, at the height of the easy money).
Worth noting has been the lack of capital flowing toward the 250 tourism units that Longboat voters approved in early 2008. That is, until the owners of the Longboat Key Hilton Beachfront Resort applied this week to build 85 more units.
So now there are two enterprising groups — possibly three if you count Publix — that want to risk and invest substantial sums of their capital on the Key. The Big Question is whether Longboat Key will extend to them a warm reception. So far it has not.
But we should keep in mind: As the recession recedes and investors look for places to increase the value of their capital, they’ll do as they always do — go where they are welcome. We also know: Those places that attract capital win, those that chase it away lose.
+ The Feckless Foursome
Talk about being unfriendly to capital. Or, for that matter, talk about being unfriendly to everyone — business owners, taxpayers, tourists, downtown and the Sarasota economy.
Four of Sarasota’s city commissioners proved once again their incompetence, lack of business sense and lack of common sense Monday when they voted to install parking meters in downtown Sarasota.
Voting in favor of this shopper’s tax in the midst of a devastating recession for businesses and taxpayers were the Feckless Foursome of Mayor Dick Clapp, Kelly Kirschner, Fredd Atkins and Suzanne Atwell. The only commissioner with any economic and business sense is Terry Turner, the Ph.D. in economics, who voted not to install meters at this time.
Atkins’ vote comes as no surprise. He has a one-track mind. If the issue provides free money to Newtown, he votes favorably. If the issue punishes the city’s white residents (ignoring the fact the same issues will also punish black residents), he votes to punish. Atkins increasingly proves to be an embarrassment for the position and a disservice to the Sarasota taxpayers.
The other “A” on the commission, Atwell, one of the new commissioners, so far has shown that being an analyzer of minds (she’s a psychologist) doesn’t mean she’s an astute analyzer of public policy, human action or the economy. Explaining her vote in favor of meters, the Bird Key resident said: “I’m not prepared to face the cost of doing nothing. We need to get the infrastructure in. We can tweak it.” Huh? And what about the cost of doing something? Presumably, she is prepared to face the cost of an increasingly vacant Main Street. But apparently that doesn’t matter.
As for the other two in the foursome — Kirschner and Clapp —evident since the day their anti-growth constituents elected them, they have not a clue of the value of a vibrant economy, of population growth or of a friendly business climate. Clueless.
When the issue of parking meters came up Monday at the City Commission meeting, downtown business people and merchants marched before the commissioners in unison to urge them: “Not now.” Indeed, it goes beyond comprehension why the Feckless Foursome did not heed the message of Larry Fineberg, chairman of the Downtown Improvement District, which represents the very taxpayers who pay the downtown property taxes and generate the sales taxes that city commissioners are determined to squelch and drive away. Said Fineberg: “You’ve got a lot of business hanging by a thread. We don’t see any reasonable way that it doesn’t hurt businesses.”
Indeed, who will this new tax benefit? The only thing that comes to mind is one of Kirschner’s more remarkable comments — that the city needs to figure out how to make its parking department profitable.
John Simon, chief executive of the Pineapple Square development, has it right. As do the members of the Downtown Improvement District. Now is not the time to install parking meters — not when a shopping district is struggling to attract patrons. The time for meters is when there is a high demand for parking spaces — when the value of close-by parking rises. And this can only occur after Main Street is teeming with shoppers and diners.
Unfortunately for Sarasotans, the Feckless Foursome can’t quite grasp that common sense.
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