Is There Too Much Retail Real Estate?

Several Commissioners are eager to drastically alter both the vision plan and the town's comprehensive plan in order to save retail on Longboat Key, they say. The town attorney believes the vision plan and the comprehensive plan are virtually one in the same.

The commissioners are paying special attention to Whitney Plaza at the north end, which is now even more closed than it has been for past several years. More on WP later in the blog.

Anyone with a modicum of sense can reason that there is a causal relationship between population and the number of retail stores that exist in any locality or neighborhood.


National and regional demographics highlight the decrease in the length of time snowbirds spend in Florida and the fewer number of trips people make to neighborhood stores. The internet is an ever increasing percentage of retail sales world-wide. Both the retail shopping habits and the vacationing habits of Americans are changing.

The bottom line is that there are progressively fewer year-round residents on Longboat and the snowbirds are staying progressively fewer days.

If our community sacrifices exclusivity for tourism we will no longer attract the high-end of the residential market. Studies have shown that residents do not like to mingle with tourists.


Fulfilling the resource requirements of a growing population ultimately requires some form of land-use change--to develop the infrastructure necessary to support increasing human numbers.

Conversely fewer people require fewer retail stores and less commercially zoned land.

A resident spoke to the commission earlier this year about the over abundance of commercially zoned land on Longboat and expressed his belief that places such as Whitney Plaza would be better used for residential homes in keeping with the north end ambiance.

Perhaps the commissioners might work towards affordable family housing at Whitney Plaza for some of our employees. One year-round family of 4 is equal to 12 snowbirds in terms of purchasing power on the island.


Longboat Key was originally platted for a population of 75,000 residents, along with open space and land set aside for commercial and retail development to serve that community. At a later date the island was re-platted for a maximum population of 25,000 residents, or 1/3rd the original population.

The community planners did not adjust the land set aside for commercial use, which created a plethora of commercially zoned land, that could never be profitably utilized for retail business given the drastic population down-sizing that occurred.


Unfortunately three retail centers had already sprung up on the island and an insidious struggle ensued between the three shopping centers with, I believe, an inevitable outcome.


When there is three times more commercially zoned land than is required to adequately serve a community, two things occur - there is not enough business to support all the stores, and merchants migrate to the most profitable locations. In our case the Center Shops appears to be the winner.

Retail has virtually disappeared from Avenue of the Flowers and Whitney Plaza. Publix may build new retail space when and if they redesign their commercial real estate holdings. However, the inevitable functional ratio between population and needed retail business will remain, there will be two remaining shopping centers and a new struggle will begin.


At the end of the day only so many retail stores are required to effectively service a given number of people.

Tourism: the commissioners, who are eager to change our land use codes and comprehensive plan, assure us that greatly increased tourism is all that is needed to bring back the golden era of business on Longboat.

The truth is there was never was a golden age for retailers. I was here, and it was always a seasonal struggle. Longboat morphed into a highly desirable seasonal residential community.

Real estate prices skyrocketed along with land values and taxes. Florida has a "best use" tax system that penalizes commercial property when condominiums are worth far more. Taxes collided with declining seasonal business and many smaller tourist facilities converted into still more seasonal residences. The death spiral continues whether we like it of not.


Home owners did very well for three decades as their property values and taxes increased year after year. The activist commissioners site the post 2008 decline in real estate values as some sort of continuation of Longboat as a declining community, desperately in need of tourism. If that is the case then all of America is in need of tourism. Their arguments are ridiculous.


The types of retail stores that prosper in a tourism community are seldom the same as those that flourish in a residential community. Tourists do not need hardware stores for dry cleaners or doctors and dentists. Tourists want tee-shirt shops and jet-ski rentals.

Location, location, location: if our activist commissioners get their way we will have as many tourist facilities as it takes to make Whitney Plaza and the Center Shops and the ghost town called Avenue of the Flowers all profitable. How long will it take to build all this stuff. Who will be the first brave developers to risk money in a seasonal residential community? What will be the critical mass of tourism that will be needed to attract tourists to Longboat as opposed to Siesta Key or Boca Raton?

Finally, given the "best use" real estate tax system used in Florida, how many stories tall will a tourist facility have to be to be profitable? If our activist commissioners have their way we may need to be prepared for very tall hotels and greatly increased density at the north end.

I believe what we really need is a whole lot more community image building on a national scale and a lot fewer ill-conceived schemes to profit a few developers.

http://lbk-folk.blogspot.com/

The Fortunate Few

A lot has been written about the pending committee of experts review of the town's bureaucracy. As I wrote in a previous blog, there appear to be one or two fortunate departments and areas of our town government that are outside the per-view of the committee. As I understand it department heads participation in the process is more or less restricted to their own departments, without consideration being given to  intradepartmental operations.  My experience as a consultant taught me that no department is an island unto itself. I hope the committee members will feel empowered to explore outside Mr. Brenner's box and deeper than department managers.

The Town Manager's Office: How can there be a comprehensive evaluation of town operations while omitting the town manager and staff from the equation? The town manager is the fulcrum of all that goes on in our town bureaucracy given our town manager form of government. The town manager's office consumes over three hundred and thirty thousand dollars in salaries and benefits. This office manages all the town's expenditures, programs, contracts, hiring/firing, employee and union relations and contracted services. The town manager's office is the center of everything. How can any evaluation of operations ignore this?

The Finance Department: Here again Mr. Brenner appears to have subsumed a major aspect of our town's operations as his private sphere of concern, I am sure that Tom Kelly is breathing easier these days not having to face the gauntlet of scrutiny by strangers with extraordinary curriculum vitae.

However, I am concerned that there may be a perception of a lack of consistency attached to the final report, and possible recommendations by the committee, just because the above departments have been omitted from the study.

Why are the town manager's office and the finance department being excluded from the evaluation? Surely it is not for  lack of highly qualified volunteers, many of whom have resumes far exceeding what is required to perform a competent analysis of these departments.

Contracted Services: This is my pet peeve. I do not believe that the town always receives adequate returns for the million and a half to two and a half million dollars that the town manager spends annually on outside consultants. A few of these consultants have been retained by the town for over a decade, without having to enter into a competitive proposal process with other companies offering essentially the same services, at who knows what cost savings to the town, because the town manager never asks.

I had hoped that Mr Brenner's committee would be allowed to examine the town's process for hiring and retaining various third party companies.

I assume that the effort being asked of the volunteers is rooted in improving operations and streamlining costs.

Shouldn't we be looking at all cost centers?

Pension Plan Problems - Perhaps

The commission wants to raise taxes this year so that they can boost contributions to the town's supposedly underfunded pension plans. One supposes that our taxes will continue to be higher in coming years for the same reasonings. The commission's reasoning appears to go like this - we need to raise taxes so we will not have to dip into our overly rich reserves to pay for town operations. In turn we can take money from the same reserve fund and contribute to the pension funding mess. Do you get the logic? The only things missing are fiscal responsibility and reduced spending.

The two times I campaigned for commissioner, I railed against the town's current pension funding system; comprised of three small volunteer amateur pension plan committees along with too many over-paid lawyers, advisor's, actuaries and investment agents, who all have been spectacularly unsuccessful for the past decade.

Compare pension plan performance of our pension committees with the Florida Retirement System (FRS) and weep. We are in the bottom 10% of Florida pension plans when it comes to being underfunded.

This year FRS returns on investment have ranged between 14% and 28%. At the end of 2009 FRS was at 88% valuation, down from a 2008 valuation of 107%. Longboat's pension plan valuation has been negative since 2001.

http://www.myfrs.com/imageserver/pdf/forms/FY_2009-2010_Wrap-up_press_release.pdf

For the past five years I have contended that Longboat should be in the FRS system, rather than relying on volunteer investment committees. The argument used against FRS membership is that we cannot afford to transfer into the FRS system, just because of our underfunded situation. I counter by pointing out that the longer we wait the more underfunded we become. Do you remember the parable of Sisyphus?

Assumptions: Making assumptions is the foundation to actuarial assessments of long-term investment strategies. The set of assumptions currently in use are more than a decade old. Lots has changed and the assumptions need to be reformulated before we make even more assumptions based on dated data.

Wage and benefit projections are no longer valid. Reassessing these assumptions might have sizable impacts on future pension plan liabilities, yet we continue to operate under the old projections.

When I was on the commission I advocated a re-assessment of the assumptions that are causing so much fear amongst the commissioners. How can our community make intelligent decisions when we do not have up-to-date information?

Perhaps the time has come to cease punishing the taxpayers of Longboat for the failings of the government.

There are causes associated with our current pension fund problems.

Most recent FRS audit - http://edr.state.fl.us/conferences/actuarial/2009%20FLA%20Valuation.pdf

Longboat Needs a Great Marketing Campaign

Every Longboater should look at the lists below of the best places to live or retire in America and be mad that we are not even in the top 100, much less in the top three communities.

http://money.cnn.com/galleries/2010/real_estate/1009/gallery.best_places_retire.moneymag/index.html?hpt=C2

http://money.cnn.com/galleries/2010/real_estate/1009/gallery.Where_we_retired/

I believe that the our efforts as a community might be better spent on public relations and marketing rather than on some visioning statement crafted by five self-appointed residents who all appear to favor over-development of our community. If Longboat was in the top five of lists such as the one above, it might prove to be a far more effective means of revitalizing our community than a few people mincing words.


The original vision plan was crafted by three hundred self-appointed business people, many of whom did not live on the island, and a smattering of residents. Mr. Marlowe, the professional coordinator hired by the town, stated that the process was incomplete, just because it was created by a self-appointed group. Marlowe recommended that the process be validated by a professionally conducted statistical survey of the entire community. The funds were appropriated by the commission for the survey. Then unfortunately a four member committee was created to finalize the vision statement and arrange for the survey. Unfortunately the committee was composed of two members who were in favor of the vision plan and two members who were opposed to it. The result was a stillborn vision plan that was never presented to the residents for their approval. To say that the vision plan was validated by the referendum on rebuilding and replacing tourist units is specious at best since these two issues were not part of the vision plan; sort of like comparing apples to giraffes.


Now we have an even less representative clique of five like-minded members of the commission, planning board, PIC and the chamber crafting a transparently pro-development vision document that they intend to foist off on the community without any validation at all. To me it appears that we are headed backwards towards less inclusive, less representative government, controlled by a few that can only benefit a few by design.


Five years ago the taxpayers of this island spent $125,000.00 to fashion a vision plan that was never approved by the residents, and is now dated and economically irrelevant. What is happening now is even more irrelevant since in is unrepresentative of the residents by purposeful design.


Instead let's be great marketers like the other communities in the above list, that are receiving national praise as desirable places to live and retire. A vision plan is just a piece of paper that will be blown about by the winds of socio-economic realities. On this I agree with Al Green. I believe we need superlative marketing much more than we need well crafted documents that will most likely have little to no affect on the future of the island.


Perhaps a real vision plan effort that is representative of the entire community, not just the business people, might produce a more dynamic statement of intent that will serve the many rather than the few. It might even focus on what is working well for other communities - marketing and public relations on a national scale.

Need for Surveillance Cameras on Longboat Key

More than a year ago I introduced the idea of mounting license plate surveillance cameras at each end of the island as a means of both identifying people who commit crimes on our island and as a crime deterrent. The idea being that if criminals know they are going to be caught if they come onto Longboat, the  surveillance cameras will deter crime. Many communities already use this technology successfully.

During the past nine months there have been 6 burglaries in the village at the north end alone. Given the small population of the village this comes out to be 3 times the national average.


I introduced this concept at a commission meeting and the town accepted the responsibility of researching surveillance cameras and reporting back to the commission for possible action and funding if necessary. That was more than a year and many break-ins ago.


I spent two decades in the field of “embedded systems” and “process control and monitoring” which means roughly autonomous systems that run by themselves and perform complex tasks. My company in Nevada deployed thousands of such units in casino gaming devices.


After doing a little research, I believe it is possible to assemble from “off the shelf” equipment a surveillance system that will record license plates and other movement by pedestrians and people on bicycles, day and night, for under $1,200.00 per module. This could include cameras at the bridges as well as at each fire station where there are convenient overhead mounting possibilities.


Sub $1,200.00 systems might be affordable for numerous homeowner associations. Due to our street layouts, surveillance cameras might be installed where streets branch off of GM, protecting an entire subdivision with a single camera unit.


The surveillance equipment uses little power and would employ a small solar panel and backup battery as a means of free-standing operation and ease of deployment.


The systems I have in mind would record a running two month window of activity and require no connection to a central processing center. Using an embedded wifi capability, a periodic health check could easily be carried out by our police from inside their vehicles.


When a crime has been committed the surveillance modules can be accessed via wifi enabled notebook computers in a police or other city vehicle for processing.


If no crimes have occurred there is no need for data collection in “real-time”. It is only when an event has taken place that data retrieval needs to occur.


Low cost embedded surveillance modules may be a cost effective means of deploying perhaps ten to twenty monitoring points on the island to assist law enforcement, which cannot be everywhere at once.


I believe a network of surveillance cameras might deter crime and enhance our community image as one of the safest municipalities in the world. The City of Sarasota is deploying dozens of these cameras throughout the city. We need to take care of our own and as rapidly and as inexpensively as possible.


Use the pause button on the video below to see how well these inexpensive surveillance cameras read license plates even in the rain at night.

The Need for a Community Fiber Network

If you are not already aware of my efforts to have the community of Longboat Key get on the Community Communications Network, you should be. A CCN (Community Communications Network) could save you lots of money and increase revenues to the town's general fund, as well as present an attractive element of community living on Longboat to visitors and perspective home buyers. These are good things.

We spent one million dollars on a tennis center building that does augment the community to some degree. However, the tennis center building has little direct benefit to the majority of taxpayers on the island. I supported the tennis building and voted for it as a commissioner.

Currently a typical Longboat resident pays Comcast/Verizon about $100 a month for internet and phone services.

A Community Communications Network (CCN) can deliver these same services for half the cost and at the same time be a revenue source for the town, and light up the island with everywhere WiFi.

There are approximately nine thousand residences on our island. If each of these residences is paying $100 a month for internet/phone that comes out to be $900,000.00 a month or $10,800,000.00 a year.

The estimated cost of installing a Community Communications Network on Longboat is around half a million dollars, or half the cost of the tennis center building.

A CCN can deliver internet/phone for half the cost currently paid by the community as a whole, which translates into a possible five million dollar yearly savings to the community as a whole.

A CCN could be built using Sarasota County Infrastructure Tax funds. This is the same funding source used to construct the tennis building.

Do you see why I am so keen on a CCN?

Go to www.lbkalive.com for more information. It's your money.

Evaluating the Evaluators

Long ago those people involved in the science of psychometrics - concerned with psychological measurements - found that "interviews" lacked any real validity when it comes to evaluating personnel performance. Usually the person being interviewed puts his/her best foot forward so to speak.

The commission's current effort to arrive at a realistic evaluation of the efficiency of the town government is starting one tier down from the town manager. How can that yield a comprehensive overview of the organization?

I believe it will take a lot more than an interview or two with department heads, who want to keep their heads, to arrive at any effective plan to improve the town's operations.

It is all too clear that the town is woefully behind the technology curve.

I do not believe less than an expert consulting company will be able to effectively evaluate the town government as a whole.

One danger I see is that we use a citizen's "expert" committee to "sort of" evaluate the workings of our bureaucracy, do little in the way of much needed changes, deem the job complete and once again return to being asleep at the wheel.

Waiting for Godot and the Courts

At the recent DCA hearing the town's attorney spent all of fifteen minutes summarizing the town's legal defense of the commission's stampede to give the Loeb group anything they wanted for the Key Club expansion. That is about as long as the commission spent looking at what they were doing to the town's comprehensive plan and land use codes.

Now we wait for the various courts to decide if haste makes waste.