Retailers Keep Coming

SPRING HILL - The rising number of foreclosures says one thing.
Retail industry forecasts say something else.
In some respects, it seems Hernando County's commercial sector has ignored all of those gloomy signals coming from the housing market.
While expectations are not sky high, no one is bracing for disaster. Then again, predicting trends in the retail or grocery market can be tricky. Corporations are cautious about it.
"We're going into 2008 conservatively," admitted Lena Michaud, a Target spokeswoman. "We're conserving inventories and making plans that are consistent with that outlook."
Those retailers that sell durable items, particularly those related to home furnishings, are the ones being affected the most. It is tough times for all furniture and home appliance stores, for instance.
Nondurable items such as clothing, sporting gear and other department store inventories are another matter, said Dr. Michael Loewy, an economics professor at the University of South Florida.
"The purchases of nondurable products don't change a lot," he said. "They are less affected by general economic fluctuations."
The current trends in the local retail market prove his point.
Kohl's, Target and Books-A-Million are expected to move to Spring Hill. A JCPenney store has been built along U.S. 19 and there is speculation a Sports Authority may move next door. Perhaps another bookstore chain will pop up along Spring Hill Drive off the Suncoast Parkway.
As of December 2007, the unemployment rate in Hernando County was second worst in the state at 6.6 percent. There were nearly 2,000 foreclosures in the county alone in 2007.
This year may be worse. Last month, there were 256 foreclosures.
Even still, there are four locations throughout West Hernando that are expected to become major retail centers during the next 18 months - U.S. 19 and Spring Hill Drive, Spring Hill Drive near the Suncoast Parkway, State Road 50 west of Mariner Boulevard and County Line Road near Anderson Snow Road.
Developers are building about 1.5 million square feet of new commercial property throughout Hernando County.
In 2006, the county development department handed out 103 permits for new commercial construction. Last year, that dropped only slightly, to 102.
"You're still going to see considerable development and planning," said Office of Business Development Director Mike McHugh.
He thinks the slumping housing market and the retail industry are "not directly conjoined." If there is any connection, the current commercial trends are still reflective of the housing boom from two years ago.
"This is more of a reaction to the growth we've already experienced," McHugh said. "There has been a lag there. I think that's what we're experiencing ... It really hasn't been that long since we had very robust growth numbers."
Furthermore, the occupancy rate for shopping centers in Hernando County was at 93.3 percent in 2007, the highest it had been so far this decade, according to the property appraiser's office.
Other statistics suggest a slowing economy, but nothing too alarming. Local trade organizations have not suffered much. Strangely, the Hernando Builders Association has seen some growth in the past year.
Membership with the Greater Hernando County Chamber of Commerce has taken a dip, but nothing significant. Only 26 members decided not to renew last year, said Chamber President Patricia Crowley.
About 10 percent of those who did not renew were in the real estate business.
Sales tax revenue for Hernando County steadily increased from the 2003 fiscal year. The only time it dropped was from 2006 to 2007, when it went down from nearly $8.6 million to $8.2 million.
Budget Director George Zoettlein said $8.4 million has been budgeted for the 2008 fiscal year.
McHugh knows the construction of new commercial developments is desperately needed for an area hit hard by the sagging housing market. It may not be enough, but the upcoming retail locations will at least keep some builders active.
"It really should keep those in the construction trade busy," he said. "That'll be a good thing."

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80 Percent Of Her Income Gone

By TONY HOLT
Hernando Today

BROOKSVILLE She could not afford to "feed the beast" any longer.
Beth Garman was a real estate broker who once had a staff of 18 agents.
During the next 18 months, when it appeared the market was on the decline, all but four left the state or the industry altogether.
Garman, 48, had just endured surgery and chemotherapy for breast cancer. Now she had to face the unenviable task of firing those four employees who stuck with her.
"They all understood," she said. The four agents later went into business under the same roof again.
"It was important for my agents to stick together," Garman said. "We were a family."
The former RE/MAX broker is now an "independent player." She has lived in Brooksville since 1985. She has an 8-year-old daughter and a husband who owns a civil engineering consulting firm located downtown.
Even though she does commercial real estate as well as residential, she has been hit with an 80-percent loss of income in the last year.
She is not alone.
"It's an expensive way to make a living if you're not making money," said EXIT Success Realtor Alan Boland. "Everything comes out of your pocket."
Coincidentally, he made those comments the same day the annual dues for the Hernando County Board of Realtors had to be paid. All the member fees added up to nearly $500.
"There are some real estate veterans here who've done it for 10 or more years and they say it's the worst they've ever seen," Boland said. "That's disheartening."
EXIT Realtor Ruth Hersh, of Spring Hill, recently won a Bronze Award from her company for her sales success.
She downplayed the recognition, perhaps because she and her colleagues are under so much duress. She mentioned two former associates who bowed out of the industry altogether and now work in retail.
Hersh thinks too many people jumped in the business while sales were booming and were not expecting the imminent swoon.
"A lot of those agents thought those great times would never end," she said.
Hersh knew better. The fourth-generation Realtor recalled a sobering image from her youth. She walked in on her mother, a former Century 21 broker, while she was sobbing and sorting through her jewelry. She needed to hock some of her gold and silver to keep a roof over her and her family.
"For someone who has never been through this before, I feel for them," said Garman.
She was seated at the table of Brooksville Blue Print, a small local business she co-owns with her husband. It never makes much of a profit. Garman's stepdaughter manages it and successfully keeps it from going in the red.
Since business has slowed, Garman has spent more time at home with her daughter and step-grandchildren. She cooks, paints the house and runs errands.
She knows she is lucky to be married to a successful businessman. Nonetheless, she keeps track of every penny she owns.
What little residential business she can find usually comes her way because of reputation. She has been working in Brooksville for a long time.
"The housing side is strictly word of mouth," Garman said. "I've been really blessed there."
The guilt from having to lay off her four employees last fall still bothers her. She also struggles with the realization she is not raking in business the way she used to. When she decided it was time for her to leave RE/MAX and go on her own, she gave her agents three days notice. She looked uncomfortable admitting that.
"I had a lot of monthly outflow," she said, recalling her expenses. She often had to dip far into her own assets to make her payments.
"I couldn't keep feeding the beast," Garman admitted.
While she still struggles from guilt, she also finds room in her heart to blame county commissioners for instituting a plethora of fees, which make it difficult for her commercial business.
"The fees are just astronomical," she said. "It's hard enough to bring businesses here. When we push fees on them, we end up pushing them away."
She also puts some of the blame on the industry itself. She knows the ebb after the flow is tough to handle. Garman has seen it before, but this time seems different.
"I didn't fail at real estate," she said. "Real estate itself is failing."

Beth Garman, a former RE/MAX broker with a staff of 18 agents, had to close her business, lay off her employees and go solo. She has lost most of her cash flow and has more free time on her hands now that the real estate market is in such a slump. She occasionally spends time at Brooksville Blue Print, a blueprint copy business she co-owns on the side with her husband.