TECO teeters on an unthinkable brink

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Beneath TECO Energy's stately facade in downtown Tampa, things keep getting rougher. An already struggling TECO on Thursday unveiled a quarterly financial performance so abysmal that the company's future as an independent business - and one of Tampa's last locally headquartered corporate cornerstones - must now be questioned.

If you want all the numerical details about TECO and its Tampa Electric utility, take a look at reporter Louis Hau's adjacent story. Let's just say - barring a remarkable economic recovery in the power business - TECO is getting close to making some very hard decisions.

Should TECO, including Tampa Electric, start looking for a well-heeled buyer? Should TECO sell off major portions of its remaining assets, even at bargain prices, to raise money and counter its red ink? Could TECO even reach the point of seeking bankruptcy protection?

It's no longer absurd to ask such things. Power companies with monopoly utilities, like Tampa Electric, that are guaranteed to make money are not supposed to founder. But TECO bet big - and wrong, it appears - on building giant power plants out west just as national demand evaporated for new electricity. Now TECO is doing its best imitation of the Incredible Shrinking Corporation in hopes it can survive and rebound.

Can it contract fast enough to avoid the grim bankers?

TECO recently cut 238 jobs or about 4 percent of its work force. Are more layoffs coming?

TECO Energy has been forced to sell assets, including a prime power plant in Hardee County, raising millions to help pay down short-term debt. What else can be sold?

And TECO in April said it would slash its dividend almost in half, ending a 43-year streak of consecutive dividend increases. It's tough enough when a power company must cut a dividend; utility shareholders love dividends. But was that cut deep enough?

Consider this. On Wednesday, TECO directors declared a quarterly dividend of 19 cents as casually as if they were getting their shoes shined. Then on Thursday, TECO reported vastly diminished quarterly earnings of 8 cents a share.

Paying out 19 cents per share in dividend. Earning only 8 cents per share. What's wrong with this picture?

TECO must either earn more money soon, or stop paying out such dividends.

For now, debt-heavy TECO is holding the lenders at bay. It's won a reprieve from bankers until February. Whether TECO can regain its Rock of Gibraltar reputation with the Tampa business and economic development community is another matter.

Last month, Hugh Lee "H.L." Culbreath Jr., a former CEO of Tampa Electric and TECO and a legendary name in Tampa, died at age 82. His passing reignited frustrations among longtime TECO workers and Tampa leaders that today's company is a shadow of a former Wall Street darling among power companies.

There was a time when no one believed St. Petersburg's influential Florida Progress Corp., the parent of Florida Power, would ever be sold. It was.

TECO's time may not be far off.

Don't let the serene surroundings at the Innisbrook Resort off noisy U.S. 19 in Palm Harbor fool you. Behind the guarded gate, well-tended grounds and four 18-hole golf courses is a financial crisis of the first order.

Innisbrook - one of the Tampa Bay area's snazzier golfing resorts - is drowning in debt and appears headed for possible liquidation.

It's a long, complex tale full of red ink and lawsuits. But here it is in one sentence: Unable to attract enough guests and charge prices high enough to cover expenses, Innisbrook - one of the Tampa Bay area's snazzier golfing resorts - is drowning in debt and appears headed for possible liquidation.

That's an ugly backdrop for the PGA Tour and next week's Chrysler Championship, which will be held at the Westin Innisbrook Resort.

Here are just the highlights of Innisbrook's plight. The resort is run by Westin Hotels, but it is owned by Golf Host Resorts. Golf Host borrowed $79-million from another business - Golf Trust of America - to buy Innisbrook in 1997. The Innisbrook owner defaulted on that mortgage in October 2001. The lender, Golf Trust, has been negotiating with Golf Host to repossess the property without having to initiate a foreclosure.

Ultimately, Golf Trust will sell the resort under a liquidation plan approved in May 2001. Golf Trust was once a real estate investment trust - a collection of golf courses, in effect - that fell on hard times. It is now liquidating its interests in golf courses in this country.

Talk about falling dominos. The overbuilding of golf courses in the 1990s and mismanagement have combined to make a mess that will take years to clean up. If and when Golf Trust gains control of Innisbrook, the company says it expects to hold on to the Pinellas property until 2005 to have more time fix it up and market it.

Earlier this week, Golf Trust learned that Innisbrook's financial situation is deteriorating faster than expected. It's becoming a race between declining revenue and cutting costs. No doubt, Innisbrook's plight will be high on the agenda when Golf Trust shareholders meet for their annual meeting next month in Charleston, S.C. Stay tuned.

TIMBER LAND GETS A MAKE OVER: Those thousands upon thousands of pine acres in Northwest Florida - a.k.a. the Panhandle - continue to get a marketing make over of historic proportion. Jacksonville's St. Joe Co., Florida's largest private land owner, has turned from sleepy paper company into a juggernaut of gentrified real estate development. It's selling fancy second homes in high-end communities like hotcakes along the Panhandle's white beaches. More remote land is destined for cheaper housing and even yuppie camping sites and pricey cabin properties. Earlier this week, St. Joe chief Peter Rummell unveiled another development idea: "ranches." The first of these is a 2,100-acre project in Gadsden County consisting of 17 ranches ranging from 58 to 206 acres. Sales start next year, though Rummell won't discuss prices yet. "We still have an internal argument going on" about the size of the market for North Florida "ranches." For now, Rummell says, "I will keep my powder dry."

- Robert Trigaux can be reached at trigaux@sptimes.com or 727 893-8405.

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