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Former tech star settles into more modest digs

Nasdaq once raved about Digital Lightwave, whose stock hit $150. Its shares now sell for about 25 cents.

By KRIS HUNDLEY
Published August 4, 2006

	[Times photos, 2002: Scott Keeler]
	A jazzy logo once adorned Digital Lightwave's signature building just south of Clearwater's Bayside Bridge. Now facing harder times, the company has found office space about one-fifth of the size in the nearby Bay Vista office park.
	Dr. Bryan Zwan, chairman of Digital Lightwave and the company's largest shareholder, had loaned it millions of dollars through an entity he controls, Optel Capital LLC. When Digital Lightwave signed a five-year lease for its current space, Zwan's Optel provided a letter of credit for nearly $300,000 to seal the deal.

For lease: 92,000 square feet of Class A office space in a three-story building. Atrium. Marble floors. And terrific exposure just south of Clearwater's Bayside Bridge.

Former tenant: a once-high-flying tech star now in more modest digs in a nearby office park.

Digital Lightwave Inc., one of Nasdaq's most sizzling stocks in 1999, has left the building that epitomized its promise when it took occupancy in late 1998.

The company then had nearly 200 employees, a promise of profits and a new chief executive who was distancing the business from its Scientology roots.

By early 2000, Digital, which makes devices that troubleshoot communications networks, had been profiled on the front page of the Wall Street Journal, its sales were rocketing and its stock reached an all-time high of $150 a share.

Now the jazzy, multicolored Digital Lightwave logo is gone from what was its signature building. A "For Lease" banner is up. Earlier this summer, the 40 or so remaining Digital employees migrated to more pedestrian office space in the nearby Bay Vista office park. The company did not respond to requests for comment on the move.

For Alan Feldshue, the Colliers Arnold leasing agent who manages the former Digital property, the tech company's fall is just Darwin at work. It means opportunities for other companies to move up. Feldshue said the 8-year-old building has been renamed Bayview Pavilion, though its address is still Lightwave Drive. The interior is being upgraded with more marble, new carpet and fresh paint. Another bonus: an attached, two-story parking garage.

At a lease rate of $21 per square foot, including utilities and maintenance, the building is attracting lots of interest, he said.

"We're under negotiations with probably a half-dozen prospects, though we're also talking to a couple of full-building occupants," Feldshue said. "The vacancy rate for Class A space in that sub-market is only 5 percent. And big blocks of space are scarce."

And Digital? It has not reported a profit since 2001. Its shares now trade on the Over-The-Counter OTC bulletin board for about 25 cents. In a financial filing in late July, Digital reported yet another loan from its chairman and largest shareholder, Bryan J. Zwan. Total amount owed to Optel Capital LLC, an entity controlled by Zwan: $62.8-million in interest and principal.

But Zwan apparently has faith in a comeback. When Digital agreed in May to pay a $2.1-million fee to terminate the lease on its high-profile headquarters two years early, Zwan, through Optel, came up with the dough. And when the company then signed a five-year lease for its current space - less than one-fifth the size of its previous building - Zwan's Optel provided a letter of credit for nearly $300,000 to seal the deal.

Yet another sign of a pulse at Digital: In late June, the company touted the development of something new: equipment "with Jitter and Wander test capability."

As Jeff Adams, Digital's senior sales support engineer, said in a press release: "Our new capabilities are exactly what the customer is looking for."

Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.

[Last modified August 4, 2006, 00:55:55]