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By Times Staff
Published October 21, 2007

Progress CEO remembered Oct. 17

McGehee a man of inspiration

By many industry measures, Progress Energy is a large company. But in some regards, the tragic events of recent days have made us much smaller, by reminding us all of the things that truly matter.

The sudden illness and death of our beloved CEO and chairman Robert McGehee died Oct. 9 was a devastating loss to his family and friends, and to the 10,600 employees who knew him as Bob.

He was a rare combination of inspiration and humility, a man who had the uncanny ability to connect with people of all backgrounds and interests.

Bob also never forgot - and never let our company forget - that Progress Energy's primary job is to provide a dependable, affordable and environmentally sound service to our customers.

As Bob's family, our employees and the many others who knew him grieve his loss, we are bolstered and humbled by the outpouring of sympathy, affection and respect from the community.

Bob left a legacy of commitment and responsibility - not only for energizing homes and businesses in the Carolinas and Florida, but for empowering, building and sustaining communities - and our employees are dedicated to honoring his memory by advancing his record of outstanding focus and service on behalf of our customers.

Bill Johnson, Raleigh, N.C.

Chairman, CEO and president, Progress Energy

Biotech brass plead case Oct. 17

We need biotech infrastructure

While the biotech industry argues for offering tax breaks and other goodies to high-tech firms relocating to Florida, we need a reality check. If we expect top-notch institutions like Max Planck or Courant to set up high-tech operations in Florida, we will need the infrastructure that these institutions have come to expect.

That means education, public services and support for the arts and environment. And yet the state Legislature is cutting back on these right now. Yes, it's a hard year, but I've lived in Florida two decades now, and according to the Legislature, every year is a hard year. So if we just wait until next year ...

Meanwhile, Wikipedia is leaving for California, whose high taxes pay for education, public services and support for the arts and environment.

If we expect high-tech firms to not only come but stay, we will have to think less in terms of offering goodies and more in terms of public investment. The alternative is a Florida consisting of theme parks, roadside attractions, parking lots and low-paying jobs.

Gregory McColm, Temple Terrace

Bombay furniture to close all stores Oct. 16

Competition doomed store, not housing

Mark Albright's article on the closing of the Bombay furniture store reads the "housing slump claims another victim" in the retail industry. While there is a housing slump, I would like to caution Mr. Albright not to attribute a business' failure "to reverse a three-year decline" as "another victim." True, when money was loaned too cheaply, borrowers were indiscriminate with that money and we all feel the echo effects. However, Bombay Co. (and others) relied on easy money to dive into a fad market that was quickly oversaturated. They lost out to other stores that sell the same "inexpensive goods" for less, at a time when buyers have less to spend. Bombay Co. was destroyed by competition and its own inflexibility, not by the housing slump. I predict creative, diverse businesses, such as Burgess Carriage House, will survive the housing slump by doing business the way they did before the housing boom. After all, business is business.

Margaret Abbey, St. Petersburg

Insurance industry

Press has a role in insurance dance

I am not a fan of either Allstate or State Farm, at least as respect to their position on Florida. It is not that they are nonrenewing policies that bothers me - they should be allowed to reduce their exposure if that is what they want to do, corporately. It is that they are lobbying hard with folks like James Lee "Dim" Witt for a national catastrophe program. Now why do you figure they're behind that? Because they'd love the government to assume all of the real nasty, less predictable, business-model-busting risk and come storming back (no pun intended) into Florida and all the Gulf Coast states (New York and Massachusetts, for that matter) to write the predictable stuff as they do in most states. Florida would return to an oligopoly and the leverage over the Office of Insurance Regulation would be restored, as well.

Having said that, I find it dismaying that the press should cover these jack-booted extortion campaigns by Florida Insurance Commissioner Kevin McCarty (as marionette, and Gov. Charlie Crist as puppet master) as if the frivolous accusations are true and the evidence is sitting on McCarty's desk. They are throwing every accusation they can make at Allstate, just as they had done with State Farm. And you saw what happened. State Farm backs off a little and offers a modest rate reduction on the "true up," and McCarty's real goal is met.

Do you not think that if there were real evidence behind these accusations that McCarty and Crist, for political gain, would not want these cases in front of a jury? This would be Enron/WorldCom stuff for them. Heroes of the people. And it worked on State Farm, so now it's Allstate. Who will be next? What a shakedown of an industry.

And I believe the press is not only an accomplice, but the most important part of the strategy. Once Crist and McCarty tell the world through the media that these guys are crooks - they've colluded ("violating antitrust laws"), they've manipulated the modelers, rating agencies and reinsurers - the ultimate outcome doesn't matter (who really paid attention to the OIR settlement with State Farm?), in the eyes of the public, the belief that State Farm is a cutthroat bunch of fat-cat cheaters is cemented in the minds of every Florida news watcher. As if the average Floridian needed any help in his or her contempt for big insurers.

So let's just watch this latest shakedown take place behind closed doors. A settlement will be reached and Allstate will pony up a modest rate decrease on its "true up" filing, then go back to Chicago to figure out how to manage its business model against the constant pressure of Wall Street, rating agency expectations and the decision between amount and cost of reinsurance vs. self-insuring (rolling the dice), something we cannot do in reaction to an inadequate premium base.

The fact is that if any company does not think it is right to reduce rates for any reason, and they in fact think the rate ought to be higher for the exposure, they are going to do whatever they must to justify those rates and it is the OIR's job to challenge that. I, too, don't know how they can be filing for increases, and even if justified, don't know that I'd pick the politically charged "true up" process as my line in the sand. But they are numbers and they can be vetted. And this can allbe done without going to the press with one's case. The OIR already has the authority it needs to approve or deny any filing. It doesn't need to make inflammatory, and as yet unproven, accusations to the press.

Any response from Allstate would have to be very measured - you don't get very far by saying the guy who regulates you is wrong. He still holds a lot of power over you.

Kelly King, St. Petersburg

Chief financial officer, Edison Insurance Co.

Stop charging so much for housing

Honesty in pricing will revive market

Congratulations to Tampa on just being ranked as the ninth-weakest housing market in the country by Moody's. Our drastically overvalued housing market has seen a price drop this year, and has another (larger) drop projected through 2008. In light of this bit of national recognition, perhaps the Times would like to follow up on recent television and print reports - including its own - in which Realtors, lenders and developers have used that coverage to tell us all what a great time it is to buy now.

The fix to the housing market is to stop overcharging. This requires realistic expectations from sellers, honesty and integrity from Realtors and unbiased coverage by the media.

Eric Odgaard, Tampa

If we don't want coal, what will power us? Oct. 7

Time to embrace solar photovoltaics

As reported in this newspaper by David Adams back in June, energy efficiency can reduce demand by 19 percent and renewable energy could substitute for 26 percent of conventionally generated electricity, saving Florida consumers $84-billion.

Solar photovoltaics is a proven technology that's been around for a long time. Anyone with questions about it can get answers by going to the Florida Solar Energy Center (www.fsec.ucf.edu), which has been researching it since being established by our Legislature in 1975. We don't need more research; we need implementation on a broad scale. If you can pay your current electric bill, you can have solar now (go to www.jointhesolution.com). Meanwhile, our power companies should be considering alternatives like St. Lucie County's waste-to-energy project utilizing plasma-arc technology instead of expensive new nuclear plants.

Fifty years from now, Progress Energy's proposed new nuclear plant will be a useless pile of deadly radioactive waste that will have to be stored at our expense for longer than any society has ever survived, and they'll be asking us to buy them a new one. In contrast, a solar photovoltaic system installed today will still be generating electricity (it's made of inert materials and has no moving parts to wear out).

The choice is obvious and the time to act is now.The solution is in our hands.

Thomas Eppes, Largo

To lapsed buyers: eBay really misses you Oct. 13

Auction site lacks speed to stand out

Just recently, I received an e-mail notice from eBay telling me about the new changes. While eBay auctions are my game, my biggest complaint is the time it takes to download the auction site. It's irritating when I start scrolling down the list of items up for auction and suddenly it stops.

What appeared to be complete apparently wasn't. So then I must wait another couple of minutes before continuing. After a while, it's downright maddening - especially when there is more than one page to the auction. Because of the time involved and the frustration that goes along with it, I will often cut my time short on eBay and maybe even miss out on some good deals. Perhaps it's my computer. But eBay is the only site that poses that particular problem. My hope is that eBay's renovation will help to hasten the download time.

JoAnn Lee Frank, Clearwater

Be more positive about real estate market, letters Oct. 14

Don't buy the Realtors' hype

It's fascinating to watch several local Realtors attempt to blame "over-reporting" by the Times and the news media for the depressed housing market. This blaming of the messenger overlooks the basic economics of housing.

In truth, the declining market is a natural and necessary reaction to several years of "irrational exuberance" in the housing market. Fueled by easy credit and speculative zeal, the price of many homes in Florida doubled or tripled over a five- to six-year period. We are now left with an untenable situation where the average buyer cannot afford the average home. Historically, the ratio between median household income and median home prices has been about 3 to 1. That relationship has now been stretched to as much as 5 to 1 or 6 to 1. To restore equilibrium, home prices need to drop 30 percent more in the Tampa Bay area.

The painful adjustment probably won't occur overnight. Instead, I expect we will see another 10 percent to 15 percent decline in prices over the next year or two. Thereafter, prices will probably remain stagnant for four or five years. With inflation eroding 3 to 4 percent of value each year, then the "real" price of housing should drop by more than 30 percent over the next five to six years. Raising family incomes over that same period will also help close the affordability gap.

So prospective buyers would be smart to ignore the hype of most Realtors about this being a "great time to buy." That "great selection" of homes they tout is a function of bloated inventories - which are increasing daily. And those "historically low mortgage rates" are likely to remain reasonable. If not, then higher mortgage rates are certain to further depress home prices - since the same monthly payment will then purchase even less house. (A Goldman-Sachs analyst recently estimated that a 1 percent rise in mortgage rates would reduce the fair value of home prices by 8 percent.)

Smart shoppers would be well advised to remain in their current home or to rent at bargain rates for another few years until home values return to more historically reasonable levels. Rents should remain under pressure from the increasing supply of vacant homes and the conversion of speculators to "accidental landlords." So while the party is over for sellers, both buyers and tenants will benefit from the continuing market correction. And we should all take some comfort in the return of more affordable housing in our state.

Jerry T. Ratledge

Overvalued homes are unlikely to sell

Among the numerous letters you've published recently about the housing market, Realtor Debi Balogh laid a share of blame on the St. Pete Times for showcasing the bad news and failing to emphasize that this is a good time to be buying a home.

I submit that there's nothing wrong with the housing market that a sharp decline in asking prices wouldn't cure. Prospective sellers seeking $350 per square foot for houses worth half that (according to Zillow.com) have tied the local real estate markets in knots. Until offering prices drop toward realistic levels, the number of real estate transactions will be restrained.

Lou Kirschbaum, Largo

Prices are too high at Sweetbay stores, letter Oct. 7

Grocery prices still offer a great bargain

A couple weeks ago you printed a letter from someone complaining about grocery prices at Sweetbay stores as opposed to Publix.

While I have not compared Sweetbay prices, I do compare Publix and Winn-Dixie, as I shop both stores. Each year since 2003, I have meticulously kept every sales receipt for a three-month period and averaged the price per item, which includes cleaning supplies but not tobacco or alcohol.

I buy a very large range of products and rarely, if ever, look at the price of an item.

The average price per item has gone from $2.10 in 2003 to $2.47 in 2007. In 2006, the average price at Winn-Dixie was $2.38. At Publix it was $2.35. I am willing to wager that Sweetbay would not vary much from that. I am a single man with varied tastes. At last count, I spent an average of $67.50 per week on food. One of the world's biggest bargains.

Larry Travis, Tarpon Springs

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[Last modified October 19, 2007, 22:29:22]