News-Press from Fort Myers, Florida • Page 63

NEWS-PRESS BUSINESS, MONDAY, NOVEMBER 6, 1989 'We don't even have a public relations person on the company payroll. We like to keep a low profile. Our feeling is it's difficult to be a good guy if you're painted as a bad guy. Our bag isn't self Lawrence Wilcov, Avatar president, chief operating officer 0 Headquarters Coral Gables. Employees 1,700.

Assets $43.7 million. Subsidiaries Avatar Communities Avatar Finance Avatar Properties Avatar Realty Avatar Utilities Inc. Stock traded over the counter on the National Association of Securities Dealers national market system. There 7.5 million shares of common stock outstanding under the symbol AVTR. Primary shareholder Leon Levy, chairman of the board of Avatar and general partner of Odyssey Partners and chairman of the board of Oppenheimer Funds.

Odyssey Partners is also a major shareholder of Avatar stock. Income for the six months ended June 30, net income was $71 1,000 on revenues of $764.7 million. That compares to net income of $5.6 million on revenues of $74.9 million a year earlier. The company attributed the difference in net income to an accounting change under which installment revenues are deferred. operations and put them all under the umbrella GAC Utilities Inc.

But times were getting tough in the early '70s. Interest rates had skyrocketed, the economy had slowed and borrowed money was hard to come by. The company's land subsidiary came under increasing scrutiny from governmental, environmental and consumer groups. All this led to the company scaling back and getting rid of certain operations, such as its computer leasing business and its Modern Air airline. By the mid-1970s, GAC realized it couldn't refinance its public debt and filed for protection under Chapter 11 of the U.S.

Bankruptcy Code. After more than five years under the scrutiny of the bankruptcy court, the company emerged from reorganization basically as the company it is now. Avatar Holdings Inc. began operating in September 1980 with a court-appointed board of directors. The company has continued to get rid of certain operations, such as cable television.

Now, about 30 percent of Avatar's business is in water and wastewater utility services. About 70 percent of total revenues are through its real estate operations. Cape Coral is in a category by itself in Avatar's portfolio. Wilcov likens the Cape to a teen-ager it still needs a lot more attention than a full-grown community, but it's much further along than the babies that Avatar is developing in other parts of Florida. For example, in Avatar's Poinciana, a planned development south of Orlando, just 4,000 or 5,000 people live in the community.

There are still years of utilities and road development. But, 65,000 people already live in the 60,000 acres that make up Cape Coral. The Cape is an incorporated city with roads, water and sewers as well as office, retail and industrial developments. It is ready for new shopping centers, marinas and and mixed-use developments, Wilcov said. For years Avatar has been viewed, and has viewed itself, as a holding company buying land, holding it, then selling it for development.

But the company's role in Cape Coral is changing. It is becoming a developer. "We are certainly pointing in that direction," Koszulinski said. "We just developed a marina. We are developing a shopping center.

It would tend to be a natural progression from a holding company to be more development oriented." The role change will make Avatar formidable competition for other developers, said local real estate broker and syndicator Bob Barber. "Historically they are not developers of land; they are not builders of buildings," said Barber. "It would make good sense for them to develop." Avatar has a competitive edge as a developer because it already owns so much land. It could finance a project such as a shopping News-Press representative in Coral. but the Cape hasn't even begun to see the end of Avatar yet.

In fact, "Georg (Koszulinski) can grow old there there is so much to do," Wilcov said. The company is sketching out plans for another shopping center at the intersections of Pine Island Road, Del Prado Boulevard and Pondella Road. And Koszulinski has been recruiting a major league baseball team. In the meantime, Avatar has remodeled its Cape Coral Realty, at the west end of the Cape Coral Bridge. In 1988, Avatar sold 1,223 single-family home sites and $1 .8 million in commercial and industrial land.

Avatar's beginnings can be traced to the founding in August 1933 of General Acceptance an Allentown, company, which until the 1940s focused on financing cars. Through the years, the company expanded into insurance and consumer and real estate financing. And in the 1960s, it got into manufacturing truck trailers and construction equipment and goods. In 1966, the company restructured into a holding company and was renamed GAC with subsidiaries in finance, computer leasing, retail and mortgage banking. The company became involved with the development of Cape Coral in early 1969 when it acquired Gulf American whose operations now make up Avatar Properties Inc.

The company wasn't renamed Avatar until it was reorganized in 1980. Gulf had been formed in 1957 and bought large tracts of land for development of communities such as Cape Coral, where it subdivided thousands of acres into single-family lots. Also accumulated over the next 12 years were Florida properties at Barefoot Bay, Golden Gate and Poinciana, and in Arizona at Rio Rico. It was Gulf American that built the now-abandoned $3 million Rose Garden, complete with waltzing waters and dolphin shows. At the peak of the company's activity, more than 300,000 potential buyers visited the area.

More than 100 square miles, representing more than 10,000 lots, was sold. In the early 1970s, GAC, now a diversified holding company, expanded its water utility Georg Koszulinski is Avatar's main center 100 percent and still afford not to lease it up immediately, Barber said. Barber thinks Avatar's biggest influence will be in two places. One, he said, is the 962-acre tract in the northeast corner, adjacent to U.S. 41, where Avatar and city officials announced in 1988 that they would plan a sports complex.

The other major area will be along Pine Island Road, specifically the stretch of State Road 78 from U.S. 41 to Burnt Store Road, an up and coming commercial corridor of the Cape. An Ohio company plans to build a mall at the corner of Santa Barbara and Pine Island. Down the street is Avatar's 99-acre site at Del Prado and Pondella where the company intends to build a strip center and later a larger regional shopping center. It also owns various other properties along the Pine Island corridor.

"Avatar can be a tremendous benefit to the community," Barber said. "They have the ability to go in there to build new commercial support services. "Cape Coral is the fastest-growing city in Florida. It does not have sufficient commercial support facilities." Wilcov agrees. He talked about the importance of balance a good mix of high-end and affordable housing, young and old residents and enough commercial amenities like swimming pools and tennis courts.

The Cape has none of that now, he said. In three to five years, Avatar will probably begin developing the area surrounding Tarpon Point Marina into single- and multi-family homes and retail and commercial developments. "I look at the marina as a focal point for the greater community," Wilcov said. "Not as a separate profit center. It's really designed as part of the community with the idea of eventually getting people to live there." But Koszulinski said it will not be just a residential project.

"I see it as a village concept," he said. "There will be an element of retail, offices, perhaps even a hotel in the next 10 years." But Koszulinski said he is patient and will wait until a "development window" of opportunity opens. Avatar likes to look at the big picture before jumping into any projects. It wants to know what traffic patterns will develop with the additional Cape bridge span. When, if ever, will a midpoint bridge be built? When will State Road 78 be widened? No matter what, said Wilcov, "We're not there to make a quick killing; we're there to stay." Said Koszulinski, "We are going to spend a lot of money in the Cape in the next couple of years.

"The Cape is a natural for future development." development to keep people living, working and shopping in the Cape. "We have to encourage people to stay on the west side of the river," Wilcov said. "We have to give them everything they need." Economic development in the Cape is a soapbox topic for Wilcov and Avatar, which wants to build affordable housing as well as affordable industrial space and commercial property in the Cape. To do that, the company pushes for middle-density zoning for such things as zero-lot-line homes or townhouses. Avatar and the city recently settled a comprehensive growth management plan disagreement.

The compromise involved keeping multi-family zoning in several areas that had been slated to change to single family, but lowering the density. Said Barber: "There is absolutely no market for multi-family, but it will come back. Whenever that comes back, they (Avatar) are in a good position to take advantage of the market because they have the land." Koszulinski said that the settlement benefits not only Avatar, but other developers and Cape residents because it encourages the development of a variety of housing. Otherwise, he said, Cape residents might have to go to Fort Myers for certain housing products, such as planned communites with.