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The Sembler Company: building a FOUNDATION for SUCCESS

Reputation is everything.

Known for its local expertise in several markets in the Southeast and its long-standing relationships with major retailers, The Sembler Company stands firm on the foundation of its reputation.

Architects, contractors and builders say this is a company that knows how to get things done. And it gets things done.

The St. Petersburg, Fla., development company has its roots in the early work of founder Melvin F. Sembler. It was Mel who tested his prowess by developing Green Village, a shopping center in Dyersburg, Tenn.

A couple of additional Tennessee centers later, Sembler, in 1968, moved his family and business to St. Petersburg and began working in various partnerships to build shopping centers in central Florida.

Mel Sembler at various times wore the hats of buyer, leasing agent, construction supervisor and financial expert.

It's not easy starting a business. Sembler recalls crunching numbers by hand at night. He is nearly incredulous at the speed of modern technology - financial reports completed and commerce conducted with the pressing of a couple of buttons.

"Technology presents an enormous change for industry," he says. "Time has become more valuable."

New efficiencies in the wake of computerization will change the way things are done. There possibly could be less demand for bricks and mortar in the future of retail, he suggests.

The senior Sembler's financial skills have landed him in one of the most important and prestigious positions in the country. He currently is Finance Chairman for the Republican National Committee. If the Democrats aren't already worried, they should be.

While he travels the country working for the political party he loves, Sembler's sons and a team of highly experienced professionals are taking The Sembler Company down new and profitable routes.

Craig Sher is its president and CEO. He cites three areas in which he would rate the company as outstanding.

"One is integrity," says Sher. "We do what we say. We deliver."

Second, the company is financially strong, he says. It has good relationships with the banks.

The third strength is The Sembler Company's great collection of bright, young people. And, says Sher, the long tenure of many of its employees gives clients confidence.

"This is not a transient company, it's a family," he says. "A customer likes to know that the face across the table won't change."

A privately held business, Sembler Company charts its own course. There is no pressure from shareholders, Sher says.

Embracing change Vice Chairman Brent Sembler describes the development industry this way: "If you aren't ready for change, you're in the wrong business."

The willingness of a company to embrace change says a lot about the management of a company, he states.

Moving into larger, perhaps riskier, ventures has energized the company and unleashed creativity, he says. Starting a new chapter for the firm, The Sembler Company is now involved in two entertainment-based retail developments in Tampa and St. Petersburg.

Other changes? The tenant mix in neighborhood strips is now 70% service and 30% retail. "Twenty years ago, it was 70% retail and 30% service," Brent Sembler says.

There is less co-anchoring of these centers today. When supermarkets opened in-store pharmacies, drug stores determined they were better off expanding their inventory to include typical convenience items and then moving to freestanding, easy-access locations.

"You have to fill in retail space to meet needs," Brent Sembler says. "Tenant mix is an art, not a science."

Strip center management continues to represent a significant business segment for Sembler. The company manages Sembler-owned centers as well as those owned by other individuals or investment groups.

"Half of our management business is for other owners," Brent Sembler says. "It helps keep our leasing people busy."

Claiming a short attention span and an abundance of energy, Brent Sembler says he likes to be physically involved in company projects. "I'm a project manager of a $15 million shopping center," he says. "I juggle a lot of balls. I enjoy people and persuading them to see things my way."

As new development slows in the next few years, The Sembler Company likely will do more managing, Brent Sembler says.

Re-development will also be a growth area, he says, citing the company's role in BayWalk, a waterfront entertainment-based development in an older section of St. Petersburg due to open later this year, and in Centro Ybor, a Tampa retail entertainment project being developed in partnership with Steiner + Associates.

Puerto Rico: Under-retailed As Sembler vice chairman with responsibility for leasing and operations plus the company's Puerto Rico Division, Greg Sembler sees interesting trends taking hold.

National retailers with 500 to 1,000 stores growth no longer rely on regional malls to supply their growth. Power centers, such as the ones Sembler is developing, attract big-box and other operations because they can offer cheaper rent and more flexible hours.

"Operating costs are lower at power centers," Greg Sembler says. "One reason is that they may not be beautifully enclosed like a mall, which is more expensive to maintain."

The Sembler Company has been active in Puerto Rico since 1993. It recently completed its second shopping center there and has begun site work for a third. The centers are home to large and small national tenants, he says, which have opened their doors to enthusiastic customers.

Another growth area, Greg Sembler says, is with freestanding Eckerd Drug Stores. The Sembler Company has a longstanding relationship with the Largo, Fla.-based company and does a large percentage of its new stores in the Southeast.

As Eckerd moved into the convenience-store or general types of merchandise, it was more practical to put up freestanding instead of strip-center facilities, he says.

Greg Sembler notes that some of the large national retailers now prefer to own their land and buildings, Target and Home Depot among them. In some states it is advantageous for tax purposes to own rather than rent, he says.

Shorter leases Vice President of Operations Steve Althoff says the commercial real estate business is more demanding now than it was 10 years ago. One example is that landlords and tenants both are requesting shorter leases these days.

"Three to five years is more typical now compared with five- to 10-year contracts a decade ago," he says.

This, as Brent Sembler observed, keeps the leasing staff jumping.

"One hundred percent leasing is a key component of a healthy center," Althoff says. The trend in these centers toward services such as dry cleaners, dentists and doctors and away from retail has actually improved life for management.

"It's a better business situation," Althoff says. Services make good, stable tenants.

Althoff adds that the demands on tenant reporting, including analyses of each property, have increased. "We manage all properties as if they were our own," he says.

Store sizes appear to be moving in both directions: growing larger and getting smaller. Publix Super Markets works with Sembler to build 65,000 sq. ft. buildings and 28,000 sq. ft. ones.

As much as anything, it depends on the site. In Atlanta, for example, urban in-fill plots often cannot accommodate a Publix mega-store. So, one with less than 30,000 sq. ft. takes its place and inventory, but not selection, is pared down to match.

"Sembler adapts very well to our changes," says James Leckey, Publix director of real estate in Lakeland, Fla.

A developer such as Sembler brings sites to the retailer, and they run the numbers, Leckey says. "Their site plans are well-prepared. We often approve them without making changes," he says. "They are experts in certain areas [regions]."

Retailers depend on knowledgeable developers to work through the maze of state laws and local codes and to handle any adapting that might be needed. Developers know buildings require pilings on the coast and slab foundations in the central part of the Sunshine State.

After a 15-year relationship, Sembler knows Publix's trademark touches, such as angle parking. "It's easier for retired consumers when they are backing out," Leckey notes.

Hawkins Construction in Tarpon Springs, Fla., is on the bricks-and-mortar side of the equation. It has been working with Sembler since the early 1980s. "Lately, we've done 10 to 15 jobs a year with them, including Eckerd Drug Stores and Publix," says Lonnie Hawkins. "They are one of our favorite developers because of their honesty, integrity and fairness."

Hawkins built Sembler's elegant two-story headquarters in St. Petersburg. "It's a real Class A building with granite and other high-end finishes," he says. To Hawkins, the building's integrity is surpassed only by that of the Sembler staff.

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