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Anatomy of the Hertz deal
Anatomy of the Hertz deal: News-Press reporters Dick Hogan and Tim Engstrom discuss how the Hertz deal came to fruition, complete with the details of how the company kept things secret to the very end. Video by Guy Tubbs.

Hertz facts

Founded: 1918
Stock: Trades on the New York Stock Exchanges as HTZ. Shares closed Friday at $24.85. 52-week high: $25.02 (May 8). 52-week low: $10.22 (July 26, 2012).
Financials: Cash: $653.8 million.

Debt: $16.3 billion. Market capitalization: $10.5 billion.

Who will build it
Hertz Global Holdings is planning to build a 300,000-square-foot office structure in Estero to relocate its corporate headquarters. That scale of project typically would be undertaken by a builder experienced in projects of that scale. In Southwest Florida, here are some of the local candidates:

OWEN-AMES-KIMBALL

With operations in Southwest Florida and Grand Rapids, Mich., O-A-K built Harborside Event Center in downtown Fort Myers.

MANHATTAN CONSTRUCTION

A national major builder, it acquired Naples-based Kraft Construction in 2008. Initially the company was called Manhattan Kraft, but it’s now again known simply as Manhattan. Manhattan built Cowboys Stadium in Dallas and JetBlue Park (spring training home of the Red Sox) in south Lee County.

MCGARVEY DEVELOPMENT

Relocated to Fort Myers in 1996 from Morristown, N.J. Its local projects include the nine-building, 24-acre Riverview Corporate Center in Bonita Springs.

Zoning amendments

On Friday afternoon, Hertz and the landowner of its planned new headquarters site in Estero filed a zoning amendment with the Lee County Department of Community Development for the Coconut Point development of regional impact, which includes the proposed Hertz site at Williams Road and U.S. 41.
Here are the main things they’re asking for:
Increase general office space from 315,000 to 678,000 square feet.
Decrease multi-family homes from 1,528 to 1,214
Decrease number of hotel rooms from 440 to 320.
Eliminate performing arts center.

Incentive package

$3.4 million a year for up to 20 years through the Capital Investment Tax Credit.
$7 million, Quick Action Closing fund, paid out based on specific performance-based criteria.
$3 million, Qualified Target Industry Tax Refund, once the company meets job and salary criteria.
$4.6 million, Lee County incentives. Enterprise Florida estimates the local incentives could top $5 million.
$945,000, Quick Response Training program, reimbursement for training costs.
$125,000 a year for four years through an economic development rate reduction from Florida Power & Light Co.

Key players

>> Carl Schwing: Bonita city manager part of crucial meeting
>> Heather Fitzenhagen: State rep who helped campaign for state money
>> Jim Moore: Lead negotiator for final agreement with Hertz
>> Ben Nelson: Bonita mayor had 5 minutes to wow execs
>> Mike Reagen:Greater Naples Chamber head helped scout Collier sites
>> Todd Poste: Hertz exec who led negotiation efforts
Rick Scott: Florida governor who met with Hertz CEO in January
>> Gray Swoope: President of Enterprise Florida helped recruit Hertz

More

More coverage of Hertz moving headquarters to Lee County

All eyes were on Bonita Springs Mayor Ben Nelson, and he was feeling the pressure.

He had fewer than 5 minutes to pitch his city to a group of visitors looking to relocate the headquarters of their unidentified company.

The pressure was intense, the circumstances more than a little unusual.

Lee County economic development officials had worked for six months to get to this point, and had only dealt with site selection consultants.

The six visitors — all men dressed business casual, no ties — already were behind schedule when they arrived at a small meeting room at Worthington Country Club for this 20-minute meeting over deli-style sandwiches. The visitors were in a hurry — they had prospective sites to scope out — and had asked for something they could eat quickly.

They introduced themselves by first names only, and even those were obviously phony.

“Call me Bob,” one said.

“Call me Bob, too,” said another.

About a dozen people sat around a conference table in the room: four company representatives, two site consultants, Interim County Manager Doug Meurer, Economic Development Director Jim Moore, his business development director Brent Barkway, Nelson and Bonita City Manager Carl Schwing.

Editorial: Time to build on success of bring Hertz headquarters to Lee County

Schwing led off with a quick by-the-numbers overview of Bonita Springs; size, population, etc. But the circumstances even sped his pulse up.

“All of this clandestine stuff was kind of exciting,” he said.

Nelson felt a little tense.

“I had no idea what kind of company they were with, so I had no idea what they were interested in, but I assumed they were from up north,” Nelson said. “So, I told them when you are in Bonita Springs, you can be on the beach in five minutes or fishing on the Gulf.”

(Page 2 of 7)

In those same minutes, Nelson said, you can be bow hunting in the CREW Trust, picking up children from school, or having dinner and drinks with clients at Coconut Point.

“I don’t know if that is what you are looking for, but I know that is exactly what I am looking for,” Nelson told them.

“They all said thank you and stood up and started to leave. I thought, ‘Oh no’.”

He asked the Lee delegation still in the room: “Did I just blow it?”

“No, that was awesome,” Schwing told Nelson. “You hit it out of the park.”

It would be three months before Lee County officials would know the name of the company those visitors represented and four months before the rest of the world would be clued in by Gov. Rick Scott. The identity of at least two of the visitors remains a mystery today.

It was a long journey, but after that Jan. 31 meeting over sandwiches, the search for a new Hertz headquarters zeroed in on south Lee County. It ultimately led to an announcement Tuesday that Hertz would bring at least 700 jobs to a new world headquarters in Estero.

“That was a pivotal meeting for us,” said Rich Broome, executive vice president of corporate communications for Hertz, one of the then-anonymous men at the meeting. “That meeting confirmed this was a place we could seriously consider becoming part of the community.”

July 2012

Big deal had very simple beginnings

Despite the anonymous meetings, months of effort to recruit Hertz and a deal that might change the economic landscape of Lee County, it all started simply enough.

In July, representatives of McCallum Sweeney Consulting, a business site selector based in Greenville, S.C., called Barkway. A corporate client was looking for sites to relocate its headquarters.

Barkway, 43, has worked at the Lee County Economic Development Office for nine years. He takes those types of calls regularly.

“They described the type of site they were looking for, and I started gathering some possibilities and narrowing down what they were looking for in a site,” Barkway said. Considerations included being large enough for a major office building and accessibility to major roads.

(Page 3 of 7)

Barkway compiled thick folders of potential sites and arranged to meet with the consultants later in the month in Fort Myers.

The site consultants disclosed the deal would involve a large company with about 500 employees. They also said they had quietly visited Southwest Florida three times in recent months, even flying into Miami and driving over to stay incognito.

“These companies do their homework very carefully and very quietly,” Barkway said.

Barkway and Moore, his boss, were the only members of the Lee County staff to know details of the project.

“You couldn’t do this businesses without confidentiality,” Moore said. “If word gets back to their home office, the first thing that is going to happen is they are going to lose some key employees.”

McCallum Sweeney representatives declined to be interviewed for this story. Their website lists other big-name clients, including Chrysler, Procter & Gamble and FPL.

To maintain confidentiality, Barkway said he kept all materials and contact lists related to the project in a locked cabinet at the office. Most of the calls to the consultants happen after hours anyway, because they would speak to the company during the day then relay information to Barkway later.

Barkway’s wife, Jennifer, took all the after-hours and weekend calls in stride, even when they came on weekends at Disney, or during a vacation in New Orleans. Barkway remembers stepping outside during a visit to rural northern Michigan in the dead of winter to complete a call with a single bar of cell phone reception.

“I’ve been doing this for nine years now, so either she knows that I can’t tell her anything, or she just doesn’t care,” he said with a smile.

Then, while still winnowing possible sites, McCallum Sweeney called to say the project had been tabled. A few weeks went by without contact.

“I thought we lost them,” Barkway said.

September

Lee gets back in game after some uncertainty

Instead, in September, the site consultants called to say Lee was back in the game, and the jobs target was now 700.

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Lee officials still didn’t know they were working with Hertz, but the company announced in November it had closed on a $2.3 billion acquisition of Dollar Thrifty, based in Tulsa, Okla. Lee officials would later learn that Tulsa was a competitor for the headquarters.

Broome said the company’s earlier site selection efforts were just “exploratory” until after the Dollar deal came together.

“When we bought Dollar Thrifty, we had to get serious about what we were going to do going forward,” he said. “There was really nothing meaningful happening until we finished that acquisition.”

October

List of possible sites in Lee, Collier narrows

In October, the company requested information from Enterprise Florida, the state’s economic development arm, through McCallum Sweeney.

“We knew it was a Fortune 500 company planning for a new headquarters location,” Enterprise Florida President Gray Swoope said.

In Southwest Florida, the prospective site list had narrowed to seven, four in Lee and three in Collier, Moore said. Moore referred McCallum Sweeney to Mike Reagen, CEO of the Greater Naples Chamber of Commerce to help develop those sites.

Reagen and Moore declined to list those locations, but Reagen said the site consultants were very clear: They wanted to talk about Collier sites only with him and Lee sites only with the officials there, and the two were not to share information.

“They were very professional, but there was absolutely no chitchat or anything like that,” Reagen said. “But they were friendly.”

January

Gov. Scott learns the truth about Hertz

In January, Gov. Rick Scott met with Hertz CEO Mark P. Frissora and Swoope. After confidentiality agreements were signed, Frissora disclosed that Hertz was the company.

“We hadn’t put two and two together,” Swoope said. “The CEO shared the vision of where they wanted to go with the company.”

That information identifying Hertz was withheld from Lee officials under terms of the confidentiality agreement.

Later that month, the consultants and company representatives visited Bonita Springs to visit prospective sites and enjoy that brief, but fateful, lunch inside the light sage-colored walls at Worthington Country Club.

(Page 5 of 7)

February

Negotiations heat up for parcel near mall

One day in February, Ned Dewhirst, Oakbrook’s Bonita Springs-based senior vice president of Florida operations, got a call from Barkway in Lee’s economic development office.

A mystery company was interested in an Oakbrook parcel just north of Coconut Point Mall: Highway frontage in a growing area for a showcase retail operation for car sales and rentals, plus room for a sleek, environmentally friendly headquarters.

Dewhirst was his company’s point man in the discussions. Soon he bore down for three weeks of negotiations on an option on 34 acres at the southeast corner of U.S. 41 and Williams Road in Estero.

But first, Oakbrook had to pierce the veil of secrecy that had been in place since Hertz started scoping this area for a location.

March

An ultimatum is given: No sale without an ID

By March, Dewhirst still did not know the name of the company. He had met Hertz Executive Vice President Todd Poste and showed him the 34 acres. But Poste didn’t want to reveal the name of his employer before the option agreement was signed.

No dice, said David McArdle, Chicago-based president of Oakbrook. He couldn’t take a chance that the mystery company would not be a good neighbor for Oakbrook’s other properties in the area.

“I said, ‘Who are you? We’ve been developing the property for 20 years. We want to make sure you’d fit in this area.’”

Besides, McArdle said, Oakbrook already had a financially solid buyer interested in the property and there was no guarantee the mystery company would have the wherewithal to follow through with an actual purchase.

The critical moment in the standoff came in mid-March, when Dewhirst and Poste met to have dinner at a restaurant in Coconut Point Mall.

Dewhirst doesn’t recall which restaurant, but he does remember what happened after he reiterated Oakbrook’s position: no ID, no sale.

“He handed me his business card,” complete with Hertz’s name, and the option negotiations began in earnest, Dewhirst said.

(Page 6 of 7)

He and McArdle had to sign confidentiality agreements, but the negotiations continued and by the first week in April the deal was done.

McArdle said he was delighted when Hertz finally revealed its identity. “It looks like we’ve landed a big fish for Lee and it’s nice it’s on our property.”

Also in March, Barkway and Moore began discussing incentives with McCallum Sweeney to iron out more details before bringing in the company.

April

Deal nearly comes undone near the end

Finally on April 10, Hertz officials met at the economic development offices to disclose the company’s name and financial information. These were the final negotiations.

“They were on a very tight schedule because they wanted to have it all pulled together by May 1, and we still had to have time to get the proposal on the commission agenda,” Moore said. “We were here Saturday and Sunday hammering it out.”

Moore said there were a few sticking points, but he declined to elaborate.

“At the end of a successful negotiation, you shake hands and agree it was fair,” Moore said.

On April 30, county commissioners unanimously approved a $4.6 million local incentives package for what was still known as Company A. They were assured by Moore that it would mean at least 700 jobs.

For Hertz, preventing leaks was still crucial. The company did not want employees finding out about a move before company executives had everything completed and could tell them properly.

The deal nearly derailed again when, near the end of the legislative session, state Rep. Heather Fitzenhagen, R-Fort Myers, blundered. Fitzenhagen, who had been brought in to help shepherd through $14.6 million in state incentive money, sent Hertz CEO Frissora a dozen roses with a note. “Can’t wait to be your ambassador,” an apparent goodwill gesture despite the strict confidentiality agreement.

May

Negotiations finish; announcement is made

As state budget negotiations wrapped up in the first days of May, local delegates worked with their peers and Gov. Scott to insure that the budget included state incentives of more than $14 million. Anything above $5 million requires legislative approval, Sen. Lizbeth Benacquisto, R-Fort Myers said.

(Page 7 of 7)

On Tuesday, CEO Frissora, Scott and a dozen local officials crammed on to a riser in front of the Hertz rental center at Southwest Florida International Airport to speak to about 200 community leaders and members of the media.

Scott spoke first about jobs and having the right environment for attracting them to Florida. Frissora talked about an exciting new beginning for his company, and how Hertz wanted to bring the bulk of its employees and those of Dollar Thrifty under one roof.

Frissora announced the option on the land in Estero, but noted that the company hated to disappoint Mayor Nelson.

Nelson said he is anything but disappointed.

“We had some great sites in Bonita Springs, but I guess just not the perfect site,” Nelson said, saying the company looked at the interchange of Interstate 75 and Bonita Beach Road very carefully. “It’s their job to find the perfect site. I’m happy that our discussion helped everyone in the region because we will all benefit from those employees coming here to live and work.”

Reagen, at the Greater Naples Chamber, said all of Southwest Florida can count this one in the win column.

“When it comes to economic development, Southwest Florida is in competition with Austin, Texas, and Carmel, California,” Reagen said. “Any talk about any competition locally is nonsense.”

Barkway, who spent the past 10 months working to draw Hertz, quietly watched the news conference from off the stage, before returning to the office. There, he and Moore started taking calls from site selectors and business executives around the nation who had seen the news.

So what was it like to finally meet Frissora after working so long to bring his company to Southwest Florida?

“I still haven’t,” Barkway said.

Reporter Steve McQuilkin contributed to this report.

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