And it helped that Arvida gave her "an unbelievable deal" while Kearney "wouldn't negotiate on price," says Stephenson, who ended up paying $376,000 for 3.76 acres, as opposed to the $600,000 Kearney demanded. "We had really hoped to attract Kay," says Mainline CFO Ennis, "but it would have been difficult for us to match their price." Summit East's prices also alienated Mike Sheridan, who this year has been looking for 50,000 square feet for his company, a third-party administrator of insurance benefits that is growing by nearly 15% a year. "Rick has not been able to translate how much he wants for the property into the value-added he's offering," says Sheridan, chairman of Fringe Benefits Management Co. "I'm not 100% sure he's going to pull it off."
Summit East is, after all, merely "vaporware," as Don Rosenkoetter puts it. That hasn't stopped him from signing on, however. Others have looked at the Summit East site map, but Rosenkoetter, CEO and president of One WebPlace Inc., went further. He actually chose a Monopoly-size square on which to build a 54,000-square-foot headquarters for his start-up, which makes E-commerce software. The 55-employee company, which has been based in Albany, Ga., expects to move in come April 2001.
"It's a wonderful environment for a nerd workaholic," says Rosenkoetter, who admits that his construction experience has been limited to sand castles and airplane models. Still, he knows what he'd like to see as part of the new headquarters: an exercise room, a sauna, showers, an outdoor basketball court, and a media room so "employees can watch our commercial on the Super Bowl," he cracks.
The company may be able to afford such a premium TV spot, given what it's spending on the new building. Kearney is actually financing the construction, then leasing the finished product to the start-up, which will have to pay for any internal modifications. "Unless we do a little bit to facilitate them coming here, there will never be a first," Kearney has said. There's already a second. Glen Davidson, owner and president of PAT LiVE -- the only division of ATG Technologies, a three-time Inc. 500 company -- says that in February he decided to build the headquarters for his $12-million technology-service company at Summit East, against the advice of his own accountants. "They said it was too expensive," he recalls. "But you've got to spend your money on something, so why not have a nice place to work at?"
If that philosophy sounds eerily compatible with Kearney's, that may be because Davidson meets with Kearney and six other CEOs once a month as part of a peer group. "He did the sales pitch on me. I got to thinking about what Rick preaches hard on -- the retainment of our people -- and I said, 'Heck, let's do it,' " Davidson says. "I've made a lot of decisions in my life without looking at the analytical side of it."
As far as Kearney's concerned, the analysis that led him to build Summit East remains solid, no matter how soft local reaction has been. To fill up the 136,000 square feet of office space that's part of Phase I of the development, he decided at the end of last year to launch an incubator. He set about raising $50 million to back a dozen or so high-tech start-ups, which are expected to move in with Summit East companies. He's setting aside 2,000 square feet of space in his own building for just such a start-up tenant. And he's already had interest in the incubator from corporate supporters, including IBM and Sprint. "If the people locally don't get it, we'll just bring the companies in from afar," Kearney reasons. David Wimberly, whose company, First Financial Group LLC, serves as adviser to the Summit East Technology Fund LP, says that "this whole concept is just a real brainy concept. Rick is a real genius at coming up with ideas."
But as Kearney sees it, he never had any choice. Mainline, he's convinced, will have to radically change over the next five years -- at least as a peddler of mainframes, machines whose prices are dropping 30% a year. "Five years from now," Kearney says, "we will not be selling mainframes and making a profit. I just don't know what business we'll be in." He adds: "There will be big winners and big losers in the next five years. Everything will be reevaluated in terms of whether it can be done differently through electronics. The world as we know it is going to change. We're all at risk."
Clearly he sees Mainline playing a role in E-commerce, helping integrate and facilitate new E-business partnerships. This year he's aiming for 5% to 10% of revenues to come from the company's E-commerce efforts. That's why he acquired a local $1.1 million Web-design company last September and launched a Korean-based E-commerce consulting division in January. That's why he took it upon himself to build Summit East rather than hire a developer -- because a CEO needs to know more than ever before. Furthermore, "put up a four-wall building downtown, and you are not going to survive," he says. Scott Maddox, the supportive mayor of Tallahassee, says that Summit East represents the kind of "bold bet" that cities need to take. "If you act in a traditional governmental fashion, you will miss the boat in the Information Age," says the jeans-clad 32-year-old mayor.
"What we're doing is creating a friendly environment for companies that want to participate in the transformation of this marketplace," Kearney explains. "You have to have fertile, tilled soil for wherever the seeds land. You have to be ready for whatever comes next." Tilting forward in his office chair, he unwinds the phone cord from the receiver, preparing to plug it back into its jack. "We don't know what half the changes are going to be," he says softly. "But we've got the fiber-optic cables in the ground, and we're ready."
Joshua Hyatt is a senior editor at Inc.
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