The Business of Remaking a City
Young Financiers are the Developers of Hotel Duval and Backers of Many Tallahassee Businesses
It had the town talking for days.
On opening night in October 2009, Tallahassee’s Hotel Duval, which had undergone a major $15 million renovation, transformed itself into Cirque du Soleil.
There were drummers hanging from the hotel’s carport ceiling accompanied by ear-splitting music. Exotically dressed contortionists in silver body paint draped themselves around the hotel lobby and meeting rooms.
And there was a fireworks display that could be viewed from the hotel’s swanky rooftop lounge.
The 1,000-person guest list was a veritable who’s who list of Tallahassee notables.
That memorable grand opening party marked the beginning of Hotel Duval’s unprecedented popularity. It has become the go-to spot for events in Tallahassee and its South Beach-inspired rooftop lounge is a favorite destination among young professionals.
Not a bad start for two young men in their early 30s with no college degrees and no experience running hotels. What Hotel Duval developers James “Chad” Kittrell, 32, and John Thomas “J.T.” Burnette, 34, did have going for them was a hunger and willingness to bet big, an uncanny ability to recognize and deliver what their hometown lacks, and the capacity to finance an ambitious multi-million dollar project in the middle of a severe recession.
Friends and business partners, Kittrell and Burnette teamed up with a third partner, Frank Whitley, on the development of Hotel Duval. Many of Kittrell and Burnette’s real estate development projects are done under the name of Hunter & Harp Holdings, though they do business under many other names, such as Capital City Partners.
Quietly, over a span of a half-dozen years, Kittrell and Burnette have become a driving force behind many new development projects and businesses in the city, with ownership in companies employing more than 600 people.
Besides Hotel Duval, this under-the-radar company owns trendy restaurant Midtown Filling Station, and before that the Winery and Tapas restaurant in the same location. They opened Genghis Grill on Apalachee Parkway last year. They own Tallahassee-based Ol’ Man Treestands, which makes and sells hunting equipment. Burnette is also a part-owner in the IT company Brandt Information Services.
What most people don’t realize is that the bread and butter of their business is actually federal contracting work done under the name SheltonDean. Dating back to 2005, according to a federal database of contractors, SheltonDean received more than $64 million to repair and maintain federal buildings.
“Our core business is federal contracting,” Burnette said. “Everything you see and touch is really just an investment. It is funny that everybody thinks of us as Hotel Duval.”
Nevertheless, their success at Hotel Duval opened doors for them to do other major development projects that have the potential to revive overlooked parts of Tallahassee.
One is a mixed-use project near Gaines Street that envisions a three-story restaurant and bar on the corner of Woodward and Madison that the Tallahassee Democrat said will have a top-floor glass-bottom pool extending over the sidewalk. The other is a mixed-use office and retail project at the corner of Tennessee and Monroe streets.
Both are in limbo as Hunter & Harp works to obtain financing.
“They are visionary, you’ve got give them that,” said Tallahassee Mayor John Marks, who met with Kittrell before hotel renovations were complete. “I like people who have vision and can see the potential in something. I don’t know that anybody would have thought that (Hotel Duval) would be able to transform into what it is today.”
Hunter & Harp’s offices are located off South Monroe, near dingy car repair shops and modest strip malls. Their 13,000-square foot offices are renovated and modern.
Kittrell has a stubbled chin and the good looks of a tanned baseball player. He wears a suit with no tie. Interviewed by phone, Burnette is confident, with a relaxed Southern drawl.
Both Kittrell and Burnette grew up in modest, middle-class homes and shared an early entrepreneurial drive that continues to this day.
Kittrell’s parents divorced when he was young and his mother lived in a tiny 800-square-foot home across from Kate Sullivan elementary, which he also shared with two brothers.
His mother worked in state government and his father owned a fence-building company. Kittrell said he split his time between both of his parents.
Up the road in Monticello, Burnette’s mother was a nurse and his father was an accountant. Early on, Burnette had entrepreneurial leanings, with his first job raising chickens at age 14. A few years later, he started an IT temp staffing business and also began working as a contractor and later got his roofing license.
“At 16, when Burnette Construction originally started, I got a $200,000 contract in Quincy to rehab HUD housing,” Burnette said. Then he got a series of lucky breaks. One of his first roofing assignments was in Panama City just after a hurricane blew through. A $40,000 assignment turned into $1 million worth of repair work.
“Luck has a lot to do with it,” Burnette said.
Meanwhile, at Leon High School, Kittrell played on the baseball team and was hopeful he might be able to parlay that into a career. After high school, he went to Tallahassee Community College and played for their baseball team.
“I lived in a house with four guys and my Dad paid all my expenses,” Kittrell said. “It was a very easy life, and there wasn’t a whole lot to worry about.”
Kittrell decided he want to quit baseball and “party” instead, he said. So his father cut him off financially, explaining that he had made a grown-up decision with grown-up consequences. Kittrell called up old baseball coaches to inquire about job opportunities.
He landed a part-time job making minimum wage at the Department of Revenue, and continued going to school at TCC. Not long after, he learned of an opening for an administrative assistant position in the marketing department at SunTrust Bank.
There was only one catch — it was full time. With bills to pay, Kittrell jumped at the chance to make a full salary. A few months later SunTrust announced it was consolidating its marketing department. Kittrell was told to move to Orlando, or seek employment elsewhere. Kittrell, who was then 19 or 20, reached out to Jimmy Alford, who was working in a SunTrust office that catered toward highly paid doctors and surgeons.
“He had a position come open where I would be underneath him and he would serve as my mentor,” Kittrell said. On his first day, he was asked to amortize a 30-year mortgage.
By hand. No calculator allowed.
“I had no banking experience,” Kittrell said. “I had worked in the marketing department, I understood a little bit, but not enough to be dangerous.”
It took him several tries, but eventually he learned how to do it.
“He taught me from the ground up and then that grew into how the banking industry works and how banks worked,” Kittrell said. “He served as a great mentor to me.”
Early on, Alford said Kittrell had a knack for mixing in the world of SunTrust’s wealthy clientele. “The thing I remember most about Chad was how well-liked he was,” Alford said. “How well he got along with other people. Everyone at the bank liked him, he was good at nurturing relationships with customers and at that time we were doing a private banking function for the medical community; these were high-end people.”
Money to Play With
Soon Kittrell rose to the position of vice president and moved to Wakulla Bank, where he was vice president of commercial lending at age 24. Kittrell learned, just as he had at SunTrust, that banking wasn’t just number crunching. “It was about building relationships,” Kittrell said. Because of his youth, he was entrusted with many clients under age 40 who had found similar success at a young age.
Kittrell was making what he called “decent money” for his age. Perhaps it was his exposure to financially savvy bankers, but Kittrell chose not to spend it on a nice car, clothes or nights out with friends. Instead, he pooled his money with some of his similarly financially blessed friends from high school and became a landlord.
“I bought my first house when I was 20 or 21,” Kittrell said. Records show in March of 2000, Kittrell bought one side of a duplex in Richview Park Circle, near Park and Capital Circle for $68,000. Three years later, in 2003, he bought the other side of that duplex for $86,000. Records show Kittrell sold both in 2005 for $150,000 each, a profit of $146,000.
“We were able to gain some cash and some assets and we were doing OK, and then we had our real jobs, too,” Kittrell said. “So we were in good shape.”
Through his work at Wakulla Bank, Kittrell met Burnette, who by then had done very well with his construction company and was starting to pick up more federal contracts.
“Both of us went to a couple years of college and dropped out,” Kittrell said.
The two became friends and one day decided to become business partners. “He and I formed a company,” Kittrell said. At first, it had a different name, but eventually they settled on Hunter & Harp – their mothers’ maiden names.
The men were involved in one project to build condominiums in Alabama that went bust and taught them a big lesson, though Burnette said their involvement in it was minimal.
“During the boom … anybody can get financing, it was a lot easier for projects like that,” Kittrell said. By contrast, Kittrell said, now if “a bunch of 25-year-olds” tried to get a multi-million loan to build a condominium “they would throw you out the door.”
Early Success at Midtown
Though they were doing well from SheltonDean contracting work, Kittrell and Burnette were looking for investment opportunities. They started small, such as purchasing a warehouse with a tenant or a small office building. The idea was to generate cash flow to sustain them while they searched for bigger projects with more payoff.
The first project that garnered media attention was The Winery and Tapas restaurant in Midtown. Opened in 2007, it helped lure young professionals to Midtown.
Jon Gardner, a wine aficionado, was brought in to run the bar and restaurant.
The Winery, with its extensive wine list and modern décor, quickly became a favorite happy hour spot and the Tapas restaurant got rave reviews for its food.
“We saw a desire of young professionals to have somewhere to go where they didn’t have to go down to Tennessee Street and socialize with 19-year-olds,” Kittrell said. “The entire Midtown district really made a lot of sense to us.”
Soon after, the sleepy Midtown district became a dining and shopping destination, with new neighboring businesses including clothing boutique Cole Couture, rival wine bar The Wine Loft and cupcake shop Lucy and Leo’s Cupcakery, which was featured on the Food Network.
“We’d go anywhere and we knew what we were good at, which was financing,” Kittrell said. He insists their expertise in financing doesn’t only come from his banking background. “I learned a great deal from my mentors on how to navigate the system, but the real juice on what we do now we learned on our own.”
Kittrell and Burnette spent a lot of time figuring out how to secure big bank loans when banks were reluctant to loan money. They eventually began using a combination of U.S. Small Business Administration and conventional loans.
For instance, the SBA gave Hunter & Harp, under the name Duval Partners, a total of $5.25 million in loans to develop Hotel Duval. “A lot of that stuff we know (about SBA loans) are the keys to the kingdom, so we don’t really give that information out,” Kittrell said. “It has cost us a lot of money to learn those lessons.”
Hotel Duval was first built in 1951 and later became an FSU dormitory and offices. In the 1980s it was bought by Radisson and later became a Park Plaza hotel.
Hunter & Harp bought the hotel as a “real estate play,” Burnette said.
“Hotel Duval took on a life of its own,” Burnette said. “In the middle of that purchase you had a market that took a turn in the wrong direction. At that point you have to rethink your decision. We knew the hotel had to be the best of breed.”
Before construction even began, Kittrell and Burnette hired Marc Bauer, who had gone to Florida State and had experience opening new hotels.
“I was incredibly impressed by their knowledge and business acumen at their age,” Bauer said. “They are sharp and entrepreneurial.”
Though Kittrell and Burnette had spent most of their lives here, they had a good sense of what Tallahassee lacked. “We go out and listen to the market. We do a lot of listening,” Kittrell said. Many people in their 20s told him they would like to stay in Tallahassee, but felt there weren’t enough jobs and entertainment choices.
They set out to research other hip boutique hotels, traveling to New York and Miami’s South Beach hotels, especially taking a liking to the sleek Gansevoort Hotel in New York. “A lot of our concept and our vision came from New York,” Kittrell said.
Catherine Baker, Burnette’s wife, is Hunter & Harp’s in-house interior designer and helped bring that vision to life, selecting the furniture, flooring and lighting.
The risk they were taking wasn’t lost on them, Kittrell said. “We were all at a point in our lives, where J.T. and I weren’t married, we didn’t have kids, so if we were going to take a risk like that, we were at a point to take it,” Kittrell said.
Two years later, the success of Hotel Duval is undisputed. It has simultaneously become a popular place for visitors to stay, but also a hotspot for locals with its rooftop lounge, ground-floor lunch and breakfast bistro and upscale Shula’s 347 restaurant.
Thirty percent of the hotel’s guests live within two hours of Tallahassee, and 45 percent of the hotel’s revenue comes from hotel bookings – meaning the majority of Hotel Duval’s income comes from its food and beverage services, Bauer said.
The owners of Hunter & Harp are seen as the men with the Midas touch, able to transform buildings or even entire parts of town into something hip and trendy.
“Before that project we kind of flew under the radar,” Kittrell said. “We didn’t really want to be out there. And we are still not those type of guys.”
Hunter & Harp is increasingly moving into the restaurant business. The Winery and Tapas restaurant has been transformed into the Midtown Filling Station. It is run by managing partner Alex Beltrami, who used to own Fusion and Tantra Lounge.
Beltrami said he was about to leave Tallahassee and move to Austin when he was persuaded by Kittrell and Burnette to stay and open a new restaurant.
The Filling Station became an instant hit, with a garage theme and bar food done in a gourmet style. For instance, they have tater tots smothered in a three-cheese fondue and bacon. “A good CEO can’t wear all the hats and do everything, but they recognize talent and put it in the right spot, it’s been a great relationship,” Beltrami said.
Jamie Langley is another restaurateur who ended up in business with Hunter & Harp.
The owner of the Beef ‘O’ Brady’s franchises in Tallahassee was working on opening a Genghis Grill in Tallahassee last year. Genghis is a restaurant franchise offering build-your-own Mongolian stir fry. Langley was told by his business partners one morning by e-mail that they were not interested in investing in Genghis.
Sitting in a hotel room in Clearwater, Langley panicked. He had already told the Genghis Grill headquarters to green-light the project but he needed more than $1 million to get the Genghis Grill up and running in Tallahassee.
He racked his brain to see if he could think of someone with the cash and interest to help him out. He remembered a nice guy named J.T. who used to come to the Beef ‘O’ Brady’s on Thomasville Road and shoot the breeze with him about the restaurant business.
“I thought, ‘Hell this guy, maybe he has restaurants that I don’t even know about,’ ” Langley said. “I remembered he had a Hotel Duval hat on and I knew his initials were J.T.” He called Hotel Duval that morning and asked to speak with J.T.
Langley spent 10 minutes explaining his dilemma. He told Burnette what the development costs would be and promised to use his own money first.
He was shocked when after only a few minutes Burnette told him: I’m in.
Did a stranger just agree to help finance a $1 million project?
“I said ‘Do you understand that this is a big deal?’ and he said ‘I get it, you just tell me how much stock you want and we’ll take the rest,’ ” Langley said.
Later, Burnette told Langley that he agreed to help finance the project because in his talks with him at Beef ‘O’ Brady’s he had seemed like a nice guy.
“We like to identify people with experience and determine what they are qualified to do and enable them to pursue their dreams,” Burnette explained. In that way, Hunter & Harp is closer to a venture capital firm that invests in start-ups.
“Genghis has gross sales in excess of $4 million,” Burnette said. “Three to four stores will open this year and within a two-year time Genghis will have gross revenues in excess of $10 million.” He said his decision wasn’t based on the Genghis concept.
“I only believed in Jamie,” Burnette said.
From Stir Fry to Computers
Hunter & Harp has other businesses that most Tallahasseans never interact with.
Burnette is also a part-owner in Brandt Information Services, which provides information technology services to governments. For instance, Brandt has found a niche providing labor market research and mobile solutions to the state of Florida and the federal government.
Richard Wise, 34, and John Thomas, bought Brandt Information Services in 2007 from Nolia and Bill Brandt. They now own it in partnership with Burnette and employ more than 100 people. “John Thomas and I are the day-to-day operators and J.T. Burnette is our third partner that helps us at the 30,000-foot level,” Wise said. “He is a great entrepreneur and a great financier … . J.T. is a guy that has the big idea and understands technology and business and can keep us pushed toward growing and new markets.”
Wise said he is impressed with Hunter & Harp’s efforts to revive Tallahassee. “(Hotel Duval) was something the city definitely needed,” Wise said. When he recruits people to come work at Brandt, he said having amenities like Hotel Duval and the Midtown area helps.
“Everything we do is about bringing something new to Tallahassee, or something new to the market,” Kittrell said. “If it’s a new experience, people take hold of that.”
What Hunter & Harp invest in may seem like a mixed bag, but Burnette said there are lessons learned at each business that can be applied to the other.
“I’ve owned over 14 businesses,” Burnette said. “What happens when you own 14 is you get to see this full spectrum across all these different industries and all the similarities.”
Though they did not disclose the company’s revenue or profit, it’s clear Kittrell and Burnette have had enormous success. But both take pains to behave modestly.
Property records indicate Kittrell doesn’t even own a house. Burnette’s wife is listed as the owner of a home purchased for $1.5 million in 2009.
“I’ve never in my life spent more than 10 percent of my income to live off,” Burnette said. When asked why he chose to use his money to make investments, he said the answer was simple.
“It doesn’t matter who you are, if it costs you only $100,000 to live, what in the world are you going to do with the rest of it?” Burnette said. “This is what makes the most sense to me — enabling people to meet that goal of ‘We are going to produce something.’ ”
To that end, Burnette said they are now working with Florida State University to help them commercialize some of their solar energy technology, a direction he’s excited about taking and the reason for a recent trip to China to conduct research.
Kittrell said he appreciates the unique capacity Hunter & Harp has to make Tallahassee a better place to live.
“Right now we’ve got a reputation of being the capital, driven by state government and Florida State University and FAMU and TCC,” Kittrell said. “If I had an overall vision, hopefully we build a city that one day can hold the talent that we produce — and that is when the city will grow.”
Kittrell and Burnette
» SheltonDean (federal contracting work)
» Hotel Duval (hotel)
» Midtown Filling Station (restaurant)
» Genghis Grill (restaurant)
» Ol’ Man Treestands (hunting supplies)
» Brandt Information Services (information technology)*
» Development at Tennessee and Monroe – retail and offices
» Restoration and renovation of four buildings in downtown Jacksonville
*—Only Burnette is a co-owner