Monday Morning: Balmy Boca carries message of renewal

At the Boca Raton Resort and Club on Florida’s Gold Coast, the air is languid and balmy.

This is the tail end of the hurricane season, and the resort is settling in for the winter, a time when the well-to-do traditionally begin their pilgrimages south to escape the biting winds that sweep down from Canada and chill the Eastern seaboard from Maine to North Carolina.

For nearly a decade, the Securities Industry Association, the nation’s premier trade group representing the brokerage industry, has also made the trek to the Boca Raton club for its annual meeting.

An eccentric visionary named Addison Mizner founded the resort during the height of the Roaring ’20s – America’s first great bubble economy.

A self-proclaimed Klondike gold prospector and prizefighter, Mr. Mizner was 6 feet 2 inches tall, weighed 300 pounds and was fond of parading in public in his silk pajamas with a monkey perched on his shoulder.

Mr. Mizner was also an architect who had a fondness for the finer things in life and knew how to cultivate the right friends.

He teamed up to build the resort with Paris Singer, heir to the sewing machine fortune, and once counted the likes of Elizabeth Arden, Irving Berlin and Harold Vanderbilt among his backers.

The resort reflects his eccentricities and his tastes and was a hit with Wall Street tycoons from the day it opened. They were amply represented among the movie stars and European royalty who attended the dedication.

The buildings, all painted a flaming-pink salmon color, reflect a heavy Moorish influence. They are a rich confection of arches, gateways, intimate courtyards, vaulted ceilings, soaring columns, tropical landscaping and mosaic fountains.

The resort is flanked on one side by a championship golf course and on the other by the million-dollar views of Florida’s yacht-studded Inland Waterway. Beyond a thin barrier island lies the ocean.

With its old-money feel and slightly over-the-top pretense, the resort has been the perfect backdrop for the annual gathering of Wall Street’s movers and shakers.

For the past decade, the booming economy richly rewarded the securities industry, pushing salaries and bonuses to new heights and swelling payrolls. All of that began to change, of course, with the crash of the Internet economy.

But in the wake of the Sept. 11 attacks on the World Trade Center and the Pentagon, a grim new reality slowly has been overtaking the industry. And even the verdant luxury of the Boca Raton club couldn’t mask the seriousness of the situation facing even the strongest brokerage firms.

Last year, more than 700 SIA members flocked to the resort for the annual meeting, but this year, industry officials acknowledge, that number had fallen to around 450.

Some companies refused to let their executives fly, others were too consumed by the post-attack task of doing business, and still others simply didn’t want to spend the money. Indeed, Wall Street has been ravaged by layoffs.

In a study published before the Sept. 11 attacks, Sanford C. Bernstein estimated that as many as 34,000 workers, or about 9% of the industry, were in danger of losing their jobs over the coming year.

Those numbers likely have been multiplied by the attacks.

Even industry stalwart Bear Stearns Cos. last month announced that its intent to cut 830 jobs, about 7.5% of its work force.

Those cuts follow similar announcements by nearly every other major brokerage firm – from Goldman Sachs Group to Morgan Stanley and most recently Credit Suisse First Boston.

Merrill Lynch & Co. Inc., the nation’s largest brokerage, is set to lay off more than 10,000 workers as part of a major retrenchment that could change the face of the brokerage industry.

One Merrill executive could only shake his head and offer a wry smile when asked how things were going. “It’s hard to tell when you don’t know whether you’ll have a chair and a desk in the morning,” he said.

While the industry staged a remarkable recovery after the attacks – stock markets reopened a week later and handled record volume without incident – it was clear that the events of Sept. 11 still weigh heavily.

Mark B. Sutton, the 2001 chairman of the SIA’s board of directors, acknowledged that the organization briefly considered canceling the meeting but decided to go forward “out of a determination to carry on with business as usual.”

“We wanted it to be a rallying point,” he said, to focus on the future.

Perhaps it should come as no surprise that Mr. Mizner ended up in bankruptcy after the Florida land boom and the the stock market collapsed in 1929.

But as a sleek white yacht glided slowly on the waterway below my window, the scene offered a gentle reassurance that as bad as things are, this too will pass.

Related Topics: Securities Industry And Financial Markets Association (SIFMA)