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Universal Health Care's exodus leaves gaping hole in downtown St. Petersburg

ST. PETERSBURG — Universal Health Care Group's 800 employees were a daily boon to downtown St. Petersburg merchants.

They accounted for half the business of a nearby Subway, and a big chunk of the daily receipts of cigarettes, soda and chips at Detroit Liquors. At Fortunato's Italian Market, groups of Universal employees ordered five pizzas to go when celebrating a co-worker's birthday.

The workers' sudden exodus this week — as a scandal-plagued Universal is liquidated and hundreds are left jobless — is leaving a big hole in downtown's economy.

"It's bad. They're 50 percent of my business," said James Clayton, manager of the Subway at 200 Central Ave. "I don't know how this is going to play out. I'll start ordering less food and making less bread." He hopes no Subway employees will be laid off.

"I think all the businesses around here are going to feel it. It's going to be very sad," said Margaret Bishop, longtime employee at Fortunato's Italian Market at 259 Central Ave.

At least 20 Universal employees were regulars for breakfast at the Lucky Dill at 277 Central Ave.

"We knew exactly how they wanted their sandwich or their omelette," general manager Shelly Burkett said. "We're going to miss them as customers, but they are the ones who have the real hardship."

Friday marked the last official day of business for the insolvent Universal, the day after FBI agents raided the firm amid widening allegations of fraud, embezzlement and other financial mismanagement. Only a skeleton crew will remain at the office at 100 Central Ave., mainly to service a small HMO operation in Texas and Nevada. The probe into alleged corporate wrongdoing could linger for months.

Managers and owners of downtown businesses said the best remedy for the economic blow is to land another big employer fast.

Mayor Bill Foster said he will meet with the city's economic development team next week to analyze the situation.

"Anytime you lose a large central base of employees at once it's going to have an impact," Foster said.

Detroit Liquors, a diagonal stone's throw from Universal's offices, is bracing for a big financial hit.

"They accounted for 75 percent of the day business. They came in here all the time," said Ben Pridgeon, a Detroit clerk.

Jeffrey Bullock, owner of Bull Fitness at 115 First St. S, said he has lost several personal training clients. He's offering a week of free classes to any displaced Universal employee to help with the stress of losing a job.

Zack Gross, owner of Z Grille at 104 Second St. S, said many downtown businesses survived the 2008 stock market crash and the 2010 BP oil spill. They will survive the loss of Universal, too.

"It will impact everybody just a little bit," Gross said.

Dozens of Universal employees have filed a class-action lawsuit alleging that they never received 60 days notice of the layoffs as required by law. Some workers were told that the notice was not required because the layoffs were due to unforeseen circumstances. An attorney for the plaintiffs isn't buying that.

"I don't think it's unforeseen, if you've committed fraud, that the FBI is going to show up at your door," said Ryan Barack, a Clearwater labor employment attorney representing the Universal workers.

Hundreds of employees who were hurriedly ushered out of Universal's offices during Thursday's morning raid were directed to call a recording to find out when they could get back in the building to return company property, collect personal belongings and go through the exit process.

Universal employee Sharon Loeffer took time to smoke a cigarette before eating her lunch outside Fortunato's on Friday. She usually rushes because most employees are allowed just 30 minutes for lunch.

"We might take a whole 45 minutes today," she said with a smile. "What are they going to do? Fire me?"

Members of just three departments — member services, case management and pharmacy representatives — were allowed back in on Friday.

The rest were told to check back Monday morning to see when they could re-enter. The uncertainty frustrated those who fretted about when they could file for unemployment, switch to a spouse's benefits or get access to any personal items left behind.

Employees were already upset to learn that their personal health benefits had been cut off and they would not be reimbursed for paid time-off days. Then they received one final monetary blow.

"With regards to the exit process," the company recording said, "this will not be considered a working day as the process will be expedited."

In other words, you won't get paid for cleaning out your desk.

Katherine Snow Smith can be reached at kssmith@tampabay.com or (727) 893-8785. Jeff Harrington can be reached at jharrington@tampabay.com or (727) 893-8242.

What's next for Universal Health Care?

. The liquidation of Universal Health Care's operations is effective 12:01 a.m. April 1. All members who have not independently switched to a private Medicare plan by then will automatically be placed on the original government Medicare program, which could mean higher out-of-pocket costs.

. State regulators will begin the physical liquidation of property at Universal's headquarters next week.

. Federal and state investigations into allegations of fraud, embezzlement and mismanagement of funds are ongoing.

Universal Health Care's exodus leaves gaping hole in downtown St. Petersburg 03/29/13 [Last modified: Friday, March 29, 2013 10:39pm]
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