St. Joe Co., FLA's largest private landowner to cut 80% workforce, scrap dividends, sell 100K acres

[seafan]

Fla. developer calls retreat



WaterColor, the St. Joe Co. 499-acre waterfront development in the Panhandle town of Santa Rosa Beach, is St. Joe's flagship property.


By KRIS HUNDLEY, Times Staff Writer
Published October 9, 2007

Faced with a real estate market that won't budge and a stock price that won't stop slipping, Florida's largest private landowner is taking a chain saw to its operations.

St. Joe Co., a papermaker turned real estate developer, said Monday it would eliminate about 80 percent of its work force of about 900, sell 100,000 acres of land and scrap its dividend to shareholders. The draconian moves by one of the state's most prominent and politically connected real estate firms are the strongest signal yet that Florida's struggling housing market has yet to hit bottom.

Despite the dramatic restructuring plans, chief executive Peter Rummell insisted, "This is not a fire sale."

"We are not dumping stuff on the market and we are not going to make stupid decisions, but there are things that we believe have reached their height in pricing," he told analysts Monday. "I firmly believe that we would be doing this whether the market was good or bad."

.....

During the real estate boom, St. Joe flourished, even launching a PR campaign to rebrand the Florida Panhandle as Florida's "Great Northwest." The company's stock topped $80 a share in mid July 2005. But when home sales slowed, St. Joe's stock started on a downward skid. From about $60 in May, the company's shares closed Monday at $34.04, down 11 cents.

The result? In those five months, more than $1-billion of the company's market value vanished. The company's profit dropped in four of the last six quarters, and sales have not risen since the third quarter of 2005.

.....

As part of its restructuring, St. Joe intends to sell "nonstrategic" assets including the Sunshine State Cypress Mill in rural Liberty County west of Tallahassee and unspecified parcels with commercial entitlements.

Also "priced to sell," according to the company, are 1,200 developed homesites and about 190 homes. Most of these residential properties are in a 200-mile swath across northwest Florida.

Rummell said St. Joe would focus on its "high-growth assets," particularly 75,000 acres in Bay County surrounding the site of a recently approved new international airport. In August, the U.S. Army Corps of Engineers gave final approval to the controversial project, which will be built on land donated by St. Joe about 20 miles northwest of Panama City.

.....

Rather than dwell on its job cuts or land sales, St. Joe characterized its broad slate of changes as a way to "accelerate value creation."

"We are dramatically changing the company to become more efficient," Rummell said.

And just before Jeb Bush left the governor's mansion in January, 2007, he was a busy little bee, buying up properties from his pals at St. Joe's, using millions of dollars of taxpayers' money.




'Unique' DOT land deal gets approval (Jeb Bush and St. Joe Company), September 27, 2006

Link to these excerpts no longer active)

TALLAHASSEE - State lawmakers unanimously approved a deal Tuesday to spend $46 million to purchase 4,000 acres for current and future roads from St. Joe Company, the politically connected firm that is the largest private landowner in the state.
State transportation officials, who have labeled the deal ''unique,'' have defended the deal as a way to acquire property at a discount and avoid the legal battles that usually occur when the state wants land for roads.

''If we have the ability to purchase the right of way now, literally saving the taxpayers hundreds of millions of dollars, I think it's a great program,'' said state Sen. Mike Fasano, a New Port Richey Republican and member of the 14-member panel that voted Tuesday.

Environmental groups derided the decision as ''corporate welfare'' for St. Joe, which enhances the company's vast holdings.
Elliott Negin, a spokesman for the National Resources Defense Council, criticized Tuesday's vote, saying it was wrong to plan for roads without knowing what kind of development is planned.

.....

Over the last few months, St. Joe officials negotiated the deal to have the state purchase 4,000 acres of land spread over 10 counties in Northwest Florida. The land is equivalent to 180 miles of roads, but the land is for both existing road-widening projects and for roads that may not be built for at least 10 to 15 years. DOT is only buying the rights to the land, and may in fact, swap it for different parcels if future studies show the land is not needed.

The state legislators had to approve the transaction because DOT needed to shift the $46 million from another land-buying account.

Rep. Ron Greenstein, a Coconut Creek Democrat and commission member, chided DOT bosses for not letting lawmakers know about the deal until shortly before Tuesday's meeting. He also asked why the proposal needed to pass before November, when a new governor will be chosen. The administration of Gov. Jeb Bush has long-running ties to St. Joe.

.....

DOT will buy 4,000 acres from St. Joe, September 27, 2006

.....

The deal, about six years in the making, is raising eyebrows because the land hasn't been appraised yet and the company has long ties to Bush.

.....

The deal does come at a convenient time for St. Joe, Florida's largest private landowner, which has been dealing with the souring real estate market. The Jacksonville company's earnings and stock prices have not been rosy, and the company laid off about 150 employees, it reported in August.

.....

On Friday, St. Joe chief strategy officer Chris Corr wrote a letter to the DOT saying the company is committed to investing at least $50-million into transportation infrastructure in areas close to St. Joe's property. This would also benefit the northwest Florida public, he wrote.
Both the state and the company have said that the reason to buy now is to lock in cheaper prices for the state, assuming that real estate prices will increase as development continues.

State auditors have criticized the state for paying too much for land in the past.

And, surprise, surprise, it was done when the Legislature was not in session.




It gets even better...

A boondoggle in the Florida boondocks, October 9, 2007

Here's the plan: build a very big airport - a Tampa International-sized airport - way out in the wild next to Pine Log State Forest. Call it the "Panama City-Bay County International Airport," even though Panama City is 30 miles away and already has an airport. Insist that West Florida "needs" expanded air service, even though passenger traffic from Panama City is half what it was in 2000. Be shocked! shocked! if anybody suggests that the raison d'etre for airport relocation is so that St. Joe Co. can develop its vast adjacent acres into high-priced ersatz "Old Florida" villages with all the charm of a theme park.

Never mind that St. Joe is donating 4,000 acres for the new site, half of it wetlands which will be destroyed. (St. Joe "promises" to set aside 9,000 acres of conservation land in return). Never mind that the housing boom which made St. Joe as fat and happy as a kennel tick is over, and that the company has been laying people off.

Florida taxpayers will take care of it. We always do. Even a boondoggle in the boondocks.

"This has nothing to do with airports and airplanes and such," says Donald Hodges. "It's a land deal. In Florida, if you peel an onion down far enough, you find a land deal."

Hodges retired from Delta Air Lines after 20 years as an engineer, executive and airport design expert who worked on the expansion of Atlanta Hartsfield. He isn't exactly antiaviation. He's not a wild-eyed socialist, either: "I'm on the Bay County Republican Executive Committee, for God's sake," he says.
But he does think that this new airport is a "house of cards," an environmental nightmare and a lousy economic proposition. He's hardly alone. The people of Bay County voted against the new airport. But hey, here in Florida winning a vote is often just a suggestion.

Boondoggle boosters insist the project will bring jobs to West Florida, though a study conducted by an Orlando economist projected that most would be in the service sector. Want fries with that $700,000 second home?
The Federal Aviation Agency, concluding that the economic benefit of relocation was "slight," will only grant $72-million, the same amount they would spend upgrading the existing facility. To be fair, the FAA did concede that the new airport would save on fuel consumption - after all, it's 6 miles closer to Atlanta.

This whole deal hangs on what Joseph Tannehill Sr., chairman of the Airport and Industrial District, terms "deficiencies" at the current airport: short runways, residential areas on three sides and water on the fourth. Curiously, airports with the same problems, say, New York's LaGuardia, D.C.'s Reagan-National, and Boston's Logan, have yet to be shut down by the feds.

.....

Wonder how much money Jeb just lost in St. Joe's fall?

Not to worry.... he recently joined Tenet Health Care as a director, and Lehman Brothers as a financial advisor.


That corporate welfare is nice, huh?

[rpannier]

1. It's good that Tenet and Lehman hired him...

Based on his past success, he will probably run them into the ground too.

[seafan]

2. A morning kick. n/t

[gratuitous]

3. "This is not a fire sale"

Peter Rummell insisted as he directed a hose at his executive compensation package.