Putting its money where its land (and airport) is

March 18, 2010

Behind St. Joe Co.'s headquarters relocation: Putting its money where its land (and airport) is

Wake up and good morning. What's Jacksonville's loss is the Florida Panhandle's gain. St. Joe Co., for decades the largest private land owner in Florida (now passed by, I believe, by Plum Creek Timber Co.), is relocating its headquarters near Jacksonville 300 miles due west to the Panama City area of Florida's Panhandle, moving it closer to a new, St. Joe-inspired international airport opening in May. (Photo: St. Joe's Watercolor beach development on the Florida Panhandle.)

There are several story lines here:

* First, Jacksonville is taking a big hit by losing a large corporate headquarters. The Florida city, not unlike Tampa Bay, is not exactly swimming in large, higher-profile companies, though locals say St. Joe has never been much of a local  community booster in Jacksonville. Still, any time a large company moves, people start sniffing for something fishy (not necessarily the region's aromatic paper mills). Why did they move? What's wrong with Jacksonville? Keep in mind Tampa Bay just took a big hit this year with the soon-to-leave headquarter's move of Walter Energy to Alabama. St. Joe's market value  is $2.7 billion, while Walter's is $4.73 billion.

* Second, St. Joe is consolidating its influence and focusing it on the region of Florida where it owns the most land and where it is most development-focused. Consider the brand new airport opening in two months outside Panama City. It's called the Northwest Florida Beaches International Airport. Well, St. Joe rebranded the Florida Panhandle, aka the Redneck Riviera, as Florida's Great Northwest (a Panhandle local reminds me) years ago. St. Joe provided the land for the airport. St. Joe is moving its HQ near the entrance of the new airport. St. Joe is developing the many cares it still owns adjacent to the airport. And St. Joe convinced Southwest Airlines to use the new airport by agreeing to cover any early losses the airline may sustain. That's clout. And, of course, Southwest's jets and a bigger airport suddenly means a far larger swath of America will have direct and quick access to the Panhandle, which previously was served by a smaller airport offering far more limited geographic service.

* Third, like most real estate developers, St. Joe has been beaten up by the recession and collapse of the housing bubble. St. Joe started developments rapidly in the past ten years, trying to leverage its beachfront and nearby property to appeal to upscale buyers of second homes and vacation houses. St. Joe got hit hard a few years ago and announced layoffs and delayed certain developments until the economy showed signs of coming back. Clearly, moving its headquarters to the Panhandle is a vote of confidence that St. Joe believes that part of Florida still has plenty of potential.

So tough luck, Jacksonville. We feel your pain. As for Panhandle leaders, folks are thrilled, according to the Panama City News Herald . "It’s a heck of a show of faith and trust in the region that the corporate executive team of St. Joe wants to go to our churches, dine in our restaurants, send their children to our schools and make that commitment to Northwest Florida,” State Rep. Jimmy Patronis, R-Panama City, told the paper.

This is a significant power shift, economically and politically, for the Panhandle.

-- Robert Trigaux, Times Business Columnist