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

St. Joe Company Reveals West Bay Timetable

From: News Herald 3/6/2010

PANAMA CITY — St. Joe Company is gearing up to promote West Bay as a premier location for industries and plans to have infrastructure in place before 2012.

“What we are creating in West Bay is a new central business district for Bay County,” said Kevin Johnson, St. Joe vice president of economic development. “This is the largest mixed-use facility in the United States of America.”

Johnson spoke to a packed room of more than 200 government and city leaders during the Bay County Chamber of Commerce’s monthly First Friday event.

“The most exciting news is they have a timetable and they are investing in infrastructure,” said Janet Watermeier, Bay County Economic Development Alliance executive director.

St. Joe has a timeline to complete infrastructure for the first 100 acres at the new industrial park adjacent to the new Northwest Florida Beaches International Airport by about mid-2011, Johnson said. Another 300 acres are planned to be ready by the end of that same year, he said. Eventually, 1,000 acres will be developed for industrial, flex-commercial office and retail use.

The timetable is an estimate because of the magnitude of the project, Johnson said. In the next three years, St. Joe hopes the state will release money to move State 388 to better facilitate the airport.

“This is not like baking a cake – there is no timing on it,” Johnson said of the project. “What we want to do is get all the ingredients so that when the time is right, we have all the necessary ingredients to bake the cake.”

The date release is exciting for economic officials because it indicates the industrial park will become a reality, Watermeier said.

St. Joe is actively courting particular companies, using a Dallas real estate group whose corporate clients St. Joe hopes to attract. To draw attention, St. Joe is targeting trade writers to tour the new airport and, beginning Tuesday, plans to make presentations directly to specific companies, Johnson said.

Bay County is best positioned for aerospace and defense industries, followed by transportation and logistics, financial, health services and environmental, Johnson said. St. Joe hopes to see a cluster of aerospace firms at the new airport. That means a focus on education and advanced training and research, he said.

The local workforce is only one element on which Bay County plans to focus, Watermeier said. The alliance recently revealed a comprehensive plan that looked at everything from ready-to-build sites and existing structures to telecommunications and infrastructure needs.

St. Joe is working with the alliance to develop incentives to attract businesses, Johnson said. He would not give any specifics about what St. Joe wants in any incentive package.

“We want to be able to respond to the bottom-line needs (of companies),” Johnson said.

Bay County has relied on beautiful beaches to build its tourism industry, but sugar sand and green water isn’t enough to draw diverse, high-wage companies and keep them, Johnson said.

“Don’t just turn on the sunshine light — that’s not enough,” Johnson said. “We have to change how we compete and you can’t do it by standing still. We have to think about how we compete for jobs. We can’t just wait for them to come.”