The St. Joe Company yesterday put a gun in its mouth and shot itself in the foot. The Jacksonville-based company announced it has put 100,000 Florida acres up for sale, will lay off 75% of its workforce and will scrap the dividend it pays shareowners. In addition, St. Joe announced it was getting out of the construction business and will concentrate on developing planned communities.
The company certainly could have "planned" a lot better over recent years as hurricanes, clogged roads, unnaturally high real estate prices and increasing property taxes started reversing the migration trends in and out of the state. It isn't as if this was a surprise to anyone with a Florida newspaper subscription. Maybe if the planners at St. Joe had been doing their jobs, the drastic measures of yesterday's announcements could have been phased in over time.
In any event, the strategic planners and public relations staff ought to be first in the purge for letting their chief executive sound like a nincompoop. During a conference call yesterday, St. Joe CEO Peter Rummell talked out of multiple sides of his mouth.
"This is not a fire sale," he said of the dumping of 100,000 acres, 190 homes and 1,200 developed home sites, not to mention the elimination of 760 jobs. "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." Like, perhaps, St. Joe's stock price?
The St. Joe press release that preceded Mr. Rummell's obfuscation is insulting to anyone who understands the basics of business and how to read plain English.
"St. Joe intends to harvest value from its land assets that are no longer strategic," the release states, "that have already been moved to their highest and best uses, or whose full potential value is beyond the time-value curve."
Even the National Association of Realtors has stopped denying the realities of the real estate market, but St. Joe is still in a Sunshine State of denial.
"I firmly believe," CEO Rummell added, trying to convince us that he firmly believes anything that smacks of forthrightness, "that we would be doing this whether the market was good or bad."
Yeah, right.
If Coore & Crenshaw can replicate at the new Sugarloaf Mountain in Floride their masterpiece at Cuscowilla, whose bunkers are both classic and colorful, then "free" membership could be the real deal.
As the housing market, especially the new construction part of it, continues to weaken, builders are trying just about everything to move product. We've noted that Hovnanian and other national companies have resorted to deep discounts on homes already built, and almost all builders, including the local ones, are throwing in extras like high-end appliances and plasma TVs just to provide enough incentives to attract buyers from an ever shrinking pie.
Now the LandMar Group, which builds communities primarily in the southeast, is offering "Founding Family Incentives" for anyone who purchases a home site at the company's Sugarloaf Mountain development near Orlando. LandMar, which is headquartered in Jacksonville, is offering a 15% rebate on home sites and a choice of either an additional 10% rebate on the cost of a home site - if you build within two years of purchase - or a free upgrade to full golf membership, an $8,000 value. An Associate Golf Membership fee, typically $12,000, has also been waived, meaning that if you opt for the $8,000 upgrade, the golf initiation costs nothing. Founding families will also be memorialized in some "permanent place" in the community, presumably a plaque in the clubhouse.
The golf deal seems particularly interesting since the course, set to open next year, is a Bill Coore/Ben Crenshaw design, and most of their courses are celebrated in golf design circles. Their Cuscowilla course in rural Georgia is a classic, characterized by red bunkers (from the mix of clay and sand), fairway bunkers fringed with natural grasses, and an immensely fair but challenging layout. It is also fairly flat, which the course in Florida is likely to be, despite the "mountain" in the community's name. The only mountains in central Florida are at Disney World, and they aren't real either.
Looking for a home in the Orlando area, or anyplace else in the south? Let us know and we will put you in touch with a real estate broker who can show you communities that best fit your lifestyle, and your game.
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March 2024 In This Issue Half Million People Leave Florida. Why? Your Next Home Not Getting Bigger; It’s Getting Better
