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St. Joe Co. betting on Southwest

By
Real Estate Broker/Owner with Stone Real Estate Group, LLC

St. Joe Co., the largest private property owner in Northwest Florida, hopes Southwest Airlines will lift the company and region out of a major recession that has crashed the real estate market.

"We continue to believe we will be positioned to take advantage of the new airport," St. Joe president and CEO Britt Greene said. "We believe this is a game builder for St. Joe Co."

The company, which donated the land for the airport project, released its fourth-quarter and 2009 report during a press conference Tuesday. The company's net loss for 2009 was about $130 million. In 2008, the company lost about $40 million. The fourth quarter of 2009 saw a net loss of about $59 million compared to a loss of about $28 million for the same time in 2008.

The company was hit hard during the recession, which devastated property values last year. St. Joe sold about $6.6 million in commercial property and $14.3 million in rural property and is positioning itself for the opening of the Northwest Florida Beaches International Airport on May 23, officials said Tuesday.

"We are energized by the significant opportunities the airport will present since it is surrounded by some of St. Joe's most valuable land holdings," Greene said.

The company reduced overhead, restructured and renegotiated and extended its corporate credit facility, company CFO and Executive Vice President William S. McCalmont said. Southwest Airlines is key to St. Joe's plans, which include developing about 1,000 acres in the West Bay sector adjacent to the new airport, Greene said. St. Joe plans a 35,000-square-foot industrial-flex space and 50,000-square-foot commercial spaces. Greene said he expects to make announcements this year about companies locating at the new industrial park.

Local officials have said at least one company has shown interest in the space.

Southwest Airlines will fly up to 2,000 people per day to Bay County, which means more tourism, more business and more demand for real estate, Greene said. The new airport will be a contender for the aerospace industry as local leaders push to be part of a regional effort to build an aerospace corridor.

St. Joe agreed to pay Southwest up to $26 million to cover any losses the airline incurs during its first two years of operation.

Beazer Homes expects to build more than 200 homes, priced between $150,000 and $250,000, to meet demand, Matt Brandman, Beazer's Northwest Florida division president, wrote in an e-mail. New construction has been down countywide since 2008, except in Lynn Haven, and is a leading indicator for economic recovery.

Already, ticket sales are encouraging, Southwest Airlines spokeswoman Christi Day wrote Tuesday in an e-mail. She said vacationers often book early but noted Panama City is different than any of Southwest's other markets. The company is especially pleased with ticket sales in advance of the advertising campaign that starts in March.

"This is a sign that people who are already familiar with the market are excited about being able to travel there more easily than before, and at an affordable rate; and also a sign that others are discovering this new destination on Southwest.com," Day wrote. "We do hope to see this trend continue all the way through the start of service."
 
Copyright © 2010 The News Herald, Panama City, Fla., Scarlet Sims. Distributed by McClatchy-Tribune Information Services.

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