St. Joe Company
- For the mining company see: St. Joe Minerals
|Traded as||NYSE: JOE|
|Industry||Real estate development|
|Jorge Gonzalez- President and Chief Executive Officer
Marek Bakun- Executive Vice President and Chief Financial Officer
Kenneth M. Borick- Senior Vice President - Chief Legal Officer
K. Rhea Goff- Vice President and Chief Administrative Officer
|Products||Residential, Commercial & Rural Land; Forestry Products; Resort Operations|
|Revenue||> US$ 14.6 million (January 1, 2012- September 30, 2012 |
The St. Joe Company (NYSE: JOE) is a land development company headquartered in Watersound, Florida. The company had been headquartered in Jacksonville, Florida, United States, and is Florida's second largest private landowner, owning about 567,000 acres in the state as of November 2012.
The company was founded in 1936 as part of the Alfred I. du Pont Testamentary Trust by du Pont's brother-in-law Edward Ball. Prior to its establishment, the trust had already begun land purchases, making its first one in 1923. During the land booms in South Florida, the company acquired still-cheap land in the Florida Panhandle. In 1933, du Pont's purchased the Apalachicola Northern Railroad. Apalachicola Northern had extended its network from Chattahoochee to Port St. Joe, Florida, in 1910, hoping to take advantage of increased shipping trade through the Panama Canal. However, when the Great Depression hit, business dropped off significantly. Du Pont purchased the struggling railroad and made plans to use the infrastructure to build a paper mill, leading to the foundation of the St. Joe Company. Du Pont drew up elaborate plans for the development of his mill town as "The Model City of the South", but died before it could be completed. His brother-in-law, Ed Ball, took control of the St. Joe Company in 1935 but never acted on the master city plan.
Construction began in 1936 and from 1938 to 1996, the company operated a paper mill at Port St. Joe, as St. Joe Paper Company. Land purchases continued throughout the 1940s and 1950s, often for "mere dollars an acre" and St. Joe eventually owned more than one million acres (4,000 km²). The company invigorated the local economy following the Depression, employing thousands at its paper mill, but wreaked havoc on the environment. The mill released sulfurous exhaust from sulfate pulping and dioxins, an unintended toxin generated by the chlorine bleaching process used to make white pulp. By the 1950s, the company was drawing 35 million gallons of water a day from the Floridan Aquifer, seriously depleting the water table. St Joe Paper also clear-cut millions of acres of old growth forest, engaging in silviculture to replant the areas with slash pine. The practice decimated the native longleaf pine stands, reducing the species to "2 percent of its former range." Because of this, the United States Department of the Interior designated parts of the region a Critically Endangered Ecosystem.
The paper mill was most profitable in the 1960s with products being directly marketed to company-owned box plants. However, an extended period of down time (9-months) due to market conditions in 1996 signaled the beginning of the end for the mill. After nearly sixty years, St. Joe decided to get out of the paper business. The mill was sold in 1996 to Florida Coast Paper for $390 million and was able to operate and produce paper until the decline of the container board market. The mill closed August 16, 1998 and did not reopen. The mill was gone by 2003.
After the dismantling of the paper mill, the St. Joe Company was back in town in 2008 to unveil a $344 million plan for the former mill site that was similar to Alfred du Pont's idealized Southern town – an integrated city with upscale residential districts, entertainment venues, a thriving port and a diverse economy. The company made a deal with the State of Florida to re-route US 98 inland to permit development of beachfront property.
Talisman Sugar Corporation
St. Joe acquired the Talisman Sugar Company in 1972, which included almost 50,000 acres (200 km2) in Palm Beach and Hendry Counties in the Everglades. St. Joe received negative publicity for their south Florida sugar cane business from labor unions and environmental groups, including by Cesar Chavez of the United Farm Workers. Additionally, pressures over environmental damage led the company to strike a deal with the federal government and state of Florida to sell its sugar business as part of an Everglades restoration project; Florida paid $133.5 million in 1999 to St. Joe Co. for the 50,960-acre (206.2 km2) Talisman Sugar Plantation. As part of the deal, the company continued using the land for an additional five years, during which it contracted the land to Florida Crystals and other sugar growers. In order to utilize some portions of the Talisman property which were not contiguous, land swaps with other sugar growers were necessary.
Some of St. Joe's most profitable deals came from selling conservation land to the state. A total of some 90,000 acres (360 km²) were purchased by the state for $182 million. That works out to an average of over $2,000 per acre—not a bad return on land that, according to the company website, was often purchased for "mere dollars an acre".
Florida East Coast Industries
Ball acquired a controlling interest in Florida East Coast Railroad for the Alfred I. duPont Testamentary Trust in 1960, which allowed the railroad to finally emerge from bankruptcy. On October 9, 2000, JOE spun off to its shareholders the 54% equity interest in FECI through the distribution of FECI Class B common shares.
Post Ball era
Following Ball's death in 1981, the company began to sell off its industrial operations and focus on land development. As a developer, St. Joe has distinguished itself as catering to more "well-heeled" clientele, but has also established a reputation as more environmentally friendly than the company under Ball. Pete Rummell, formerly chairman of Walt Disney Imagineering, was hired in 1997 to lead their real estate business and became Chairman and CEO.
St. Joe built a 140,000 sq ft (13,000 m2) corporate headquarters on the St. Johns River in downtown Jacksonville in 2003. At the groundbreaking, Rummell said, "This is an important milestone for us. We don't get a lot of revenue from the city of Jacksonville, but it's important to who we are and what we are." The company subsequently moved its headquarters to Watersound, Florida.
The company operates through four segments:
- Residential Real Estate develops large-scale, mixed-use resort, seasonal and primary residential communities, as well as selling housing units and home sites to retail customers and builders.
- Commercial Real Estate develops and sells commercial properties, including retail properties, multifamily parcels, office parks and commerce parks.
- Rural Land Sales markets parcels for various rural residential and recreational uses in northwest Florida. It sells parcels of undeveloped land and developed home sites within rural settings.
- Forestry grows, harvests and sells timber and wood fiber. Its products primarily include pine pulpwood, timber and cypress products.
Since the national downturn in the real estate market in the mid-2000s, the company's sales suffered, with earnings dropping off by 60 percent in 2006. As a result, the company cut its workforce, exited the homebuilding market and sold its office holdings which included the corporate headquarters built in 2003.
In the late 1900s, St. Joe began to sell timber land in rural areas after deciding to focus on community and commercial development. Rummell departed in August, 2008 and was replaced by Hugh Durden as Chairman of the Board. Durden was also Chairman of the Alfred I. duPont Testamentary Trust since 2005.
In December 2009, the company acknowledged selling two large developments at a loss, which they characterized as "non-strategic". The transactions were intended to take advantage of federal tax rules on losses from the sale of assets. On March 18, 2010 the company announced plans to relocate their corporate headquarters to a site near the Northwest Florida Beaches International Airport when their current lease expires in 2011. Most of the company’s land is located in the panhandle and their success depends on development there.
At the end of February, 2011, St. Joe announced that Britt Greene had resigned as CEO and President of the company. The company's largest shareholder, Fairholme, disagreed with management's asset development plans and sought to replace certain board members. Greene and three other members will announce their resignation from the board within a few days. Two members from Fairholme and former Florida Governor Charlie Crist will replace them.
The company began marketing the panhandle region as "Florida's Great Northwest" and was the major force behind plans to relocate and dramatically expand Panama City-Bay County International Airport in the hope that a larger airport would attract wealthier home buyers. St. Joe owns about 78,000 acres (320 km2) of land in the area surrounding the new airport site, and has announced plans to build 5,800 homes and 4,300,000 square feet (400,000 m2) of commercial space. The company has also offered to donate about 40,000 acres (160 km²) for preservation. The project attracted quite a bit of opposition, including taxpayer and environmental groups who pointed out that the current airport was operating at only half its capacity—with 12 outbound flights a day— and argues that the new facility would primarily benefit one developer, at taxpayer expense. The new airport was approved and construction began in 2009 on 4,000 acres (16 km2) donated by St. Joe. The Northwest Florida Beaches International Airport opened on May 23, 2010 northwest of Panama City.
Since construction, the new airport has seen much heavier use than the old one. For example, in the year ending June 26, 2012 the airport had 47,604 aircraft operations, average 130 per day: 47% general aviation, 23% military, 16% airline, and 15% air taxi. 110 aircraft were then based at this airport: 78% single-engine, 14% multi-engine, and 8% jet.
- Nelson, Melissa: New airport could put Florida's Forgotten Coast on map Atlanta Journal-Constitution, April 28, 2008
- St. Joe Company website, St. Joe Story-page 1
- Humanities & Social Sciences Online: Green Empire: The St. Joe Company and the Remaking of Florida's Panhandle by Kathryn Ziewitz and June Wiaz-2004 ISBN 978-0-8130-2697-8
-  Pulp & Paper, March, 2000-Florida Coast Paper mill to stay shut
- Angier, David:  Knight Ridder/Tribune Business News, May 4, 2003 - With Stench of Paper Mill Gone, Investors Catch Wind of Port St. Joe, Fla.
-  Zoom Info, Alfred I. duPont Testamentary Trust
- Leary, Alex & Liberto, Jennifer:  St. Petersburg Times, June 24, 2008-Florida to pay U.S. Sugar $1.75-billion for 187,000 acres in Everglades
- Hoovers.com: company profile-Florida Crystals Corporation
- Kleinberg, Eliot:  Miami Herald, April 30, 2004-Firm's M'S Exit Aids Everglades
- Barton, Susanna: "St. Joe builds new foundation" Jacksonville Business Journal, February 1, 2002
- Goodnough, Abby:  New York Times, May 9, 2007-In a Quiet Part of Florida, a Bid to Bring in the Crowds
- Hoovers Business Intelligence: The St. Joe Company
- Basch, Mark: "St. Joe sells St. Johns golf club as part of tax strategy" Florida Times-Union, December 28, 2009
- Basch, Mark: “St. Joe moving headquarters out of Jacksonville” Florida Times-Union, March 18, 2010
- Turner, Kevin: "St. Joe's CEO and three board members ousted in shake-up" Florida Times-Union, February 28, 2011