How the real estate market slowdown has affected area mega-housing developments

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How the real estate market slowdown has affected area mega-housing developments

By DAVID BAUERLEIN   |   More by this reporter  |  Morris News Service   |   Posted: Monday, October 20, 2008 ; Updated: 12:46 AM on Monday, October 20, 2008

They thought big.

Their developments would build homes and town centers across thousands of acres.

One after another, they took their proposals to the St. Johns County Commission, arriving like airplanes being cleared for landing at a busy airport.

Now, they're just waiting for the market to come back.

Twin Creeks, SilverLeaf Plantation, and Ashford Mills were among the mega-developments that won approval from St. Johns County when home prices were soaring and rooftops were rising at a breakneck pace. None of the three "developments of regional impact" has broken ground.

SilverLeaf Plantation, which would be the second-biggest development in St. Johns County behind Nocatee, has gained new residents of the livestock variety. The Hutson Cos. of Jacksonville is using the land for 1,200 head of cattle, said senior vice president Rachael Bennett. She said the land was classified as agricultural property when the Hutson Cos. bought it, and that's how it will be used for the foreseeable future.

"From an operational standpoint, the DRI was a long-range plan that would work well, certainly in a hot market, but if the market isn't hot, we're perfectly content to keep it as a farm," she said.

RiverTown, also in northern St. Johns County, has moved forward. Jacksonville-based St. Joe Co. opened a home sales center and built amenities such as an athletic complex with baseball fields at RiverTown.

But the home sales market remains weak. St. Joe has been in talks with home building companies about modifying their contracts for how fast they purchase lots in RiverTown, according to the company's most recent quarterly report.

The slowdown has given St. Johns County a respite from population growth that had been "nosebleed fast," said St. Johns County Commissioner Cyndi Stevenson.

"We needed a break from 7 percent [annual] growth," she said. "What we've needed to see is a little more balanced growth, and we're starting to see more commercial development. That's kind of how the free market works."

Still, she said the pendulum swing has been a "bit extreme." She said she'd like to see steady, 3 percent growth.

During the housing boom, St. Johns County was a hotbed of activity for large-scale pro-jects known as developments of regional impact in state growth-management law.

From 2001 to 2006, St. Johns County approved seven developments of regional impact for bedroom communities. In order of approval, they were Nocatee, Aberdeen, Durbin Crossing, RiverTown, Twin Creeks, Ashford Mills and SilverLeaf Plantation. The county also signed off on World Commerce Center, a DRI focused on office, industrial and retail.

In Duval County, the Timucuan development on the Northside won city approval in 2007, but the state challenged the agreement. The landowners came back to the city this summer to get the designation repealed, allowing development to take place in smaller pieces.

In Nassau County, the Three Rivers development won approval in 2006 but there hasn't been any activity at the site, according to the Northeast Florida Regional Council, which monitors such developments.

In Clay County, Saratoga Springs was approved last year but has not yet broken ground.

To gain approval, a developer must commit to paying for construction of regional roads that will handle increased traffic from new residents. St. Johns County also negotiated for developments to help pay for new schools and build parks that would be available for use by all residents, not just people living in the developments.

Even as developers won support from local and state officials, the window of opportunity was closing on the home-building boom. The last three developments to win approval -- Twin Creeks, SilverLeaf Plantation, and Ashford Mills -- are the ones that haven't broken ground.

Curtis Hart, vice president of the Collins Group in Jacksonville, said the company is waiting for a rebound in the home market before moving ahead with Ashford Mills.

For St. Johns County, the downside of that wait-and-see approach is the mega-developments aren't financing the roadwork and amenities that go hand-in-hand with building new homes.

The Twin Creeks development, for example, entailed funding to widen County Road 210 between U.S. 1 and Interstate 95, help build an overpass for County Road 210 across U.S. 1, and expand the traffic capacity of the interchange where Interstate 95 meets Country Road 210.

After Twin Creeks foundered, the county joined forces with the state to finance a $4.8 million contract to add lanes at the I-95 interchange. But the county still needs money to do the other projects that Twin Creeks would have bankrolled.

Source: http://staugustine.com/stories/102008/news_102008_011.shtml