Jacksonville losing St. Joe Corporate Headquarters

[cline]

Their panhandle developments are way more enviromentally freindly that the rape and pillage they did at Rivertown. Most of their market seems to be over there now.

Their panhandle developments are the embodiment of a rape and pillage job.  And their market has always been over there.

[Lucasjj]

"Wouldnt GAAP require the assets to be booked at current market value?"

Land is recorded at historic price, not market value.

[stjr]

"Wouldnt GAAP require the assets to be booked at current market value?"

Land is recorded at historic price, not market value.

--------------------------

True, although if an asset's market value falls below cost, GAAP, using the lower of cost or market approach, would require the asset be written down (this is a one-way street, write-ups are generally not allowed).  Of course, for taxes, no write downs until the property changes hands at a loss!

No matter the condition of the economy, I don't see their land going back to $1 an acre so that's not a threat to St. Joe.  My guess is they actually have the land on the books for a little bit more because they likely capitalized some improvements, carrying, and marketing costs into the land over the years.  Should still be minuscule compared to its current values.  If not, another sign of gross mismanagement.

[tufsu1]

Jax, the reason management can screw the stockholders and the company and still look good is because Ed Ball bought most of St. Joe's holdings during the depression at $1 per acre or less. 

You should understand that it was the shareholders themselves in the mid-90's that were sick of mediocre "safe" returns...and wanted the company to get involved in real estate, thereby increasing their stock value.

The stock went from $20 in 1998 up to over $80 in 2006.....and many of the investors likely sold before it dropped back to where it is now.

[stjr]

Jax, the reason management can screw the stockholders and the company and still look good is because Ed Ball bought most of St. Joe's holdings during the depression at $1 per acre or less. 

You should understand that it was the shareholders themselves in the mid-90's that were sick of mediocre "safe" returns...and wanted the company to get involved in real estate, thereby increasing their stock value.

The stock went from $20 in 1998 up to over $80 in 2006.....and many of the investors likely sold before it dropped back to where it is now.

Let me clarify, some shareholders got screwed (obviously, the ones still holding the bag on the way down).  But, many of the controlling (note, it doesn't take many shares to control most public companies) shareholders (i.e. the ones who converted the company from a passive investor into an active developer) were also officers and directors who received very generous compensation for their paper profits.  It appears most of them jumped the ship before it began to seriously list.  Again, buyer beware.

[stjr]

Wow, four $1 to $6 million/year execs (based on last three years SEC filings) out of 194 employees in a company losing $71 million on $105 million in the last 9 months.    Ed Ball is sending steam out of his grave now!  He would fire all of them.  Really, Ed Ball made the money when he bought the land for nothing during the depression.  These guys and Mr. Rummell, below, don't deserve that much credit.

[Peter Rummell took millions more of compensation and benefits (in at least one year, alone, 2003, in the range of $10 to $15 million).  Millions more are reserved for severance and pension packages.]

(Note, although the T-U article below refers to an update today, it appears this article is actually from 2009 as the execs referred to left 12/2009)

St. Joe lays off two high-ranking executives
Cost-cutting move in light of difficult market conditions

   * By Mark Basch
   * Story updated at 9:43 AM on Wednesday, Mar. 17, 2010

Two of The St. Joe Co.’s (NYSE: JOE) highest-ranking executives will be leaving the company at the end of the year in a cost-cutting move, according to a regulatory filing.

Christine Marx, general counsel and corporate secretary, and Stephen Solomon, senior vice president and treasurer, are leaving as part of “continuing efforts to reduce overhead expenses in light of difficult market conditions,” St. Joe said in a filing Friday with the Securities and Exchange Commission.

Marx and Solomon were two of St. Joe’s four highest-paid executives, according to the company’s proxy statement filed earlier this year. Marx earned a base salary of $314,844 in 2008 and a total compensation package, including stock and options and other long-term pay, of $1.08 million. Solomon had a base salary of $282,744 and a total package of $901,652.

The only higher-paid executives are President and CEO Britt Greene, who had a total compensation package of $3.76 million, and Executive Vice President and Chief Financial Officer William McCalmont, who earned $1.56 million.

Marx had been with St. Joe since 2003 and Solomon joined the company in 1999. St. Joe said in the SEC filing that their duties will be transferred to existing St. Joe employees.

St. Joe, which reported 194 employees as of Feb. 1, has downsized its operations considerably in the last two years as the recession slowed business at the Jacksonville-based developer of residential communities. St. Joe implemented a plan in late 2007 to cut 80 percent of its workforce, in part by transferring those employees to the payrolls of other companies that partner with St. Joe.

St. Joe still owns about 580,000 acres of land, mainly in the Panhandle.

The company reported a net loss of $70.7 million on revenue of $105.4 million in the first nine months of 2009. St. Joe’s results have been falling each year since it peaked with revenue of $718.5 million and a net profit of $126.7 million in 2005.

Florida Trend Magazine, 2008, Rummell jumps the sinking ship:

Rummell Transformed St. Joe Co.
By Richard Westlund - 5/1/2008

Eleven years ago, Peter Rummell left Walt Disney Co. to become CEO of Jacksonville-based St. Joe Co. Fresh off the creation of Celebration as a “new town” near Orlando, Rummell had a clear mission: Transform an industrial conglomerate with interests in paper mills, timber, rail transportation and sugar cane into a real estate development company.

“We were all over the place,” recalls Rummell, 62, who is stepping down as CEO in May but will remain chairman. “At that time, the board hired me rather than a railroad or sugar guy because they thought the future was in the land. My job was to develop a strategy for the land, while taking apart the conglomerate in a way that made sense to shareholders.”

In the decade after Alfred duPont founded it in the 1920s, St. Joe purchased roughly a million acres in the Panhandle for next to nothing. That gave Rummell, who had started his real estate career in 1971, a fresh canvas to develop residential communities.

While selling off St. Joe’s older businesses, a process that took about three years, Rummell focused on two key development projects. Applying lessons learned with Celebration and the nearby New Urbanist community of Seaside, Rummell launched WaterColor, a master-planned beachfront development in Fort Walton Beach. “We knew there was an existing market for these homes, and the land was relatively easy to entitle,” he says. WaterColor set the pattern for future St. Joe residential projects and is virtually sold out.

Rummell’s second major goal was creating a new Panama City airport to improve access to the central Panhandle and spur economic growth. St. Joe donated 4,000 acres and became the leading advocate for the Panama City-Bay County International Airport, which is now under construction, with completion expected in 2010.

Richard Clattenburg, an analyst at T. Rowe Price Group in Baltimore, calls Rummell a visionary who changed both his company and the region, creating a more upscale vacation image for the Panhandle. “Peter can see what something could become years down the line while managing the process along the way,” says Clattenburg.

St. Joe’s stock price has mirrored Florida’s real estate cycles. As the Florida residential market took off, the company launched a series of developments from Tallahassee westward, and shares reached a high of around $90 in December 2005.

Then came the national market downturn, and St. Joe’s sales dried up. In 2007, profit fell to $39.2 million, compared with $51 million in 2006. The company cut its staff from 980 in mid-2007 to a projected 200 in early 2008. In mid-April, its stock was trading for around $40 a share.

“What we’re going through is one of the facts of life in the real estate business,” Rummell says. “There’s plenty of activity in our sales centers, but there’s no incentive for buyers to make a decision.” He expects 2008 to be another slow year, with some improvement in 2009.

St. Joe still owns about 700,000 acres â€" worth as much as $1 million an acre â€" with no urgent need to dispose of those assets. “When you deal with such large amounts of land, you have to take a long view, otherwise you’ll never capture the real value. I believe the next decade will bring even greater success for our company.”

Courtesy of St. Joe Proxy Statement filed with SEC:

The table below summarizes the total compensation paid or awarded to each of the named executives for the years ended December 31, 2008, 2007 and 2006, calculated in accordance with SEC rules.

(See full table at page 43 at: http://ir.joe.com/secfiling.cfm?filingID=950135-09-2383 )                                                                                                                                                                                                                                
 Peter S. Rummell
                  2008      1,400,197    
Former Chairman and
                  2007      2,836,798    
Chief Executive Officer    
                 2006       4,195,469        

[reednavy]

Seems smart to be adjacent to their biggest egg, hell, their golden egg.

KECP (Northwest Florida Beaches Int'l) opens May 23rd and will be the boon for them, but NW FL's spark to initiate serious sprawl.

[tufsu1]

that depends on your definition of sprawl...if it is continued development in undeveloped areas, then yes...if it is unplanned growth, then no.

http://www.nytimes.com/2010/03/10/realestate/commercial/10airport.html?ref=realestate&pagewanted=all

[urbanlibertarian]

Here's the address of the new airport: 982 State Highway 388, Panama City Beach, FL 32413

Here's the website of the new airport: http://newpcairport.com/

[reednavy]

I guess in a way that St. Joe's PC Airport and associated West Bay Sector Plan is controlled sprawl. While it is developing land that is nothing but forests, it has an overall plan to restrict it to within the mapped areas.