Who backed out of St. Joe's $130-million deal?
Wake up and good morning. I know, we've all got the buzz of the presidential election on our fuzzy minds this morning. Congratulations on a hard-fought, historical event. We'll be sorting this one out for months if not years.
But for now, I want to go instead to the 607,000-acre behemoth known as St. Joe Co., Florida's biggest private landowner (though it will lose that title as it continues to sell acreage). It reported earnings, a loss in fact, on Tuesday. Here's a basic story and here are greater details. You may remember, that St. Joe assembled the bulk of its rural land holdings in the 1920s and 1930s for pennies on the acre. The company has no debt and no mortgage on these holdings. The company's cost to keep it is minimal. Lucky St. Joe.
What's more compelling is St. Joe's strategy to keep reshaping the Florida Panhandle -- dare we still call it the Redneck Riviera? -- or, as St. Joe's marketing hammer dubs it, Florida's Great Northwest.
One of the recent mysteries at St. Joe is: What happened to this $130-million land deal earlier this fall for 67,365 acres of conservation land in Liberty, Jefferson, Gulf and Franklin counties? St. Joe terminated the sale but never identified the buyer or why the contract soured. Now the land is back on the market.
At little light was shed this week in St. Joe's earnings conference call with analysts. Here's the full transcript. Wachovia analyst Chris Haley bugged St. Joe CEO Britt Greene to elaborate. Greene did: The message seems to be that the buyer -- someone who has bought from St. Joe in the past -- got cold feet when the credit markets started drying up courtesy of Wall Street's meltdown. Here it is in Greene's own words:
"The contract was with the previous buyer of Joe lands. This is very non-strategic conservation oriented land. And it was frankly a result of the termination being a result of the buyer’s cost of capital and access the capital in the 11th hour that caused the termination. And given the timing of the closing in the capital markets at that time in early October, it was - they decided to terminate and to leave the contract. It doesn’t mean in the future that we won't sell to that buyer. They have been a good buyer in the past and I would expect would be in the future and understand the position they were in."
Also notable in the conference call was Greene's update on the new airport being built just north of Panama City, in the heart of the Panhandle. This has been a St. Joe project from day one because the larger runways will permit jets of size to reach the Panhandle, a crucial factor in St. Joe's strategy to improve the accessibility of Panhandle country to a greater reach of potential buyers.
To help folks stay up on the airport, Greene made note of a new Web site -- here it is -- that will track the progress and offer positive spin on a project scheduled to be open for passengers come May 2010.
--Robert Trigaux, Times Business Columnist