Tuesday, October 23, 2018
Business

St. Joe Co. sale of timberland to make the Mormon Church Florida's biggest private landowner

The Mormon Church is poised to become the largest private landowner in the state.

AgReserves Inc., a Utah-based tax-paying affiliate of the church, is buying nearly 383,000 acres in northwest Florida from the St. Joe Co., according to a deal announced Thursday.

The price tag of $565 million includes the bulk of St. Joe's timberland in Bay, Calhoun, Franklin, Gadsden, Gulf, Jefferson, Leon, Liberty and Wakulla counties.

The church already controls the Deseret Ranches in Central Florida, which consists of about 290,000 acres spread over three counties. The new deal would push its holdings above 650,000 acres. That's more than the other Florida land heavyweights, including Perry-based Foley Timber and Land Co. (562,000 acres) and Plum Creek, a Seattle-based real estate trust with 448,000 acres, according to Plum Creek's website

AgReserves intends to keep using the St. Joe land for timber and agriculture and will assume all existing agreements and contracts involving timber production.

"AgReserves has demonstrated its commitment to wise land stewardship and prudent resource management during more than 60 years of ranching and agricultural operations in east-central Florida," said Paul Genho, chairman of the AgReserves board. "We will apply that same commitment and expertise to managing the property we are acquiring in Florida's Panhandle. We look to the long term in everything we do."

St. Joe will hang on to its residential and commercial real estate and its resorts and leisure and leasing parcels and any land that it plans to develop for any of those purposes.

A dozen years ago, St. Joe tried to reinvent itself as a developer of master-planned communities throughout the Panhandle. The push soured during the state's real estate bust, and the company wound up posting a stunning $330 million loss for 2011.

At its peak, the St. Joe Co. owned well over a million acres in Florida. After the sale, it will own about 184,000 acres.

The company described the land it was selling as "non-strategic."

"This sale of timberland will help the company concentrate on its core business activity of real estate development in northwest Florida," Park Brady, CEO for the St. Joe Co., said in a statement. "The proceeds from the sale will provide the company with significant liquidity and numerous opportunities to create long-term value for our shareholders."

Bo Taff, who helps manage Foley Timber, viewed the deal favorably.

"We're glad to see roughly 400,000 acres will be in long-term private ownership," he said. "And based on what we know of the company and their land management practices in central Florida, we believe they will be good stewards of the land in north Florida as well."

Branching out from its Utah base, the church began assembling land for its Deseret Ranches in Florida in the 1950s. Today, AgReserves oversees a vast operation that includes beef cattle, citrus and timber along with farming. It employs about 90 full-time workers, including some of the original families who came east to work on the ranch in 1952.

Beyond Deseret Ranches, AgReserves operates investment farms and ranches throughout the world. Through its subsidiaries, the company also produces potatoes and sweet corn for the food processing industry.

The agricultural arm is low-key, offering scant details on the publicly available portion of its website. The site currently advertises just three full-time positions in Florida: property and water resources manager; general manager of Deseret Farms of Ruskin; and cowboy.

Its home page highlights a quote from former church president Gordon B. Hinckley explaining the long-haul strategy:

"We have felt that good farms, over a long period, represent a safe investment where the assets of the Church may be preserved and enhanced, while at the same time they are available as an agricultural resource to feed people should there come a time of need."

The theme is consistent with a broader teaching within the Mormon Church to be prepared for adverse times by building a three-month supply of food; storing drinking water; saving a financial reserve; and, as possible, accumulating a longer-term food supply of items like wheat, white rice and beans that can last 30 years or more.

Industry observers indicated the deal's per-acre price of nearly $1,500 seems consistent with the infrequent sales of large timber tracts.

The St. Joe Co. said the final price of the deal may change before it closes. Assuming approval from both regulators and St. Joe shareholders, the sale is expected to close in the first quarter of 2014, St. Joe said. Shares in St. Joe closed at $20.99, up $2.86 or nearly 16 percent.

Times researcher Natalie Watson contributed to this report.

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