Pinellas failed to learn real estate lessons of 1920s

It was supposed to be a perpetual prosperity machine powered by the eternal sunshine.

For several years the fevered land flipping, home building and road grading transformed the Tampa Bay area.

Captivated by the rumors of riches, out-of-staters flocked to Florida for a piece of a sure thing. "Realtor" became a supreme career aspiration. The region's population doubled.

But just as people were counting their profits toward early retirement, a hurricane pulled the plug on the hyperactivity. Buyers turned cautious. Property could be had for 50 cents on the dollar. Paper fortunes vanished, and banks shuttered. Disillusioned Floridians pined for the hills of North Carolina.

Sound familiar? It's an outline of the 1920s Florida real estate boom and bust. But historical amnesiacs can be mistaken for assuming it describes the real estate roller coaster that's recently rocked our region.

For at least the past 100 years, at intervals of a few decades, Florida real estate lunges into manic overdrive. But for sheer weightless exuberance followed by back-breaking crash landing, nothing matches the boom and bust of the 1920s.

"Most people today have almost no historical sense of the boom and bust of the '20s,'' said Ray Arsenault, history professor at the University of South Florida, St. Petersburg. "When I bring it up, many people don't know what I'm talking about.''

All those staid old neighborhoods dripping with greenery and strutting like Spanish royalty around Tampa's Bayshore Boulevard and St. Petersburg's Snell Isle were the overhyped and overleveraged speculations of their day.

The Gandy Bridge, so familiar to decades of cross-bay commuters, was a grand undertaking completed by the skin of its teeth and hailed as a "masterpiece of bridgedom." Like the Suncoast Parkway of its day, it knit communities together, trimming the trip from Tampa to St. Petersburg from 43 miles to 9 miles.

The skylines of St. Petersburg and Tampa were set in stone in the 1920s and didn't change much until the glass skyscraper era. Think the original Vinoy Park Hotel and Snell Arcade in St. Petersburg and the Floridan Hotel and Tampa Theatre in Tampa.

Large -cale builders were rare back then, so most of the frantic flipping was in land, both raw and developed. Hundreds of thousands of lots changed hands, the buyers often winter vacationers set on making their fortune.

Gene Shea, a St. Petersburg Realtor for 60 years, spent winters in boomtown Palm Beach as a teenager in the mid 1920s. He recalls a five-member Hawaiian band, complete with ukuleles and steel guitars, luring buyers to a realty office.

"You'd drive out to the subdivisions and all the lots were staked out. But you didn't see many houses being built," said Shea, 96, one of the oldest working Realtors in the United States.

The St. Petersburg Times reported in 1925 that plots changed owners six to eight times. Not that the Times cared. It grew fat on hundreds of pages of weekly real estate advertisements.

In some ways, the atmosphere was weirdly different. Deals were struck on St. Petersburg's green park benches by agents wearing knickerbockers, the puffy knee-length pants. Realty companies enlisted retired ministers as salesmen or set up honey traps using attractive young women.

"It was so extreme. Salesmen sat on benches waiting for suckers — 'Have I got a deal for you!' " said Bill Tourtelot, whose grandmother and grandfather started the local family real estate company, Tourtelot Bros., in 1928.

As the Times described them in 1925, business practices foreshadowed those of the recent boom: "Sales are usually made with a small amount of cash being put up as 'binder money.' The investor who does not really have any use for the property except for profit on quick resale gets busy and resells it before the first payment falls due."

Like so many latter-day Donald Trumps, flashy developers flourished. In Tampa, you had David P. Davis, who launched a fleet of specially marked buses to dazzle prospects for his housing development on Davis Islands, which he dredged from the bay. It worked: On his first day he sold lots worth $1.03-million, a huge sum at the time.

St. Petersburg had its own cast of characters, like Walter Fuller, Perry Snell and "Handsome Jack" Taylor. Taylor was a hustler who fled to Florida after fleecing investors in stock scams during World War I. With his blue-blooded DuPont wife, Taylor corralled investors to build neighborhoods like Pasadena. The couple's fly-by-night ethics emerge in a story about a deal in which Mrs. Taylor rolled down her silk stocking and pulled out a hidden $10,000 bill.

Taylor kept a chauffeured Daimler limousine and held court in a private rail car. When the boom collapsed in 1926, Taylor skipped town so fast he left behind a private monkey house and an aviary of rare birds.

Snell was a Kentucky druggist-turned-real estate bigwig who adorned his downtown sales office with millions of dollars in art collected on grand tours of Europe.

On April 9, 1925, the Times disclosed details of Snell's new $4.5-million Mediterranean revival development, Snell Isle. Innovations included "underground systems for electric and telephone wires," and streets to be "ornamented with statuary... under the direction of a competent artist."

As 1925 became 1926, St. Petersburg's Evening Independent newspaper confidently proclaimed a "New El Dorado." Building permits had reached $24-million. A year earlier they had been a mere $9.5-million.

Tampa fared even better with $28-million in permits, five times the total of the year before. St. Petersburg and Tampa were dwarfed in that regard only by boomtown Miami, soon to be linked to the Tampa Bay area by the $6-million Tamiami Trail, now U.S. 41.

In just a few years, two-thirds of the lower half of Pinellas had been subdivided, and 300,000 lots had been bought and sold. Fifty subdivisions ran sales offices in downtown St. Petersburg, a city with 6,000 real estate agents.

As prime land vanished near the cities, buyers pushed into the boondocks. One 1926 ad for $4,500 bungalows in Pinellas Park urged buyers to live "just outside the high-rent district."

By late 1925, the smart money sensed the fever would break. The boom had run out of fuel. Fuller, who lost millions in the bust from building neighborhoods like Jungle Terrace, blamed a "greedy delirium to acquire riches overnight without benefit of effort, brains or services rendered."

"We just ran out of suckers," Fuller said with the hindsight of several decades. "That's all. We got all their money, then started trading with ourselves."

In a case of terrible timing, a Category 5 hurricane raked South Florida in September 1926. It was dubbed "the blow that broke the boom." Miami was devastated, and the ill effects metastasized to the rest of the state.

Hurricanes Charlie and Katrina performed a similar cold-water-in-the-face function with the boom that ended here in late 2005/early 2006.

A tentative recovery in the late 1920s was pinched off by the Great Depression. Much of Florida reverted to a swampy, buggy backwater, waiting for World War II to pull it from the muck.

St. Petersburg's government was so deeply in debt to pay for roads and utilities — and so accustomed to the cash bonanza of the boom — that taxes turned oppressive. Some homeowners actually jacked up their houses and shipped them on barges to the tax haven of Pass-a-Grille Beach.

The dour mood was captured in a popular joke during the Depression: A tourist arrived in St. Pete each November. He came with a $20 bill and one shirt — and changed neither during the winter.

Tourtelot's grandfather lost everything. He arrived in Florida with profits from a Chicago auto dealership and invested in Weeki Wachee land. "In 1928, it all became worthless," Tourtelot said. "And I mean overnight."

The bonhomie of the boom gave way to the bitterness of the bust. By the 1930s, Tourtelot's grandmother took to carrying a two-shot Derringer pistol in her purse.

Real estate transactions back then were low tech, and mass-production builders wouldn't arrive until after World War II. But human greed is a constant, historical shortsightedness a given. The next generation always considers itself invulnerable to the bust that shellacked its grandparents.

"In some ways, we're riding on the '20s and '30s even now," Arsenault said. "The aesthetic creations of that era are marvelous. If only we could do as well.''

James Thorner can be reached at thorner@sptimes.com or (813) 226-3313.

Pinellas failed to learn real estate lessons of 1920s 07/05/08 [Last modified: Wednesday, July 9, 2008 4:05pm]

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