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St. Joe for sale. A case of too many eggs in one (Panhandle) basket?

St. Joe Co., the one-time Panhandle juggernaut of real estate development and a company long steeped in Florida land history and political influence since the Depression, may put itself up for sale.

A number of investor fights inside the company are driving this possibility. But St. Joe's decision, announced Tuesday, to hire investment bank Morgan Stanley to pursue "strategic alternatives" that include a possible sale also begs this question:

Did St. Joe put too many of its development eggs in one basket — namely, yuppie vacation housing near the Panhandle beaches — only to crash head-on into the collapsed real estate bubble and, for the coup de grace, the BP oil spill?

St. Joe even moved its headquarters from Jacksonville several years ago to the Panhandle. The company gave away an enormous tract of land north of Panama City to create Northwest Florida Beaches International Airport. It promised to cover Southwest Airlines' losses if it provided ample air service.

The strategy was to provide jet-caliber, nonstop service to the Panhandle from a much broader swath of the United States than was previously offered through lesser airports and bumpy propeller planes. The idea? To lure upscale southerners and baby boomers to the long overlooked Panhandle — despite its lingering nickname of the "Redneck Riviera" — to sample St. Joe's upscale beachfront and adjacent developments built in the "new urbanism" style.

I've seen plenty of St. Joe Panhandle projects. Many are beautiful. Many are pricey.

In the late 1990s, St. Joe hired Peter Rummell as CEO after he built Disney's master-planned, new urbanism town of Celebration, with its old-style downtown, walkable sidewalks and front porches.

After Rummell, St. Joe CEO Britt Greene stayed the Panhandle course. Despite St. Joe's largesse in giving away land and building hospitals, some Panhandle residents resisted St. Joe as too pushy.

When the real estate bubble burst, the yuppies went away. St. Joe withered and began reporting losses. Investor David Einhorn, known for shorting stocks (profiting if the stock prices fall), recently claimed St. Joe inflated the value of its real estate assets.

St. Joe's largest shareholder, Bruce Berkowitz, still sees value in St. Joe. But he may be behind this week's shake-up and push to sell the company.

If the real estate market collapse was not stunning enough, St. Joe's decision to concentrate its assets in the Panhandle also made it fall prey to another disaster.

The BP gulf oil spill.

St. Joe sued BP and others tied to the horrific April spill claiming it's been harmed by bad global perception that white sand Panhandle beaches — key to so many St. Joe developments — are tainted by oil.

St. Joe got its start in 1936 during the Depression years when rich Alfred DuPont bought lots of Florida land dirt cheap. Ed Ball — a big name in Florida business and politics and DuPont's brother-in-law — eventually ran and expanded St. Joe.

Over the years, St. Joe owned various other businesses ranging from Florida East Coast Railroad and Talisman Sugar Corp. to upscale home and commercial builders. Always influential in Tallahassee, some of St. Joe's best deals came from selling conservation land to the state.

Are we about to see an end of an era for this Florida icon?

Robert Trigaux can be reached at trigaux@sptimes.com.

St. Joe for sale. A case of too many eggs in one (Panhandle) basket? 02/09/11 [Last modified: Wednesday, February 9, 2011 9:08pm]
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