As head of St. Joe Co. for 11 years, Peter Rummell has spearheaded the transformation of vast swaths of Florida's Panhandle into high-end resort communities.
Now if he could just get more people to move in.
Describing the state's residential real estate market as the worst he's seen in 37 years, Rummell said Tuesday he'll be stepping aside as chief executive in mid May. He will be succeeded by William Britton Greene, 53, St. Joe's president and chief operating officer.
Rummell, 62, who will remain chairman of the Jacksonville company, said the transition was planned to be a nonevent.
"There's no hidden agenda here," said Rummell, who is credited with transforming St. Joe from a papermaker to a placemaker. "There's a time to come and a time to go."
Though clearly disappointed by his company's recent performance - St. Joe eked out a penny per share in earnings for the last quarter of 2007 - Rummell emphasized long-term prospects during a conference call with analysts.
"Joe's northwest Florida has arrived at a significant tipping point," he said, referring to the bulk of the company's 700,000 acres in the Panhandle. "I believe the best is yet to come."
Positives, Rummell said, include a reduced head count at St. Joe, slashed to 200 from 980 a year ago. The company is selling 100,000 acres of rural land, has pared capital expenditures and reduced its debt. Most important, as Rummell reminded analysts twice, a new international airport is finally under construction outside Panama City in the heart of St. Joe's market.
The airport, being built on 4,000 acres donated by St. Joe and surrounded by 75,000 company-owned acres, is seen as key to unlocking the developer's resort communities to hordes of retirees and second-home buyers from around the country. Rummell said bulldozers are moving, after several lawsuit-induced delays, and that has spurred conversations with potential new air carriers as well as industrial interests.
"The intensity is dramatically more than it was six months ago," Rummell said of interest in St. Joe's property in the airport area. "Let the games begin."
The resurgence is welcome after a couple of years in the doldrums. Tom Dodson, vice president of sales for St. Joe's West Florida region, said last week that after the real estate spike in 2004, St. Joe's residential developments starting slipping downward in mid 2005 and hit bottom in 2006. Though traffic picked up in 2007, sales barely budged. The company reported selling 134 home sites and 31 homes in the fourth quarter.
Dodson was optimistic that sales would pick up during the spring selling season. His rationale: The airport will bring a sense of urgency, and baby boomers aren't getting any younger. "How much longer will they want to wait to buy that second home?" he asked.
But while Dodson said sales in St. Joe's oldest community, WaterColor, were already rebounding, prices are down. "There's been a 30 percent or better correction since 2005," he said. "I'm not saying that's unhealthy."
In reporting for 2007, St. Joe took a $13.6-million write-down on the costs of its homes and home sites. For the year, the company reported earnings of $39.2-million, or 53 cents a share, on sales of $377-million. That was down from net income of $51-million, or 69 cents a share, on revenue of $524.3-million a year ago.
Speaking to analysts, Rummell declined to predict when Florida's real estate market might improve. But he reminded them that Florida has worked through downturns in the past.
"We continue to strongly believe in Florida's long-term future," he said. "And Joe's long-term ability to create value."
Kris Hundley can be reached at email@example.com or (727) 892-2996.
1997 Category 2008 1.2-million Acreage 700,000 $3-billion Market capitalization $2.73-billion $10.01 (Jan. 2, 1997) Stock price $36.65 (Tuesday) 2,000 Employees 200 (by end of 2008) Railroad, real estate, forestry, sugar Business Real estate, timber
Source: Company reports
"(Florida's) resort and residential markets are as tough as I've seen in my 37-year career. And there is no clear indication of when those market conditions are going to make any dramatic change." Peter Rummell,chief executive officer of St. Joe Co.
St. Joe Co.: Then and now
When Peter Rummell, a former Disney executive, took the reins of St. Joe Co. in January 1997, it had only recently changed its name from St. Joe Paper. Here are other ways in which the company changed during his tenure.