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Panhandle developer St. Joe declares huge loss, shrinks strategy

Published Feb. 28, 2012

Florida's one-time prince of luxury Panhandle real estate development, St. Joe Co., formally abdicated its role Monday and declared a stunning $330 million loss for 2011.

For St. Joe, the loss reflects its lengthy struggle against Florida's troubled real estate market, a proxy war between wealthy investors over the future of the company and its recent adoption of a sharply scaled-back strategy to shrink its investments in St. Joe housing communities and sell undeveloped tracts of land at a bulk discount.

"We believe that this new investment strategy continues to build upon the successful cost reduction initiatives that we previously implemented and positions us to increase our short and medium-term cash flow, reduce our long-term risk and maintain our strong cash position necessary to weather a tepid and uncertain real estate environment and to best exploit our substantial land resources," chief executive officer Park Brady said in a statement.

Once Florida's biggest private landowner, St. Joe laid out bold plans in the 1990s and the early years of this century to remake much of the sleepy Florida Panhandle into a series of upscale master-planned communities. The vacation homes, many architecturally inspired by the new urbanism of the early Seaside development and Disney's Celebration, were aimed at the tastes and wallets of well-to-do Southerners.

The strategy faltered when the deep recession first hit in late 2006 and was aggravated by the 2010 BP gulf oil spill, which hurt tourism and Panhandle real estate values in the heart of St. Joe's territory.

On Monday, St. Joe's financial report included a $328 million loss in the fourth quarter, accounting for nearly all of the 2011 loss. Brady said St. Joe will continue to invest in some of its current projects "where the investments meet our risk-adjusted return criteria in line with our new real estate investment strategy."

He said spending will be focused on the company's Venture Crossings at the Northwest Florida Beaches International Airport north of Panama City, on a home community called Breakfast Point in Bay County, and on RiverTown, a 4,170-acre master-planned community in St. Johns County not far from Jacksonville.

St. Joe, based in WaterSound near Panama City, owns about 573,000 acres of land, primarily in the Panhandle. It announced its loss after the close of Monday's stock market. Shares, which have been under attack by short sellers, closed at $15.97.

Contact Robert Trigaux at trigaux@tampabay.com.