A Conversation with St. Joe's Britt Greene
Economic Visionary By Linda Kleindienst Originally published in the Apr/May 2010 issue of 850 Business Magazine
The St. Joe Company has positioned itself as a dominant force in planning the future growth of Northwest Florida. In a rare one-on-one interview, president and CEO Britt Greene recently spoke with 850 about the company’s transition from timber to real estate development to job creation — and the economic development surge he sees on the region’s horizon.
In 1998, Britt Greene was sent to Northwest Florida on a mission that would chart a new course for The St. Joe Company. Florida’s largest landowner at the time, a powerful force in politics and business, was about to shift gears. Greene’s orders were to start in Walton, Bay and Gulf counties and help transform St. Joe from a timber company into a real estate developer.
He began with a 16-lot project in Walton County called Camp Creek Point. Next came The Retreat, with 90 lots. Both projects, Greene recalls, were “highly successful.” Soon to follow was WaterColor on Scenic Highway 30-A, the first major planned resort community with amenities built by St. Joe in Northwest Florida. And the rest, as they say, is history.
Today, St. Joe is one of the primary forces helping to shape the future of Florida’s northwest region through the company’s focus on residential, commercial and economic development.
“There was a major cultural change — to move from being the St. Joe Paper Company, the large landowner, to being The St. Joe Company and becoming a real estate developer,” said Greene, 55, who will mark two years as St. Joe’s CEO in May and credits his predecessor, Peter Rummel, with the vision. “That required a cultural change at all levels. That’s a fairly short history. Look at what we’ve done in that time.”
St. Joe still owns more than a half-million acres of Florida land. The majority of it lies in Northwest Florida — the company’s holdings in Walton, Bay and Gulf counties alone exceed 350,000 acres — and most remains in active timber operations. But dotting the gradually developing Gulf Coast landscape are communities such as WaterSound, WindMark Beach and WaterColor that have been and are being developed by the Jacksonville-based company. And sitting in the middle of Bay County is the 75,000-acre West Bay development, the soon-to-be home of the nation’s newest airport — the Northwest Florida Beaches International Airport. Built on 4,000 acres donated by St. Joe, the airport and the immediate surrounding land, which has been designated for commercial development, are expected by many in the region to ignite an economic development revolution.
Larger in land size than Manhattan or Washington, D.C., the West Bay Sector Plan offers the potential to help set the tone for future development of the region. But Greene acknowledges the burden St. Joe carries to make sure the West Bay project is done right.
“There are a lot of people who live (in the region),” Greene said. “If we don’t do it right, we’ve affected more than the stakeholders of the company, we’ve affected the stakeholders of the region. There’s a big cake out there, and the question is, how do you start eating it? If you don’t do it right, you’re not going to enjoy it when you get to the end.”
To provide better oversight, St. Joe recently announced plans to move its corporate headquarters from Jacksonville to West Bay, next to the new airport, sometime in 2011.
In the Beginning
The roots of The St. Joe Company go back to Alfred Irénée du Pont, an American industrialist who moved to Jacksonville in 1926. Along with his brother-in-law, Ed Ball, he delved into banking and real estate, buying up Florida land for dollars an acre during the land bust of the late 1920s. When du Pont died in 1935, Ball became trustee of his estate and kept buying land to grow the timber that fed the Port St. Joe paper mill. The income from the mill allowed Ball to acquire railroads, a telephone company, banks and sugarcane plantations.
The company’s landholdings surpassed the million-acre mark, but Ball wouldn’t sell any of it. In the 1950s, Walt Disney attempted to buy 3,000 acres. But after making Disney wait all day for an audience, Ball merely sent out a note that reportedly said, “I’m not selling land to you. I don’t deal with carnival folk.” So Disney instead set his sights on Central Florida.
Ball, who tangled with environmentalists, union bosses and even the U.S. Department of the Interior (over the type of pine trees St. Joe was planting), died in 1981. The company continued buying land into the 1970s, accumulating more than 1.5 million acres. In 1996, the paper business was sold to Smurfit-Stone, which closed the mill in 1999.
Greene was born in Michigan but grew up in St. Louis. He came south to attend the University of Florida because he loved warm-weather sports such as water skiing, golf and tennis and was impressed by the academic reputation of the school’s faculty. While Ball was still buying land, Greene was earning a degree in business administration, with a major in marketing and minors in accounting and mechanical engineering. He worked in Tampa for 17 years before being hired by St. Joe in January 1998 to start real estate development in what the company had already dubbed “Florida’s Great Northwest.”“I went out to assess what we had and where the first opportunities would be,” Greene recently recalled during an interview in his fifth-floor corporate headquarters office overlooking the St. Johns River and the city of Jacksonville.
Under his wing, St. Joe began development in earnest, but then the economic downturn began and it became evident that home sales would slump.
“In 2005, in August, we started to see a market change,” Greene said. “We realized we were starting to see changes in primary and resort residential buyers, high-worth individuals who had the capability of buying the product but who were saying it was getting a little too expensive. We had a series of hurricanes … (but) we found out it wasn’t about hurricanes, it really was about price … We knew something was happening.”
Not sure whether the housing bubble would burst, but deciding to err on the side of caution, the company began to exit from homebuilding in 2006 and sold its office portfolio in 2007. The next year, equity was sold to pay off company debt. Several work-force reductions saw the company go from a high of 1,800 employees in 2006 to 142 today.
“We sit here with no debt, we still own a little over 580,000 acres, we have all the amenities and assets we created, we have developed real estate on the ground, (and) we have a very strong financial statement that our shareholders recognize and appreciate,” Greene said. “So I sleep at night. I feel good. Our shareholders feel good.”
Today, St. Joe is not abandoning its communities, having turned the actual home construction over to others. Instead, as he sees the economy begin to recover, likely by the end of 2010, Greene said, “Our dominant strategy now is going to be centered around economic development and creating jobs … Our eyes are forward.”
The Airport and the Economy
The dream for the new, $318 million Northwest Florida Beaches International Airport was more than 12 years in the making. The move to relocate came when the old Panama City-Bay County International Airport was told it could not extend its runway farther into the bay. Yet it was commonly accepted that for the region to prosper, the airport needed to be bigger.
“We needed an airport for the next 50 years, to give the region room to grow,” Greene said in explaining St. Joe’s willingness to get behind the project, even though the company at first was asked only to give the plan its support, not land. Ultimately, because of the company’s huge land holdings in the county — and the limited air corridor between military bases that was available for commercial traffic — West Bay became the only viable spot for the relocation.
“You’d think it would be easy to give land away,” Greene said with a chuckle. “But it took a lot of years to give the Airport Authority that 4,000 acres of land.”
The West Bay plan, which Greene calls a “blueprint for the right way to plan economic development,” contemplates 37 million square feet of commercial development and 27,000 residential homes.
While acknowledging “that’s a lot of square footage,” he said that the open space available in the commercial areas gives businesses (he’s especially envisioning aerospace and defense companies) room to expand and will provide them with direct access to an international airport with a 10,000-foot runway. Greene foresees it as a boon for economic development in the area.
“The real asset in Northwest Florida is the environment, but nothing is more important than that airport,” he said. “You can grow, and you’re next to an airport that gives you the flexibility to connect with the world. The vision has to be 10 years out — that’s how long it’s going to take to create the dynamics of the critical mass needed to create the engine so it starts to serve itself.”
To help that vision, St. Joe was instrumental in bringing Southwest Airlines to the new airport, agreeing to offset any losses the airline incurs up to $26 million during the first two years of operation.
“If we have to write a check, we know it’s worth it because we know the infrastructure is there to support what the Southwest effect can bring to Northwest Florida,” Greene said, referring to an expected surge in tourism as the new airline adds enough capacity to bring 2,000 more visitors to the region each day.
Greene also points out that many of the new businesses the commercial area around the airport is expected to attract should bring high-paying jobs that will help Northwest Florida keep some of its best and brightest talent — including large numbers of highly trained men and women who are leaving the military but want to stay in the region, as well as local college students who want to stay after graduation.
“I think this offers an opportunity for the region to grow, not just because the baby boomers move in or come down to vacation, but because you’re giving young adults work opportunities,” he said.
Now Greene is hoping that the state will ante up some incentives to enhance the growth potential of the region’s commercial interests.
“Florida never before had to go out and fight for economic development. For the most part, Florida’s economic development came because the state offered a lifestyle,” Greene said. “This state enjoys some economic clusters. It has the toolkit to be a winner. But it needs the framework to be able to compete. If we think locally, we’ll perform locally.
“People are saying Florida is over,” he said. “I don’t believe that. It’s been going hard for 100 years, and it’ll be going hard for another 100. This is a great opportunity for the state to (look at incentives for relocating or expanding businesses). The real benefit? Bringing new jobs to the marketplace.
“We’re not just about growing timber. We’ll be growing timber for a number of years ahead. But taking timberland and converting it into a higher and better use, which creates an asset value for our shareholders, is very important. Jobs is the way to accelerate that.”
And how long will it take to realize the full potential of West Bay?
“It won’t be in my lifetime,” he said.
Starting with a Clean Slate
“People have accused us of having this secret map in the vault somewhere that is the secret master plan for the entire region,” Greene said. “Well, we don’t have that, but one of our core competencies is being able to take large-scale real estate projects like West Bay and do enough forward visioning and thinking about where is the best place to put residential and industrial.
“The ability to do this from a clean sheet, as one property owner, is different from most areas of the state that have had fractional ownership over a number of decades — having different owners with different visions … It is a large land mass that has a unique opportunity for us to plan it correctly.”
Greene said St. Joe understands that when a 100-acre parcel is developed, it will affect the next 100 acres, which will affect the next hundred. And sitting next to West Bay are another 100,000 acres of St. Joe-owned land.
Because of the philosophy that what happens in one sector of the region can affect another — the ripple effect — the company has not restricted its work to development but has worked with local communities to promote health, education, transportation and economic development programs and projects.
As an example, witness the new 25-bed Sacred Heart Hospital on the Gulf in Port St. Joe, built on land donated by St. Joe. The company also partnered with Sacred Heart on a new hospital in Walton County that opened in 2003. Roads have been moved and widened at the company’s behest. U.S. Highway 98 went from a two-lane road to four lanes in Walton County after St. Joe handed over the right of way to the Florida Department of Transportation. The company has done the same in planning roads for the West Bay sector.
“We have to do it right from the start,” Greene explained. “We are as concerned about the infrastructure as we are about the price of the lot going into a master-planned community. If we’re not, we don’t get to keep going. If we’re not advancing the infrastructure, we come to a halt, and it takes time to catch up. It’s one thing that does keep me up at night, the huge responsibility and accountability that comes with owning that much land.”
The St. Joe Community Foundation, funded through property transfer fees that will continue in perpetuity, has already donated $15 million to local education, health and other programs.
Affordable housing also is on the radar, especially to attract those workers who Greene hopes will get jobs either at the airport or with the businesses that will build up around the airport.
“I love real estate development. I can’t think of a better way of doing it than with a blank sheet of paper,” Greene said. “Number one, do no harm. Make sure you don’t leave a wave of destruction, but leave a path of opportunity. I think we’re on track.”
What Would Ed Ball Say?
“I think Ed Ball would say he’s happy to see we’re dynamic enough to change the strategies of the company and that we don’t just sit and rely on history, that we look forward and that we’re visionaries for the future,” Greene said. “I think Ed Ball would be excited by what we’re doing. He might say we still don’t own enough trees. But I think he’d be excited by the way we’re using the trees to build out a region. I think du Pont would be excited. And I think they’d give us a pat on the back for paying attention to the culture of the region from a health and education standpoint, being good stewards.
“It would be fun to talk to them, go back for a day and say, ‘What do you think, guys?’ ”
The St. Joe Company owns significant acreage in Northwest Florida, but most of its holdings are in two counties — Bay and Gulf. Property records show that the company owns about 58 percent of Gulf County’s 554.60 square miles.