Financial Flexibility and Cash Flow
Our Land
Our New Home
Economic Development Opportunities
Economic Development Opportunities
A Region to Emerge
Dear Shareholders,
The year 2009 was marked by key accomplishments and important milestones for our Company. We successfully continued our efforts to reduce operating costs, overhead expenses and capital expenditures. At the same time, we prepared for the business and development opportunities that we believe will arise from the May 2010 opening of the Northwest Florida Beaches International Airport, creating significant long-term value for our shareholders.
Financial Flexibility and Cash Flow
We made considerable strides increasing our financial flexibility despite the economic climate and its challenges last year. We further streamlined our operating cost structure, positioning the Company to benefit from our vast and well-located land holdings in Northwest Florida. We also completed the sales of non-strategic assets generating significant cash and tax benefits while reducing our holding costs.
We are virtually debt-free and have almost $300 million of liquidity. We are now able to strategically focus our resources and capital on the land and development initiatives in Northwest Florida.
Our Land
When we first embarked on our highest and best use strategy, our priority was to seek as many land-use entitlements for commercial and residential development in our region as possible. This continues to be one of our core competencies, and we now have landuse entitlements totaling over 31,000 residential units and approximately 11.6 million square feet of commercial space. Our opportunities are significant, and we believe that by taking measured risks, we will be able to extract meaningful value.
Our New Home
As we seek to maximize the opportunities presented by our lands adjacent to the new airport, we recognize the importance of strengthening our physical presence in Northwest Florida. To that end, we have made the decision to move our Company headquarters to Phase I of our project in the West Bay Sector Plan where we will be located immediately outside the entrance to the newest international airport in the country.
After 75 successful years in Jacksonville, we believe our relocation to West Bay represents an exciting shift for our Company. This move will allow us to be in close proximity to the numerous real estate development and infrastructure projects that we have spearheaded in the area over the past 12 years. This decision also underscores our commitment to the dynamic economic development opportunities that we believe are being created in Northwest Florida.
Economic Development Opportunities
After years of significant effort, involvement and commitment from our team, the nation’s first international airport built in the last 16 years is set for its grand opening in May 2010. With its 10,000 foot runway and capacity to operate 24 hours a day, the new airport represents vast possibilities for us. Given the 71,000 acres of entitled land we own surrounding the airport and the fact that so much of our land is within 15 miles of the Gulf of Mexico, including significant beach frontage, we believe that we will benefit immensely from commercial and residential real estate development in the region.
As part of unlocking these opportunities, we formed a strategic alliance with Southwest Airlines in 2009 providing for the commencement of low fare air service to the new airport. We believe the availability of Southwest Airlines’ direct, low fare air travel will change the dynamics in Northwest Florida making it more accessible to commercial users, visitors and buyers from the nation and the world. It is this enhanced global connectivity that we feel will contribute to the evolution of Northwest Florida as not only a top ranked vacation destination, but also as one of the nation’s newest business, research and aerospace corridors.
We have initiated our pre-development activity on the first three phases of the West Bay Sector Plan, encompassing 1,000 acres adjacent to the new airport. The master plan on these initial phases is complete and the infrastructure design is in final engineering. It has been designed to accommodate office, retail, industrial and hotel uses. We have formed relationships with CB Richard Ellis, The Haskell Company and TranSystems Corporation to maximize the value of these particular holdings.
In 2010, we are focused on the following commercial development initiatives adjacent to the new airport:
- horizontal infrastructure development at the “front door” to the airport for uses including office, retail, restaurant and a limited service hotel,
- an approximately 50,000 square foot Class A multi-tenant office building, which will serve as our new headquarters, with expected completion in the summer of 2011, and
- an approximately 35,000 square foot light industrial building, with expected completion late this year.
CB Richard Ellis has begun to pre-lease both the office and light industrial buildings, and we look forward to updating you on their progress.
A Region to Emerge
Looking ahead, the future brings with it incredible opportunities for us, beginning with the opening of the Northwest Florida Beaches International Airport in May. The airport will provide convenient access to the region, allowing the area to support an influx of business, commerce and tourism. Our existing properties and available land will play a critical role in what we envision as a new economic growth corridor. New business and traffic patterns will emerge as the real estate landscape and the entire Northwest Florida region is reshaped. We believe we will be in the best possible position to capitalize on these opportunities and create value for our Company and for our shareholders.
We are excited, energized and confident about what is in store for Northwest Florida and for St. Joe in 2010 and beyond.
Thank you for your support.
Wm. Britton Greene
President and Chief Executive Officer
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