In real estate parlance the concept of "assemblage" describes the increase in value when property is contiguous versus separate parcels of land with little direct relationship or value-adding effect. It is concept made even more power when the property is developed.

To Peter Rummell, CEO of the state’s largest private land owner, St Joe Company, that concept is below his radar screen – his company has taken it to a scale virtually unheard of in real estate development – "regional place making": creating lifestyles and community. A process that increases value exponentially, what St. Joe refers to as "Value^N".

"Most real estate companies create value arithmetically by maximizing the value of individual, isolated development projects. Many barriers – including land acquisition costs, over development and the lack of a ready market – prevent these companies from generating synergy between projects," states Mr. Rummell.

Catalyst effect is one of the key principles that St Joe is employing to move things forward. Synergistic characteristics – projects feeding off of other projects strengths – has added an 11^th man to the game.

This undertaking is a calculated strategic decision with underpinnings in the demographics of the baby-boomer generation as well as the unique background of Mr. Rummell and his team. Not to mention the huge inventory of high-quality land at their disposal (one million acres including 39 miles of coastline and 256 miles of near-coast waterfront). There is virtually no other company capable of an undertaking of this magnitude.

The swelling baby-boomer generation, the wealthiest in recorded history and their pursuit of a better lifestyle was the impetus for rethinking the land use plan of St. Joe’s massive holdings. Florida still remained the preeminent destination for them.

"St. Joe is positioned to benefit from the convergence of demographic, geographic and economic forces." Mr. Rummell notes, "St. Joe owns a significant portion of the remaining developable coastal lands in Florida. With millions of Baby Boomers considering a move to the Florida coast, St. Joe is well-positioned to meet this demand."

Moving the land use strategy to commercial and residential communities was going to require the deft touch of a master "place maker". And St. Joe only had to look at Walt Disney to see what could be achieved and hire the man whose vision they needed.

Rummell began his real estate career with the Sea Pines Company in 1971, where he was involved in the development of Hilton Head Island, S.C., and Amelia Island, Fla. Beginning in 1977, he was with the Arvida Corporation, where he served as general manager of the Sawgrass development in Ponte Vedra Beach, Fla. He joined the Rockefeller Center Management Corp. in New York in 1983, leaving in 1985 to become president of Disney Development Company. At Disney, he also helped manage the company's theme park and resort development, including Walt Disney World in Orlando, and was a driving force behind the 20,000-person planned community of Celebration, Florida. As president of Disney Design and Development, he managed the company's holdings adjacent to theme parks in Anaheim, Orlando, Tokyo and Paris.

This unique background in "place-making" has been the framework shaping St. Joe’s transition from the timber industry to regional community projects in "Florida’s Great Northwest". St. Joe is one of the few real estate operating companies to have assembled the range of real estate, financial, marketing and regulatory expertise to take a large-scale approach to real estate development and services. [Sidebar on St. Joe Projects].

St. Joe Company realizes that an undertaking of this magnitude required the creation of some necessary catalyst projects – many of which have been started by the donation of land by St. Joe. The Sacred Heart Health Systems, a 50-bed hospital in Walton County is a critically needed facility to attend to the influx of baby boomers. The relocation of the Panama City airport has just been approved by the FAA for feasibility analysis – a robust regional airport is necessary to facilitate commerce and tourism.

Senator Durrell Peaden (R) whose District One encompasses large St. Joe land holdings in Bay & Washington counties feels that St. Joe is on target. "St. Joe’s vision encapsulates the ideal industry growth to bring to the area: clean industry that preserves the environment. Their economic development focus is covering the right areas of infrastructure, highways, healthcare, training of workforce and transportation such as the Panama City airport relocation."

Senator Peaden is also a physician and appreciates the critical piece that healthcare plays into the whole strategy. "Were it not for St. Joe we would probably be 15-20 years away from getting the Sacred Heart Health Systems hospital in the area," he says.

But St. Joe cannot build community without the community itself buying in. The company supported the creation of the 16 county economic development coalition, Florida’s Great Northwest, Inc. (see FGNW article this issue) to create a voice and forum for Northwest Florida’s economic development plans at the community level.

Rep Bev Kilmer emphasizes the importance of community consensus. Her House District 7 encompasses, in whole or part, the counties of Walton, Bay, Jackson, Calhoun, Gulf, Liberty, Gadsden and Leon. The majority of St Joe’s land holdings in Northwest Florida are within this district.

"In order for St. Joe to do a lot of the things they are going to do," she states, "they have to have community consensus. The counties have to agree or they are not going to give them permits to do what they want to do."

"I feel overall they are going to be very good for the area. We need economic growth and the one thing that I feel very good about is that St. Joe wants to compliment the areas where they build as opposed to dominate it or take it over."

Mr. Rummell insists that the communities own the process. "This is not about our land, this is about the region. And as far as we’re concerned anything that benefits the region benefits us."

The key challenge for Mr. Rummell is how do you change an entire region?

"The evolution of true places, like other types of social phenomena, does not happen in a dramatic single step. Nor does it happen in a series of unrelated incremental steps."

"Instead, true places emerge as the result of the convergence of a set of events, each seemingly with limited impact. These endeavors, when combined and focused on a concentrated area in a compressed timeframe, create a tipping point, a point beyond which momentum pushes the place-making phenomena ever forward"

Tipping Point refers to a concept articulated by Malcolm Gladwell in The Tipping Point: How Little Things Can Make a Big Difference, a book Mr. Rummell highly recommends, in which certain trends, fads or cultural shifts often languish in their infancy until a certain level of awareness places them into mainstream thinking from which they have a life all their own. This heightened state of awareness is a necessary ingredient to move the regional strategy forward. While St. Joe may have many of the necessary ingredients to kickstart the process it will be the thinking of the populace of Florida’s Great Northwest that will ultimately fuel the momentum to sustain it.

"The goal here is to do things everywhere you can along with the synergy of all of them," says Mr. Rummell, "But some place there is the tipping point and you never know quite where it is going to be, you now it is out there. It is hospitals, advertising, marketing and the community development we are doing along with the resort development and hotels. All of a sudden people start thinking about it in a different way. They start using it different. That’s where it is going to come from."

For Mr. Rummell the tipping point, "is the essence of what we are talking about doing."

Scott Jackson
MindLace Media & Photo
scott@mindlace.com
850-217-7994

 Ó 2001 Scott Jackson

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