Owners of Hotels, Resorts, Condos and Other Commercial Property Face Pall of Uncertainty — Just As Economies and Housing Markets of Florida and Other Gulf States Were Showing Signs of Recovery
By Randyl Drummer
With estimates of the economic losses of the Deepwater Horizon oil spill already as much as $11 billion in counties along Floridaâ€™s Gulf Coast alone, owners of income-generating property throughout Florida, Alabama, and Mississippi face varying degrees of financial exposure to the crisis.
Perhaps no commercial property owner is more exposed to the spill across its portfolio as the St. Joe Co. (NYSE: JOE), one of Florida’s largest real estate development companies and northwest Florida’s largest private landowner. Jacksonville-based St. Joe, primarily engaged in real estate development and sales, owned about 577,000 acres as of March 31 — primarily in Florida’s northwest Panhandle, where the coast could be under siege by the oil slick for months.
About 70% of St. Joeâ€™s property is within 15 miles of the Gulf of Mexico, where a BP plc drilling rig exploded April 20 roughly 175 miles to the southwest, killing 11 crew members and causing a massive deepwater oil leak. The companyâ€™s land-use entitlements in hand or in process totaled about 31,600 residential units and about 11.6 million square feet of commercial space as of March 31, as well as an additional 646 acres with land-use entitlements for commercial uses. So itâ€™s hardly a surprise that St. Joe has been especially active in monitoring the spill.
As brown tar balls began washing up on the sugary white sand of Florida Panhandle beaches this week, the U.S. Coast Guard calculated the amount of Gulf coastline affected by the spill at 120 linear miles and growing. Tar was expected to wash up as far east as Okaloosa County between Santa Rosa and Walton beaches and northwest winds are expected to push the oil slowly along the Panhandle coast in coming days.