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Stocks S / St Joe Company
|Subject: Re: Say It Ain't So, St. Joe||Date: 9/9/2006 5:57 PM|
|Author: Nats43||Number: 134 of 140|
The following was in this morning's Tallahassee Democrat:
Originally published September 9, 2006
St. Joe bails out of home building
By Bruce Ritchie
DEMOCRAT STAFF WRITER
The St. Joe Co. has announced it's getting out of the home-building business in Florida - and it's laying off more employees in the process.
The company, which is developing Tallahassee's SouthWood community, announced Thursday night it wants to focus on development rather than on building and selling homes.
The move means further workforce reductions, the company said in a Securities and Exchange Commission filing. The company had 1,362 employees in 2005, according to the Hoovers Inc. market research firm.
St. Joe expects to terminate 10 percent of its workforce with the new announcement. The move will cost St. Joe $10.7 million in termination benefits.
The company laid off 11 percent of its workforce last month during a reorganization.
Company spokesman Jerry Ray said Friday he doesn't know how many employees are being laid off.
"I haven't seen any lists," he said. "I'm sure some people will get moved around, but I don't know how many."
He also said the announcement shouldn't make a difference to how SouthWood or its other communities in the region are developed.
"The style, look and feel of a master plan is very well decided ahead of time," Ray said.
St. Joe has been been talking about getting out of the home-building business since April, he said.
The company announced in August it was selling 681 home sites to Beazer Homes USA Inc. of Atlanta. The sale included sites for 82 SouthWood townhouses.
SouthWood eventually will have 4,700 homes along with additional commercial and office space. The company also is developing WhiteFence Farms east of Tallahassee and SummerCamp in Franklin County.
St. Joe said in its announcement that it will honor new home contracts and warranties.
Some area home builders said St. Joe's announcement may provide benefits for the local housing market.
"It's an exciting opportunity for volume homebuilders," said Edie Ousley, spokeswoman for the Florida Home Builders Association.
St. Joe owns more than 800,000 acres of land, much of it between Tallahassee and Destin.
The company stands to make more money selling land than building homes, said Robby Hartsfield, president of Hartsfield Construction Inc. in Tallahassee.
"If I had all this land, I'd develop it and sell the land," said Hartsfield, who is vice president of the Tallahassee Builders Association. "I wouldn't have to worry about the homeowners or the warranty issues."
St. Joe's departure, and the entry of national home builders into the region, could mean stiffer competition among subcontractors resulting in lower home prices, said David Wamsley, CEO and managing member of K2 Urbancorp in Tallahassee.
"When they come in and see some of the pricing they have had to see with subcontractors in this market, I think it's going to shock the system a little bit," Wamsley said. "Ultimately it will reduce the price of a house."
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