COVER STORY, JULY 2009

PLANNING IN THE PANHANDLE
New airport is start of long-term development.
Jon Ross

A new airport comes to Panama City next May.

Jerry Ray is looking to the future. His firm, the Jacksonville, Florida-based St. Joe Company, is working with the Bay County Board of Commissioners, officials at the Panama City-Bay County Airport and members of the National Audubon Society on the LEED-certified Panama City-Bay County Airport. The facility is the first piece in the West Bay Sector Plan, a massive mixed-use project destined for Panama City, Florida, and surrounding areas. The aggressive but environmentally responsible development strategy calls for an eventual 27,000 residences and 37 million square feet of commercial and industrial space spread across 75,000 acres.

Though part of the plan may be complete in a few years, the entire project will not materialize for at least half a century. “I will not see it; I am too old,” says Ray, senior vice president of strategic alliances for St. Joe.

The airport is a relocation and expansion of Panama City’s current facility and includes a 120,000-square-foot passenger terminal, two runways and 1,400 acres reserved for future expansion. Completion is expected next May. The airport only represents a small part of St. Joe’s $500 million stake in the West Bay Sector Plan, a commitment that will include 4.4 million square feet of commercial space and 6,300 residences.

St. Joe also brought in leaders from the Audubon Society to conduct land-protection studies around the airport. Their goal was to ultimately protect 44 miles of undeveloped shoreline and creeks and tributaries near the development site. The society also helped make the airport as environmentally friendly as possible; green features include a water reclamation system among and more standard LEED requirements.

“One of our commitments was to put in place a saltwater system that would return water to the environment cleaner than it was in the natural environment. We said we would return it twice as clean, according to scientific measurements,” Rays says. “We want to demonstrate that it is possible to have economic development and environmental preservation simultaneously.”

In large projects like these, extensive planning is important. With the help of Jacksonville-based The Haskell Company and TranSystems Corporation of Kansas City, Missouri, St. Joe is positioning parcels for office, retail and industrial construction. “You look at all the infrastructure — where do the roads go, where do the utilities go, all those types of things,” says Haskell’s Brad Slappey. “You don’t want to commit to something that’s not flexible enough to reverse. You want to be very careful about where your infrastructure goes, so it can accommodate multiple uses down the road.” It’s too early, however, to talk development specifics or even mention future tenants. “There’s certainly interest in the area,” Slappey says. “Any time you have an airport, there’s interest.”

One large advantage of the plan is that it’s easy to build to each tenant’s specifications. With so much greenfield land available for developing, officials at large companies can easily come in, commit to a space and mold it to their requirements. “Most of the time, your options are limited because you have a small piece of land and everything around it is already developed,” Slappey says. “The advantage is that if you have a big user that comes in and wants this, that and the other, it’s easier to accommodate them because you have a lot more land to maneuver around.”

The West Bay Sector plan is a fulfillment of years of history. Development has come slowly to Northwest Florida for a variety of reasons. Commercial space tends to flock to major interstates, and there are few that cut through this portion of the state. In addition, geographical concerns and the rising environmental consciousness of area citizens had limited the county’s commercial real estate growth prospects. 

“The land is largely owned by two entities; one is the United States government and other government entities, the other is The St. Joe Company, which began to buy land in this area in 1923,” Ray says. “Between the two, a lot of the land was left in a rural state. This is an area of Florida that’s not been as well connected to the rest of the country.”

Developers and citizens in Panama City realized as early as the 1940s that something needed to be done to compete on a national scale and started calling for an update of the city’s existing municipal airport. “There was a front-page editorial in the Panama City News Herald, and it said if we do not connect ourselves to the rest of the country, we will languish in our economic development,” Ray says. This led to an ultimately unsuccessful effort to rebuild the airport, a dream that resurfaced in the 1960s and again in the ’80s and ’90s. “We had no idea how long it would take. No one had never done this before,” Ray says. “It is a 100-year project. It will correct something that has been a mess now for 50 years.” 

An undertaking this large will undoubtedly change many times during the course of development. Starting small and branching out is a smart way to ease into the project. Once the airport is complete, it will attract airport services, which will, in turn, encourage hotel and retail growth. Warehouses, Slappey says, pop up around airports for logistics purposes. “After that, who knows. You start with the obvious, and go from there,” he says. “It’s always hard to get your hands on what it will look like in the end. The reality is that it’s going to change as the years progress.”

Ray is happy developers in Central Florida are finally planning for the next generation of tenants. Long-term projects like the West Bay Sector Plan are where commercial real estate officials should be heading, Ray says.

“We’d make a lot more in this country by planning for the future, and we never do it. We have roads that are clogged up and then we go fix them, right? So, why not try it the right way for once?”

©2009 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.