Panama City Beach TDC Meeting Notes from Tuesday's Meeting

Notes from the November 27, 2007 Combined Board Meeting of the Bay County TDC and the PCB CVB

Eight of the nine board members were present with Buddy Wilkes absent.

The board voted unanimously to approve the 9/30/07 financial statements.

2008 Spring Break Program Update:  President Dan Rowe advised the board that commitments totaling $84,500 have been received from co-op participants.  No lottery was required as the available packages exceeded those requested by local businesses.  He also explained that additional co-op opportunities remain available, but that the CVB would not be actively marketing them.  However, he encouraged the current participants and the Marketing Committee to seek additional participants.  Rowe also reported that the agreement with MTV had not yet been signed, but that he expected it to be soon.

Sea Turtle Draft Lighting Ordinance Update:  The President reported that the community workshop would probably take place during the 3rd week of December.  [Subsequent to the meeting, the TDC announced that the community workshop has been scheduled for December 19th, 2007 at 9:00 AM at the PCB City Hall.]  Rowe also reported that staff would be meeting with the U.S. Fish and Wildlife Department to gauge their response to the draft ordinance.

FSU Flying High Circus Update:  Rowe advised that everything was proceeding well with the circus scheduled for next summer.  He also reported that a press conference was scheduled for December 5th concerning the event.

Indian Summer Festival Update:  The President reported that staff had terminated the contract with Sound Associates as directed by the board.  He also explained that he planned on discussing the 2008 festival with the Marketing Committee at their next meeting.

December Marketing Committee Meeting:  President Rowe advised that the December Marketing Committee meeting has been rescheduled for December 12th at 9:00 AM.

Sports Marketing Activities Update:  Director of Sports Marketing Richard Sanders made an extensive report to the board concerning his department’s current activities.  He reported that future bookings are very strong, but advised that the board should be mindful about competing destinations that are engaging in expansion plans that may be attractive to event organizers.  He also advised that planning for the facility expansion feasibility study was proceeding on schedule.  He expected the study to commence after the holidays and that the report can be expected about 90 days after commencement.  Chairman Phillips reported that Director Sanders will be inducted into the National Softball Association Hall of Fame at their 2008 annual meeting.

Strategic Plan Framework:  The President reported that he is planning a board workshop during late January 2008.  The purpose will be to develop a 3-5 year strategic plan for the CVB.  He also advised that he expected to hire an outside facilitator to assist with the workshop.

CVB/TDC Media Policy:  Rowe advised that he as in the process of developing a draft Media Policy in conjunction with the CVB’s agency, Y Partnership.  The purpose of the policy will be to formally answer the question of how the CVB/TDC should speak as a body to the media.

President Rowe also reported that he would be meeting with Y Partnership on November 29th at their Orlando offices.  He planned to meet with both their public relations department and their advertising department to better understand their work on the CVB’s account.

Rowe also reported that the search process for the current staff vacancies would begin within the next couple of weeks.

Meeting notes courtesy of Bryan J Durta. Thanks Bryan.

National Home Sales Stable, Condo Sales Down

In a report release by the National Association of Realtors (www.realtor.org) today it is reported that total existing home sales, including single family homes, town-homes and condominiums dropped by 1.2% in October compared to September 2007 bringing the annual pace down 20.7% from the annual projected pace in September 2006. As set in October 2007, the annual projected sales pace for all home types nationally is 4.97 million total units sold.

The national median home price for all home types in October was $207,800, down 5.1% from October 2006 ($218,900 then). Although this is on an overall national level, real estate markets are very localized with regards to trends. NAR President Richard Gaylord said, “Keep in mind that home prices are up in 93 out of 150 metro areas, and there is a lot of confusion in the market from reports about national data. Broadly speaking, home prices in most areas are up modestly or fairly stable. . . areas with population or job growth are seeing the strongest home price gains.”

Total housing inventory rose to 1.9% in October to 4.45 million which represents a 10.8 month supply based on the annual projection of 4.97 million units sold. Existing condo sales dropped 9.1% from September to October and is 20.2% below the annual pace set in October 2006. The median condo price was up however to $223,500, 4.9% higher than October 2006.

Existing home sales in the South were unchanged in October with an annual rate of 2.03 million, however this is 19.4% down from October 2006. The median home price was down 6.7% from last year to $171,400.

As an interesting side note, the annual projected sales pace of the South is 41% of the entire nations annual projected sales of all home types; this is almost double that of the next highest region’s projected annual sales pace (the Midwest at 1.18 million).

All data came directly from the report NAR release on November 28, 2007. The report can be read in its entirety here.

50,000 Residential Units in Panama City Beach

In working on a market study locally, a buddy of mine came across some information on the Panama City Beach Chamber web site (www.pcbeach.org). According to this information, Panama City Beach is expected to have an additional 8,500 residental units open in the next 5 years with an additional 15,000+ to be announced at a later date. 5,800 opened this year including The Shores of Panama, The Towne of Seahaven, Nautilus Cove, Grand Residences by Marriott, and Aqua just to name a few. There were some that I know are on hold for now and of course market conditions will determine what comes online in the future, but still I thought this was very interesting information. There are currently almost 21,000 condos, hotel rooms, and townhouses in Panama City Beach.

Some of the big ones include Breakfast Point at 3,100 total units expected to be open in 2012, Grand Panama with 795 total units, Laketown Wharf with 735 units open this year, Miracles (on the old Miracle Strip Park site) with 700 units open in 2012, and Solimar Resort and Spa with 812 units open in 2010.

New Developments

This week in Pier Park

Happy Thanksgiving! A day late, but you didn’t actually expect me to post yesterday, did you? Actually I had planned on it, but it just didn’t happen. We had a great Thanksgiving spending time with family, I hope you had a great Thanksgiving as well.

I meant to take pictures this week of Pier Park, but that didn’t happen either. There is a lot of activity there, I’ll get photos next week. In the mean time, here is the latest press release:

For Further Information, Please Contact:
Les Morris, Simon Property Group
(317) 263-7711
E-mail: lmorris@simon.com

MORE CHOICES COMING TO PIER PARK

– Stores, Restaurants and Massage Services on Tap at Panama City Beach Community Destination –

PANAMA CITY BEACH, FL (November 20, 2007) – Simon Property Group, Inc. (NYSE:SPG), the country’s largest owner, developer and manager of high quality retail real estate, announced another wave of enviable retailers and restaurants coming to Pier Park, a 900,000 square foot retail and entertainment complex located on 93 acres that covers land from Front Beach Road (at the City Pier) to the heavily-traveled Highway 98 (Back Beach Road).

“We’re very pleased to announce these new stores coming to Pier Park,” said Paul Ajdaharian, regional vice president at Simon. “I think the breadth of the stores and restaurants that we’re announcing here speaks to the great variety that shoppers will find when they come to Pier Park.”

Fish Tales, owned and operated by glass artist Cindy Stephens and her husband Buddy, is a whimsical, unique art gallery representing the finest local art on the Gulf Coast. Fish Tales has two stores in Grayton Beach and Apalachicola and is relocating its Grayton Beach location to Pier Park.

Stephens has been creating, designing and exhibiting her work for over a decade. She is currently a full-time studio artist and creates commissioned glasswork for a variety of community and commercial projects. She works with many different forms of glass – stained, leaded, beveled, etched, slumped and fused.

Fish Tales will feature Stephens’s unique art glass work including her signature fish mobiles, along with mirrors, mosaics, glass tile, lamps and furniture. Among her most popular pieces are her hand-carved tables with glass inlays.

“We are very delighted to be at Pier Park which is the greatest thing to happen to the Florida Panhandle,” said Cindy Stephens. “It has been very exciting to watch the project develop over the past months and there is no question that for Fish Tales, this is the place to be.”

Hofbrau Beer Garden is modeled on the famous beer gardens of Munich, Germany. The restaurant at Pier Park will have 233 seats in three distinct sections – a beer hall and bar (85 seats), a beer garden (80 seats) and a café. Five Hofbrau beers will be available on tap.

In addition to beer, Hofbrau will have an authentic German food menu with a delicious assortment of appetizers and nightly entertainment featuring live bands including some from Germany.

Bootleg Barbeque’s feel is “More Rockabilly Than Hillbilly,” as they serve the best pulled pork, slow smoked ribs and chicken on the Panhandle for lunch and dinner seven days a week. Bootleg Barbeque, a full service restaurant, will be located in the heart of Pier Park directly across from The Grand movie theater.

Bootleg Barbeque, owned and operated by families of the Emerald Coast, are ready to provide for your party of 10 to 210 with many take-home feasts from which to choose.

Massage Envy is a bold concept in therapeutic massage. Massage Envy offers a variety of massages – from Swedish and deep tissue to sports, reflexology, pregnancy and trigger point massages. The company was created in 2002 on the premise that massages should be relaxing, but also affordable and convenient. Massage Envy makes this possible through a monthly membership plan that enables customers to enjoy massages on a regular basis.

For a monthly fee, members enjoy: one massage, plus additional massages at a discounted cost; family add-on and guest pass opportunities; on-site corporate and in-home massage services; retail and gift certificate discounts; access to 4,000 appointment spots; and portability of membership at Massage Envy clinics nationwide.

With the new location at Pier Park, Massage Envy has 300 open clinics operating in 38 states with an additional 390 clinics sold and in development.

Tilly’s offers the largest selection and assortment of leading brands in the surf, skate, motocross, and California lifestyle to the retail industry. Operating 74 stores throughout California, Arizona, Colorado, Florida and Nevada, the company excels in customer service and appeals to youth, teens and adults alike. Tilly’s motto really explains it all – at Tilly’s “If its not here…its not happening.” For more information, please visit its website at www.tillys.com.

These stores join Target, The Grand 16-Plex Theatres, Panera Bread and Longhorn Steakhouse which are already open at Pier Park.

Simon Property Group, Inc. is an S&P 500 company and the largest public U.S. real estate company. Simon is a fully integrated real estate company, which operates from five retail real estate platforms: regional malls, Premium Outlet Centers®, The Mills®, community/lifestyle centers and international properties. It currently owns or has an interest in 379 properties comprising 256 million square feet of gross leasable area in North America, Europe and Asia. The Company is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. Simon Property Group, Inc. is publicly traded on the NYSE under the symbol SPG. For further information, visit the Company’s Web site at http://www.simon.com.

Also, a total list of announced stores coming to Pier Park:

Dillard’s (126,000 sq ft), JCPenney (83,692 sq ft), Target (opened 10/06, 137,000 sq ft), Borders Books and Music, The Grand Movie Theatre (opened 5/07), Jimmy Buffett’s Margaritaville (only five in the US), The Fresh Market, Old Navy, Long Horn Steakhouse (opened 4/07), Panera Bread (opened 5/07), ULTA Cosmetics  Aeropostale, American Eagle, Ann Taylor Loft, Alltel Wireless, Back Porch Seafood House, Bath and Body Works, Beach Scene Bebo’z Gift & Home Collectables, Bootleg BBQ, Brookstone, Buffalo Wild Wings, Camille’s Sidewalk Cafe, Candymaker Candy Stores, Carlyle & Co., Chico’s,  Claire’s, Del Sol, Emerald Coast Photography, Fish Tales, Five Guy’s Famous Burgers and Fries, Fresh Produce, GNC, Guglielmo’s Italian Grill, Hofbrau Beer Garden, Irene and Co., Resort Wear and Boutique, Jake at the Beach, Jos. A Bank, Journey’s, Justice  Kilwin’s Chocolate, Lane Bryant/Cacique, Lid’s, Marble Slab Creamery, Massage Envy, Merle Norman Cosmetics, New York & Company, No Regrets Stationery and Gift Boutique, Payless Shoes, Perfumania, Quizno’s, Rack Room Shoes, Red Brick Pizza, Reggae J’s, Island Grill, Ron Jon Surf Shop, Smoothie King, Solace Day Spa Salon, Southern Water Outfitters, Starbucks, Sunglass World, SUNSIGHTS by Solstice, Tatoe Tots Children’s Boutique, The Walking Co., Tilly’s, Trader Tom’s Shells and Gifts, Victoria’s Secret, Yankee Candle, Zales Jewelers

Panama City Beach CRA

The Front Beach Road CRA and other CRA projects is moving along. I was out and about and snapped off some photos of the progress on Beckrich and Churchwell.

On the CRA website, www.PCBonTheMove.com they’ve added some before and after pictures of what Front Beach Road will look like when all is done.

Click here.

Also, it looks like they are moving dirt where the multi-modal station will go on North Thomas Drive.

Panama City Beach CRA Pictrue Panama City Beach CRA Pictrue Panama City Beach CRA Pictrue

The Fed Lowers Rates another Quarter Point – and my opinion on the current market condition

I guess this is old news now, but I thought I’d post it anyway to document history.  This is the second cut in a row in an attempt by the Fed to get the current housing slump and oil price spike under control and prevent our economy from going into recession.  I would be lying if I was to say that I have a full understanding of how this works and how the Fed’s adjustments effect all of us economically.

Click here for an article that spells it out the effects on the economy of lowering the interest rate.

I understand the basics.  You lower the interest rate, the cost of borrowing money goes down, so people, businesses, etc. borrow more money/buy more product, real estate, etc. and the economy is given an injection of growth through financial movement.  Unfortunately I think the present state of the real estate market as a whole (nationally) is a little more complicated.

What happened during that period of time many have come to call a “boom” is that the cost to borrow was little and people bought in the beginning because the lifestyle they desired was less expensive than it had ever been before.  They wanted that second home, interest rates were so low it cost almost nothing to borrow for it, so they made the stretch to make the purchase.  Tons of people did this, so many that there wasn’t the supply to meet the demand.  The buyer noticed this and decided to become a seller to capitalize on this.  He had something that he didn’t really need that someone else wanted and was willing to pay for it.  The property sold for a profit.  The buyer realized his quick profit and decided to do it again when he had the chance.  Multiply this scenario by hundreds of thousands across the country and you have a “boom”.

I remember at one point a guy was telling me that he missed his opportunity on several preconstruction development deals because he never got a call back.  At one point if you were not proactive in making sure you found out about and purchased the preconstruction, you missed out.  I had a friend that worked on a big project in Vegas in the middle of the “boom”.  He told me they were literally taking orders.  When someone called, their story was basically “if you are interested, send me a $5k reservation check overnight with the signed reservation agreement and we’ll try our best to get you a condo, but I don’t have time to talk because I’ve got 30 more phone calls to return in the next two hours.” If my memory serves me correctly, this was a 900 plus unit resort that was sold out as soon as they brought the product to market.

ok, back on point.  So, tons of buyers bought, and so many realized that they could “flip” out for a quick profit that buyers were no longer buying to use, but to resell.  Buyers were buying to sell and developers were scurrying to keep up with the demand.

The good and the bad of all this is that nothing happens overnight.  It took years for the market to heat up and it took years for the market to cool off.  As prices started rising pretty sharply, and interest rates started to rise, the buying began to slow.  In this particular case, the buying began to slow quicker than the developments could slow until it slowly flipped with there being slightly more supply than demand.  As buyers began to realize this they started trying to sell so as to recover their costs, sharply increasing the inventory on the market and further increasing the gap between supply and demand.  In addition all the buyers that bought – not because they could afford to buy and use, but to flip for a profit – are stuck with adjusting mortgages that they couldn’t afford in the first place.

So we’ve got a couple of pretty big problems that actually boil down to one huge problem:  we have a great deal more supply than we have demand and there are tons of people that bought that could not afford to buy that are getting foreclosed upon, which will further increase the market inventory – creating even more supply than demand.  The unfortunate thing about this is that we are just going to have to wait this out.  Unless the Fed lowers the rates an astronomical amount (which he won’t do and shouldn’t because a total swing in the opposite direction would actually be worse for our economy in the long run) or, Heaven forbid, something tragic happens on US soil again, we won’t see any huge change in the market for a while with regards to shrinking the gap between the supply and the demand.

I know this may seem glum, but there is a positive side to all this.  Those that can afford to hold will be fine.  Real estate, as with most investments, is statistically strong over the long term.  It is an exponential relationship: the longer the term, the lesser the risk, the lesser the term, the greater the risk.  The buyers that bought to flip and couldn’t afford to hold took the risk that they would not be able to sell and get foreclosed upon.

Had I the knowledge in 2003 to be buying and flipping, I would have totally done so.  I have friends that did very well during that period.  I also have friends that are holding several houses right now not knowing how they are going to make their bills next month, hoping (and praying) for a sale.

Another upside?  If you can buy and you like longer term investments, now is the time to buy.  Existing homes are selling for pennies on the dollar if you look hard enough and in many cases these properties can cashflow for the buyer with great credit.  In addition, developers are practically giving away new homes just to not carry the inventory.  I hear stories of developers taking offers at cost just to get out.  I wish we had that problem here (I’d love a new house), but this is mostly in larger metropolitan areas.  Our development boom happened on the beach.   Right now you can buy a condo on the beach for around $260 sqft.  I could be wrong about this number, but I think right now it is costing somewhere between $250 and $300 a square foot to build.  If you can buy right now, you should definately buy.

Ok, I’m done with my rant.  I hope this all makes sense, it’s 1am and I’m going to bed.  No more work today.