Year: 2007

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.

Wednesday TDC Meeting – Spring Break Marketing Update

Notes from Wednesday’s TDC meeting:

Artificial Reef
A presentation seeking financial assistance to sink a boat that is currently at the PC Marina was added to the agenda. The gentleman was seeking $40,000 to assist with the total $75,000 cost. There was some concern whether there were funds available in the current year budget; however, a motion passed 9-0 recommending that the CVB board approve the $40,000 expenditure.

Indian Summer Festival Contract
A motion made by Jack Bishop passed 8-0(with Joe Kennedy abstaining) recommending that the CVB board exercise its option to cancel the final year of the 3 year contract with Sound Associates/Ron Johnson to put on the Indiana Summer Festival. Some members felt that the CVB should not continue to fund events that have shown an inability to become self-sustaining. Some felt that the event is primarily a local event, rather than a tourist draw, and was therefore an inappropriate use of CVB funds. And finally some were of the belief that continuing the festival was important, but that Sound Associates did a poor job of putting on this years festival.

Special Events Policy
A motion passed 9-0 recommending that the CVB board reaffirm the “January
2003 Special Events Advertising Policy and Procedure” be followed for all future special event funding requests. Although this policy has never been revoked or modified, recent boards(including the current board and committee with the 2007-08 budget) have not followed it.

Update on The Klages Group Research
The committee briefly discussed the final draft of the Klages Group survey form which was included in the committee packet. Visitor inquiry data and mapping prepared by Klages was also distributed.

2008 Spring Break Co-Op
Barry Lott of Y Partnership updated the committee on the plans for Spring Break 2008. He explained that although the contract with MTV has not yet been finalized, the plan is to begin implementing the advertising elements by mid-November. Lott presented the agencies current co-op plans:

Hotel Partner Options
Premium $10,000 (only 4 available; includes featured coverage on the PCB Spring Break subsite and 1M impressions on the mtvU site, additional impressions available @ $7500 per 1M) Promotional $2500 (limited number available; includes extensive PCB Spring Break subsite coverage, but no coverage on the mtvU site) Unlimited $1000 (listing on the PCB Spring Break subsite and event calendar)

Non-Hotel Partner Options
Premium $5,000 (logo on mtvU site)
Unlimited $1000 (listing on PCB Spring Break subsite) Event $500 (listing on subsite event calendar)

Ann Henry expressed her concern that the co-op plan resulted in a disproportionate contribution from the Hotel Partners in comparison to the Non-Hotel Partners. Chairman Phillips was in the audience and responded that some changes will be made before being finalized.

Lott also advised the committee that an additional expense of $18-20,000 to design and operate the co-op web subsite will be required in addition to the $200,000 payment to MTV. The subsite will be required because Hotel logos can not appear on the mtvU site except in the form of banner advertising using the 10M impressions in the contract. Bill Spann stated that all required expenses should have been included in the budgeted amount of $200,000; however, Lott expressed his belief that the agency had previously advised the CVB that this additional expense would be required. Mr.
Phillips expressed his disappointment that the co-op now needs to reach $70,000 before reducing the CVB’s budgeted expense of $150,000.

Lott also informed the committee that MTV was currently negotiating the village location with two hotel properties. It was also announced that no non-hotel properties were being considered due to mtvU’s alcohol policy. An co-op registration meeting is scheduled for next Tuesday afternoon.

A motion was made by Bill Spann to request that the board revise the plan concerning co-op funds received in excess of $50,000. The board decided on October 9th that any co-op funds received in excess of the $50,000 budgeted amount would be used to reduce the CVB’s budgeted portion of $150,000. Mr.
Spann suggested that any excess funds could be used for additional Spring Break promotion instead. The motion was withdrawn before a vote was taken.

Jack Bishop also advised the committee that a competing co-op is being proposed to do additional marketing beyond the MTV program. Mr. Phillips expressed his opinion the industry is free to do additional marketing, but that the CVB should not get involved in any further Spring Break 2008 programs other than the current plan. Mr. Phillips also expressed his opinion that PCB has changed and that the CVB needs to get out of the Spring Break business. Russ Smith stated that he did not feel that multiple competing co-ops was a good idea.

A revised motion was made by Mr. Spann suggesting the board revise October 9th passed motion concerning the treatment of co-op funds exceeding $50,000.
The motion to suggest that the board revise the $50,000 number to $70,000 to account for the Spring Break internet subsite cost passed 7-1 with Kirk Lancaster casting the dissenting vote and Mr. Kennedy having departed early.
Prior to the vote, Mr. Smith suggested that the CVB revise its Spring Break plan to provide for $150,000 special event funding to an outside co-op which could take over the MTV program and add additional promotions. Mr. Phillips disagreed stating that the CVB needs to retain control that it would lose with an outside co-op managing the MTV program.

Meeting notes courtesy of Bryan J Durta. Thanks Bryan, for the thorough notes.

Audubon Nature Center in WestBay and the New Airport Name

Dr. Ed Wright, former Dean for FSU-PC and fellow blogger publishes a blog specifically on WestBay, Florida.  He offers a very informed opinion and provides an excellent source for facts on the goingson in the WestBay area. 

Some of his recent posts include:

A Regional Airport?  – There was a very interesting article in Sunday’s News Herald (11/4/07) about the need for the new airport to have a regional name and identity. This is definitely something we should discuss and consider.

Friday at the Beach to Highlight Audubon Nature Center  – On November 9th, the Panama City Beaches Chamber’s Friday at the Beach breakfast will feature Linda Macbeth from Florida Audubon. Linda will discuss Audubon’s plans to build a world class nature center in West Bay.

For those that have not noticed, I have a spot in the sidebar that displays RSS feeds directly from his blog, WestBayFlorida.Blogspot.com.  Whenever you are on pcbdaily.com, you can see the latest on his blog.  To read the entire post, just click on the title and it will take you to the WestBay Florida blog.

Thanks Ed, for all the valuable information and input you publish on WestBayFlorida.Blogspot.com

Foreclosure rates continue to rise

It isn’t hard to find negative news on the current state of the real estate market. We were talking in the office yesterday about how almost daily there is a new article about the foreclosure rate climbing, lending getting more difficult, etc. The latest I read on cnnmoney.com was that the foreclusure rate (nationally) in quarter 3 was 30% higher than quarter 2 and almost doubled from quarter 3 of 2006. This is said to be affecting 1 in 196 households. Nevada had the highest foreclosure rate – 1 in 61 households – tripled from quarter 3 in 2006. California had the second highest foreclosure rate – 1 in 88 households – four times what it was in quarter 3 in 2006. Numerically California was the highest with 94,772 filings in the third quarter. Florida was the third highest – 1 in 95 households – doubling from third quarter last year with 86,465 total filings

How long is it going to take to get out of this glut? Many have said that we have to get through all the foreclosures first. How long will that take? The problem with this is that it has not and will not be a quick process. In addition, the foreclosures add to the already too-full pool of inventory on the market.

Right now consumer confidence is down. Even the savvy investors are afraid to purchase now because they are worried that their purchase may go down in the coming months from what they bought it at.

Where is the light in all this? The light is in buying right now. I know this is what all the Realtors are saying right now, and of course it has some motivation to keep the paychecks flowing, but it has a lot of truth to it. The fact is, right now property can be bought at sometimes pennies on the dollar. If an opportunity comes around to make a purchase that will cashflow, you should take it in a second. You can’t worry about whether you’ll lose $10k in value over the next year, you have to look at the 3 to 5 year upside, or even more. Real estate was never a good short term investment, and the market over the last few years influenced people to forget that. Real estate becomes a good investment when you can generate more money on a regular basis than you are paying out. If you can cashflow $50 a month, you can have as many as you want and you’ll only make more money. Now I understand that there is more involved (like having enough for emergency reserves, etc.), but this is a simple example.

Now is a great time to buy, that’s the positive. It stinks for people like me who are trying to sell their home, but it is a great time to buy.

State economists say recovery is farther away than expected

By Bill Cotterell
FLORIDA CAPITAL BUREAU POLITICAL EDITOR

“The housing-driven economic slump that made Florida legislators cut $1.1 billion from the state budget last month isn’t getting worse, but it will last “a lot longer” than expected, state economists said Friday.

No hard dollar amounts came out of the two-hour round table by top fiscal forecasters from the Legislature and governor’s office.

But planners made some downward revisions of their July forecasts amid gloomy forecasts that consumer spending, wages, auto sales, tourism, fuel costs and other leading economic indicators will languish longer in the trough dug by the slowed housing and construction markets.

Amy Baker, coordinator of the Economic and Demographic Research Office, said at least a few factors were forecast in July to begin recovery next year. But she and Frank Williams, an economist in her office, said it will be late 2009 before the economy really revives. . .” (more)