First of all, thank you for being here this morning on a rainy morning. I'm George Gonzalez, President, Chief Executive Officer, and Chairman of the Board of the St. Joe Company. It is my pleasure to welcome you to the 2026 Annual Shareholder Meeting. In accordance with the notice of meeting, I officially call the meeting to order right at 9 o'clock Central Time, 10 Eastern Time. We will conduct this meeting in accordance with the agenda you were given when you registered this morning. If you have not registered, please do so at this time at the table just outside of the door. On the reverse side of the agenda is a list of the rules of conduct for this meeting. To ensure an orderly meeting, we require all participants to abide by these rules. After the formal business portion of the meeting has been adjourned, we will have a presentation, and then we will provide an opportunity for questions and answers. Only validated shareholders may ask questions in the Q&A session. Out of consideration for others, please limit yourself to no more than two questions. We'll answer as many questions as time allows. Now I would like to introduce the other members of the board. Those present in person, Mr. Howard Frank, Ms. Elizabeth Franklin, Ms. Ray Goff. We have Mr. Cesar Alvarez joining us through video. He's actually waving. You can see him on the screen. Mr. Tom Murphy is unable to join us this morning. Also with us today is Josh Nixon of Grant Thornton, the company's independent registered public accounting firm, who will be available to answer any appropriate questions during the Q&A. The company's chief legal officer, Lisa Walters, will act as the secretary of the meeting. We are being assisted today in the tabulation of proxies and ballots by Mr. James Hagan, agent for Broadridge Financial Solutions. At this time, I appoint Mr. James Hagan as inspector of Elections. The notice of the meeting has been mailed to each shareholder of record as of March 18, 2026. The Inspector of Elections has informed me that 52,079,637 shares of the company's voting stock are present in person or by proxy, constituting a quorum for today's meeting. A list of shareholders on March 18, 2026, the record date is available and may be inspected during the meeting by any shareholder who has signed in. The final report of the inspector of elections will include the votes, if any, of shareholders present and voting during today's meeting. The company's mailing agent, Broadridge Financial Solutions, has provided an affidavit of mailing to show the notice of the meeting was given on or about March 31, 2026. A copy of both the notice and the affidavit will be incorporated into the minutes of this meeting. Description of the proposals. Next, I will describe each proposal to be acted upon today, and then we will take the vote. Since no director nominations or proposals for business were properly filed by a shareholder in advance of this meeting, the business of this meeting is limited to the following three proposals. The first proposal before the shareholders is the election of six directors to serve for a one-year term until the next annual meeting. I am standing for re-election as a director today, along with the following nominees, Cesar Alvarez, Howard Frank, Elizabeth Franklin, Ray Goff, and Thomas Murphy. we recommend the election of these nominees the second proposal is the ratification of the appointment of grant thornton as our independent registered public accounting firm for the 2026 fiscal year the audit committee retained their services of grant thornton to audit the company's financial statements for 2026 and the board recommends that the shareholders ratify the appointment of grant thornton the third proposal is a proposal to approve on a non-binding advisory basis the compensation paid to our named executive officers as described in the compensation discussion and analysis section. The compensation table and related narrative disclosure set forth in the company's 2026 proxy statement. We recommend approval of the compensation of our named executive officers. Now we will now vote on the proposals. Those shareholders voting in person should now mark their ballots. If you have previously voted by proxy, you do not need to vote again today unless you want to change your vote. If you would like a ballot, please raise your hand and one will be provided to you. The inspector of elections will not collect any outstanding ballots. Okay. Thank you. Since everyone wanting to vote by ballot has done so, the polls are now closed. The result of the voting. Will the inspector of elections please report the result of the balloting when you're ready.
Mr. Chairman this initial tally is subject to verification and the final tabulation may reflect small changes in the vote I will announce. The final tabulation will set forth in the in the formal report of the inspector of election to the secretary of the company which will be made after the count has been verified. I certify the majority of the votes cast cast has voted for the election of each of the nominees as director of the company. In addition, the votes cast favoring the ratification of the appointment of Grant Thornton has exceeded the votes cast opposing to approve the compensation of the named executive offices as received more votes for than against. Thank you, Mr. Chairman.
I hereby declare that the director nominees have been duly elected, that the appointment of Grant Thornton as the company's independent registered public accounting firm has been ratified, and that shareholders approve the compensation of the name executive officers. On a personal note, I believe this is Mr. Hagen's last meeting with us. Thank you. Thank you for all the service. We appreciate it. this concludes the official business of the 2026 annual meeting the annual meeting is adjourned and we will now continue to the informational portion of our meeting today before we before the market opened this morning we filed a form 8k and attached an investor presentation that i'm going to review with you this morning we also posted the presentation in the investor relations portion of our website at joe.com so for those listening online you can follow along as we go through the presentation after the presentation we'll have a question-and-answer session we also have bound booklets that you most of you have already opened in your seats so you can follow along and actually keep that and take that with you after the meeting is over so slide one consistent business strategy we always start our presentation by outlining our business strategy We always want to provide clarity on what we're doing and why we're doing it. The first one is expand the portfolio of reoccurring income. The second one is develop residential communities with long-term scalable and repeatable revenue. The third one is to execute a multifaceted capital allocation strategy with CapEx, capital expenditures for business growth, stock repurchases, and debt reduction. and then the final one is to execute a steady and growing dividend program slide number two is the framework of how the company's position we show this slide in our presentations also these are high level numbers so there's not a lot of movement year to year but it's a good reminder of the framework that the company has to work with we own 165 000 acres 87 of which are located in three counties Bay Walton and Gulf we have entitlements or rights to develop for over 170,000 residential units and over 22 million square feet of non-residential and the majority of the current revenue is derived from less than two percent of those land holdings the next set of slides are our financial slides we include these slides every year and we include this time period from 2016 to 2025 or the preceding year because that's a time period that we've been executing that business strategy that I just went over. We get a lot of good feedback, positive feedback about these slides because it shows the trajectory in that time period when we've been executing the business strategy and it's all in one place. So a lot of prospective shareholders that have one quick place to go to to get a quick snapshot of the trajectory. This is the first one of the financial slide, is slide three, which is our balance sheet. And I think everybody knows this, but I still get unusual questions from time to time. The balance sheet is based on book basis or historical cost basis, not market. So the one small dip that you can see in 2025 in the balance sheet, that was primarily because of the sale of the Watercrest Senior Living property in the third quarter of last year. The next slide is revenue. So this is the combined consolidated and unconsolidated revenue for the company in that same time period. For 2025, our combined revenue consolidated and unconsolidated was $858.5 million. That consists of $513.2 million of consolidated revenue and 345.2 million of unconsolidated so that 858 is essentially 5 513 million of consolidated revenue which was the highest consolidated revenue number we've had in 19 years not counting 2014 when we had the one-time sale timber sale in 19 years ago we were a totally different company 19 years ago we primarily sold bulk land and our reoccurring revenue at that time was 15 percent today we're at 60 percent so it's a pretty significant transformation of the company going from 15 percent recurring revenue to 60 percent something else I wanted to point out about this slide is our revenue by segment 32 percent is residential 43 percent is hospitality and 23 percent is commercial the compound annual growth rate for this time period in our combined revenue is 27 percent slide number five is our ebitda we do have a calculation in slide 28 a very traditional calculation of ebitda the compound annual growth rate is 27 percent which was a little bit higher than last year when we showed the same slide which was at 26 percent net incomes tends to be a little bit more lumpy because it includes other measures like depreciation, which is a non-cash item. We did have a 56 percent increase in net income year over year. The compound annual growth rate is 25 percent, up from 21 percent when we had this slide last year. Slide number seven, earnings per share. This follows very similarly to the revenue slide, two dollars per share. It's the highest we've had in 19 years, not including 2014 with that one-time timberland sale. The compound annual growth rate is 28%, up from 25% when we had this slide last year. Something I wanted to point out, shares outstanding, because obviously this share is a calculation of weighted average shares outstanding with net income attributable to the company. In 2024, we had 58.3 million outstanding shares. As of May 11th of this year, we have 57.1. So that's a little bit over a million share reduction. Depreciation is something we track and we include in these financial slides because we do build assets that we bring into service. And this is just a tracking of the growth and depreciation, which is a reminder as a non-cash item. net income is reduced by depreciation you can see kind of the growth of the company and the assets that we have built and brought into service slide nine free cash flow this is where we take our net income add back depreciation since it's a non-cash item and then subtract sustaining capital and sustaining capital is the capital that we need to maintain our existing properties so for 2025 going through that math our free cash flow was 158 million that's compared to 2024 with the same calculation where the free cash flow was 112 million so we had an increase from 112 to 158 of free cash flow the next slide that we also track with this set of financial slides is project level debt and again that's all essentially the only debt we have, project level debt the assets stand on their own cash flows. Everything in this chart is in the right direction, everything improved from last year debt is now 25% of the company's total assets last year was 28%. The average weighted effective interest rate is now 4.7%, last year it was 4.8. This year, 82.7 percent of outstanding debt has a fixed or swapped interest rate. Last year was 73.8. And then the average remaining life and years is 19.7. Last year was 18.8. And as we've mentioned several times, the strategy with our debt reduction execution is to focus on shorter duration, higher variable interest rate debt. And that focus is essentially what's led to the improvement that you see in this slide when compared to last year. Capital allocation. This is a snapshot of capital allocation from January 1, 2015 through the end of the first quarter of this year. There's been a total of $2.2 billion that has been allocated in this time frame. And you You can see the breakdown by the major categories, 64% of that 2.2 billion was allocated to capital expenditures for growth, 30% of that 2.2 billion was allocated for share repurchase, and then 5% was allocated for dividends. So speaking of stock repurchase, we wanted to show a snapshot of stock repurchase that we've had year to date. So this is for the first quarter, which we've already reported and we've disclosed. And then this also includes the month of April and through May 11th, which was yesterday, the settlement date through yesterday. So this is very current. We haven't disclosed. This is the first time we've disclosed the numbers for April and then through settlement date of yesterday. So for this time period, January 1 through May 11th of this year, we have repurchased 390,437 shares, totaling $25.8 million. For the same period of time last year, January 1 through May 11th, we repurchased $198,214, or $8.9 million. So that's a pretty significant increase for the same period of time. And as a reminder, for last year, the full year, the company repurchased 798,622 shares for $40 million. The next slide is, as we have grown, and we have obviously over this period of time, we have still kept a focus on efficiency. We've kept a focus on overhead, SG&A. And this is a slide that we have in our presentation every year, which tracks corporate and other operating expenses, what we call overhead as a percentage of consolidated revenue. And when we started our journey, that number was at 24%. Last year, we were at 5%. So that's a pretty significant downward trend in the right direction. This is one of the few line graphs that we like the trajectory being downward. And we actually had a decrease year over year from 6% to 5%. So let's talk about the future. The next set of slides, we're going to take you through kind of where we are in planning and executing the next set of projects. So this slide 14 is all the approved detail-specific area plans, or DSAPs. And as a reminder, in our sector plan, the final step is to obtain approval of a DSAP from each respective county commission. They are Walton County. They have full public hearings. The reason why DSAPs are significant to us is that's really the last step that we need to obtain approval for before we get into the development orders and development permits where we can break ground on projects. um so um the dsaps are a minimum of a thousand acres um and they're mixed use we have both commercial and residential and the numbers that you see here in terms of the residential units and commercial square feet we also have the ability to move those numbers around based on market conditions so we see an opportunity for any specific dsap to do more residential we can swap commercial square feet and do more residential and vice versa but this is a good baseline of what each DSAP is approved for. So we have 10 approved. We have three that we started, and then we have seven that we have not started yet. So I'm going to take you through where we are with all of these 10 DSAPs. So these, slide 15, shows the three slides, the three DSAPs that we have started. The Bay County DSAP 1, which is, of course, latitude. Walton County DSAP 2, which is Water Sound Origins West. And then the third one is Ward Creek, which include those three communities along State Road 79, Bayside, Breakwater, and Saltgrass. Slide 16 shows that DSAPs that we have planned to break ground, start development in late 2026, early 2027. So late this year or early next year. The variability is obviously the time to permit with local jurisdictions and state and federal jurisdictions. But we have these two DSAPs planned to start this year late or early next year. One is Pigeon Creek, which is the DSAP that we made an announcement early this year. We executed a contract with Pulte Group, the third largest home builder in the country. This is their first entry into this market. And by the way, Pigeon Creek is not the name of the community. Howard has asked me before, make sure it's not Pigeon Creek. That's just a placeholder name we use for the names of the DSAPs. The community will have its own brand name. The second DSAP is Teechee. Again, that's just a placeholder name. We also plan on starting that DSAP either late this year or early next year. Slide 17, these are DSAPs that we have planned to start in the middle part of 2027 of next year. There's three of them, West Bay Creek, which is just to the west of latitude, West Laird, and Lake Powell. Those are the two other DSAPs, so a total of three that we're planning on starting in the middle part of next year. i mentioned in the i believe in the q1 earnings release that we had obtained approval from a utility provider for a utility corridor i know that's not exciting it's not sexy water and sewer is not exciting but it's a necessity for what we do for a living and when you have utility corridors that span a long distance it takes a long time to negotiate those agreements with utility providers. We were happy to report in the first quarter that we obtain an approval, an agreement for utility corridor that's essentially going to allow us to get forward, get moving with those two DSAPs, West Laird and Lake Powell. Then the last one are DSAPs that we have planned. So this totals the 10. And going through these three slides, these are all 10 that we have approved. These are two DSAPs that we don't have an exact time frame yet of when we're to get started so the start date is to be determined that's the walton county dsap 2 which is to the west of origins west and then west bay crossings which is in that intersection of state road 79 and philip griffith boulevard so with these last two that that includes all 10. so i hope that gives you a pretty good snapshot of where we are timing wise what our expectations are in terms of what we're planning on commencing these new DSAPs. It goes without saying that we also have many other DSAPs that we have not submitted for approval yet, and those are decisions that we'll make along the way as we execute these 10 DSAPs that we have approval. We have a couple others that are probably getting close to where we'll probably seek approval for those two. So our residential home site pipeline. We show this as an assembly line because that's the way it feels like to us. We have many active residential communities where we're actively developing, selling home sites, spanning a pretty broad range of price, demographic, consumer product type. But the seeding and harvesting cycle for residential infrastructure that's needed to monetize lots and close on lots, it's a one to two year cycle. and it's not a snapshot it's not one moment in time so we think of it as an assembly line particularly in our large scalable communities where we have multiple phases we have to constantly be feeding the assembly line and these are just to give you an idea of the general steps or the general stations in the assembly line so currently through the end of the first quarter we have 23 1,653 units in what we call in production in the assembly line. The first stop in the assembly line is a concept plan, an actual site plan, master plan that gives us a really good feel for the yield of the land, how many units we can do, what the geometry of the infrastructure is going to be in terms of the road network. The next step or station in the assembly line is engineering and permitting. This gets very exact. We go from conceptual planning to very exact set of engineering construction documents. We have 3,840 units in that station. The next station is platted or under development where the infrastructure is being developed. And by infrastructure, I mean horizontal infrastructure, roads, water, sewer, natural gas, stormwater facilities. So we have 1,762 units in that station. Of course, the last station is our favorite, which is closings. The text box on the right-hand side, as of March 31st, we have 3,204 home sites under contract. That's a significant increase from last year, where we had 952. It's a 237% increase. And that was primarily, not exclusively, but primarily because of the contract that we executed with Pulte Group for Pigeon Creek, which was a really big deal to have a new third national home builder coming to our market. They wouldn't come to our market unless they saw the growth, unless they saw the opportunity. And we do have 18 active home builders in our builder program. This is a map showing all the residential communities that comprise that pipeline. so if you look at the previous slide so slide 20 is residential home site pipeline a map of all the residential communities that are in that residential home site pipeline and you can see we have a pretty wide range of locations again consistent with what i said earlier we have a pretty wide range of pricing product type consumer that are moving into these communities so the next slide we haven't shown before it's a same concept but this is our commercial leasing pipeline we tend to think of this a little bit different than a pipeline than assembly line that's why we didn't show it in an assembly line form because these are more discrete projects and properties so we have a total of 3.9 million square feet in the commercial leasing space pipeline the first step or the first station in that pipeline similar to the residential home site pipeline is where we have a concept plan we have a site plan and master plan where we have a really good feel for the geometry of the property of the commercial asset we feel we can accommodate those square feet so So we have 2.6 million square feet in that initial station, which is three times the size of our existing commercial leasing portfolio. The next station in the pipeline is square feet under construction or planned to be under construction this year. That's 110,000 square feet. And that's broken down by 69,134 square feet that we actually have under construction today at this moment. and then we're going to have an additional 41,000 square feet that we're going to have under construction before the end of the year, and we feel pretty confident that we'll commence construction of those additional 41,000 square feet. Then, of course, the last station is the actual existing leasing portfolio, which consists of 1.2 million square feet. As of March 31st, 96% of that 1.2 million square feet was leased, So that's a pretty good percentage. And then that 96% leased percentage consists of approximately 250 individual leases, 250 individual commercial leases. So this leasing, this slide, this segment, this leasing pipeline segment represents a generation of 8.2 million in revenue per quarter. And as of the end of the first quarter of this year, margins were 73.2%. So this is a part of a portfolio that we want to continue to grow. And I get asked questions often about the timing of growing this portfolio. And I want to give you a little bit of insight into that. So our strategy is to have full buildings paying the maximum lease rate. so there's a timing component of that right because we can build a lot of buildings without looking at the timing and when they're going to get leased when they're going to get occupied but we don't think that's in our best interest so we're constantly calibrating the demand because we want to make sure that when we built these buildings in this commercial leasing portfolio we're maximizing the lease rate and we're maximizing the occupancy the good news is we're getting phone calls from national retailers national apparel brands that we didn't get years ago so we used to have to call now they're calling us so that that's indicative of the growth of the market of the maturation of the market we are we in terms of our commercial leasing portfolio we have the ability to ramp up we have the ability to throttle up if that if we feel that balance between starting construction and having a commitment to lease is there. But I want to give you kind of a feel for how we think about the strategy and the timing of growing this commercial leasing portfolio. Right now, the 3.9 million square feet, when we include what we have under planning, we feel pretty good about that size. That's a very realistic number to reach. But again, we're not going to do it recklessly where we have a bunch of empty buildings and then we have to reduce the lease rate. We want to maximize the lease rate and always have a very high occupancy rate. So this is a map, slide 22, of those commercial properties. It doesn't include all the existing, so the 1.2 million, it doesn't include all of those because those are really scattered all over the place. This is primarily the ones that are still active and we're going to be developing and adding. Slide 23. So the two most active for us and the ones that have the two, the two that have the most energy are the Water Sound Town Center, which is in front of Water Sound Origins, and then West Bay Center, which is in front of Latitude. So I'm going to show you a little bit more detail about each one of those two. So slide 23 shows the Water Sound town center we have 400 000 square feet planned 155 962 square feet completed so that's about 39 percent of what we have planned is completed and of what's completed are we have 98 leasing occupancy so that's a pretty good number 98 that's nearly 100 you can see in this site plan And the buildings that are shown in blue are completed. So those are the buildings that comprise the 155,962 square foot number. We have one building shown hatched in blue and white diagonal lines. That's a building that we have completed the shell, and we're currently in the process of working with tenants to do the tenant improvements. That building was essentially pre-leased before we finished the shell. And this is one of the buildings where we're kind of focusing on national apparel brands. Like I said, we're getting a lot of phone calls from those retailers, and they all want to be kind of together. So there's going to be – we've announced some. There's a lot of others we haven't announced yet, but we're pretty excited about the energy that we have with those retailers in the Watertown Town Center. So the two buildings shown in orange or red, those are two buildings that we're currently in design permitting, and we're going to start construction of those two buildings this year. Slide 24 is the West Bay Center. So the orientation of this one, because we try to orient everything north to south, but this is a long rectangle, so this is oriented differently. So the north is to the left of this site plan. You can see State Road 79 right at the top. And latitude is essentially to the west, so it's kind of down, the lower part of this site plan. So this one has a lot of energy right now. So we have planned this for 500,000 square feet. We have about 15,000 completed. We have 84,000 square feet currently under construction or planned to be in construction in 2026. So you can see in terms of the color convention, the dark blue at the very top or the left-hand side of the site plan, those are completed. We have that L-shaped building with diagonal lines that are similar to the Watertown Town Center building. We completed the shell. and then we're currently working on tenant improvements in that space we've got pretty good momentum on pre-leasing that building the orange or red are the buildings that we have already started construction or we're going to start construction before the end of the year obviously the big one which we announced a few months ago is we started construction of the Publix which has been long anticipated in the latitude community and I believe we may be pouring footers this week or next week of that building so the progression is has been going very very well it's a it's a footprint that Publix is very similar to the Publix here in front of the Waterstown Town Center so it's one of the bigger Publix footprints we enjoy a great relationship with Publix we deal with them directly we don't have a broker or middleman we We affectionately refer to them as Lakeland. They've been a really good partner with us, and they're our top grocery store for our communities. The one thing I wanted to mention, too, that this is 500,000 square feet. We also have a portion to the south, the extreme south portion of this master plan that we can do an additional 200,000 square feet. So this would be a total of 700,000 square feet, which is a lot. Just to give you a sense of scale, you're familiar with pier park north where we have uh dicks in fresh market as our anchor tenants in the end caps that's 320 000 square feet so this is 700 000 square feet so the growth potential of this center is pretty significant and we are not planning it and designing it as a big power center with a big building we want to create that villagey walkable feel so as you can see from this site plan we have a boulevard road plan with on-street parking smaller scale buildings fronting on that boulevard and then parking in the back of those buildings so this has tremendous potential and this is one that we can very easily throttle up as demand continues to grow so slide 25 speaking of latitude so latitude is unconsolidated joint venture and it's a unique joint venture. So last year we broke down the components of the cash flow to explain how it works. And this is an update of that slide. So latitude, we have 3,700 homes that have been planned. 2,273 are completed as of the end of the first quarter. So that's about 61% of the homes are completed the initial capital contribution of each partner was 11.7 million and then earnings for each partner have been 92.1 million that compared to last year march 31st 2025 that number was 67 million in addition to the cash flow generated from the actual operations and transactions uh we have also been paid for contribution of the raw land 22.3 million that's on top of the 92 million so it's got some moving pieces to it but you can see why we made the decision to do this joint venture as opposed to just selling the land if we had just sold the land uh to a builder uh the the cash flow in the monetization of that would not would not have been anywhere near what this is so we've been very happy with this joint venture we've been very happy with the community we think it's a great community i was there sunday i was driving around and there was a lot of happy people in golf carts eating and drinking and having a great time we're very happy with our partner mental has been an exceptional partner so something that i wanted to show this year when we made the decision when our board of directors made the decision to move forward with this joint venture we were focused on the cash flows obviously which by the way the the reality has far exceeded what we had originally projected what we had in the original pro forma so cash flows was the core reason why we made the decision but we also had other reasons why we made the decision to move forward with this joint venture at the time this land was literally in the middle of our sector plan and had the least amount of energy there was just pine trees everywhere there was nothing going on and we made the decision to move forward with this joint venture again in addition to the cash flows that we thought it would produce because we wanted to energize that part of our land holdings and Latitude has done that so when we made the decision on the Latitude joint venture in addition to the cash flows, we were thinking about three different things. So that energy of consumers and homes, that would generate demand for our commercial segment, West Bay Center, which I kind of gave you a snapshot of that. That was important to us because that was an investment we're making in a joint venture that has great cash flows. But in addition to that, it's creating consumers that we can monetize in our commercial segment. Similar in our hospitality segment, As everybody knows, we're working on a really tremendous marina concept on the intercoastal waterway. It won't just be open to latitude residents, but we anticipate a lot of latitude residents will take advantage of that marina. And then the third component is business services. As you've seen over the last year in our earnings releases, we've been talking a little bit more and more about what we call our asset light businesses. Watershound Real Estate, Watershound Insurance Agency, and Watershound Tidal Agency. All three of these benefit significantly from this joint venture. And we're constantly thinking of adding business services to this group, and we have several in the works. So it's something that we're going to continue to add over time. The thing that's not here that's also a reality, latitude by creating energy in that part of our land holdings was also energy for projects like Pigeon Creek. right if latitude wasn't there it would have been very difficult to execute a contract with Pulte Group for Pigeon Creek so that's another secondary tertiary benefit of this joint venture and I would also argue Ward Creek has created some energy also because of latitude so the last thing I want to go over is the what we call the virtual circle value creation we showed this last year and i want to show it again because this is not just a one-time thing we show at an annual meeting we live this every day we we kind of think about this and we make decisions to invest in a project we're constantly thinking about obviously the cash flows the financials of that project but we're also thinking about how that project benefits other parts of the company so the front porch of our company is our hospitality segment it's amazing how many people get introduced to the region get introduced to the company get introduced to our communities because they stay in one of our resorts they stay in one of our hotels so as we have guests in our hotels that exposes the visitors to the lifestyle the water sound lifestyle and the high quality of life we have in our region so it creates demand for our residential communities our residential communities our apartment communities and then when those communities get going it creates a customer base for the hospitality assets somebody gets exposed to our region in one of our communities by staying in a resort then they decide to buy a home in one of our communities then when they buy a home in one of our communities they decide to join our club that also creates a customer base for the commercial town center tenants right these are consumers that commercial tenants covet and that allows us to invest in our commercial segment our town centers medical space office space then of course then those commercial town centers become amenities for our residential communities and enhances the quality of life of the residents in those communities then those commercial town centers in those commercial spaces they also enhance the experience for our hotel guests, our resort guests, because there's more things to do when they're here, more places to eat, more places to shop. And of course, our hospitality segment, our guests in our hotels become consumers, customers for our commercial segment. So this is the way we think of the company literally every day. We think about this every day. It's not just a slide that we put together for the annual meeting and for those of you following online we're animating this so we're introducing every time I talk about these components one shows up one at a time it's a lot easier to see than the presentation that you're seeing online where it's just one one graphic as this virtual circle is happening it's also creating a need for public infrastructure it's creating jobs and it's accommodating population growth and this is the really most important thing that the shareholders that understand our company the most understand this one point the best. All this is creating value. It's driving value for all of our adjoining lands that we own around these properties. That's not captured in the financials, but that's a very significant component of the company. As the virtual circle is happening, we're growing revenue, we're growing income we're growing our communities our commercial town centers is driving the value up of all the adjoining land that we own that's really important for everybody to remember and that concludes our presentation this is the non-gap reconciliation for EBITDA and then of course I'm not going to read the disclosure that our general counsel does such a great job with every year so with that i would love to open the floor up for questions as a resident of latitude and with the influx of the other communities along that highway 79 corridor many of us are wondering if saint joe has any interest in golf course development we're always thinking about everything that's really the the short answer and we've thought about golf in different regions of our land holdings, and that is one of them.
I'm glad if you're Waterstown resident also. What's going on with Marina has pretty much been at a standstill the last 12 months.
Yeah, so we haven't obtained all the permits yet. So the standstill is what it usually is, government. We have obtained some of the permits, and that's some of the work that you've seen. We're going to move forward with another component of it, and we're going to start doing that pretty soon. And once we get all the final permits, then we're going to go full steam ahead.
First off, I just want to thank you and the team for all you've accomplished since the last meeting and also all you're doing to prepare for the future. I do not have a real estate background, so it would help for me if you would share your thoughts. I really like that slide on the commercial leasing pipeline. You know, the role of people and partners to make the most out of that pipeline.
So we do have partners, joint venture partners. We do have some commercial assets that are part of the leasing portfolio that we have partners. We usually bring in partners because they have a particular expertise. They have relationships. It's usually not because of capital necessarily. So we try to be very thoughtful about is there a partner that we can partner with in any segment, but particularly the commercial leasing segment that can bring value to us in ways that we can't create ourselves. And if the answer is yes, then we're going to move forward with creating a joint venture and partnering with that entity. We always have a couple of those going on, and we have a couple of those going on right now with partners who are really experts and have a lot of relationships and a lot of expertise in specific lanes of that industry. If we can't find a partner or we think the value we can add by ourselves is the value that's needed at that location, then we'll move forward with that by ourselves. So Water Sound Town Center, for example, is one that we've been doing on our own, and we did reach that threshold where now national retailers, retailers national apparel brands are calling us for a while there we were we we tried different ideas about how to kind of get that momentum now we haven't and we're going to be executing that and in our town centers we don't incur any project debt so the we don't have to discount lease rates because we have an anchor in any of those buildings so we charge full rate from the very beginning, and usually they're pre-leased before we start construction. So it's a really nice portfolio that's going to age very well over time. More questions?
Yes. My name is Mark, and I'm also a resident in Latitude. I've got a couple of questions. An easy one. So you mentioned home sites under contract around $3,200. Is that between you and the developer, or is that with the consumer No, that's with our builder partners. With the developer and yourself. And then there's been mention of a second area of latitude. Any comment on how that's progressing or if that's still in the works?
Yeah, and we mentioned early on that if the community was well received and was successful, which by every measure it has been, that we would try and continue that relationship, and we have been in discussion with our joint venture partner about the kind of next phase to the west. There's nothing to report yet, but we have been in discussion, and we've made really good progress.
And then my last question on Pigeon Creek with Pulte, any insight as to what that development's going to look like? Is that going to be more under 55, and will there be infrastructure for schools that's going to come along with that down the road, if so?
Yeah, so Pigeon Creek is not going to be an age-restricted active adult community. The only community that we have for that is Latitude. So Pulte Group is still working on the exact product lines, but they're going to have probably four different product lines, not age restricted appealing to a wide range of consumers they could be appealing to retirees although it's not age restricted not gonna be themed that way they could be appealing to families so it could be a pretty broad range so probably the the closest thing this is just my perspective and I'm certainly not speaking for Poulter Group is something similar to Ward Creek when when you look at Ward Creek and you look at the broad range of product type and demographics there's retirees there there's families there there's a mixture of both it's probably going to be very similar to that Ward Creek to us includes D.R. Horton on the east side Fisher Holmes and Coulter on the west side and Toll Brothers on the west side too and in terms of schools we're always working way ahead of years ahead with our respective school board superintendents planning tracking demand spatially working with them on needs that they have for for additional schools we're usually way ahead by the time you see school break ground we've been in discussion with with that school district for five six years if that second phase of the latitude would
happen are the economics with Minto the same or is that part of your discussion It's part of the discussion. Part of the discussion. And then I guess a follow-up would be, is there any appetite to do another joint venture elsewhere, or was that just kind of a unique, like you said, it was pine trees at the time, and you guys got obviously a great deal on that. Is that something that you would entertain in the future in another area? For age-restricted? Yeah.
Yeah, you know, the future is a long time away, right? So we're always open to entertaining. But right now our focus is on just that one in terms of a joint venture for age-restricted community. It's been very successful. We want it to continue to be successful. And if there's opportunities in the future, you know, we'll certainly look at those.
Question. Off of what he was talking about, do you see now that the area has kind of blossomed and you've brought in a lot of new national builders, the opportunity to either do something with Minto and other people or just open that, I guess, West Bay Creek DSAP up to a lot of the other builders that are now here that have 55-plus communities in terms of the product offering to maybe enhance what we're getting out of it.
Yeah, we're always – we have 18 active builders, And at every moment, in addition to those builders that we report that are active in our program, we're in discussion with five to ten additional builders. So, yes, short answer is yes. We're in discussion with builders on a daily basis, almost, that want to come into the market. It takes a process and some time to find a space for them because remember we have the one to two year seeding cycle for development and depending on when they come in and start talking to us there may not be a lane for them right away but we also try to put a lot of thought into where we put them relative to our existing builders right because we don't want to just recklessly think of well we're going to add five more builders let's put them in here then the builders that are there start cannibalizing each other right and then there's a race to the bottom in terms of margins so we try to be very thoughtful in where we place the builders so they're complementary to the other builders in that community so yes we're constantly talking to many other builders that want to come to the market but that's a process of both them and us being thoughtful about where we're going to place them.
Okay then the last one I know I've asked you before on it but is there any update on the 30a west project because again I've seen the the drawings for it it looks beautiful but I also look at that and think that that could represent a large chunk of stock being bought back if we chose to go a different route with it so I was just wondering if there's any update yeah excellent question so we're always in discussion and we're still in discussion with that on that project but to your point we're always calibrating the financials of any project, whether it's a joint venture or a project we're doing ourselves with, you know, calibrating it with a broader capital allocation, right?
And if projects, and there's an ebb and flow, right? Because market conditions change, cost of construction changes. And we track that over a long period of time. And if we think it makes more sense to allocate capital in other projects or buy shares back or continue to grow a different program, we're going to do that. And that project is one that we've been in that process. We don't just, once we conceptualize a project, we just don't put blinders on and go, right? We're always calibrating it just to see where it is. And that's certainly one of those.
Has there been any discussion on the, I guess you could call it the non-core 13% of the acreage and what to do there? I know in previous meetings that's been brought up about maybe timber sales again or something like that. Has that been discussed at all?
Yeah, we do. And essentially I call it our land holdings on the east side of the Big River, on the east side of the Appalachia Culler River. Where we have a concentration of land ownership is in Leon County, for example, in Tallahassee. And we obviously have a project that preceded us, Southwood, that was done in that community. in Southwood we made a strategic decision many years ago that we would not invest in developing home sites we think it's it's makes a lot more financial sense to invest here because we have growth here we have a migration we have higher margins so what we're doing in Southwood because it does have master infrastructure is we're selling tracts of land to builders so we're not investing any capital to develop home sites we're selling tracks of land with entitlements and then the builders will build the infrastructure and build the homes that's what we're doing in southward we've done that also outside of southward in leon county you may have seen we've had two or three land sales over the last couple years to builders we sell the land to them they put the infrastructure in and they build the homes we're going to continue that strategy we we don't have any any perspective of investing capital in that market so we're we're i often say we're we don't sell land we're a picky seller of land um and that's really bay walking on gulf right in in leon county and some of the surrounding counties that we have some land at the right price we'll sell it and that's key because we do get uh to your question about timberlands would we sell timberlands in that market we would but um now that the company has grown and and our financials have grown uh as you have seen we don't have um a sense of urgency to sell that land at a low price so we we get offers uh from folks and they're you know they're global offers we don't even respond I think. Are we on time? Maybe one more question. Of course.
Thank you. Could you talk, George, it's less of a question, but talk a little bit about health care facilities in the area, because as we grow, all the people that are moving in, what's going on with health care, medical facilities, and the new hospital that's under construction?
Absolutely. So, great question. Not just because you're a director. So health care to us is as critical to quality of life as anything else. It really is. Without good health care, it's hard to have high quality of life. And it's not just for one demographic. It's for the entire demographic. And we have great health care providers in our region. All of them are tenants of ours. We've enjoyed a relationship with them for a long time. They're great folks, great companies. But as our region has grown, we need more of everything, more of everything when it comes to healthcare we need more general practitioners we need more specialists we need more diagnostics we need more of everything so one of the a big bold idea that we we had many years ago was to create a medical campus where we would target an academic health center model an academic health center from all the research we've done is the most successful health care delivery system in the country where the synergies between teaching research and clinical delivery really come to fruition because the days of doctors creating LLC being in business those days are kind of in the river mirror doctors tend to be employees of large for-profit health care companies like HCA large not-for-profit health care companies like Ascension or employees of academic health centers, and there's many examples of academic health centers, and they're usually kind of one of the main economic engines in that market, whether it's UAB, right, Shands, NYU. So we created that vision. We masterplanned the campus, and it's the campus at the southeast corner of 79 and Philip Griffin. then we engage in a series of very these things are not easy right these are big bold ideas we engage in a series of discussions with with many potential partners and those discussions have kind of landed in the first phase of that campus we opened a couple years ago the medical office building that's there and it's full of clinicians already and there's a really high-end outpatient surgery center that has already been opened the second phase is the big deal the second phase is an actual teaching hospital we've been working on that very hard with our partners again nothing nothing that has value is easy but we're there that hospital is if you drive by it you can see the construction we anticipate that hospital is going to be open middle part of 28 the hospital has been master plan and planned for future expansion phase one is going to be probably 100 to 150 beds that hospital has been planned for almost 600 beds and with an ability to add wings very easily without disrupting the core operations of the hospital so that's a that's an asset that's going to be under fsu health so florida state university their college of medicine their research apparatus which is very robust they're gonna that's their asset and it's going to be a full-blown teaching hospital we're gonna have residencies there that's the plan that's really important to me it's really important to our region because where docs do residencies that's where they tend to stay it's not where they go to medical school and for us to eventually have it's not going to happen right away it's going to take a little bit of time but for us to have a reoccurring pipeline of residencies that go through that teaching hospital is pretty significant because that's reoccurring right that's those are not physicians that you have to recruit the goal of this academic health center is to to bring resources from outside of the market right bring doctors from outside of the market and I can't tell you even though all the final mechanics of the deal structure are still being finalized so there hasn't been a lot of branding that you've seen right you drive by there you don't see FSU health that's going to change pretty soon when they finalize all the agreements and all the mechanics but even with very with no branding and really very little kind of external communication i can't tell you how many club members of ours who are physicians in atlanta in houston in nashville call and say hey let me know about that because i may have an interest in moving in and being in that facility that's without any effort right without any recruitment and i get those phone calls on a regular basis so that in a way kind of sit toe in the water proving the concept right so we're pretty excited about that it's not just something we're doing to help sell more homes at latitude i don't think we need that help it's something for the community right it's a community asset that's going to help every single demographic in the community and it's a really big deal i think we have time for one more question i think you had your hand yes yeah it's beyond ongoing discussions we we have finalized it's a ground lease and And that's been finalized. So we expect to see kind of physical progress on that over the next few months, year, OK? All great questions. I really appreciate it. Great. Thank you for coming. I really appreciate it.