Panama City Beach: Redevelopment Slow But Steady
By T. Wayne Waters, Condo Owner Magazine, February 23, 2015
About 14 years after establishing a major redevelopment plan, about seven since the national economy began a downward spiral, and five after the oil spill, Panama City Beach keeps slow but steady progress forward as abandoned condos and motels are redeveloped or razed and a new roadway redevelopment segment will soon break ground.
Panama City Beach (PCB) is looking spiffier than ever, helping residents and visitors alike move around more easily, and seeing the slow, fitful beginning of resurgence in hotel renovation and condominium development.
PCB has about 14,000 permanent residents, miles of beachfront along the Gulf of Mexico and draws hundreds of thousands of vacationers and part-time residents each year. Now, many of those PCB residents and visitors may find it easier to get around the city thanks to the 2013 completion of Segment 1 of both the Front Beach Road and South Thomas Drive Reconstruction Projects. Portions of both of these major roadways now offer new lanes dedicated to transit trolleys and bicycles, landscaped medians, sidewalks, underground utilities, additional roadway lighting, and storm water retention ponds that also serve as public ponds in walking parks with pathways, lighting, seating and landscaping.
These reconstruction projects were part of PCB’s Front Beach Road Community Redevelopment Plan initiated in 2001. Segment 2 is expected to get underway within a few months, according to Panama City Beach Director of Building and Planning Mel Leonard.
“Now we’re at the point we can do Segment 2,” Leonard said. “It should kick off in two to three months and would take the Front Beach Road improvements from its intersection with South Commerce Drive west to Jackson Boulevard. It’s estimated to be about an 18-month project and then would probably take another 18 months to get cranked up. The time frame for the segment after that, though, could be reduced if the economy stays strong.
“People will be able to park at their condominiums and be able to easily walk, ride a bike or take a trolley to get around the city that way,” Leonard explained in reference to the completed redevelopment plan. “That will help improve the capacity of the city because once the roads are clogged up with cars there are other ways for people to get around. The combined bicycle and trolley lane is designed to allow some people to bypass all the Front Beach Road traffic in its two existing roadway lanes.”
Slow but Steady
The primary focus of the 2001 Front Beach Road Community Redevelopment Plan in its inception was to create the Community Redevelopment Agency (CRA) tasked with implementing improvements in local “transportation, parking, beach access and safety issues on Front Beach Road and designated connecting roads.” The plan was (and is) expected to not only improve transportation for PCB residents but also encourage new tourism and create enhanced public recreational facilities.
The pace of the redevelopment is dictated by Panama City Beach’s economy, which, of course, mirrors to no small degree the national economy and suffered the additional setback the Deepwater Horizon oil spill wrought in 2010. From the beginning, the CRA plan has been a long-termed project funded through Tax Increment Financing (TIF) within the designated Front Beach Road Redevelopment area and designed for gradual implementation over a three-decade time period.
“We don’t borrow anything to make those projects happen,” Leonard said, who’s been in his current capacity since just before the redevelopment plan was created. “We wait until we have enough cash on hand and each project is costing about $12 to $13 million. The funding is based upon assessed values by the county and those went down quite a bit with the economic downturn. Now, we’re getting in about $8 million a year so we would have to save up maybe two or three years to do another segment of it.”
Segment 1 of the redevelopment plan was completed about two years ago and was centered on improvements on South Thomas Drive and Front Beach Road (SR 30A) from South Thomas to Hutchison Boulevard on the south side of the city.
“At the peak,” Leonard said, “we were getting $10 million a year, and at the very bottom of the market we were close to only $5 million. So, we weren’t able to do as many things as quickly as we had hoped but still we were able to take that time to get some engineering reports done and do some of the things we could afford to do until the money builds up.”
Leonard added that Segment 3 is tentatively planned to include work from the State Road 79 improvements to Panama City Beach Parkway south to Front Beach and turning east to through Pier Park, a shopping and entertainment hub in the heart of the city.
“We’re hoping that about the time Segment 2 is finished the economy will stay strong as far as property values go and then we’ll be able to turn right back around and start jumping to the west side of the city, looking at improvements at the gateway to the city on State Road 79.”
Condo/Hotel Upside
After the economy took a dive in 2008, Panama City Beach, like many cities in Florida and other states, saw proposed condominium developments falter, in many cases bailing out before beginning construction or in some cases ceasing construction, perhaps going into foreclosure. PCB officials took measures to give such developments the best chance to keep their options open.
“We had a lot of development orders that went through when the economy was strong,” Leonard said. “Those development orders would typically only run for about six months, so we had a lot of condominiums that were approved but then the development orders expired and the projects went away. The city council, on the coattails of what the state did in the last few years, adopted an ordinance to preserve the right of some condominiums that were previously approved and met certain requirements to keep their development orders. We ended up having six of those condominiums meet the requirements and got their development orders extended two to four years before they would have to submit for a building permit. They have this period now so that if the economy keeps turning around, we might have one of these six be one of the first ones to get restarted. We’re hoping that this will soon spur some redevelopment.”
At least one PCB real estate professional, Chris Arnold, wrote in a blog last year that the biggest change he’s seen recently in the condo market is in the new condominium owners and management whereby many “…condominium associations have ousted the old management and have begun focusing on the structure and property. As such, it is very common to see buildings getting new paint colors and grounds being improved.” Arnold summed up by noting that a “beach full of solid condominium associations gives us a maturing Panama City Beach.”
Meanwhile, some older hotels and motels deteriorated over the last decade, but the number has dwindled.
“We’ve had resurgence the last couple of years of people buying these motel and hotels and putting money into remodeling them,” Leonard said. “A lot of them have been brought back up and are kind of quaint, kind of nice right now.”
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Leonard mentioned only two mom-and-pop motels that have had to be razed in the past few years. One that caught considerable unfavorable PCB Council concern and regional media attention is the Beach Club Motel, an older property that caught fire about two years ago.
“A crew will be out there in the next day or two to start demolishing it,” Leonard said, before this issue went to print. “What we will do is end up taking the cost of that and putting it on the next tax bill so that as the owner pays taxes on it we would be paid back from that.”
Overall, Leonard has been pleased with the way motels and hotels have been rehabbed in recent years and the way the condo landscape has seen a modest improvement. He also said that city officials don’t feel any sense that PCB has reached a limit to condominium or hotel development and that the city typically runs out of capacity during the major holidays and busiest times of the year.
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