market
Panama City Beach Reinvents Its Economy
By Selena Chavis
When publications such as the Forbes/Slatin Real Estate Report and CNN’s Money Magazine report that Bay County—and specifically Panama City Beach (PCB)—will soon comprise the fastest growing real estate sector in the nation and the best investment market, heads are bound to turn. And, according to local officials, eyes across the nation are watching to see what will happen next in this gulf coast community that in past years drew its claim to fame from characterizations such as the “Redneck Riviera.”
Could a beach community long recognized as “party central” for spring breakers and economy-sized “mom and pop” hotels soon become the envy of investment markets across the state? With plans for the new Panama City-Bay County International Airport (see story on page 20) to break ground this fall amid other major community enhancement initiatives, many believe the foundation is being laid for just such an occurrence.
“Most of us feel like you will never see real estate go down again in Panama City Beach,” said PCB Mayor Gayle Oberst. “The market is going to be middle to high-end. It’s not going to be the same place you could come to 10 to 20 years ago and rent something inexpensive.”
Bob Warren, president and CEO with the PCB Convention and Visitors Bureau (CVB), concurred, noting that the addition of more than 8,600 rooms to the area over the past three years has created a sense of urgency about generating more occupancy. “That’s monumental. PCB has to generate an additional 3,200 room nights on top of what we are currently doing,” he emphasized. “We are shifting our thought process to a different socio-economic visitor.”
Most of the rooms generated come from an increased focus on the condominium market, said Debi Knight, president of the Greater PCB Chamber of Commerce, adding that there are 26,000 units available on the market now, and growth is expected to continue. “As of early 2007, PCB has experienced an unprecedented number of new condominium
projects,” she said.
With the development push concentrated on condominium development, Warren said the area will appeal to a more affluent visitor but is still expected to be more affordable than many upscale resort markets. Oberst agreed, adding that the developments that are doing well are those that offer a number of on-site amenities and attractions. “The market is looking for units that offer more than just a place to stay,” she said.The Waiting Game
While expectations are high for PCB as an investment market over the next five to 10 years, many acknowledge that, currently, supply outweighs demand and the real estate market is soft.
Knight said that the area is doing well in comparison to other markets, though, and that many Realtors are suggesting an upturn in activity. “Believe it or not, across the country, we are holding our own,” she said. “There are a number of new resorts that have broken ground and are doing well.”
Janette Klein, broker associate with ResortQuest Real Estate, said she believes that it’s just a matter of time before the market picks back up. “The airport is going to make a major impact…it’s going to bring in all kinds of industry and opportunity,” she said, referencing expectations that the airport will create an estimated 14,000-plus jobs for Bay County and generate hundreds of millions in additional revenue. “The good thing about PCB is that it’s got the ability to grow…there’s land. A lot of cities don’t have that opportunity.”
Warren said that 70 percent of condominiums units are currently in rental pools, and while there may be an excess of inventory right now, he expects that the current state of affairs will change in the near future. “When the housing market turns around, you’ll see a whole new flood of investment money come into the area,” he said, pointing out that recent publicity surrounding PCB will certainly help as well. “These are things that will generate new activity—especially from baby boomers as they look to make investments.” Klein said that because the value of the dollar varies from country to country, having access to an international market would also drive investment opportunities. “Some international businesses have more buying power and will want to invest. We’ll get more exposure, and there will be more national and international buyers.”Raising The Bar
Along with the addition of an international airport, PCB is also embarking on a number of initiatives to make the area more marketable as a destination for both second homebuyers and visitors alike, Knight said. “When people want to invest, we’ve learned that we have to sell the ‘this is a good time for PCB,’ attitude,” she said.
Included in this effort are significant retail developments, entertainment attractions and the establishment of two Community Redevelopment Agencies (CRA)—the Pier Park CRA and the Front Beach Road CRA.
Positioned to become the “new downtown” for PCB, Pier Park was the first redevelopment project undertaken by the CRA. The high-energy, multi-phased entertainment and retail district is located on Front Beach Road and will encompass more than 1 million square feet of space.
While the real estate market has been soft, Oberst said that that commercial property is selling well. Referring to the Pier Park development, she said, “they are having no problem selling rental space.”
In 2001, the Front Beach Road CRA was created, and, according to Knight, the planned enhancements will “aesthetically change the way PCB looks.” Five hundred million dollars will be spent over the next 10 years to enhance and widen Front Beach Road and feeder routes. A dedicated lane will be established for a “people mover” transportation system with a welcome center and public parking garage at both ends of the eight-mile stretch. Other enhancements will include the addition of sidewalks, tram stops, heavy landscaping and the burial of utilities.
According to Knight, the tram is scheduled for completion in 2008, and the street widening and upgrades are scheduled for a spring 2009 completion.
