"Getting Florida Back to Work", or, Shorting Florida: how much damage can Rick Scott do? A lot. By gimleteye

Government can't get Floridians back to work. All government can do is create incentives for employers and specific industries. Sadly the very industries that warped Florida's economy-- turning the state into a land speculator's bonanza with pump and dump schemes for millions of mortgages-- are firmly entrenched in the administration of a new governor who has zero experience in public policy or history, beyond what he observed from the inside of a private jet and personal wealth generated from gaming health care reimbursements.

The announcement, yesterday, that an executive of St. Joe Company, was appointed to head the state's growth management agency-- the one slated for demolition by the GOP led legislature-- provoked instant outrage in some quarters. Like this one. St. Joe, a publicly traded company has a long history in Florida as a major land owner and land developer. The corporation was hit extraordinarily hard by the recession/depression and its own ill-timed investments in large scale land developments that had been championed by the Jeb! Bush administrations. Under Bush, St. Joe blew through community concerns and secured rights from the state to build a vast community in the Panhandle centered around a new commercial airport no one needed or wanted in the middle of pristine wetlands.

Take it from someone who knows: Linda Young, of Clean Water Network, who spent years fighting the Panhandle disaster. In a press statement yesterday, Ms. Young noted that St. Joe has been a terrible investment, unless you were betting short the market: "St. Joe’s development schemes are so flopped that famed hedge fund manager David Einhorn from Greenlight Capital told Bloomberg TV that “The company has negative profits with no means of generating ongoing cash to service debt.”

“…there’s no ongoing business,” Einhorn said. “Ten years ago they had twice as many acres. All they do is sell acres. They take in cash for selling the acres. Most of it goes to the operating expense of the company so there’s not a lot of profits left for shareholders. And so basically, this isn’t an ongoing business, it’s basically a run-down of the assets. And my feeling is that if they continue on their current course, it’s going to take them a few decades, but, by the end of the day, there just won’t be anything left." There won't be anything left of Florida, either, when Rick Scott is done with our state.

Ms. Young notes: "There’s irony in the fact that Scott’s press release announcing Buzzett’s appointment uses the Bay County airport as a primary example of his accomplishments: “As vice president of strategic planning for the St. Joe Company, Buzzett helped lead the development of the new international airport in West Bay Florida, along with the largest master planned community in the United States.”

Last month, the U.S. Department of Transportation’s Inspector General released a report on improper payments that were made by the Federal Aviation Administration (FAA). In a 16-month period during 2007-2008, they found over $13 million (more than 5 percent) of payments made to 17 grantees reviewed were improper. Topping the list of illegal payments was almost $7 million to the Bay County Airport Authority in Panama City Florida. No other project came close to this level of graft."

Using government policies as "leverage" to speculate is a theme close to Governor Scott, who used federal Medicaid programs to leverage hundreds of millions in personal wealth-- and finally, cause a federal court to levy the largest civil fraud fine in US history. Only a week into the new administration in Tallahassee, and an extraordinary picture is emerging: getting Florida back to work is a scheme to short Florida. A Scott spokesperson dismissed the criticism in an AP report today, "They have an agenda." Yes, the agenda is an attempt to explain from the sinking ship: the life rafts have all been commandeered by insiders, and the special interests inside who are telling us all to just swim by ourselves until help arrives are lying. (click 'read more' for the full press statement by Clean Water Network)



FOR IMMEDIATE RELEASE CONTACT: Linda Young
(850) 322-7978

January 6, 2011

NEW PLANNING CHIEF IS FAILED DEVELOPER
Once rural lands now ‘ghost towns,’ North Florida counties’ predicted
windfalls are broken promises

Billy Buzzett – the man incoming Gov. Rick Scott picked to head the state’s land planning agency – presided over a series of failed development projects across North Florida, including pushing a sweetheart-deal international airport that wiped out massive amounts of wetlands and filled an estuary with mud, and now struggles for customers.

Buzzett was St. Joe Company’s point man during the real estate bubble, when the company got the Legislature to weaken planning rules and persuaded rural county commissions to allow natural destruction in the name of developments, many of which now sit empty.

St. Joe’s development schemes are so flopped that famed hedge fund manager David Einhorn from Greenlight Capital told Bloomberg TV that “The company has negative profits with no means of generating ongoing cash to service debt.”

“…there’s no ongoing business,” Einhorn said. “Ten years ago they had twice as many acres. All they do is sell acres. They take in cash for selling the acres. Most of it goes to the operating expense of the company so there’s not a lot of profits left for shareholders. And so basically, this isn’t an ongoing business, it’s basically a run-down of the assets. And my feeling is that if they continue on their current course, it’s going to take them a few decades, but, by the end of the day, there just won’t be anything left."


In a presentation before the Value Investing Congress in October, Einhorn summarized St. Joe’s troubles:

“- JOE’s developments are full of lots that former speculators or their banks would like to sell.

- There is little evidence of how JOE spent so much money on these developments.

- Many developments are ghost towns.

- Little value remains.”

“This is the man they pick to preside over planning in Florida? He’s a well-connected developer whose projects mostly flopped, and he wrecked the public’s resources to try to make a profit.” said Linda Young, director of the Clean Water Network of Florida.
As St Joe’s lead advocate for the new Bay County Airport and West Bay Sector Plan, Buzzett promised local politicians that St. Joe would donate 41,000 acres of its land to Bay County in exchange for relaxed development standards and public subsidies. Years later, this land has yet to be donated to the public.

“After watching Buzzett for years spin carefully crafted tales about purported land donations that never transpired, I can just imagine the grandiose promises he will provide us as he carves up Florida’s remaining resources for St Joe and for Scott’s other business supporters,” Young said.

There’s irony in the fact that Scott’s press release announcing Buzzett’s appointment uses the Bay County airport as a primary example of his accomplishments:

“As vice president of strategic planning for the St. Joe Company, Buzzett helped lead the development of the new international airport in West Bay Florida, along with the largest master planned community in the United States.”

Last month, the U.S. Department of Transportation’s Inspector General released a report on improper payments that were made by the Federal Aviation Administration (FAA). In a 16-month period during 2007-2008, they found over $13 million (more than 5 percent) of payments made to 17 grantees reviewed were improper. Topping the list of illegal payments was almost $7 million to the Bay County Airport Authority in Panama City Florida. No other project came close to this level of graft.

The report shows that the Florida DOT falsified records to cover-up the Bay County Airport Authority’s misuse of funds. One example given in the report says the airport received over $4 million for construction work on temporary pollution and erosion control, but couldn’t produce documentation showing that the completed work met FAA and contract requirements. In fact, airport construction sent massive amounts of silt into once-clear waterways, destroying wildlife and habitat.

“Appointing a man who obviously believes that environmental destruction is OK in the name of profits to head the state’s land-planning watchdog is a clear signal that Rick Scott intends to plunder Florida worse than any governor before him,” Young said. “He’s not even trying to pretend that he cares about the environment.”

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