PCB ‘island’ seeing unprecedented real estate growth
By Ed Offley, News Herald Staff Writer | Aug 3, 2019 | newsherald.com
From Grand Lagoon to Lake Powell, construction workers are busily erecting apartment complexes, single-family homes, hotels, restaurants, fast-food franchises, planned residential communities, high-rise condominium towers and beachfront resorts.
PANAMA CITY BEACH — Drive anywhere on the Beach “island” today and the signs of a white-hot real estate development boom are inescapable.
Ten months after Hurricane Michael devastated the Panhandle, the eastern side of Bay County is still digging out from the storm. West of the Hathaway Bridge, however, a starkly different trend is continuing. From Grand Lagoon to Lake Powell, construction workers are busily erecting apartment complexes, single-family homes, hotels, restaurants, fast-food franchises, planned residential communities, high-rise condominium towers and beachfront resorts.
“The real estate market,” says Panama City Beach Chamber of Commerce President Kristopher McLane with a broad grin, “is insane.”
The reasons for this unrelenting surge in construction are many: The steady rise in tourism to the beach – now at 13.3 million visitors per year – is fueling commercial development from high-rise condominiums to hotels and vacation rental homes. Many Bay County residents displaced by the hurricane are relocating to the “island,” where a number of apartment communities have recently been completed or are still under construction. And as the massive post-World War II baby boom generation reaches retirement age, a significant number are buying single-family houses on or near the beach as investment properties or retirement homes. Meanwhile, mortgage interest rates remain low and overall demand for real estate in Northwest Florida remains high.
“The current demand [for commercial and residential development] is pretty steady,” said Panama City Beach City Manager Mario Gisbert. “Everybody wants to live, work and play here.”
Chris McCall, a commercial realtor with Counts Real Estate Group, confirmed that the current market is on a rampage. “Demand is soaring, and developers are coming out of the woodwork to satisfy that demand,” he said.
Of particular significance is the fact that Hurricane Michael, which largely spared the “island” from widespread damage, had scant impact on the wave of new construction, which actually began in earnest about five years ago. This was confirmed by an examination by The News Herald of building permits approved during an eight-month period prior to the Category 5 storm and records for the eight-month period following its landfall.
The records show that during that 16-month period spanning March 2018 and the end of June 2019:
* A total of 934 new construction building permits were issued with a total “valuation” of $269.6 million. (This term reflects the estimated construction value of each project but does not include the land price). Overall, this included 573 residential permits with a total valuation of $165.4 million, and 67 commercial projects values at $99.2 million.
* Hurricane Michael appears to have had little or no impact on the growth. In the eight months prior to the hurricane striking Bay County, city and county officials issued 309 residential building permits with a total valuation of $81.4 million. In the eight months following the storm, another 264 residential building permits totaling $77.7 million were approved.
The single-most apparent trend in the 573 residential building permits issued across the “island” since March 1, 2018 is price: The average valuation (construction cost excluding land price) was $277,814, conservatively indicating that most new homes on the Beach “island” are selling at a market price ranging from $200,000 to $500,000. And an overwhelming majority of new housing units under development west of the Hathaway Bridge – 484, or 84 percent – are traditional single-family homes. These are followed by 45 townhouses, 35 duplex units and four manufactured homes, many of which are in the $250,000 to $300,000 range.
* While smaller in number, commercial building permits followed the same pattern. In the eight months prior to Hurricane Michael, 34 commercial building permits valued at $44.8 million were issued. In the same interval following the storm, 33 commercial building permits totaling $54.3 million were approved.
The more expensive projects included $20.6 million for 10 apartment buildings in the St. Joe Co. development Parkview Crossings by Frank Brown Park; a new $13.4-million lodge building for Shalimar Christian Retreat in Panama City Beach; $12 million for the TownePlace Suites hotel under construction at 16000 Panama City Beach Parkway near Frank Brown Park; $6.2 million for a new office building at 130 Richard Jackson Boulevard, and $6 million for a Candlewood Suites Hotel now under construction at 16920 Panama City Beach Parkway near SR 79. In all, 26 commercial projects valued at $1 million or more have been issued city or county building permits since March 1, 2018.
* And not overlooked: During the 16-month period, contractors built 268 swimming pools with a total valuation of $10.7 million. All but 10 of them were for new single-family homes. Of the total, 156 permit applications received approval in the eight months prior to the hurricane and 112 permits were issued in the eight months following the storm.
While the current pace of construction is breathtaking, local planners say there are few signs the construction boom will end anytime soon.
Since the Panama City Beach Public Utilities Department provides water service to both the city and unincorporated Bay County west of the Hathaway Bridge, Director Al Shortt and his staff keep close tabs on future development projects. In a briefing to City Council on June 27, Short reviewed a list of “committed or potential developments” on the Beach “island” that are in a preliminary planning stage:
2,678 apartment units;
989 condominium/townhome units;
408 subdivision lots;
1,501 hotel rooms;
51 commercial developments.
“There is a pretty significant demand for our services,” Shortt said. Anticipating future demand for development well into the next decade, Panama City Beach announced in February its plans to expand sewer and water service north of the US 98 corridor, including construction of a $46-million wastewater treatment plant slated to begin operations in 2024. The new plant will provide sewer service for thousands of undeveloped acres north of Back Beach Road as far as the city’s utility service boundary at the Intracoastal Waterway, opening up the area to development, Shortt told the city council at its Feb. 14 meeting.
“We will be able to build out our entire service area” when the project is complete, he added.
In his June 27 briefing to Council, Shortt estimated that the expansion of utilities to the north of U.S. 98 will spark development of 12 thousand additional homes by 2029. The development boom is far from over.
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