DESTIN, Fla. — Maybe it’s the whimsical alliteration or the paradoxical sting of the term, but people just love to refer to the Florida Panhandle as “the Redneck Riviera.”
They usually drive home the put-down with a satisfied smirk, as was the case during a NBC news segment not long ago.
But that’s becoming ancient history, thanks to a boom in commercial real estate and the throngs of private residential investors that hope to make the expression obsolete.
Like the rest of northern Florida’s pristine Gulf coast, the area is being gobbled up by rich, retiring Baby Boomers and thirtysomethings that struck it big during high-flying dot-com days. Celebrities like Sheryl Crow, Courteney Cox and Faith Hill are seen strolling its beaches and upscale boutiques or popping by The Red Bar for an impromptu performance.
Tom Powell, executive director of the Walton County Economic Development Council, attributes its evolution from mobile homes and airbrushed T-shirt stands to possibly the next Naples, Fla., or even the Hamptons of the South, to supply and demand — and sheer luck. He reports that of the 100-mile stretch of white sand from Panama City to Pensacola, the Destin and South Walton segments were simply the last portions developed.
“That there was so little waterfront property available drove prices through the roof — the price of land skyrocketed,” he said. “The only people who could afford it were affluent, and the types of businesses that followed were built to appeal to those customers.”
Destin itself has a population exceeding 11,000 and a growth rate of 3 percent. Okaloosa County, including Destin, counts about 175,000 people and registers a 2 percent growth rate, while wealthier Walton County has about 43,000 residents and a growth rate of 5 percent.
Powell, citing data from the most recent quarterly report by the University of West Florida, said Okaloosa County retail figures for total, de-seasonalized, taxable sales in the first three quarters of 2003 were projected at more than $600 million a quarter, for a total of $1.8 billion.
Walton County’s total, de-seasonalized, taxable sales in the first three quarters of 2003 were estimated between $171 million and $224 million each quarter, or a projection of $600 million.Retail has grown steadily over the last five years, although it has dropped off slightly this year due to the overall economy. However, the development of new retail areas has increased, based on speculation that the economy will recover soon.
The influx of $1 million-plus mansions — nearly half of which are paid for in cash, say real estate sources — and luxury sedans and SUVs has already caught the attention of Turnberry Associates, a real estate development and property management firm based in Aventura, Fla. Riding on the success of its best properties, Aventura Mall and the Turnberry Isle Resort & Club, the company hopes for the same magic with its latest project, Destin Commons.
The first phase of the 660,000-square-foot, open-air mall bows in November and is anchored by a high-end resort version of Belk Inc., a Bass Pro Shop (a must for a city founded on fishing), and a 14-screen movie theater. Benetton, Cache, Chico’s FAS, Victoria’s Secret and Abercrombie & Fitch also have signed on.
Drew Barkett, director of development and real estate for Turnberry, reports 95 percent of the tenants are new to the Panhandle. “There’s nothing like this until Jacksonville. We were pushed by one of our clients to find a real retail opportunity here because they were doing so well at the Silver Sands outlet mall down the road,” he said. He projected average sales-per-square-foot at Destin Commons would exceed $400.
Barkett describes the mall’s location and lifestyle concept as “a home run”for its high-profile spot on the corner of Highway 98, which runs east-west, and Mid-Bay Bridge Road, one of only a few north-south thoroughfares. Turnberry estimates that more than 80,000 cars drive through this 10-lane intersection daily, while the bridge is the closest link to the mainland and airport.
The firm also thinks it has an aesthetic hit, for which Barkett credits partner Peter Bos, ceo of Legendary Inc., a local residential and commercial real estate development firm. “It’s always good to have a local partner who knows the lay of the land and local government, but Peter had the same vision of quality and lifestyle,” said Barkett.Bos has created a role for himself aspart astute businessman, part community leader who takes great pride in the vision he has largely built. He is probably best known nationally for Sandestin Golf & Beach Resort, now owned by Intrawest. He is well-schooled in what tourists and second-home owners want, and shopping is at the top of their list. “A study by Macy’s found that the area attracts 5 million visitors a year,” Bos said. “Not including the residents, the first year’s going to be a zoo.”
Bos said he likes the fact that Turnberry is family-owned and inclined toward long-range investing. “They don’t build to flip. In fact, we both signed an agreement that doesn’t allow either party to sell. We’re going the extra mile down to the classic architecture and quality of the fountains, because it’s for our kids’ kids to enjoy.”
It was just the environment Belk was looking for, according to executive vice president Steve Pernotto, to model a resort store after its Hilton Head, S.C., prototype. The 66,000-square-foot location will carry more upscale lines including Tommy Bahama and Lauren Ralph Lauren. “We’d been looking at other options for five years now, but this was the only one we took seriously. It really was a bull’s-eye,” he said.
Destin Commons is one of several new shopping destinations in the area. Adding most to the competition is Grand Boulevard at Sandestin, a mixed-use development with a heavily landscaped, residential feel. The project is owned and operated by Howard Group, which opened Silver Sands Factory Stores in 1992. With 120 shops that continue to expand and generate top sales nationwide, Silver Sands is ranked as one of the top 10 performing outlet centers by the Outlet Retail Merchants Association.
“The area hadn’t matured enough for national tenants, so an outlet mall was the right alternative at that time. Now we’re ready,” said president and ceo Keith Howard.
Seeing that the wealth was moving east toward communities like Rosemary Beach and Seaside, Howard situated his latest venture along the northern side of what he calls “the 50-yard line of Highway 98,” with the city of Destin at the west end. Though not financially linked to Sandestin, Grand Boulevard’s eventual 700,000 square feet of banks, grocery stores, pharmacies, hotels and national retail tenants will be intertwined with the resort and easily accessible by bike or golf cart.Two Marriott hotels, a gourmet version of Publix, Café Tu Tu Tango, Brighton Collections and Tommy Bahama’s ninth restaurant-retail “compound concept” are slated to open in its first phase at the end of this year and the beginning of the next.
“Our retail needs to be the latest and greatest and unique. These clients havediscriminating taste, and they only give you one shot. It has to be right,” said Howard.
With the advantage of a captive audience, Sandestin is expanding its retail as well. In addition to The Market Shops —a cluster of specialty stores like Chico’s and Charming Baby — the 2,400-acre resort property has created The Village of Baytowne Wharf. Much like a grander version of Seaside, the elegant development features a hotel, conference center, resort homes averaging more than $400 a square foot, shops and eateries.
“We noticed a huge change in our demographics about five years ago. The demand for better specialty stores had gone up,” said Marsha Chouinard, director of retail for Sandestin. Those include Coconut Kids and Island Clothiers, which offers Lilly Pulitzer, Lulu Guinness, Jill Stuart and Supply & Demand. Opened in June 2002, Island Clothiers brought in an estimated $800,000 in sales its first year.
New shopping choices within the resort shouldn’t affect The Market Shops’ performance, according to Chouinard. She reports that although both areas sell Fresh Produce, a resort line from Boulder, Colo., there hasn’t seen a dip in the former location’s sales.
Sales per square foot average $375 at The Market Shops, while its Starbucks ranks as one of the chain’s top-grossing franchises in the nation. “It just proves how starved this area is for more national brands,” said Chouinard.
Whether increased national presence will overpower the area’s favorite mom-and-pop boutiques isn’t a concern to local retailer Jim Ball. As the owner of 16 specialty stores, the former Navy pilot had locked down the local retail scene, covering niches from home to misses’ to juniors.
“My business plan has been to have different stores in the same location rather than the same store in different locations,” he said, noting that he strivesto figure out which piece of the market is missing from the lineup.Ball plans to open three stores at Destin Commons. One will be a second branch of his most notable theme concept, The Buzz, a vibrant juniors store with brands like Diesel, Juicy Couture and Project E.
Due to a trademark complication, the new store is called zBuz. Others are Trio, his most upscale venture so far with highlights like Brighton, Seven and Tammy Mars, and Bungalows, which he reports willprimarily purvey Tommy Bahama.
“We’ll get better traffic at the mall. It was never a question whether we’d go in. Nothing will trump it in the area,” said Ball, who projects combined sales from the three stores of more than $3.3 million the first year.
Ball, who originally held stores in Pensacola and Fort Walton Beach to the west, always saw more potential in Destin, even during the Seventies. His biggest spenders were Destin daytrippers. Reporting they were a well-traveled lot comprised mostly of mothers and daughters wearing gold Rolex watches, he knew he had to move to their side eventually.
“It’s the same clientele, just more of them. It’s most evident when you see all the private jets lined up at the airport on weekends now.” He only wishes someone would notify Tom Brokaw and crew.
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