Consolidated-Tomoka Land Co. has long been a staple of Daytona Beach. With a storied history of land ownership dating back more than 100 years, the company’s land holdings included 25 percent of the Daytona Beach acreage until just a few years ago. But as Volusia County and Daytona Beach continue to experience tremendous progress and economic growth, CTO’s significant land ownership presence may be coming to an end—while an increase in population, jobs and business development is just beginning.
CTO’s new direction is changing the future of Daytona Beach. As of June 2018, the company has approximately 77 percent of its remaining land holdings of approximately 5,600 acres under contract to sell to various buyers. These buyers, who are mostly developers, will become investors in Daytona Beach and Volusia County—and therefore, a significant part of the area’s growth story. CTO estimates the majority of transactions under contract will close in the next few years, which will lead to a healthy increase in new single family and multi-family residential housing options, new shopping and dining venues, and new career opportunities with growing businesses like Brown & Brown, TopBuild, Teledyne Technologies, B. Braun and Costa Del Mar. These new developments are critical in positioning Daytona Beach to attract and retain families, as well as prospective employers and employees.
Since 2012, soon after John Albright took the helm as President and CEO of CTO, the company has sold around 2,685 acres of land that has either been developed or is slated for future development. These buyers will likely have invested more than $1.5 billion in developments, including the completion of the 630,000-square-foot Trader Joe’s distribution center; the 350,000-square-foot Tanger Outlets; the 400,000-square-foot distribution center for B. Braun; the 400,000-square-foot retail power center under construction from North American Development Group; the 260-unit apartment complex built by Integra; two new auto dealerships; the first Buc-ee’s convenience store to open outside of Texas; and the 1,200-unit Mosaic residential community. Also recently under development is the 3,400-unit Latitude Margaritaville residential community, which sold more 300 homes in its first five months alone, and was recently named the most popular active adult community in the U.S. by 55Places.com.
These developments represent not only billions of dollars in capital investment but also thousands of new jobs and residents. The developments already completed on land sold by CTO since 2012 have created an estimated 3,500 jobs, which is approximately 200 basis points of the unemployment in Volusia County. New employment opportunities such as those from these new developments have been shown to smooth the “boom bust” cycles of the area’s economy, which had been traditionally more reliant on tourism. In addition to the increase in jobs, this new development creates increased property tax revenue for the local government. And with an increased real estate tax base of more than $1 billion, the additional dollars could help shore up the sometimes-stretched municipal finances.
With new development comes new residents. For the first time in decades, officials in Daytona Beach are anticipating a population growth, with the Latitude Margaritaville and Mosaic developments alone expected to grow the city’s population by more than 10 percent. Because the Latitude Margaritaville community is designed for those 55 and older, they generally don’t add to the costs of government services like the local school system. Many of these residents have disposable income and an interest in enjoying the amenities of the local area, including the beaches, speedway, golf options, and even the universities. However, this growth does not come without concerns—particularly about traffic congestion. Developers argue they are paying their share of funds to enhance the current roadways and that it is now up to the county to fulfill road construction needs. Indeed, developers have been required to fund future road construction work before starting their respective developments, and CTO alone has constructed more than $15 million worth of roads for the city and county over the years.
The hard work and progress in monetizing the CTO’s land and reinvesting the proceeds into income-producing assets is evident in CTO’s results for 2017. The company considered 2017 an exceptional year in its long history, noting record earnings, a growth in book value per share by 27 percent; a total shareholder return for the year of more than 19 percent; and a rise in their dividend by 50 percent on an annualized basis. In his annual letter to shareholders for 2017, Albright expressed his excitement in the growth of Daytona Beach and CTO’s contribution to that growth.
“We believe that Daytona Beach is witnessing a true renaissance of a small beach town, and as ambassadors for this community, we enjoy meeting people and telling this story, over and over again, because it is truly a great story,” he wrote.
