July 30, 2014

Big Deal

The first. The largest. The only.

Superlatives like these can be tricky things. But for Babcock Ranch, the 91,000-acre planned development and state park in Lee and Charlotte counties, they apply.

The state purchase of about 74,000 acres of the Babcock property for an environmental preserve is the largest land buy in Florida history. Plans to operate the state land as a public playground and working ranch that pays for itself would make it the first and only such operation in Florida. Add to that a new community on the remaining 17,800 acres—an environmentally friendly place where residents can work and shop without leaving the neighborhood.

Developer Syd Kitson was the first to succeed, after many others tried and failed, in making the deal work. And by most accounts, Kitson is the only person who could have put the deal together—with players including 40-plus Babcock family members, state government and numerous agencies, two counties and several environmental groups—in little more than a year.

Even people who liked his plans doubted it could be done. Government just doesn’t work like that, they said. His ideas were too innovative; there were too many players, including some prominent opponents.

"There were very few people who thought I had any chance at all," Kitson said recently during an interview at his Port Charlotte office. "Most said I had no chance. There were so many things that had to happen just right, and in a small window of time.

"But we just went step by step. If any one step had missed, it would have been over."

There were no missteps. The likelihood of that, in such a complex process, seems impossible. But Kitson was able to help facilitate the state purchase of 80 percent of Babcock, while he’ll use the rest to develop the new community.

"I think Babcock was meant to be preserved," Kitson said. "There were too many places where things could have gone wrong, and didn’t."

The Rally to Save Babcock Ranch
Babcock Ranch has existed in Southwest Florida for decades, although its location in once-remote rural stretches of eastern Lee and Charlotte counties kept it low-profile.

Pittsburgh lumber baron Edward Vose Babcock bought the land in 1914, when it was used mostly for logging and agriculture.

Family members often used the place for vacations, and some occasionally lived there. They also leased parts of the property for hunting, growing crops and dirt mining; and they raised cattle and tried ostrich and alligator farming. They started some of the area’s first "eco-tours" (which still operate).

But by the late 1990s, the family was bigger, and less interested in ranching vocations or vacations. They decided to sell, but faced differences over how that should be done. The land could have been broken up into 10- or 20-acre parcels, or smaller or larger pieces, and sold easily enough to developers. They also explored developing it themselves. But many in the family wanted the land preserved for others to enjoy as they did.

They finally sought state purchase.But even the support of then-Gov. Jeb Bush couldn’t get past the family’s demand that the buyer handle their tax burden from the sale, and acquire the private-ownership company’s stock.

The state is constitutionally prohibited from buying that kind of private stock, and from shouldering a seller’s taxes. Those legalities made a state buy impossible.

Fears that the land would once again be pieced off for intense development stirred efforts to try to raise private donations to buy the entire holdings. For much of 2004 and 2005, "Save Babcock Ranch" was the cause célèbre and the rallying cry for environmental and political activists.

"No One Will Outwork Me"
In April 2005, Kitson entered the game. The competition was fierce, and although quiet, reportedly involved some of the biggest names in national and international real estate development. At that time, Kitson was not one of those.

Born and raised in New Providence, N.J., Kitson attended Wake Forest University in North Carolina, where he played football. He was drafted by the Green Bay Packers in 1980, and played for them for four years, and then for the Dallas Cowboys for half a season.

But in those days, he said, the money in the NFL was nothing like now, and he always knew he wanted to be in real estate. When he was in college, alumni offered to "introduce" him to various businesses.

"One fellow was in real estate, and he took me around and showed me all these buildings and projects he’d done," Kitson recalled. "I could see that he was doing something that would last, and that appealed to me."

But not long after entering the business world, Kitson was caught in the crash of the late ’80s. "We went through some hard times," Kitson said. "But it taught me to be very conservative in my dealings."

His football lessons also came into play.

"The work ethic I gained from athletics is the key to what I’ve accomplished," Kitson said. "In sports, you suffer mentally and physically. You play when you’re hurt, when you’re tired. I may not be the smartest guy, or the most talented player, but no one will outwork me."

He rebuilt his business, formed Kitson & Partners, and in the 1990s entered the Florida market. His pre-Babcock deals included Grande Champion golf course community in Daytona, with about 700 homes. That was followed by Ibis Golf & Country Club in West Palm Beach, which also was already developed, but distressed, when Kitson’s company acquired it and turned it around.

Nothing approached the magnitude, or the ground-up aspect, of Babcock. But Kitson is still far removed from the stereotypical developer or pro football player. At a lean six-foot, five inches, he much more resembles the runner he is now rather than the offensive guard he was. He was determined to trim down after football, an early signal of the determination that came in play for Babcock.

He’s more Brooks Brothers than Tommy Bahama; more older brother than back-slapping buddy. Unfailingly polite and impeccably mannered, he makes people feel they are important, and their conversation fascinating. It’s hard to find anyone with anything negative to say about him.

"We don’t always agree, but you can’t help but like him. He’s just a really nice guy," said Lee County Commissioner Bob Janes, one of the most consistent opponents of the Babcock development. "He’s honest, he’s never misleading or deceitful. He’s very easy to work with, very sensitive to nuances. Even when things haven’t gone his way, he never loses his temper, and never gets so angry he cuts off communications. I am personally fond of him, even though we disagree on what he’s doing."

Eva Armstrong, a former state lands director who worked closely with Kitson in Tallahassee, also cited Kitson’s gamesmanship. "He really is extremely competitive," Armstrong said.

Putting It Together
It all came together with Babcock. Others offered more money, but Kitson offered his vision for preserving the land—and that’s what meshed with the family. He also promised to handle their tax burden, and to keep the beloved ranch employees.

With contract in hand, and financial support from Morgan Stanley, Kitson then went to work on the state, where earlier work done for the purchase finally paid off. Legislators quickly approved the money.

In other years, things could have been different. But in the spring of 2006, Florida had an unexpected revenue boom from sales taxes on hurricane recovery and construction items. "If it had been this year, the money wouldn’t be there, and it could not have worked," Kitson said.

He also had support from environmental lobbyists. "Syd is one of the hardest-working people I’ve ever met," said Eric Draper, a lobbyist with Audubon of Florida. "He worked really hard to sell me on the environmental merits of what he wanted to do."

On July 31, 2006, Kitson closed on deals to buy the entire ranch from the family, and do a same-day turnaround to sell 73,000 acres to the state for $351 million, with Lee County chipping in about $41 million of the total. The exact sales price Kitson paid the family still has not been disclosed, but educated guesstimates range between $750 million and $900 million.

"People Want a True Sense of Place"
Kitson kept about 17,800 acres for his legacy project: an entire new town with up to 19,500 homes and 6 million feet of commercial space. In addition to the state land, about half of that property will be open green space, meaning that about 90 percent of the original ranch remains undeveloped.

Although some people still complain that the entire parcel should have been saved, Kitson and state leaders maintain that would be impossible, given the state’s inability to buy it all, and other developers’ desire to make more money with greater development.

Kitson says his new town will be unlike any other in Florida, a sustainable community where people can live, work, shop and play without leaving, and won’t need cars to get around in town. Trails for walking, biking, horses and Segways will connect all areas.

There will be community gardens, and open spaces for children’s imaginative play—not just ball fields. He’s already setting up a nursery to ensure a steady supply of native plants for landscaping. Green, energy-efficient buildings will be standard, as will storm-resistant construction.

Affordable housing is an essential part of the mix, says Kitson. He plans workforce housing scattered throughout, not clustered in one area, and is setting up mechanisms to help it stay affordable even for second owners.

If it sounds like small-town America of 50 years ago, that’s the idea. "People want to get back to the way things used to be, with a real, true sense of place—but they want it with all the technological conveniences," Kitson said. "That’s what we’re creating."

His plans, however, required density increases, which Charlotte County allowed. Lee County balked at some of the development in its borders, so plans changed to eliminate initial building inside Lee’s boundaries.

Lee County still worries about traffic on roads to Fort Myers. Kitson insists the traffic will be less than expected because people will have their needs met inside the town. He says he’ll pay for improvements needed because of the traffic his project generates, but will not shoulder the burden for cars from other developments along the same roads.

Wrangling with governments over development can suck up time and money, and Kitson faced his share of hurdles. "But he is so relentlessly can-do," Draper said. "When a potential setback presented itself, he’d gather his advisors and find ways to deal with it. He absolutely refused to accept defeat, and he gives others that same can-do sentiment."

"The Stars Were Aligned"
Bill Hammond, a longtime Lee County environmental guru, ruffled more than a few feathers when he signed on as a Kitson consultant. He and other environmentalists Kitson hired say they’ve staked their reputations that he’ll develop as planned.

And Kitson unfailingly and continually credits his team and partners for getting the project this far. "For so much of the time everyone worked 24/7 to make this happen," he said. "It could not have worked without that great commitment from every person here."
Money matters, too.

"If you take on a big project like this, you’ve got to have deep pockets, over the long-term, to make it work. Morgan Stanley has that, and they like green projects," Hammond said.
While Kitson’s integrity and continually positive outlook are big pluses, Hammond said Kitson "is not driven so much by external factors as by the fact that for him this is a legacy project. He knows this is something that can really change the way Florida develops, and he wants to make it work right."

Armstrong said Kitson was unusual in that he "put his cards on the table right away. There wasn’t a lot of game-playing with him like with so many others, and that helped move the process along."

But while the state purchase went smoothly, settling details over how that preserve will be managed is a tangle that’s still being unraveled. The idea is that it continue as a working ranch, with cattle, crop farming, eco-tours and possibly hunting, bringing in almost $1 million a year for expenses.

Contrary to popular thought, the land is not pristine, nor virginal. It’s attractive because it’s been cleared for cattle and managed for things like water flows, fire and exotic animal and plant control.

Keeping it that way takes manpower, equipment and money. To what degree those ranching activities continue in the long term, and how they’ll mesh with public uses such as hiking or camping, is still unsettled.

Current agreements call for Kitson to manage the preserve for at least five years, with an option to extend that another five years. In the meantime, a nine-member state board, appointed just for that purpose, is working on a plan for public access, and the board and Kitson collaborate on management decisions. "Eventually the board will take over management, and we want that to be a seamless takeover," Kitson said.

Keeping the preserve going as a ranch that runs without taxpayer funds, yet still provides public use, is a Florida first. "It’s never been done before, so we want to make sure it’s a success," Kitson said.

Todd Gates, chairman of Southwest Florida construction/development firm Gates, believes Kitson’s plans for a new community "will be a tremendous benefit for the area and the state. He’s hired experts, and is committed to a new kind of community, one with a real neighborhood feeling that’s very eco-friendly. I think there’ll be a big demand for that."

With permitting and development reviews still under way, Kitson doesn’t envision significant building onsite until perhaps 2011. By then the current real estate slowdown should have leveled off.

Kitson says it will take a lot of residents to ensure that his town becomes the community he envisions. That’s one reason he sought the density increases.

But he believes the market exists, and his offering is special enough to attract the residents. "I’m thinking long-term. I want to show others that developing like this is good, and it can work," he said. "It takes bodies, but there are enough people out there now who want to live like this. I’m banking on it."

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