Florida Trend | Florida's Business Authority

Around the State- Northeast- July 2002

Fast-growing JEA is buying up water utilities in northeast Florida.

By Herb Drill

Florida's largest municipal electric utility, JEA, is scooping up water utilities in northeast Florida and positioning itself to become a major water supplier. In five years, the utility has added more than 155,000 mostly water/sewer customers. It already has almost half a million more customers -- water and electricity -- than the No. 2 municipal utility, Orlando Utilities Commission.

Since mid-1997, JEA has bought four water/sewer utility companies in and around Duval County -- paying a total of more than $250 million and boosting its reach to 788,451 accounts from 632,969 in 1997.

JEA now wants to serve the proposed Nocatee mega-development -- with 15,000-plus homes planned over 25 years -- in St. Augustine. The utility also is investing $1 billion in seven electricity generation units, a 36-inch water main under the St. Johns River and pipes under San Jose Boulevard to service current and potential customers.

Development of major residential and commercial projects in Duval and surrounding counties -- such as Palencia in St. Johns County and Jacksonville's Cecil Commerce Center -- and redevelopment of downtown Jacksonville have provided a solid foundation for JEA to build on. The utility could land major industrial customers if economic development leaders lure targeted companies BMW, Boeing Co. and DaimlerChrysler to the Cecil Commerce Center.

Also in the utility's favor: Very little competition in northeast Florida. The water utility in St. Johns County serves primarily the southern part of that county. Florida Water operates in JEA's territory, but JEA is negotiating with Florida Water to acquire its northeast Florida assets, says Walt Bussells, CEO of JEA. If that deal works out, JEA will add approximately 5,000 more water/sewer customers.

Bussells says the expansion will help JEA keep rates low -- currently the lowest in the state. "Increasing the customer base allows us to spread the costs and provide three utilities to the same customer" -- electricity, water and sewer.

In the News

Duval County -- Mercedes-Benz of North America Inc. will close its 125,000-sq.-ft. Western Way parts depot by the end of the year and cut 40 full-time and 10 part-time jobs, which go to Orlando. The Western Way regional office, training center and vehicle prep facility remain.

Jacksonville -- Stein Mart (Nasdaq-SMRT) President Michael D. Fisher will take over from CEO John H. "Jack" Williams Jr., who is retiring at the end of this fiscal year, the company announced at its shareholders meeting in June.

Jacksonville is at risk of losing its eighth-largest private employer, Citibank, to Birmingham, Ala., which is offering the bank $100 million over 10 years. Florida Senate Majority Leader Jim King, R-Jacksonville, is seeking similar incentives to keep Citibank in Jacksonville. At stake: 4,000 jobs, from part-time clerical to high-tech positions paying up to $200,000.

A JEA investigation disclosed a malfunctioning lightning protector probably caused a major power failure in April. The blackout left almost all of JEA's 370,000 electricity customers without power -- most for hours. Economic losses were "significant," says Joe Perry, University of North Florida economics professor, "but there is no way to put numbers on it now or maybe ever."

A $3-million-plus donation from Gasper and Irene Lazzara will allow Jacksonville University to build the Lazzara Health Science Center for JU's School of Nursing and a planned School of Orthodontics. Gasper Lazzara, now retired, was chairman of Orthodontics Centers of America (NYSE-OCA).

Winn-Dixie Stores Inc. (NYSE-WIN), the only Jacksonville company on the Fortune 500 list, fell from 145 on the list last year to 160 this year. Revenues dropped 5.8% to $12.9 billion. Moody's Investors Service downgraded its credit status to "junk," citing an intensely competitive environment "with less financial flexibility than some other retailers."

H&R Block's Option One Mortgage call center is scheduled to open in Jacksonville's Southside by Aug. 1. The center will provide about 50 jobs now and about 400 in two years, primarily in customer service and loan processing. OOM originates, buys, sells and services primarily credit-troubled home loans.

The St. Johns River harbor is now eight feet deeper in the west channel of the Blount Island Marine Terminal. The deeper harbor --38 feet now -- will help Jaxport better service ships. Next up for deepening: The main channel near Mayport to Drummond Point by late 2003. The project is projected to cost a total of $31.6 million, paid for by Jaxport, the federal government and the state.

Northeast Florida -- The Florida Association of Realtors says the median home price in Gainesville in March jumped 19% from a year earlier to $125,800. Alachua County's comprehensive plan is making development more restrictive and expensive, driving up existing-home prices. In Jacksonville, the median price rose 8% to $114,400. Statewide, the median home price rose 8% to $134,100.

Putnam County -- The county will spend a $330,000 state grant on road improvements to support a new Wal-Mart Supercenter. The retailer has proposed a 1.2-million-sq.-ft. warehouse at U.S. 441 and County Road 326. Residents claim the super center would tarnish the area's horse-country ambiance. County commissioners voted 3 to 2 in May in favor of the Wal-Mart project.

Slip Sliding Away
KINGSLEY LAKE -- A longtime summer tradition in northeast Florida has died along with Frow Woodrow Strickland, owner of Strickland's Landing, a popular water park near the Clay-Bradford county line. Generations of families and church groups have enjoyed the park and its elaborate water slides since the 1940s. Strickland died in April, and his children say financial considerations, including "astronomical" liability insurance, are forcing them to close the park.