Fresh CEO Jim Apple will lead Burroughs & Chapin Co. Inc. into better economic times, but don't expect major developments from one of the Strand's largest property owners any time soon.
"We will buy more than we will build in the future or at least in the near future," Apple said.
Expect B&C to snap up retail and residential properties that are making money now rather than risking money on developments that make money later, he said. The company has also grown its landholdings significantly and is looking to become involved in projects from Atlanta to Washington, D.C., Apple said.
The shift for the company that owns developments such as Broadway at the Beach and Grande Dunes means it continues to lay off and add people as needed, Apple said, and thatincluded a round of layoffs last week.
Two of the highest profile decisions the company must make is how to develop two central Myrtle Beach properties - the former sites of Myrtle Square Mall and The Myrtle Beach Pavilion Amusement Park. For now, Apple said B&C has development plans and will wait for the right opportunity, Apple said. The properties offer some of the largest plots of undeveloped land in downtown Myrtle Beach, leading many to speculate about their future use.
Brad Dean, president and chief executive of the Myrtle Beach Area Chamber of Commerce, calls the two pieces of land and their development crucial to the Strand's future. If the right projects are built on the high profile properties, it could drive major growth, he said.
But with development plans on hold, Apple will only hint at his plans for the Pavilion site.
"By the nature of that site being one of the most unique pieces of land in our area, there are a lot of possibilities," he said. "You would naturally think that it would hopefully someday contain a residential component, certainly contain retail."
For developed commercial properties, B&C will look to buy assets that can be financed appropriately, Apple said. For example, the company may buy apartments because there is agency debt - that is, loans backed by Fannie Mae and Freddie Mac- to finance residential acquisitions.
Economist George Ratiu with the National Association of Realtors called the strategy understandable given the current market. "Fannie and Freddie backed loans have been easier to get," Ratiu said. "Demand for living space ... obviously hasn't fallen off."
Undeveloped plots represent the largest share of distressed commercial property at about 22 percent, Ratiu said, while offices and apartments have fared better. If the company has current cash flow from properties such as Broadway at the Beach, B&C may be able to grow while development companies that only built and sold properties must wait for demand for new construction to come back.
Turning it around
Dean said he is confident Apple has the skills to lead a turnaround for B&C, after the company shrank considerably during the recession.
Under the last chief executive, Jim Rosenberg, the company sold five NASCAR SpeedParks, including one in Myrtle Beach; the Myrtle Waves water park; South Beach Resort and another timeshare in Tennessee. The sales and layoffs shrunk the company's work force during the recession by about 75 percent, chairman Egerton Burroughs told The Sun News in 2009. The company posted a $52.8 million operating loss in 2008 and said it would not pay dividends to shareholders for the first time.
Shareholders are optimistic about growth, Apple said, but he declined to comment on company profits or whether the dividend has been reinstated. As a private company with fewer than 500 shareholders, B&C is not required to disclose financial information. The company will continue to stay out of the amusement park business, Apple said.
The company has kept the work force stable since the cuts, with about 700 employees including seasonal workers, Apple said. That's about 50 fewer employees than the same time last year, he said.
There is turnover as some employees are added and others laid off, including a round of layoffs last week, he said. Apple would not give further specifics on last week's layoffs, but said they were hiring and firing as part of the shift from development and amusement parks to acquisition and current cash flow.
Despite hits to the work force and bottom line, the company grew its land holdings by at least 5,000 acres in the past five years to roughly 30,000 acres total, Apple said. Most of the land was bought in South Carolina and is undeveloped, he said.
Although Apple said B&C will focus on Horry County in the next five years, the company will also look for opportunities in the region. That could include projects anywhere from Washington, D.C., and Nashville down to Atlanta, including more throughout South Carolina.
"We will go where we know people, where we have experience, where we've done business in the past," Apple said.
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