Crossroads of the Future

At the Crossroads of the FutureAs development and population density expand in southern Okaloosa and Walton counties, Freeport and DeFuniak Springs prepare to relieve the pressure. Are these two historic cities ready? 

By Tony Bridges

{mosimage}These are precipitous days for the crossroads towns of Freeport and DeFuniak Springs. Five years ago, they were rural, relatively unremarkable communities, similar to dozens of others in Northwest Florida. But now, a combination of easy Gulf access and cheap, available land has made them attractive to developers, leaving both towns poised for tremendous growth.

As the real-estate saying goes, it’s a matter of location, location, location. Freeport and DeFuniak Springs are situated on U.S. Highway 331 in a corridor that runs from north to south from Interstate 10 to the beaches of Walton County. To one side is sprawling Eglin Air Force Base. To the other, well, nothing – including major roads. When the beach communities to the south begin to bulge northward, they have only one way to go: Freeport first, DeFuniak soon after.

Because of this, builders are buying up land in a real-estate gold rush, and they’re planning massive developments that could quadruple the area’s population over the next several years. Meanwhile, friendly municipal permitting, new industrial parks and enterprise-zone tax breaks are luring in new businesses.

The business outlook for the corridor appears cheery, with high expectations for new home sales and an increase in jobs in an area that already has one of the state’s lowest unemployment rates. Still, the growth won’t come without serious challenges.

{mosimage}Roads will be a major problem. Construction traffic already is choking an overwhelmed 331, and that’s likely to last until funding can be found to widen the highway. Infrastructure also could be an issue – not as much in Freeport, where city officials have been expanding water and sewer lines for years, but in DeFuniak Springs, which is struggling to get ahead of developers’ plans. And the quest for attainable housing – a major concern in resort-rich Walton County – will continue as city officials and developers both look to each other for solutions.

The Freeport/DeFuniak Springs corridor is at the edge of a new future.

“It’s changing every day before our eyes,” said Scott Brannon, the Walton County commissioner who represents the district that includes the corridor.

Northwest Florida on the Move

Of the two towns, Freeport came first.

Settlers chose the area in the early 1830s because it made for a good boat landing at the mouth of the Choctawhatchee River. By mid-century, it had grown into a stop for steamboats and mail carriers heading to and from Pensacola and was a shipping point for cargo going upriver into Alabama.

It was called Four Mile Landing then, but the name changed to Freeport during the Civil War because there was no charge to dock at the landing, according to Beckie Buxton, the city’s unofficial historian.

After the war, Freeport continued to grow as lumber companies moved in to take advantage of the local network of rivers where logs could be transported easily. The work generated by the lumber mills attracted more settlers and helped to carry the local economy into the next century, even as steamboats slowly were being phased out.

Meanwhile, the railroad came to North Florida. In the early 1880s, a surveying party scouting a train route happened on a beautiful, round lake several miles north of Freeport. The surveyors decided to establish a station there, naming it for Fred DeFuniak, a railroad executive. The town of DeFuniak Springs was born.

DeFuniak Springs, with its railroad stop, claimed a good chunk of Freeport’s cargo traffic, and also gained fame as a cultural center after the Florida Chautauqua Association – an organization of educators and thinkers – convened there in 1885.

The town incorporated in 1901 and became the county seat.

The Freeport/DeFuniak Springs corridor stayed relatively quiet until World War II, when the military effort created a minor boom in jobs at what was then Eglin Field, as well as at Wainwright Shipyard in nearby Panama City.

Pre- and post-war growth led to construction of new ways in and out of the two communities. That included a bridge across the Choctawhatchee Bay, linking Freeport to the south part of the county, as well as the two-lane U.S. Highway 331 and Interstate 10, which connected Jacksonville to Pensacola around 1961. DeFuniak Springs even wound up with a small airport.

Freeport finally incorporated in 1963 so city leaders could get a grant for a fire truck and an ambulance.

Over the following years, Eglin Field grew into a major air base and Army training facility, and the white-sand beaches along the coast began to fill up with resort communities. Both towns became “enterprise zones” – special state designations that allow tax incentives and refunds for companies willing to locate there – and new businesses began filtering in. In 2001, Freeport built an industrial park. Two years later, the Walton Economic Development Council opened another one in the city.

The new jobs, and the arrival of retirees seeking balmy weather, meant thousands of new residents. The population of Walton County increased by 46 percent between 1990 and 2000.

Going into the new millennium, about 5,500 people lived in DeFuniak Springs, and another 1,500 in Freeport. Mainly, they were under 65 years of age, worked for the government or in the hospitality industry in southern Walton County, and earned a median household income of $35,000.

But that’s all prelude.

Building up and out

The real growth explosion in the corridor has taken place over the last two to three years. The land started running out. There is only so much of it in Walton County – roughly 1,000 square miles, including the bay.

Of that, Eglin covers more than 150,000 acres, conservation areas account for nearly 300,000 more, and the Nokuse Plantation wildlife refuge now takes up another 53,000. And along the coast, what little hadn’t been developed just cost too much.

Walton’s new arrivals needed homes. And word came that the military planned to expand Eglin by as many as 2,800 more service members.

Developers turned north to Freeport. The land still was relatively cheap. City officials were open to growth. They already had seen what was coming and had been expanding water and sewer infrastructure, and even hired their first city planner. The area was ripe for development.

“People are looking for ways to maintain ties with the beach without actually having to live at the beach,” said new city planner Latilda Henninger. “You really have the best of both worlds in this little community.”

Three construction companies bought a total of nearly 9,000 acres, and landowners began selling for major profits. Taxable property values in Freeport jumped 26 percent from 2003 to 2004 and another 34 percent the next year. The projected increase this year is a whopping 68 percent.

The buyers have wasted no time putting their new land to use.

Several major construction projects already are under way along 331 north of Freeport. They include three large residential developments – Hammock Bay, Owl’s Head and Freeport Plantation – and Bay Grove, a 24-unit office park targeted to law firms, accountants and other professional services.

Bay Grove developer Michael Jenkins said Freeport just seemed a natural location.

“It can draw people from the south end who don’t want to drive all the way to DeFuniak, and people from DeFuniak who don’t want to drive all the way to the beaches,” he said. “I think 331 is going to be one of the major business corridors in Walton County.”

All together, developers have planned 5,000 new residential units and 300,000 square feet of commercial space for Freeport as of now, according to Henninger.

But “they’re not going to happen tomorrow,” she said. Expected completion times for the largest projects range from 10 to 20 years.

Henninger says developers aren’t just building new subdivisions but also are working with the city to expand public facilities. For example, Hammock Bay owner Jay Odom included 60 acres for a city park, with soccer and baseball fields, a skateboard area and a community theater. And both Hammock Bay and Owl’s Head have set aside land for schools, as well as providing assistance with construction of Habitat for Humanity homes.

“They’ve made themselves active partners in the community,” Henninger said.

Along with all the construction, the city is recruiting new businesses to serve the growing community and bring even more jobs. Henninger said that grocery, building supply and retail stores all have invested in land around Freeport.

“A lot of people are interested,” she said. “But they’re waiting to see some rooftops.”

Meanwhile, up the road in DeFuniak Springs, the pace of growth is slower, but picking up.

A half-dozen new businesses have opened recently, and construction has begun on both a shopping center, featuring a Beef ‘O’ Brady’s restaurant, and a new Walgreens. The airport has been expanded with new hangars and a runway extension. And commercial and residential development is taking off, with several major projects planned.

The two largest developments are the tentatively named Bay Springs – which includes 200,000 square feet of commercial space, 180 townhomes, 218 single-family lots and 312 apartments – and Hunter’s Ridge, another Jenkins project that is expected to add more than 200 new residential lots.

Still, even with DeFuniak Springs’ progress, the balance has clearly tipped in the corridor.

“Freeport is the shining star right now,” said Bob Smith, president of the Walton County Economic Development Council. “It’s what everyone’s talking about.”

The Challenges of Change

{mosimage}Growth hardly ever comes easily, and this is no exception. The corridor’s transition already is under way; its future is going to be about accommodating the changes generated by the influx of people and the urbanization of a rural area.

Some challenges will be a matter of retaining identity, as city planners for Freeport and DeFuniak both agree.

“This is a very strong community that wants to be progressive yet hold on to those things that are important,” Henninger said. “We know we’re growing, but we’re going to do it at our own pace.”

Greg Scoville, planner for DeFuniak Springs, echoed those sentiments.

“It is important to maintain the small-town character of the town center and preserve the historical district . . . Change is inevitable, but that change doesn’t have to be at the cost of our community values,” he wrote in an e-mail.

Other challenges will be more concrete. No. 1 among them: traffic.

U.S. Highway 331 already is growing crowded with the trucks rumbling to and from various construction sites. Added to that is the increased commuter traffic coming from the southern part of the county, and the fact that the two-lane highway is Walton’s main hurricane evacuation route.

“It’s a big limitation,” said Sean Garretson, a consultant with Texas-based TIP Strategies, hired to help Okaloosa and Walton counties capitalize on growth.

The highway will need to be widened to four lanes to carry the increased traffic in the stretch between Freeport and Interstate 10.

“We all agree that is the most important need for this area,” Henninger said.

But it likely won’t happen any time soon.

The Florida Department of Transportation state is spending its near-future construction budget on the south end of 331 – about $35 million for a bypass that will connect the north and south legs of 331 at Freeport, and another $19 million for construction in 2008 to widen the highway from U.S. Highway 98 to the south end of the Choctawhatchee Bay bridge, according to Tommie Speights, a DOT spokesman.

So, while there’s $39 million to acquire right of way for the widening of 331 between Freeport and DeFuniak Springs, there is no money for the actual construction.

That doesn’t mean the money can’t be found.

Henninger said that Freeport Mayor Mickey Marse is lobbying Tallahassee and Washington, D.C., for highway construction funds. And the state Legislature recently passed a bill that allows communities strained by development to collect money from developers to help mitigate the effects.

The trick is going to be getting enough funding from public and private sources to start widening 331 before the traffic situation becomes untenable.

At the same time, both cities will need to continue boosting water and sewer infrastructure. Freeport already has expanded its sewage treatment capacity at one plant and is building another. DeFuniak Springs is looking for ways to meet coming demands from at least three planned projects south of I-10.

“These developments alone will place significant pressure on the city to expand its water and sewer capacity,” Scoville wrote.

One partial solution: The city is considering whether rate increases for gas, water and sewer are necessary. If so, and if the fees are implemented, then “hopefully, we can keep pace with the demand on these services,” he wrote.

Equally critical to successful growth is the issue of homes for the people who work and live in Walton County – homes they can afford, that is.

“That’s a critical issue in this area,” Henninger said.

Homes and rents in the beach communities are too high for most of the people who work at the resorts there. High land values are prompting landlords to sell rental properties. And, in a county where the average wage is about $10 an hour, even many of the homes in the new planned developments will be out of reach.

“What we are seeing right now might better be defined as ‘attainable’ or possibly ‘work-force attainable,’” Scoville wrote, “but even then, it would take two wage earners with a combined income of at least $75,000 to $80,000 a year to ‘attain’ a $200,000 townhome. And if they have children, they will be even harder pressed to do so.”

Garretson, the consultant, said that developers seem to be looking to public officials for a solution while the officials are looking back to the developers. In the meantime, not much is getting done.

He isn’t the only one who sees it that way.

“If we keep going the ways it’s always been, affordable housing is not going to solve itself,” Brannon, the Walton County commissioner, said.

County and city leaders will have to be realistic about the profit needs of developers, while at the same time figuring out ways to increase lower-cost housing. One idea is to offer incentives to developers, possibly by cutting their costs to tap water and sewer lines, or by streamlining the permitting process to make it faster and easier.

So, assuming that all of the challenges are overcome, and that growth continues successfully, what will the northern Walton County of the future look like?

“I think you’ll see the same mix that you would in any cosmopolitan area,” said developer Jenkins. “It’s going to be a beautiful area to live in.”