Paradise in limbo: rebuilding in Mexico Beach is slow due to economic stalemate

Mexico Beach

MEXICO BEACH, Fla. (WMBB) — The shop is currently un-airconditioned and steamy from the summer heat, but George Hunter can still be heard singing as he toils away inside. He keeps the doors closed and sealed with beach towels in an attempt to defy nature and dehumidify the building so they can paint the walls.

George is the co-owner of the Shell Shack souvenir shop and fish market, one of the small businesses that Hurricane Michael destroyed when it made landfall on the cozy village in 2018. It is also one of the few that is being rebuilt, approaching the two-year mark of the storm.

“It pretty much wiped us out,” said Theresa Hunter, Shell Shack co-owner, about the storm. 

And with no store, for the past two years Theresa and George have had no source of income.

“Luckily we had savings,” Theresa said. “It’s been tough but doable.”

The owners of Shell Shack are doing a lot of the work themselves. They are keeping the doors shut and sealed with beach towels and have conserved the original signage and wood from the old building to bring some nostalgia into the new shop.

The rebuilding process has been a long one, not just for the Hunter’s, but for all of Mexico Beach.

As we approach the two-year mark of Hurricane Michael, rebuilding in Mexico Beach is stuck in its own way. With fewer homes rebuilt to be used as rentals, there are fewer visitors to support local businesses. 

According to Zillow, there are currently zero apartments, homes, townhomes or condos of any size on the market for rent. 

Over the past year, there have been less than 20 rental units on the market, according to data from the Central Panhandle Association of Realtors, or CPAR.

“Our rental market was decimated by the storm,” Mexico Beach Mayor Al Cathey said. 

And the properties that are left have increasing rent prices. Due to the low supply and high demand, rental prices have gone up for those who are looking for a place to stay. 

Data collected from Zillow shows that rental prices in Mexico Beach have been steadily increasing since 2016, reaching an average price of $1,487 per month in October of 2017. The city saw a slight dip in rental prices over the next year hitting $1,420 per month in October or 2018, before seeing another increase over the next couple of years reaching $1,692 per month in January of 2020.

Home sales have been similarly impacted.

Data from the CPAR shows that the post-Michael sales price of homes in Mexico Beach has seen a definite increase compared to the pre-Michael prices.

Debbie Ashbrook, CPAR chief executive officer, explained what drives home prices up and down in Mexico Beach.

“Older and smaller homes that would make up the lower cost portion of the market are no longer there to bring the average price down,” wrote Ashbrook in an email. “Also, a lack of inventory generally creates a higher demand and thus higher prices in any market. That is just economics.”

Rebuilding will help housing prices go down, but those like the Hunters who are choosing to rebuild Shell Shack despite the housing setbacks, are in a delicate situation.

Cathey said that the successful return of the city’s small businesses is heavily intertwined with the speed of construction and the return of renters and second home-owners to the area.

Convincing the second home owners, who Cathey said makes up 70%-80% of the residential properties in Mexico Beach, is proving difficult.

The city is still lacking a gas station and a proper grocery store. Mexico Beach City Manager Mario Gisbert said that these basic amenities are what is driving the cost of living up the most. He added that there are no sit-down restaurants and most of the food is served out of food trucks.

Mexico Beach Mayor Al Cathey said the permit for the city’s gas station was just pulled, so they are still waiting to finalize plans. Residents must drive 15-30 minutes to the nearest gas station in Parker, Port St. Joe or Wewahitchka to get gas.

Cathey said that while he still sees people wanting to be a part of Mexico Beach’s village-like lifestyle, it is hard to get visitors to rebuild their million-dollar beachfront homes without these amenities.

“People don’t necessarily want to pay for a waterfront house and have to fix peanut butter and jelly sandwiches,” Cathey said. “We’re sort of trying to build our business community with our rental market as it comes back simultaneously.”

Gisbert warns that with 85% of homes and 50% of residents gone, it is important for small business owners to be sure they have a reliable market before they invest in reopening their doors. 

“It’s sort of the chicken and the egg theory,” Cathey said. “Everyone is watching the housing market, they’re watching the rental market, they’re watching the fishing and when the fishermen come and trying to decide, ‘now’s the time; there’s enough happening now that I can go ahead and do this.’”

But the Hunters said they were never worried about reopening Shell Shack. They said that they’re confident that the beach will rebuild despite the lack of housing available at the moment. 

“It’s going to be back because no matter what, it is the beach and everybody loves it,” Theresa said.

She said she finds people are ready to return to the area even if it means staying somewhere like Panama City or Apalachicola and driving in to visit Mexico Beach. 

Though tourists can travel to the beach, both Cathey and Gisbert said that missing rental properties during rebuilding also means construction workers have to travel every day, slowing the city’s rebuilding efforts.

“The lack of housing certainly curtails the workers in their ability to be close to work,” Cathey said. “We have people that drive from as far as 100 miles away every day so when you add that to your workday obviously your production goes down.”

Gisbert also said that many workers from closer areas, including Panama City, are already doing work in and around Panama City so Mexico Beach has to draw from farther areas.

The lack of housing for workers is slowing down the speed of construction of the very housing that could be use to house those workers. Without housing and rentals, there are now tourists. Without tourists, small businesses cannot return.

The Hunters were fortunate enough not to have to deal with the lack of workforce and workforce housing by working with local contractors, namely, their cousin at Hive and Home Residential Construction, and another local contractor, Michael Kent. 

The Hunters are also putting a good amount of their own sweat into the reconstruction. 

“Any time we were not doing anything we were down here getting everything ready for the construction people and trying to get everything lined up,” Theresa said.

Theresa added that they’re most worried about restocking their inventory in the face of the ongoing pandemic.

“We have trade shows that we go to,” Theresa said. “But with the COVID coming along I’m not sure if the trade shows are going to be open for us to get our merchandise back in.”

Otherwise, she said that things with building are going extremely smoothly.

Both Cathey and Gisbert said although rebuilding in Mexico Beach is slow, it is well underway.

“The lumber shop is the busiest place in town because everyone is rebuilding,” Gisbert said. “When you drive up and down [Highway] 98, you can count 65 buildings under construction at this point in time.”

Construction permit reports from the city of Mexico Beach for 2019 and 2020 show a total of 866 approved permits for commercial and residential building. Gisbert said that commercial permits include multifamily condo and apartment buildings.

One of those permits is for Shell Shack. 

The Hunters started construction about five months ago. Over the 16 months since the storm prior, they were doing what they said was “the hard part,” which was filing insurance claims, finalizing building and engineering plans and finding contractors. 

The Hunters are about 75% through rebuilding their store and are hoping to open by spring of 2021.

Gisbert said that the rest of the city still has a long road to recovery. 

“We’re just about at the two-year mark and we’re a good ways from normal,” Gisbert said. “I would say year five things will start to — we’ll start to say, ‘Wow, we’ve come back.’” 

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