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February
19, 2010
U.S.
Securities and Exchange Commission
Division
of Corporation Finance
Attention:
Daniel L. Gordon, Branch Chief
100 F
Street, N.E., Mail Stop 3010
Washington,
D.C. 20549
Re: Consolidated-Tomoka
Land Co.
Form 10-K
for the Year Ended December 31, 2008
Forms
10-Q for the Periods Ended March 31, June 30, and September 30,
2009
Schedule
14A filed April 22, 2009
File No.
1-11350
Dear Mr.
Gordon:
This
letter responds to comments of the staff (the “Staff”) of
the Securities and Exchange Commission (the “Commission”)
contained in the letter from the Staff dated January 28, 2010 (the “Comment
Letter”) regarding the above-referenced filings by Consolidated-Tomoka
Land Co. (the “Company”).
Set forth
below are responses to the Staff’s comments numbered 1 through 3, as set forth
in the Comment Letter.
Form 10-K
for the Year Ended December 31, 2008
Income
Properties, Page 5
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1.
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We
note your response to comments 1 and 2 in our letter dated November 30,
2009. Please tell us the average occupancy rates expressed as a
percentage and the average effective annual rental per square foot for
each
of your income properties for the last five
years. Please confirm that you will include similar disclosure
in future filings.
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Response
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As
to the specific information requested and clarified by a telephone
conversation with Erin Martin of your office, the aggregate average rent
per square foot over the years 2004-2008 was $17.72. We
will include similar disclosure in future filings and advise in writing
when properties are less than 100%
occupied.
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U.S.
Securities and Exchange Commission
Division
of Corporation Finance
February
19, 2010
Page 2 of
4
_______________________________________________
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Note
6, Notes Receivable, Page 10
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2.
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We note your
response to comment 6 in our letter dated November 30,
2009. Please tell us how you determined the fair value of the
collateral supporting the impaired notes receivable as of June 30, and
September 30, 2009. It would appear that if the fair value of
the collateral exceeded the amount of the notes receivable that the debtor
could have sold the land and paid the outstanding notes
receivable.
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Response
As stated
in our letter dated December 14, 2009 in response to note 6 of your letter dated
November 30, 2009, in measuring for impairment of a loan, we evaluated the fair
value of property collateralizing the loan based on our knowledge of the Daytona
Beach real estate market, as the largest landowner in this
area. Subsequent to our December 14, 2009 letter, we obtained
appraisals for the properties foreclosed in August 2009 and November
2009. Both appraisals reflected current values that support the
recorded book values.
Sales
efforts by the debtors of the properties are unknown to us; however, both
parties were insolvent, and foreclosure was a convenient disposal of the
debt. In addition, the current real estate market, financing
restrictions and the economy do not lend themselves to an efficient buy/sell
environment.
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Definitive
Proxy Statement filed April 22,
2009
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Stock
Option Compensation, page 27
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3.
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We
note your response to comment 9 in our letter dated November 30,
2009. Please describe in more detail why the compensation
committee made the awards that it did. For example, please
describe what specific aspects of Messrs. McMunn and Teeters’s performance
were taken into consideration. Furthermore, please provide more
disclosure about the other information taken into consideration, such as
the peer group comparisons and data from compensation
experts. Tell us how you plan to comply and confirm that you
will provide similar disclosure in future
filings.
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U.S.
Securities and Exchange Commission
Division
of Corporation Finance
February
19, 2010
Page 3 of
4
_______________________________________________
Response
To
promote long-term objectives and maximization of shareholder value, stock option
compensation awards are targeted at employees who are in a position to make a
contribution to our long-term success, and retention is, therefore, a
significant Company goal. Accordingly, the Compensation Committee’s
evaluation of individual performance for award consideration takes into account
the recipients recent record of achievement and ability to positively affect
long-term shareholder value. Key factors considered in Mr. McMunn’s
stock option award were: (1) the importance of his experience and real estate
industry knowledge which continued to steer the Company through the substantial
economic and real estate downturn and was recognized by his election to the
position of Chairman of the Board in April 2008; (2) his strategic planning and
management of the ongoing conversion of agricultural lands into hay production
(770 acres impacted in 2008), which retains and enhances current and long-term
land values; (3) his ongoing efforts to protect Company lands from unfavorable
land use designations, including successful removal of acreage from an ECO
(Economic Corridor Overlay) designation for environmentally sensitive lands,
which would limit future land use and value; and (4) his leadership positions in
local, regional, and statewide organizations that monitor and influence
regulation and legislation impacting long-term real estate use.
Key
factors considered in Mr. Teeters’ stock option award were: (1) the
importance of his experience and real estate industry knowledge, which continues
to steer the Company through the substantial economic and real estate downturn;
(2) his successful management and approval of two comprehensive land use changes
and a rezoning within the City of Daytona Beach, collectively revising the land
use on approximately 200 acres from agricultural and residential to higher value
industrial and office designations; (3) his completing a major long-term lease
with an anchor tenant for a “Class A” office building, which then commenced
construction in July 2008; (4) his completed acquisition of a Harris Teeter
Supermarket including negotiating a long-term triple-net lease; and (5) his
participation in ongoing efforts to protect Company lands from unfavorable land
use designations including successful removal of valuable acreage from an ECO
(Environmental Corridor Overlay) designation for environmentally sensitive
lands, which would limit future land use and value. The Committee
believes that Mr. Mc Munn and Mr. Teeters have the skill, knowledge and proven
ability to positively impact company profitability and long-term share
price.
The
Compensation Committee used a combination of (1) historic grant information (2)
comparative compensation data from independent compensation experts for
companies of comparable revenues and (3) comparative data of our seven
designated peer companies’ compensation practices (collectively, the
“Comparative Groups”). The Committee focused on the median compensation levels
of the Comparative Groups for its comparative analysis. The Committee also took
into consideration that the Company’s EPS performance compared to its seven
designated peer companies was in the top quartile. The Committee compared the
competitiveness of total compensation, as well as the competitiveness of each
major component of compensation and the mix of those components with that of the
Comparative Groups. The economic value of each option was calculated based on
Black-Scholes methodology. No precise formula was used in the
determination of the stock option grants but rather the grants were based on
their overall competitiveness taking into account all of the foregoing factors.
It was the determination of the Committee and full Board that Mr. McMunn’s and
Mr. Teeters’ individual performance, and that of the Company during an extremely
difficult economic year was outstanding, and that it was in the best interest of
the Company and its shareholders to provide a competitive long term equity grant
that would incentivize each of them to remain with the company and to increase
the share price over the vesting period.
We
confirm that the Company will provide a more detailed disclosure similar to the
preceding in future filings.
* * * *
U.S.
Securities and Exchange Commission
Division
of Corporation Finance
February
19, 2010
Page 4 of
4
_______________________________________________
The
undersigned, in response to the request contained in the Comment Letter and on
behalf of the Company, hereby acknowledges that:
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the
Company is responsible for the adequacy and accuracy of the disclosure in
the filing;
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Staff
comments or changes to disclosure in response to Staff comments do not
foreclose the Commission from taking any action with respect to the
filings; and
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the
Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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We
appreciate your assistance in this matter. Please address any comments or
questions with respect to the foregoing to Bruce W. Teeters, Senior Vice
President-Finance and Treasurer, or in his absence me at (386)
274-2202.
Sincerely,
CONSOLIDATED-TOMOKA LAND CO.
By: /s/ William H.
McMunn
William H. McMunn
President and Chief Executive
Officer