What happens when you build an economy on real estate:

The once-vaunted Sea Island Co. is awash in debt, badly behind on its loan payments and desperately trying to find a buyer for its five-star portfolio that once seemed immune to the economic whims that batter regular folk.

The company’s downward spiral is a stunning tale of over-borrowing and over-expansion that collided with the worst recession since World War II, a downturn that has pummeled the luxury resort market across the nation.

OK, so a big developer goes belly-up; who cares?

But some of Sea Island’s vast land holdings have already been split up, and the ripple effects of the company’s downfall will be felt along the entire marsh-lined Georgia coast. The company still employs more than a thousand people, and the money it generates funds everyone from fishermen to florists in this resort-fueled economy.

“Everyone, whether you live in Brunswick or St. Simons or Jekyll Island, will feel the impact if we lose the Sea Island Co.,” said state Rep. Jerry Keen (R-St. Simons). “Glynn County without the Sea Island Co. is like Atlanta without the state Capitol. It’s hard to imagine them not being there.”

They may not be making any more of it, but its prices doesn’t always go up. And when it busts, everybody hurts.

In 2008, just two years after Sea Island celebrated the Cloister reopening with a party that one guest described as something out of “The Great Gatsby,” the company was in deep trouble. And the downward spiral was gaining speed.

Sea Island laid off 500 employees — about a quarter of its work force — in 2008 to stem the red ink. The next year the company received a record number of five-star awards from Mobil Travel Guide even as its finances tanked.

This wasn’t some obscure neighborhood resort. The G-8 met there in 2004. Sea Island is the third richest ZIP code in the U.S., according to Forbes.

Of course, nearby is Brunswick, Georgia’s most polluted city, and a poor one. Maybe at least one of the local developers’ schemes will be derailed, Blueprint Brunswick, which was to implement clearances of poor people:

Most homeowner occupied properties in the Corridor will not survive code enforcement and will be taken by condemnation and bundled for redevelopment. Those homeowners who pass inspection will be enticed to sell their properties (for “fair market value,” the value for the average home in the Corridor being identified in the Plan as $44K), on account of “incompatibility” with the Plan’s “vision” for development.

Some “revitalization” schemes continue as planned:

In the photo at lower left, Gov. Sonny Perdue, center left, in green tie, and House Majority Leader Jerry Keen, center right, watch with shovels ready Monday as workers situate a palm tree into a hole to begin Great Dunes Park on Jekyll Island.

“The revitalization of Jekyll Island has been discussed for many years, and I’m excited that this day is finally here. This public- private partnership will result in a reinvigorated Jekyll Island that will attract more visitors who will appreciate the beauty and history of one of our state’s crown jewels,” Perdue said at the groundbreaking ceremony.

That was in December 2009.

Georgia needs to do better than planting palm trees to pretend to be Florida. Florida’s Ponzi scheme already went bust. Does Georgia have to follow?

Maybe instead of investing in golf courses we could invest in off-shore wind farms, or wave power, or tide power. Maybe instead of palm trees, we could replant native forests for carbon sequestration. Maybe instead of becoming a tourist economy we could produce something, such as solar panels, wind turbines, or wave or tidal generators.

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