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Miami 2019

5th Anniversary Edition


Contents: ECONOMY OVERVIEW

Jennifer Wollmann, Commercial President, Miami Association of Realtors Avra Jain, CEO, The Vagabond Group

11 Economy:

12 Economy in numbers

16  Interview: Ron DeSantis, Governor, State of Florida

19  Interview: Carlos Gimenez, Mayor, Miami-Dade County

20  Booming economy: Miami-Dade continues to thrive in the face of global headwinds, as a booming startup industry gets set to shift into high gear

21  Interview: Raul Moas, Director, Knight Foundation - Miami

22  Interview: Pete Carr, Regional President, North America Bacardi

38  Roundtable: Talking taxes

Frank Rodriguez, Managing Partner, Shutts & Bowen Pedro Freyre, Chair, International Practice, Akerman, LLP David Appel, Managing Partner, Cherry Bekaert, LLP

43 Real Estate:

44 Real Estate in numbers

46  Strong momentum: Despite potential headwinds, the stellar Miami property market continues to outperform, with luxury sales to foreign buyers a key 47  Interview: Ryan Shear, Principal,

30  Picking up steam: Startups have exploded across South Florida as Miami-Dade’s reputation as a tech haven continues to grow

31 Interview: Manuel Medina, CEO, Cyxtera

32  Market voices: Tipping point

35  Interview: Carlos Perez-Abreu, Managing Partner, PAAST

48  Interview: Gregory West, CEO, ZOM Living

50  Roundtable: Opportunity Zones

36  Strategy shift: The Trump administration’s tax reform legislation has sparked changes in business plans and strategies throughout Miami-Dade

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53 Interview: Stuart Wyllie, President, The Graham Companies

54 Interview: Scott Lunine, Vice President & Regional Manager, Marcus & Millichap

56 Interview: Matthew Rieger, President & CEO, Housing Trust Group

57 Interview: Edgardo Defortuna, President & CEO, Fortune International Group

60 Market voices: Developing Miami

61 Interview: Rodrigo Azpurua, CEO, Riviera Point Invest+Develop

Bobby Moore, Managing Partner, Baker Mckenzie

Property Markets Group (PMG)

Ronald Fieldstone, Partner, Saul Ewing Arnstein & Lehr LLP Oliver Gilbert, Mayor, City of Miami Gardens

63 Construction, Utilities & Environment:

64 Construction in numbers

66  Building boom: Residential


ECONOMY OVERVIEW

construction is set to show year-on-

71 Interview: Manny Varas, President & CEO, MV Group

72 Interview: Luis Lugo, SVP/ Regional Manager Southeast U.S. & Latin America, Hill International

76 Balancing act: Community leaders eye sustainable improvements to ensure strong future

77 Interview: Eric Silagy, President & CEO, Florida Power & Light

78 Interview: Gilda Pereda, President, Emerald Construction

79 Interview: Carolyn Bermudez, VP & General Manager, Florida City Gas

year growth with several notable projects underway

70 Interview: Wasim Shomar, CEO, The Lynx Companies

86 I nterview: Ken Russell, Chairman, Miami City Commission, Chairman, Omni Community Redevelopment Agency

91 I nterview: Cornelius Shiver, Executive Director, Southeast Overtown/Park West Community Redevelopment Agency

92 I nterview: Kieran Bowers, President, Swire Properties Inc.

95 City of Doral:

96 Bright future: The city that began as a country club is one of the fastest-growing cities in the United States and a flourishing hub for business

97  Interview: Juan Carlos Bermudez, Mayor, City of Doral

98 Interview: Ana-Marie Codina Barlick, CEO, Codina Partners

81 Interview: Mauricio Gonzalez, President & CEO, LEAD Engineering Contractors

83 City of Miami:

84  Golden coast: The City of Miami is transforming its future with real estate projects, technology, and major global events.

102 Interview: Arnold Donald, President & CEO, Carnival Corporation

85 Interview: Francis Suarez, Mayor, City of Miami www.capitalanalyticsassociates.com

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ECONOMY OVERVIEW

Contents:

103 Interview: Joseph Roisman, Executive Vice President, Perry Ellis International

Art Noriega, CEO, Miami Parking Authority Patrick Goddard, CEO, Brightline

105 Transportation, Infrastructure & Logistics: 121 City of North Miami: 106 Transportation in numbers 108  Connected future: MiamiDade bolsters its reputation as a global gateway thanks to strategic investments in local transportation and infrastructure 112  Interview: Bob Brunn, Vice President, Ryder System, Inc.

116  Roundtable: Transportation

Alice Bravo, Director, Miami-Dade Department of Transportation & Public Works Juan Carlos Liscano, Vice President, American Airlines Miami Hub

132  Banking on success: Miami’s banks and financial firms find new ways to adapt to market trends and technologies

133 Interview: Jorge Gonzalez, President & CEO, City National Bank

134 Interview: Jorge Villacampa, South Florida Regional Bank President, Wells Fargo

135 Interview: Israel Velasco, Florida Region Executive, Popular Bank

122  Revitalized city: North Miami blazes new trails in urban planning and environmental preservation

123  Interview: Dr. Smith Joseph, Mayor, City of North Miami

125  Interview: Larry Spring, City Manager, City of North Miami

126  Interview: Jackie Soffer, CEO & Chairman, Turnberry Associates 128  Interview: Steven Zelkowitz, Managing Partner, Fox Rothschild 129 Interview: Robert Finvarb, Founder & CEO, Robert Finvarb Companies

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131 Banking & Finance:

136 Interview: Tony Coley, Regional President - South Florida, BB&T 140 Interview: Jeff Klink, Regional President, Valley 141 Interview: Jeff Jackson, Florida Market President, Capital Bank

142  Roundtable: Finance Lars Jensen, Head of Americas, Legg Mason International


ECONOMY OVERVIEW

Gayle Brooks, Chief Clinical Officer, The Renfrew Center

164 Interview: Dr. Henri Ford, Dean & Chief Academic Officer, University of Miami Miller School of Medicine

157 Education:

158  Higher learning: Miami’s renowned educational institutes are working with local businesses to shape tomorrow’s skilled workforce 159  Interview: Mark Rosenberg, President, Florida International University 160  Roundtable: Education Guillermo Prado, Dean, University of Miami Graduate School Patricia White, Dean, University of Miami School of Law John Quelch, Dean, Miami Business School Michael Origlia, Managing Director, Branch Manager, Raymond James & Associates Jack Christian, Managing Director, GenSpring Suntrust Private Wealth

162  Interview: John Murray, Provost, Barry University

Bruce Hayden, CEO, Banyan Health Systems

Rebecca MacMillan Fox, Dean, University of Miami Division of Continuing and International Education

167 Interview: David Armstrong, President, St. Thomas University

169 Miami Dade College: 170  Leading the way: A lifetime of service and the legacy of leadership is driving Greater Miami’s economy with vibrancy

171 I nterview: Eduardo Padron, President, Miami Dade College

175  Interview: Jorge Perez, Chairman, CEO, Founder, Related Group

176  Interview: Eric Montes de Oca, President & Partner, Grycon, LLC., President, Latin Builders Association

177 Tourism, Arts, Culture & Sports:

145 Health 146  Healthy moves: Miami’s healthcare industry is a pioneer in clinical care and research. To secure a healthy future, innovation is crucial

147 Interview: Penny Shaffer, Market President, Florida Blue

149 Viewpoint: Boris Reznik, Chairman, Biorasi 150 Interview: Jeffrey Welch, CEO, Tenet Health Miami-Dade Group 152  Roundtable: Healthcare Jeffrey Freimark, President & CEO, Miami Jewish Health

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ECONOMY OVERVIEW

Contents:

Miami 2019 ISBN 978-0-6924947-0-8 President: Abby Melone Chief Financial Officer: Albert Lindenberg Executive Director: Erica Knowles Design & Production Lead: Nisha Cunningham Content Manager: Yolanda Rivas Contributing Editor: Max Crampton-Thomas Lead Copy Editor: Mario Di Simine Contributing Designer: Md Shahidullah Writers: Denny Bulcao Binta Dixon Ian Leigh Sean O’Toole Cover Photo: PortMiami

178 Tourism in numbers 182  Enticing city: Miami-Dade expects a breakthrough year in 2019 for tourism, port expansion and preparing for one particularly big event 183 Interview: Andrew Stuart, President & CEO, Norwegian Cruise Line

189 Interview: Tom Garfinkel, Vice Chair, President & CEO, Miami Dolphins & Hard Rock Stadium 190 Interview: Matthew Jafarian, EVP of Business Strategy, Miami HEAT 192 Interview: Adam Jones, Chief Revenue Officer, Miami Marlins

184 Interview: William Talbert, President & CEO, Greater Miami Convention & Visitors Bureau 188  Interview: Rodney Barreto, Chairman, Super Bowl Host Committee

Photo Credits: Contents: pg 4 – Top left: Hard Rock Stadium pg 4 – Bottom: Property Management Group pg 5 – Top right: Hard Rock Stadium pg 6 – Top left: Hard Rock Stadium pg 6 – Bottom right: Urban-X Group pg 8 – Greater Miami Convention & Visitors Bureau (GMCVB) Economy: pg 11 – Large photo: GMCVB pg 11 – Small photo: David Sutta pg 20 – Julian Gigante pg 23 – GMCVB pg 26 – City of Miami pg 30 – Miami Dade College pg 34 – David Sutta pg 36 – GMCVB pg 40 – City of Miami Real Estate: pg 43 – Large photo: Mike Kelly pg 43 – Small photo: Mike Kelly pg 46 – Swire Properties Inc.

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pg 49 – Housing Trust Group pg 52 – City of Miami pg 58 – Property Management Group pg 62 – Mike Kelly Construction, Utilities & Environment: pg 63 – Large photo: LEAD Engineering Contractors pg 63 – Small photo: Florida City Gas pg 66 – LEAD Engineering Contractors pg 68 – Emerald Construction pg 70 – Vagabond Group pg 73 – Astor Companies pg 74 – Cuesta Construction pg 76 – Florida Power & Light

Invest: Miami is published once a year by Capital Analytics Associates, LLC. For all editorial and advertising questions, please e-mail: contact@capitalaa.com To order a copy of Invest: Miami 2019, please e-mail: contact@capitalaa.com All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, without the express written consent of the publisher, Capital Analytics Associates, LLC. Whilst every effort has been made to ensure the accuracy of the information contained in this book, the authors and publisher accept no responsibility for any errors it may contain, or for any loss, financial or otherwise, sustained by any person using this publication. Capital Analytics Associates, LLC accepts no responsibility for the return of unsolicited manuscripts and/or photographs, and assumes no liability for products and services advertised herein. Capital Analytics Associates, LLC reserves the right to edit, rewrite, or refuse material.

pg 98, 101 – City of Doral Transportation, Infrastructure & Logistics: pg 105 – Small photo: Ryder pg 105 – Large photo: GMCVB pg 108 – GMCVB pg 109 – Department of Transportation and Public Works pg 118 – Brightline City of North Miami: pg 121 – Small photo: City of North Miami pg 121 – Large photo: City of North Miami pg 122, 124 – City of North Miami

City of Miami: pg 83 – Small photo: GMCVB pg 83 – Large photo: City of Miami pg 84 – GMCVB pg 86, 90, 93, 94 – City of Miami

Banking & Finance: pg 131 – Large photo: Brickell Bank pg 131 – Small photo: Popular Bank pg 132 – Wells Fargo pg 142 – City National Bank

City of Doral: pg 95 – Large photo: Related Group pg 95 – Small photo: City of Doral pg 96 – Related Group

Health: pg 145 – Small photo: Miami Jewish Health pg 145 – Large Photo: Nicklaus Children’s Health

pg 146 – Doctor’s Hospital pg 148 – The Renfrew Center pg 151, 152 – Miami Jewish Health pg 155 – Nicklaus Children’s Health Education: pg 157 – Large photo: St. Thomas University pg 157 – Small photo: University of Miami Division of Continuing & International Education pg 158 – University of Miami Division of Continuing & International Education pg 162 – Florida International University Miami Dade College: pg 169 – Large photo: Miami Dade College pg 169 – Small photo: Miami Dade College pg 170, 173, 174 – Miami Dade College Tourism, Arts, Culture & Sports: pg 177 – Small photo: Jose Carlos Martinat pg 177 – Large photo: Phillip and Patricia Frost Museum of Science pg 182, 184 – Phillip and Patricia Frost Museum of Science pg 186 – Historic Virginia Key Beach


Economy: Miami-Dade’s economy is still riding the economic wave of the last several years. It continues to attract foreign investment, talented workers and new businesses, but it must meet some big challenges, such as growing its STEM employee base. It must also maintain its efforts to court foreign investment, even as this critical source of development funding starts contracting along with the global economy.

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ECONOMY OVERVIEW

Economy in numbers:

Source: U.S. BLS, Current Employment Statistics

Source: U.S. BLS, Current Employment Statistics

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Source: U.S. BLS, Local Area Unemployment Statistics


ECONOMY OVERVIEW

Source: U.S. BLS, Consumer Price Index

Source: U.S. BLS, Consumer Price Index

Source: U.S. BLS, Producer Price Index

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ECONOMY OVERVIEW

Economy in numbers:

Source: Miami-Dade Beacon Council

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ECONOMY OVERVIEW

Source: U.S. BLS, Quarterly Census of Employment & Wages

Source: U.S. BLS, Occupational Employment Statistics

(1) South Atlantic includes DC, DE, FL, GA, MD, NC, SC, VA and WV Source: U.S. BLS, Employer Costs for Employee Compensation

Source: U.S. BLS, Employment Cost Index

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ECONOMY INTERVIEW

Bold action Citing a ‘unique opportunity,’ Gov. DeSantis spells out his vision for Florida, pushing the environment, economy and education to the top of the agenda

Ron DeSantis Governor – State of Florida

I’m optimistic that this legislative session provides us with a unique opportunity to advance needed reforms in a variety of different areas that will strengthen our state and benefit the people now and in the future. In less than 60 days, my administration has taken bold action to address issues that Floridians care about: • reorienting our environmental policy around the goal of cleaning up our water; • announcing far-reaching education reforms designed to make Florida No. 1 in skills-based education by 2030; • securing hundreds of millions of dollars for stormravaged parts of NW Florida; • bringing accountability to entities ranging from the Broward Sheriff’s Office to the South Florida Water Management District; • and appointing three spectacular justices to our Supreme Court. And this is just the beginning. Environment Florida is blessed with some of the nation’s finest natural resources. The state’s unique natural environment is central to our economy, our quality of life, and our identity as Floridians. We are repositioning our water policy to meet the needs of our citizens, by, among other things: • expediting key projects like the EAA reservoir and raising the Tamiami Trail; • establishing a blue-green algae task force to develop policies to fight algae blooms, fight red tide and improve water quality; and • appointing a Chief Science Officer to better harness scientific data and research in service of Florida’s most pressing environmental needs. 16 | Invest: Miami 2019 | ECONOMY


ECONOMY INTERVIEW

I’ve requested $2.5 billion over the next four years for water resources projects and Everglades restoration. This represents a $1 billion increase compared to the previous four years and will allow us to bring major projects to completion. Given the persistent water problems we have seen over the past several years, now is the time to be bold. We cannot leave for tomorrow that which we can do today. Because the people of Florida should have confidence that their interests are being reflected in policy implementation, I asked and received the resignations of all members on the South Florida Water Management District. We needed a fresh start and I’m pleased to report that I’ve appointed a number of good people to this board. Economy We are a mobile, highly-connected society and as taxes become more onerous and as the business climate deteriorates in these states, people vote with their feet. Taxpayers and businesses leave. The tax base erodes and the fiscal situations of these states get more ominous, yielding massive budget shortfalls. It is a vicious cycle. We won’t repeat those mistakes in Florida. We will always remain a low-tax state. And we will never have an income tax! I have proposed more than $330 million in tax relief for Florida families, including a property tax cut. Education Maintaining low taxes and a healthy economic climate are important, but the most important factor regarding Florida’s economic potential is human capital. I’m proud that Florida’s university system is ranked #1 in the nation — ahead of Texas, California and New York. This wasn’t always so; the climb atop the rankings has been remarkable. We are poised for growth in finance, technology, healthcare, aerospace and more – let’s support the continued ascent of our universities so that these industries can grow by employing our own graduates in good, high-paying jobs in our low-tax, businessfriendly environment. Skills-based education offers a focused, and often more cost-effective means, by which students can acquire the tools they need to be successful. Our workforce education initiatives include grants to place students in apprenticeships, money to train teachers in computer science and funds for workforce programs within our state college system. These

reforms will make a difference and deserve your support. Education opportunity shouldn’t be limited by parental income or zip code. One way Florida has expanded opportunity has been through the Tax Credit Scholarship program for students from lowincome families. More than 100,000 students – nearly 70% of whom are African-American or Hispanic, with an average family income of roughly $26,000 per year – are utilizing the scholarship. The results have been positive: the Urban Institute recently released a study that found tax credit scholarship students are 43% more likely to attend a four-year college and up to 20% more likely to obtain a bachelor’s degree. Students who use the scholarship more than four years are up to 99% more likely to attend college and up to 45% more likely to earn a bachelor’s degree. Healthcare We need to enact policies to make health insurance, prescription drugs and medical care more affordable for Floridians. As you are aware, healthcare is being hotly debated at the national level, so let me say: Any proposal that seeks to eliminate the private health insurance policies of millions of Floridians is unacceptable. Government has no right to take away the policies that Floridians earn through their jobs or purchase on the individual market. I want Floridians to be able to purchase prescription drugs from Canada at lower prices. There is an avenue under existing federal law to accomplish this; the president is supportive of this effort and has asked me to plow ahead. This could save money for individuals, reduce costs for businesses and relieve pressure on our state budget. Bringing price transparency to healthcare can also help reduce costs, and I have instructed Secretary Mayhew from AHCA to expedite the price transparency database that the legislature required. To make the tool effective, we need legislation to provide for shared savings policies so that patients receive a financial benefit when they choose a more cost-effective option. Closing Many are called to serve in elected office, but only a few are entrusted with authority by the voters. Fewer still are presented with the opportunities we see before us today. Let’s fight the good fight and lets keep the faith so that when Floridians look back on the fruits of this session, they’ll see it as one of our finest hours.

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ECONOMY INTERVIEW

Moving forward How Miami-Dade County is propelling itself into the future

Carlos Gimenez Mayor – Miami-Dade County

What have been some significant highlights for MiamiDade County over the past year? The past year has been one of great economic development for Miami-Dade County. At The Beacon Council’s Key Ceremony in November, we celebrated a record-breaking year of achievements, with 50 companies expanding operations or relocating to Miami-Dade within the past year. Those companies drove more than $402 million in new capital investments and created close to 2,000 new jobs. On an even larger scale, the new eMerge Insights report that was just published noted that in 2018 South Florida-based startups attracted an astounding $1.38 billion in venture capital through 128 deals. In addition, startups based in the Greater Miami area pulled in three quarters of the state’s venture capital dollars, along with more than half of its deals. What is currently driving the county’s economy? Aside from the technology and venture capital startups, the biggest drivers of our county’s economy are Miami International Airport (MIA) and PortMiami. Last year, more than $31 billion in direct business revenue was generated at MIA and the County’s general aviation airports, with a total economic value to the region of $118 billion. MIA contributed directly and indirectly to more than 425,000 jobs. Passenger traffic at MIA increased by almost 1 million people for a record of more than 45 million travelers in 2018. And cargo shipments set a new record of 2.3 million tons. At PortMiami, Royal Caribbean opened its new world-class Terminal A, bringing to Miami its new Symphony of the Seas, the world’s largest cruise ship. PortMiami contributed $43 billion to the local economy, supporting close to 335,000 jobs in South Florida. PortMiami also increased containerized cargo

shipments by 5.8%, marking the fourth-consecutive year that it passed the 1 million TEU mark. What would identify as the county’s most pressing challenges at this time? Transportation, public safety and affordable housing are among the biggest challenges that Miami-Dade faces, along with the growing challenges that will result from sea level rise in the decades ahead. We are meeting all of these challenges head-on, with wideranging Smart Cities planning initiatives that range from smart signal technology and the development of a Rapid Area Transit system, to robust public-private partnerships that are creating more affordable housing for residents of all income brackets.

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Booming economy: Miami-Dade continues to thrive in the face of global headwinds, as a booming startup industry gets set to shift into high gear Florida’s economy broke $1 trillion in 2018, making it the 17th largest economy in the world. Equally impressive is that Florida is adding about $2.74 billion to its GDP daily. Although it is not solely responsible for this accomplishment, Miami-Dade County has the distinction of being the county with the most economic growth between 2013-2016. During that period, MiamiDade’s GDP grew by $10.8 million. However, there is still plenty of room for improvement. To address lingering problem areas in Florida’s economy in Miami-Dade and other counties, such as achievement gaps in schools and a high poverty rate, the Florida Chamber of Commerce has launched the Florida 2030 Project for long-term economic planning. Geographic location Miami-Dade County consists of approximately 2,000 square miles of land along the southeastern tip of the Florida peninsula, the western third of which is within the borders of the Everglades National Park. Broward County is located to the north, the picturesque Florida Keys are to the south, and the Atlantic Ocean looms to the east. This large and strategically located county 20 | Invest: Miami 2019 | ECONOMY

is home to 34 distinct cities and municipalities, each with their own unique flavor. Miami capitalized on its location on the beautiful Florida coast by constructing numerous tourist resorts beginning in the 1920s. Before that, the region was invigorated by the expansion of railroads into the area and drained many of its natural swamps and mangroves to accommodate the construction of additional livable property. Miami’s location on the southern tip of Florida also makes it a popular destination for immigrants from several countries in the Caribbean, such as Cuba, Haiti and Puerto Rico, as well as many countries in Central and South America. Today, these people have developed thriving communities that are integral to making Miami such a magical city. Global headwinds As the 17th biggest economy in the world, Miami is sensitive to fluctuations of the global economy. Unfortunately, global trade and economic growth appear to be slowing down amid fears of another recession, and the impacts of this trend are already


being felt in Miami. First, uncertainty surrounds the U.S. economy. GDP slowed to 2.2% in the fourth quarter of 2018, but the growth indicator surpassed expectations in the first quarter of 2019, posting a preliminary 3.2% expansion. Some pundits put the strong showing down to temporary factors and pointed out that consumer spending remains weak. Any deceleration could slow Miami-Dade’s Miami-Dade’s export of its principal products to the national economy, such as tourism and real estate. From an international perspective, Great Britain is mired in an economic slowdown precipitated by the ongoing negotiations surrounding Brexit, the UK’s proposed withdrawal from the European Union (EU). This slowdown stymies the UK’s ability to import goods and services from markets like Miami-Dade and, since the UK has the second-largest economy in the EU, this has a noticeable impact on Miami’s economy. Moreover, the ongoing uncertainty surrounding Brexit is also resulting in a drag on the economies of other major European players, such as Germany, Italy and France. Asia and Latin America are also not spared from the effects of the lagging global economy, and this will certainly affect Miami-Dade’s economy given its extensive trading connections with these regions. China, whose massive and rapid economic expansion has garnered global attention, is beginning to show signs of slowing down. As for Latin America, Mexico and Costa Rica are also experiencing economic downturns, and Argentina is projected to experience another year of outright recession. However, there is good news: the large economy of Brazil is expected to expand even more under the pro-growth policies of President Jair Bolsonaro’s administration. Miami will likely benefit from this growth since Brazil is one of its biggest trading partners. However, it is important to note that this is mere speculation; Brazil’s actual Q4 2018 performance was sluggish. The Dominican Republic, Colombia and Peru, also key partners for Miami-Dade’s economy, are also expected to grow economically. International advantages Miami has long been, and will likely long remain, a bustling hub of international trade. There are several factors contributing to Miami’s ability to attract foreign business and foreign-born entrepreneurs. First, Miami has deep roots in Latin American culture and a vibrant population of people from Central America, ( )

Raul Moas Director Knight Foundation Miami

What growth has the foundation observed regarding the city’s blossoming arts scene? Knight believes that art and culture connects people to places and to each other, playing a key role in building a more engaged and vibrant community. Knight has been a supporter of the arts since our start, and Knight’s vice president for the arts program, Victoria Rogers, recently announced $37 million in new support for the local arts scene, bringing our total arts funding in Miami to more than $165 million since 2005. Our strategy is twofold: funding major arts institutions as well as talented individual artists. We’ve also invested in local artists through the Knight Arts Challenge, bringing 384 arts ideas to life. The Challenge will continue in 2019. How are you working to ensure accessibility to innovation for all areas of the community? Knight believes that to ensure the long-term success of Miami’s innovation ecosystem, we must have all of Miami’s many communities at the table. Toward this goal, we recently awarded $1 million to Venture Café Miami (VCM), a nonprofit working to create an inclusive and accessible innovation ecosystem in Miami. VCM has a unique, community-focused approach that makes it uniquely positioned to facilitate much-needed opportunities for new entrepreneurs to get involved and grow their ideas in Miami. We work to elevate the notion of high-impact entrepreneurship because ventures of a smaller scale have a disproportionately positive impact in terms of jobs created, wage growth, and community and GDP contribution. It’s essentially an economic opportunity play around development, geared at making investments in models and/or visions and initiatives that we think are important — not only to help them take root in Miami, but also to signal to the market: “This matters.”

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ECONOMY INTERVIEW

Cheers People are drinking less, but better, and the ‘king of rums’ says that is working in its favor

Pete Carr Regional President, North America – Bacardi

What has been your experience in finding and keeping skilled talent within the local economy? Miami is a tough market to get people to move to, but they also don’t want to leave once they’re here. Once you get them in, the key is giving them opportunities, especially to the younger professionals who are most likely to switch jobs every two or three years. Although we don’t have a turnover issue at Bacardi, we keep trying to provide different opportunities for everybody. We are proud to create a positive work environment and to have been certified as a Great Place to Work® in the U.S.

What is the significance of this being a family-owned and run company? Being privately held and family-owned means we can do what’s right for the business and our people for the long term. Our culture is centered on three F’s — Fearless, Family and Founders — which have been part of our legacy since the business began more than 157 years ago. We encourage people to be fearless so that we are agile and entrepreneurial; we treat each other like family and invest in our people because seeing them grow and succeed is what you do for family; and we challenge each other to think like founders so that we are making the right decisions and treating each dollar as if it were our own.

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What are some of the biggest challenges facing the spirits industry? One of the biggest challenges is finding the next trend. Any type of business needs to keep the consumer at the heart of everything they do and stay on top of where consumers are moving. One big trend in our business is that people are drinking less, but better. This works in our favor because we’re in every premium and super-premium category in the spirits industry. What are some of the advantages of being located in Miami? I’ve lived all over the country, and Miami is so unique, inviting and friendly. It’s also a trendsetting city, and Bacardi needs to be where the trends are happening. Being in Coral Gables, we are close to so many bars and restaurants where we can connect with mixologists and owners to learn more about what consumers are ordering. In fact, we host “Back to the Bar” activities where employees turn off their computers to visit accounts, talk to the bartenders and engage with consumers. We’re all brand ambassadors and need to understand our business where it happens.


ECONOMY OVERVIEW

Miami is ranked first among U.S. metro areas for foreign-born population, with over 40% of residents born abroad.

( ) South America and the Caribbean. This rich Latin American heritage, as well its geographic proximity to Latin America, long ago earned Miami the title of Gateway to Latin America. One consequence of this reputation is that many Latin American businesses and entrepreneurs are comfortable – even excited – to do business in Miami. “There are people here who understand both U.S. and Latin American culture. As such, companies coming to the region have a unique advantage if they want to develop their businesses in South America, Central America and the United States,” said Socrates Melo, managing director of human resources consulting firm Randstadt. Of course, Miami is not only home to individuals of Latin American lineage; in fact, the city is ranked first among U.S. metro areas for foreign-born population, with over 40% of residents born in countries other than the United States. The immigrants who settle in Miami tend to be highly educated, too, with 41% holding bachelor’s degrees and 39% with advanced degrees. This makes Miami second only to San Jose – situated within Silicon Valley – in terms of educated immigrant population, and puts it above New York, Los Angeles, and San Francisco. These characteristics also helped to make Miami one of the top 25 cities nationwide for

foreign-owned businesses, of which there are 2,579 in the metro area. Naturally, all of this diversity and education has practical implications for Miami: the city totaled $33.3 billion in exports in 2015, seventh among all large metro areas in the U.S., and ranked first for international freight in 2016. This powerhouse performance in international trade is thanks to Miami’s robust trade connections with South America, Europe and Asia. In fact, Miami is home to well over 100 foreign consulates, trade offices and bi-national chambers of commerce that directly and indirectly facilitate foreign trade with Miami. Economic performance Miami-Dade County encompasses 35 distinct cities and municipalities, including the City of Miami, Miami Beach, Doral, North Miami and Coral Gables. Each of these individual municipalities elects its own mayors who have jurisdiction within their geographical boundaries, but they are all simultaneously governed by the Miami-Dade County Mayor. However, these 35 municipalities are home to a little less than half of Miami-Dade’s total population. The other 52% of residents live in what is known as the Unincorporated Municipal Service Area (UMSA),

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ECONOMY OVERVIEW

a 13-district region that, if incorporated, would be the largest city in Florida and one of the largest in America. The districts of the UMSA are governed by the 13-member board of commissioners – one member for each district – which is overseen by the MiamiDade County mayor, who wields veto power over the board’s decisions. The upshot of this tiered system of administration is that certain parts of Miami may be subject to the governance of more than one mayor simultaneously. For example, the City of Miami has its own municipal mayor, but is also subject to the MiamiDade County mayor. The latter is responsible for all matters that touch the entire county, such as emergency management, transportation, and public health. The former handles more local matters, including law enforcement, fire services and zoning. In the UMSA, on the other hand, the lack of a city or municipal mayor means that the Miami-Dade County

mayor handles their usual responsibilities and also covers the duties that would normally be reserved for a municipal mayor. As just one example, the City of Miami has passed a balanced, $1.09 billion budget for fiscal year 2018-2019. The budget set aside $27 million for labor negotiations and $5 million for beautification projects, all without raising taxes. The budget reflects the City of Miami’s Strategic Plan, which focuses on the key priorities of mobility, housing, public safety, improving the way services are delivered and improving shared civic spaces. In addition to Miami-Dade’s $10.8 million GDP growth between 2013 and 2016, one of the most important indicators of economic performance is job creation. Miami-Dade ranked third among Florida’s major metro areas in terms of job creation behind Tampa and Orlando. In total, Miami-Dade generated 24,300 new nonagricultural payroll jobs,

Miami-Dade ranked third among Florida’s major metro areas in terms of job creation.


ECONOMY OVERVIEW

Rebecca Danta Managing Director – Miami Angels

Miami Angels has over 110 members in our angel investment group, which comprises a mix of professional investors, entrepreneurs who have had successful exits and are no longer in the driver’s seat of company operations and local corporate executives. In 2018, we granted follow-up funding to some of our well-performing portfolio companies, such as WhereBy.Us, Raw Shorts and Blanket. It has been a good year in terms of helping some of our established companies while also making first-time investments in new companies.

constituting a 2.1% increase between July 2017 and July 2018. The jobs created were distributed among a variety of industries as follows: construction (7,900); manufacturing (7,400); transportation, warehousing and utilities (7,400); and education and health services (6,400). Another important and closely related indicator of economic performance is the unemployment rate, which fell 0.6%, from 4.9% in 2017 to 4.3% in 2018. This shows marked improvement in a statistic with a direct impact on economic performance. The fewer unemployed residents there are in a community, the more vibrant the economy will tend to be. Another important factor is that, as Miami-Dade creates jobs and reduces unemployment, the quality of jobs is also increasing, as measured by annual wage increases in key employment sectors. In 2017, the average annual wage in Miami across all of its core sectors was a strong $65,400. To reach this peak, most individual sectors saw substantial wage growth between 2012 and 2017: International Banking and Finance had the highest average annual wage: $106,600. However, this sector was also the only to experience negative growth of its average annual wage (-0.2%). The average annual wage for Information Technology professionals was $96,600, a 0.9% increase per year. The Creative Design industry average of $77,100 represented a 2.4% annual increase. Aviation increased 2.5% annually to an average wage of $53,400. The average annual wage of those working in Life Sciences and Healthcare was

$52,600, up 2.5% per year. The annual wage for Trade and Logistics was $46,300 and increased 0.5% per year. Finally, Hospitality and Tourism, with an annual average of $25,400, was up 0.4% per year. Growth factors Miami-Dade has seen considerable growth in a number of key employment sectors over the past couple of years, but how do these trends stack up to large metros in the rest of the country? As probably expected, Miami is a national leader in certain sectors, whereas it lags in others. For instance, Miami’s legal talent pool ranked fifth overall among large U.S. metro areas, making it Miami’s strongest professional sector. Miami-Dade also has a healthy proportion of workers in professional management roles, ranking 28th nationally, and ranks 24th for creative arts, media, and design professionals. However, Miami’s overall ranking for all knowledge, professional and creative workers lags behind at 50th overall, due in large part to a dearth of highskill, high-wage employees. In fact, low-skill service workers constitute more than half of Miami-Dade’s workforce. The Miami-Dade Beacon Council has launched a Miami Community Ventures (MCV) Program to address this population. Its One Community Goal initiative is designed to diversify and strengthen the community by connecting low-income, structurally unemployed individuals to living-wage jobs. The program encompasses returning veterans, veteran

Miami’s legal talent pool ranked fifth overall among large U.S. metro areas.

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ECONOMY OVERVIEW

Miami is the only U.S. city that was founded by a woman, Julia Tuttle, who encouraged Henry Flagler to extend his Florida East Coast Railroad to Miami.

subgroups and individuals who need public assistance. It is based on an award-winning program in Michigan that generated successful results. Michael A. Finney, president and CEO of the Miami-Dade Council, said the MCV program gives people a viable opportunity to succeed. A four-month pilot program was launched in three Miami-Dade communities in early 2019 with plans to hire 77 individuals at a living hourly wage. The idea is that it will be rolled out throughout MiamiDade countywide in the future. Already, the program has 37 community supporters who will identify companies willing to provide employment. Uber, the ride-sharing company, has agreed to support the program as a an employer and provider of reliable transportation. Florida Blue Foundation is one of the numerous sponsors as well and Penny Shaffer, its president, stressed the importance of alleviating poverty and connecting people with living-wage employment. There are different issues on the other side of the spectrum. When it comes to high-paying technical jobs in science, computers and math and architecture and engineering, Miami-Dade ranks 50th, 51st and 51st, respectively. One factor contributing to Miami26 | Invest: Miami 2019 | ECONOMY

Dade’s flagging high-paid sector is its average level of educational attainment and the presence of a brain drain effect. For instance, just over 30% of Miami’s adult population attained at least a bachelor’s degree, which is not a poor performance compared to the national average, but is far behind the metropolitan areas that serve as paragons of workforce education, such as San Jose and Washington, D.C. This less-than-optimal education performance is linked to the fact that Miami also falters in terms of retention of college graduates. Miami is a massively successful college town and ranks ninth nationally in university enrollment. However, the metro area suffers from a considerable brain drain that drags it down to 18th in the country in terms of graduate retention. The serious challenge of attracting and retaining additional high-skilled, high-paid talent must be addressed to ensure the continued growth and health of Miami’s economy. Cuban connections In June 2017, President Trump announced a series of stricter limits on U.S. citizens’ travel to Cuba, primarily restricting Americans’ ability to travel to the country


ECONOMY OVERVIEW

Miami and Cuba specifically is the decision by Miami Mayor Carlos Gimenez to suspend Miami’s status as a sanctuary city. In the wake of this proclamation, an estimated 1,000 detention requests by immigration authorities will be honored by the city, sending shockwaves of fear rippling throughout the city’s vast immigrant community, many of whom are Cuban, and deterring further immigration from Cuba and other Latin American countries.

individually and instead requiring them to travel as part of organized tour groups or on cruise ships. The administration stated that the policy was intended to deprive the Cuban government of money raised through its military-run tourism institutions, and instead, direct the flow of tourism money to the Cuban people. Unfortunately, the practical effects of the policy appear to be the opposite. Figures released by the Cuban government indicated that occupancy of privately-owned bed-and-breakfasts has plummeted to 44% in the wake of Trump’s new policy, whereas these same businesses operated at nearly full occupancy for years during the ObamaCuba détente. In the meantime, U.S. cruise lines continue to dock at military-run harbors in record numbers under the Trump rules, generating millions of dollars for the Cuban government. Despite continually growing numbers of U.S. travelers to Cuba, many of whom travel out of South Florida cities like Miami, American tourists regard the new rules as an inconvenience that leads to shorter overall stays, while Cuban business owners report devastating effects on their bottom line. An additional strain on the relationship between

Looking eastward The Chinese economy rapidly grew to reach a massive scale over the years since the country first instituted sweeping economic reforms, and many national and local governments have gone to great lengths to entice a growing number of Chinese investors. One of the principal means of attracting Chinese investment to American projects has been the EB-5 visa program, which provides that any foreign investor who contributes at least $500,000 to a project on U.S. soil that reaches completion is entitled to a green card. The program has been enormously popular since its launch, particularly with Chinese investors and especially in Miami. However, the program is facing uncertainty that has cooled investor interest. The program was set to expire on Sept. 30, 2018, but was extended through Dec. 7, 2018 and then again to Sept. 30, 2019. It is again not certain whether the program will be renewed before it expires in September, so foreign investors’ interest has dipped. The positive side of this development is that the processing backlog for the EB-5 program, which was traditionally years long (even resulting in a lawsuit alleging that the program was fraudulent), is now nearly eliminated and the wait is down to mere months. Developments related to this program will be important to keep an eye on, especially as the September deadline looms. There have also been several more local efforts to attract Chinese investment in Miami. For example, there were numerous trade/business development missions to China sponsored by Miami-Dade-based governmental and business entities to develop mutual cultural understanding and mutual economic growth. To name just a few of these trade delegations: OC REALTORS Global Business Alliance embarked on a trade mission in March 2019 that began in Shanghai and ended in Beijing, with the purpose of meeting with Chinese real estate professionals and organizations; in October 2018, a delegation of members from Florida seaports, the Florida Chamber

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ECONOMY OVERVIEW

of Commerce, Enterprise Florida and the Florida Ports Council traveled to China to meet with their Chinese counterparts in Hong Kong and Shenzhen; and in March 2018, Miami-Dade business and community leaders were invited to participate in the Miami-Dade County Business Development Mission to China and Japan. Another factor promoting cultural and economic cooperation between China and Miami is the enrollment of Chinese nationals in colleges and universities located in Miami-Dade County. At the University of Miami, for example, Chinese students account for approximately 6% of the total student body and a whopping 36% of the international student body. By pursuing an education in Miami, Chinese students not only create an opportunity for their American classmates and professors to learn about Chinese culture and attitudes, they also have an opportunity to learn about America generally and Miami specifically. Many of these students may become Chinese investors in the region after they graduate.

which may result in up to a $3,000 tax credit per new job created. The state also offers a variety of workplace training incentives designed to promote the initial training and continuing education of employees through employer reimbursements. Finally, Florida seeks to attract new capital-intensive industries through the Capital Investment Tax Credit, which is an annual credit, provided for up to 20 years, against the corporate income tax. To qualify, projects must create a minimum of 100 jobs and invest at least $25 million in eligible capital costs, as well as be part of select sectors. Miami-Dade County is seeing tremendous growth in population and concomitant real estate development. North Miami, in particular, boasts an impressive number of development projects that are either approved, under construction, or recently completed. In fact, North Miami’s government website lists 14 developments ranging from condominiums to retail stores to an entire mixeduse community – SoLe Mia. Downtown Miami also has a large number of luxury condos planning to hit the market in 2019, although there is ample concern of an oversupply of this type of property. The ambitious Miami Riverwalk is also moving forward, having received a $60 million construction loan in early 2019.

The ambitious Miami Riverwalk is moving forward, having received a $60 million construction loan in early 2019.

Public sector initiatives There are a wealth of countylevel business development and investment initiatives in Miami-Dade County. For example, the Economic Development Fund allots $75 million for countywide projects and an additional $15 million focused specifically on urban areas. The Brownfields Program provides economic incentives, tax credits, low interest loans and waivers of contamination assessment report review fees to developers who take the initiative to clean up and revitalize contaminated brownfield sites. Developers may also be interested in the Miami-Dade County Targeted Jobs Incentive Fund, which has the two-pronged goal of retaining existing businesses and attracting new business to the county through cash incentives of $3,000 per job created – and it’s $9,000 per job in Enterprise Zones. The Urban Jobs Tax Credit Program offers a $1,000 tax credit per job for new businesses that create 20 regular full-time jobs, or existing businesses that add 10 full-time jobs. At the state level, Florida offers the Qualified Target Industry Tax Refund to companies that create high wage jobs in targeted high value-added industries, 28 | Invest: Miami 2019 | ECONOMY

Looking ahead Miami-Dade’s economy is booming as the county continues to attract foreign investment, talented workers and new businesses. Thanks to the diversity of its people and its economy, the county is expected to be fairly resilient to the recession that is all but guaranteed in the near future. However, there are a few challenges to the continued economic success of Miami-Dade: First, the county must attract more STEM talent. Second, Miami must keep up its efforts to court foreign investment, as this important source of development funding is beginning to contract along with the global economy. Third, Miami should focus on programs and incentives to keep their record-breaking number of college and graduate students in the county after they graduate.


Picking up steam: Startups have exploded across South Florida as Miami-Dade’s reputation as a tech haven continues to grow Not many people have an image of Miami as an incubator for tech startups. However, Miami is undergoing a rapid transformation into a tech-friendly haven for startups and entrepreneurs, and experts and members of the scene say the trend is only picking up steam. “Over the past five years, the quantity of the startup formation in South Florida has exploded,” said Nico Berardi, general partner of the venture capital firm Magnetico Ventures. “Quality has increased, too, but at a slower, more linear pace. On the entrepreneurial side, Miami has come a long way. We are seeing more sophisticated local entrepreneurs starting companies here, as well as entrepreneurs moving from other cities to Miami. The challenge is that the entrepreneur side of the city’s economy has developed faster and better than the investor side.” Miami startups received $1.8 billion in venture capital funding in 2017, placing the city eighth in terms of venture capital activity among large metro areas nationwide. Although Silicon Valley still has a stranglehold on approximately a third of the country’s venture capital activity, many see the potential for a 30 | Invest: Miami 2019 | ECONOMY

better startup future in Miami – one that capitalizes upon Miami’s wealth of diverse entrepreneurs. Jeffrey Ransdell, managing director of Rokk3r Fuel ExO saw that potential before 2012, when he started the unique venture capital firm based in Miami’s Wynwood neighborhood. “We started Rokk3r Fuel because we knew there was a need for venture capital in Miami,” he said. “We also knew that Miami was going to be something special in the tech and startup space, so we wanted to get out ahead of that. Miami startup activity has been growing at an amazing rate of 100% over the last three years, so there is evidence that this is working. There is a lot of traction in Miami in this space right now.” There is little doubt that Miami is beginning to realize its potential as more than a tourist and hospitality market. In 2017, Miami ranked first on the Kaufmann Index for startup activity, the scale relied upon by economists and tech sector leaders to measure entrepreneurship in cities across America. The Miami tech sector also grew by 27.6% between 2012 and 2016. This growth has been spurred on by a variety of partnerships and incubators, including ( )


ECONOMY INTERVIEW

Cybertunities Today’s cyber world is a different place than just a few years ago, and CEOs need to take note and educate themselves

Manuel Medina CEO – Cyxtera

What unique challenges and opportunities does Miami’s business ecosystem provide for the work Cystera does? Miami is fantastic for companies like ours that have operations in North America, Europe and Latin America. The city is the perfect hub for business, and you don’t have to do a lot of convincing to get people to come here. We employ highly specialized engineers and professionals who specialize in areas such as cybersecurity, machine learning and data mining, and as such we employ people from all around the world. While it doesn’t take a lot of convincing to get people to come to this city, we are also looking throughout the area for skilled local talent and have partnerships with several neighboring universities. What are some of the common misconceptions that CEOs have about cybersecurity? The No. 1 misconception among CEOs is the belief that if they spend x amount of dollars, they are automatically safe. In reality, there’s no digital environment that can’t be breached. Business leaders tend to have a sense of complacency regarding cybersecurity and dismiss it as gibberish. The cyber world today is totally different than it was a few years ago. With the proliferation of multiple public and private clouds, it’s easy to see how the digital architecture of today’s market has evolved. CEOs need to educate themselves on this evolution and on cyber hygienics, at least to the point where they can understand what their CISO or CFO is telling them to do in that regard. What is your outlook for the growth of the city’s blossoming tech sector? I am so proud to see our city where it is. Miami wasn’t always a prime location that companies and

entrepreneurs considered when hoping to spread their wings. That has now changed. I am also the chairman of eMerge Americas, and of the 15,000 attendees we have, 30 to 40% have come from foreign countries. Back when I started eMerge Americas, you couldn’t obtain a degree in artificial intelligence. Now, local universities are offering advanced curricula in that area, which creates the foundation for a chain of talent that feeds on itself. The fact that we have such a favorable technology environment has encouraged tech entrepreneurs to move here. They come because the city provides an environment where they feel they can achieve critical mass. The city needs more of this critical mass to further develop its tech sector.

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ECONOMY OVERVIEW

Market voices: Tipping point

Laura Maydon

Managing Director Endeavor Miami

There’s no question as to whether there’s a lot of startup activity down here. On the tech side, we’ve seen progress in terms of the quantity of companies starting up, but there needs to be more investment activity locally. It’s part of the growth cycle of the ecosystem, and investment is always the last stage, since investors want to validate that there’s a solid pipeline in the city. If we look at South Florida’s development over the last five to seven years, the pipeline’s here. Endeavor offers a variety of services that can be catered to each entrepreneur and company.

I’m very happy with how the startup market in Miami has been evolving. The market now represents the first generation of startups — i.e., those like us that came here in 2015-2017. Thanks to the work of local investors who decided to take a chance on the city back then, businesses such as ours were given the platform to grow and recruit employees. I foresee a second generation that will come to this city within the next few years and further stabilize the startup market. The city, which was once generally considered to be nothing more than a vacation destination, will grow into an intricate and diverse business center.

Richard Lavina Co-Founder, CEO Taxfyle

Founder & CEO Home61

I believe in methodically building out products because if you’re a startup out of Miami, whether you like it or not, you have to create a product that people will use — and that comes before significant funding. $1 million doesn’t go as far in Silicon Valley as it does here in Miami. Cost of living is cheaper, so people hired to come here can experience a better quality of life for lower pay. Being in Coral Gables is fantastic. We were previously based out of CocoWalk, which is currently being redeveloped.

Miami is on a tipping point, and it is about to go into high gear. On an annual basis we review about 5,000 companies, and by the end of the year we invest in eight or 10 — so 0.1%. It is very competitive to get into our firm. We want to make sure we are investing in the right companies. By right companies, we mean those that align with our investment thesis, but also Miami’s startup and tech ecosystem as a whole. We want this city to thrive and be the place people come to start businesses and find capital.

32 | Invest: Miami 2019 | ECONOMY

Olivier Grinda

Maggie Vo

General Partner, Chief Investment Officer Rokk3r Fuel ExO


ECONOMY OVERVIEW

Steven Brodie Co-Managing Shareholder - Miami Office – Carlton Fields

At our law firm, we have formed a Tech Innovation Task Force, which complements the vision for South Florida to be a national player in creating and funding startups. In fact, Carlton Fields sponsors Miami Angels Office Hours, which provides opportunities for startup founders who are new to raising capital to get one-on-one advice from angel investors. That’s the future. We live in a vibrant and diverse community that will continue to grow and prosper, and our firm is well-positioned to share in that growth.

( ) Refresh Miami and The LAB. Continued growth in Miami’s tech startup sector is promised by the continued influx of tech professionals into the city thanks to its relative affordability and steady growth of employment opportunities in the field, as well as mounting investment in tech from Latin America thanks to a younger and more tech-savvy generation of investors. One of Miami’s biggest challenges when it comes to tech and entrepreneurship is sustained growth. Miami does very well when it comes to getting startups off the ground, but many falter before making the transition into stable, midsize companies. In fact, the Kaufmann Index rated Miami 36th out of 50 in this metric. Berardi is optimistic. “I don’t think the city’s startup

Tech-centered events are now commonplace, enabling dialog between entrepreneurs, investors and the general community.

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sector has an issue with scaling up. If you look at local companies in the region such as Magic Leap and Nearpod, they’re attracting hundreds of millions of dollars in venture funding and are hiring talent locally and from elsewhere. It’s just a long-term process. People want Amazon and Sequioa Capital to come here now, but it doesn’t work that way. It’s a 10- to 20year process, and we need to be patient.” One important element in facilitating that business momentum is the construction of more space for startups, and many are in the works, including the $1 billion Magic City Innovation District. These spaces will allow startups to set up with affordable nearby employee housing so that employees won’t have a long commute or go broke just to work in Miami.


ECONOMY INTERVIEW

Tax forward How PAAST is staying ahead of the curve from cyber attacks to the new tax legislation

Carlos Perez-Abreu Managing Partner – PAAST

How is PAAST mitigating the constant threat of cyberattacks in the finance sector? Shortly after we opened our doors in 1999, we established a sister company called Genesis Systems Consulting that specializes in IT consulting. We have always had a focus on cybersecurity. We have a lot of client data in our servers that includes personal information, so clients have to feel comfortable that we have the right security in place. We’re doing a lot of work with local financial institutions to help them navigate this issue through our IT consulting company, including vulnerability assessments and e-mail phishing drills that are sent to both employees and clients. Our IT staff undergoes yearly training and we recently held a panel discussion at Miami Dade College’s Cybersecurity Center of the Americas, which was recently opened. These threats are here to stay and not going away. How has the firm navigated the trend of international investors coming to Miami to do business? Miami has always been very well-positioned for the influx of foreign capital, especially from Latin America, because of our location and our culture, and how it has developed over the years. International investors are coming here because they’re looking for a place to put capital outside of their home countries due to financial or political instability in those places. This influx is not only from Latin America, but from Europe as well. Given the new tax law and Florida’s tax climate I foresee this trend continuing. Most of the capital we see coming in from overseas is being invested in real estate. Given that under the new tax law deductibility is now limited to $10,000 at the federal level, we should also see an influx of out-of-state funds from all around the country.

How do you expect the new accounting rule regarding the reporting of leases to impact the city’s real estate sector? This change has been coming for years. Take our firm, for example. We lease the building here and will now have to record the present value of our lease space as either an asset or a liability. I think this will affect banks quite a bit in terms of how they look at clients’ balance sheets. Public companies are pretty well-versed and have the personnel and knowledge in-house to navigate this change quite smoothly. For the private sector, however, I foresee a lot of pushback in terms of having to comply with this new standard because it will be very difficult for in-house accounting staffs to figure it out.

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Strategy shift: The Trump administration’s tax reform legislation has sparked changes in business plans and strategies throughout Miami-Dade The after-effects of the Trump administration’s recent overhaul of federal taxation are beginning to ripple throughout Miami-Dade County. Despite taking effect in 2018, taxes filed in 2019 are the first to be impacted by the new legislation. Consequently, many have changed the ways in which they conduct business, shifting their financial strategies to take advantage of the new legal landscape. The Tax Cuts and Jobs Act contains several extremely business-friendly provisions, including a reduction of the federal corporate income tax rate from 35% to 21%, the introduction of Opportunity Zones, a 20% deduction for pass-through entities and the retention of favorable capital gains tax rules for real estate investors. Those are just a few of the highlights of the new law, which already appears to be wind in the sails of banks and businesses in Miami. At the same time, the new law presents some “unique challenges for Miami due to the international investments and people who come to Miami,” said Joseph DeMaria, a partner with legal firm Fox Rothschild, LLP who is board certified in business litigation. “What many people don’t realize is that 36 | Invest: Miami 2019 | ECONOMY

once you obtain a green card, you are taxed on your worldwide income. As a city with a lot of international money flowing through it, there are a lot of legal issues related to money transmission and tax liability. So, Miami is unique when compared to many other American cities.” Positive reaction Still, most reports from the business community are positive. Biscayne Bay Craft Brewery enjoyed such a windfall in 2018 that it was able to invest $100,000 in new equipment to expand production. It was also able to hire two additional employees. Florida Concrete Unlimited had so much extra money in the wake of the new legislation that it decided to increase yearend bonuses for employees by 20% and also gave them pay raises. T.J. Maxx, which has multiple locations in Miami, cited the reduction of the corporate income tax rate as the impetus for several employee benefits, including a one-time bonus, an incremental contribution to the retirement plans of eligible employees, paid parental leave for eligible employees and enhanced vacation benefits. The company even


ECONOMY OVERVIEW

made contributions to local charities. Miami-based Ryder System, the transportation and supply-chain management company, paid out $23 million in bonuses, thanks to the windfall enjoyed as a result of the tax law. Apple paid $2,500 to each employee, and the tech giant plans on $30 billion in additional capital expenditures and the hiring of 20,000 new employees over a five-year period. Several other nationwide brands, many with Miami-Dade locations, are also giving bonuses, raises, and in some cases expanded benefits, including Walmart, Cintas, Lowes, Home Depot, Starbucks, U-Haul, Bank of America, Comcast, Wells Fargo, and Fifth Third Bank. Opportunity Zones Given the massive volume of corporate tax savings, along with bonuses and higher wages to employees, proponents of the tax law claim it should stimulate the economy and promote additional investment. To further promote such investment, the tax law provides for what are called Opportunity Zones. These new tax provisions allow temporary and permanent deferral of capital gains on properties located in designated Opportunity Zones. For example, if real estate within an Opportunity Zone is purchased and held for at least 10 years, the tax basis of that real estate is stepped up to the market value at the 10- year mark, thereby eliminating the investor’s capital gains liability. Frank Rodriguez, a managing partner at law firm Shutts & Bowen, told Invest: that the Opportunity Zones started to “gain steam” in late 2018. Many businesses are forming investment funds that cater to the opportunity, he said. “There’s a lot of interest.” In fact, from April through September of 2018, there was $942 million in real estate sales within MiamiDade’s Opportunity Zones, a 25% increase over total sales in the same areas at the same time in 2017. There are 68 such zones in Miami-Dade and investors and developers are even more interested in making investments in the designated areas after the IRS made the Opportunity Zone rules even more businessfriendly in April. Ronald Fieldstone, one of the partners at Saul Ewing Arnstein & Lehr LLP, said there’s “tremendous opportunity” there. “For instance, the area extending

from the west side of Biscayne to the railroad tracks up to 36th Street is a booming Opportunity Zone. Most of Overtown is an Opportunity Zone, and you will see a lot of residential and multifamily development there. All of North Miami is an Opportunity Zone as well, and there is currently an almost 200-acre, mixed-use project being developed there.” North Miami Beach saw the biggest jump in Opportunity Zone investment, from $8 million to over $80 million. Some particularly high-profile Opportunity Zone projects include Turnberry Associates’ Aventura Mall and the Magic City Innovation District, the latter of which is a $1 billion mixed-use startup and entrepreneurial incubator in Little Haiti, led by Tony Cho and Bob Zangrillo. The Arts and Entertainment District is also a hot location for Opportunity Zone investment, with one property listed by Colliers International South Florida going for its $6 million asking price in record time. This is thanks to the District’s plentiful land and high-density zoning, with plenty of room for additional development. The biggest sale within an Opportunity Zone in MiamiDade so far was the $60 million deal for the former Archbishop Curley Notre Dame High School in Little Haiti, which was acquired by an heir to The Gap family fortune in November.

North Miami saw the biggest jump in Opportunity Zone investment, from $8 million to over $80 million.

Tax shelter Another salient effect of the tax law is that the rich are fleeing states with high income taxes, such as New York and California, and seeking tax shelter in South Florida cities such as Miami. Florida has no state income tax and a relatively low 2% property tax. This exodus was prompted by the Tax Cuts and Jobs Act’s new $10,000 cap on taxpayers’ state and local taxes (SALT) deductions on their federal taxable income beginning in 2018. “Last year, we created a campaign in specific states — California, New Jersey and New York — geared toward high net worth individuals, with the objective of getting them to move to Florida to decrease the amount of taxes they pay,” recounted Fulton Abraham Sanchez, president of FAS CPA & Consultants. “We try to create this awareness that Miami is a friendly place, especially for businesses, where an individual has ( )

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®

oundtable: Talking taxes

ECONOMY OVERVIEW

The Tax Cuts and Jobs Act was signed into law in December 2017. It was the broadest change to tax legislation since the 1986 Tax Reform Act. Invest: sat down with Miami’s top law and accounting firms to discuss the reform’s impact while also touching on technology and international investment.

Bobby Moore

Managing Partner Baker McKenzie

Has Baker McKenzie seen more more clarity around tax reform? Yes, we have gotten over 2,000 pages of regulations just in the past five months, so there’s an enormous amount of clarification. We are in the period where the Treasury has issued proposed regulations and has started issuing final regulations around the big key topics that affected the international side. Most of the final regulations related to tax reform should be out by June this year. What major impact are you seeing for your international clients? In Miami, we have seen the effects on inbound real estate structuring. Over the past year and a half, the corporate rate came down from 35% to 21%. As a result, many people that had complex flow-through structures designed to preserve their ability to take advantage of long-term capital gains rates while at the same time insulating themselves from U.S. estate tax now essentially can achieve both goals through a simple corporate structure since the corporate rate is now almost as low as the long-term capital gains rate for individuals and trusts. On the outbound side, especially for U.S. multinationals, many of the old strategies around foreign tax credit planning, loss planning and the like, have less importance compared to a renewed focus on non-U.S. local tax minimization. As a result, in the past year, I have a spent a lot of time on how to reduce the effective tax rate in typically high tax jurisdictions.

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Frank Rodriguez Managing Partner Shutts & Bowen

What effect has December’s tax reform had on the cross-border, high-net-worth clients you represent? There were some international components to that tax act; however, most of those components dealt with what we call outbound planning — U.S. persons who are investing in businesses or entities outside of the United States. There wasn’t a lot that affects inbound tax planning. There are some other provisions that have come out of the tax law that are now starting to gain steam. For instance, one has to do with Opportunity Zones. There are some tax provisions that allow for temporary and permanent deferral of gain on certain property located in designated Opportunity Zones, so this is an area where there’s a lot of interest. People are starting to form investment funds that will cater to that sort of business. There’s the low-income housing tax credit — code 42 — in the internal revenue code. The federal government allocates a certain amount of dollars in tax credits every year. Those go to the states based on state population. Then the state has a housing organization through which low-income housing developers apply for the credit, and the state awards those credits. Those developers then go out to the market to develop low-income housing. They have investors — normally financial institutions — that invest in partnerships for low-income housing credits, and those partnerships then distribute the credits to the investors. It’s a way for the government to subsidize low-income housing, and it’s all approved through a regulated process.


ECONOMY ROUNDTABLE ECONOMY OVERVIEW

Pedro Freyre Chair, International Practice Akerman, LLP

What opportunities does Miami offer as a location for law firms to operate? The core attraction of Miami is its fantastic geographic location and weather. Miami International Airport is one of our greatest assets. People love to have homes in Miami. Even after the financial crisis in 2008, Miami was able to emerge very quickly, and this was due in large part to the city’s international focus. How have you navigated the trend of international investors coming to Miami? Our firm’s international group counsels both inbound and outbound clients. There are three legs to the international stool: taxes, corporate and immigration. I have a lot of business out of Spain, and when I have conversations with clients there, the questions are always focused on those three things: How do I set up my corporation in Florida? What is the most efficient tax structure? And if I want to send folks over there, how do I do it? What are the immigration rules? From there you tap into other areas like real estate. What international trends do you see unforling? I think 2019 presents a number of opportunities and risks. Miami has also provided a refuge for people escaping from turmoil. There will be a lot happening in Latin America in 2019. I think Brazil, for instance, will now be more aligned with the U.S. from a business perspective, which would result in increased activity between the United States and Brazil. On the other hand, we might see some capital flight from Mexico.

David Appel Managing Partner Cherry Bekaert, LLP

How have your clients reacted to last year’s tax reform and how is Cherry Bekaert addressing those concerns? Most CPA firms will have a good year this year because of the tax reform. Our clients were excited because most of them are in the specific industries where they will benefit from the reduced rates. They were very excited about their reduced rates, but they don’t realize the amount of time and effort to determine how best to capitalize on that rate. Questions arise about “whether it is better to expense or depreciate an asset?” or “what happens if a business has multiple service lines within one organization – which of those lines qualifies for that reduced rate?” Due to these questions we have developed proprietary software that helps us answer those questions and that also gives us the ability to plan appropriately for them. How much of an emphasis should a firm like yours place on cybersecurity? Everybody’s going to get attacked, and it’s not a matter of if, it’s when. Any business needs to be proactive as opposed to reactive when it comes to cybersecurity. Unfortunately, it’s expensive to implement, and there are costs associated with hiring somebody from the outside to perform these assessments. However, it’s money well-spent because the loss of reputation or loss of someone’s personal data is much more costly. It does not take long after a company’s security has been breached before their customers or investors seek out new vendors.

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ECONOMY OVERVIEW

( ) no taxes at the personal level. We want to let everyone know that Miami is a great place to come when there are changes in the tax code that affect the rest of the country.”

international investors “are looking for a place to put capital outside of their home countries due to financial or political instability in those places. This influx is not only specific to Latin America but comes from Europe as well,” Carlos Perez-Abreu, president of the accounting firm PAAST, told Invest:. “Given the new tax law and Florida’s tax climate, I foresee this trend continuing.” Still, despite the area’s favorable tax, business and investment climate, it would be good to remember that, in the end, the area’s economic success will always depend on solid, local business fundamentals. “Focus on building substance first,” Nico Berardi, general partner of Magnetico Ventures, cautions entrepreneurs. “Everything else will follow.”

Miami, which has always been wellpositioned for the influx of foreign capital because of its location and international culture, also continues to attract foreign real estate buyers.

Looking ahead To establish a permanent residence in Florida, people are snapping up $10 million to $20 million Miami properties, spending at least 180 days out of the year here, obtaining a Florida driver’s license and complying with other legal requirements, all of which has been a massive boon for the Miami real estate market and the economy in general. Miami, which has always been well-positioned for the influx of foreign capital because of its location and international culture, also continues to attract foreign real estate buyers. These

From April through September of 2018, there was $942 million in real estate sales within Miami-Dade’s Opportunity Zones.

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Real Estate: Miami real estate remains an attractive market. Overseas buyers, mostly from Latin America, continue to flock to the city, scooping up luxury properties. Prices are maintaining their upward momentum and sales of single-family homes last year were the fourth-highest on record. But warning signs are starting to light up, which has some wondering if a pullback is on the horizon.

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REAL ESTATE OVERVIEW

Real Estate in numbers:

Source: Marcus & Millichap

44 | Invest: Miami 2019 | REAL ESTATE


REAL ESTATE OVERVIEW

Source:

Source: Marcus & Millichap www.capitalanalyticsassociates.com

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Strong momentum: Despite potential headwinds, the property market continues to outperform, with luxury sales to foreign buyers a key pillar What goes up eventually must come down, but for now, the Miami real estate market continues to climb. With the exception of a couple of monthly outliers, the luxury and residential segments remain robust, with multiple quarters of consecutive growth in 2018 and solid signals for 2019. Sales of single-family homes in Miami in 2018 were the fourth-most in county history, according to the Miami Association of Realtors. Sales rose 1.1% on year to total 12,931 homes. The association said lack of supply and higher interest rates had an impact on the overall figures. The luxury segment continued its stellar performance despite fears of saturation, soaring 16% over 2017. Sales volume for the year totaled $12.4 billion for all homes, a 10.7% increase. Monthly spikes throughout 2018 helped propel the yearly performance. For example, in April 2018, total sales volume for all property types in Miami saw a meteoric 17.8% increase, which amounts to $1.19 billion in real estate sales compared to $1.01 billion just one year earlier. The number of condo sales surged by 24%, and the dollar volume of those sales climbed by 40.8% (from $155 million to $565.4 million). That 46 | Invest: Miami 2019 | REAL ESTATE

helped propel the quarter to a 12.3% gain in the luxury segment. The year’s third quarter also posted an impressive 16.7% rise in condo transactions and a total 6,792 home sales, up 15.2%. The first months of 2019 suggest that fears of a broad retraction have yet to materialize, with Miami-Dade outpacing the rest of South Florida. But the results are so far uneven. Residential sales rebounded in March, climbing 7.6% over the previous year, boosted by a near 18% gain in condo sales. Although prices continue to rise, they are doing so at a slower rate. This followed less-hopeful figures in February when home sales dropped 3.6%. Condo sales were down 5.1% for the month. “We are seeing a lot of activity in the larger singlefamily homes, especially with people coming from places such as New York and establishing here as fulltime residents,” said Phil Gutman, managing broker at Brown Harris Stevens. “Those properties have picked up and are doing extremely well. At one point we weren’t really moving the large single-family homes and now we just hit several records in those types of properties. We just hit a sale for $26.5 million on ( )


REAL ESTATE INTERVIEW

In good shape From X Miami to Muse Residences, 2018 marked a milestone year for a growing property group

Ryan Shear Principal – Property Markets Group (PMG)

What have been some of the major highlights or milestones for Property Markets Group in Miami over the last 12 to 18 months? We opened X Miami in July of 2018. It was a big milestone for us because it is the first project of a larger platform we are working on. Thus far, it has been well received in the community. There is a wide range of people that live in the building, from millennials to baby boomers, but also, it has a unique design, operations and management that we incorporated. We also broke ground on X Las Olas just around 18 months ago. It is the largest project I have ever built with 1.2 million-gross square feet. We also closed Echo Brickell and Muse Residences Sunny Isles, which was a monumental milestone for us and is a unique and exclusive opportunity for only 68 buyers. We signed the Waldorf Astoria residences development as well, which is set to be the tallest building in Miami. We are aiming to launch the project in 2020. In general, it was a good year for us and we entered the rent-by-bedroom, co-living business in a very large way. What makes the X Social Communities concept unique for the South Florida market? It is a luxury apartment community concept with small units to make it more affordable. But it is still a class A project with excellent amenities and locations. It creates a social living experience, for example, X Miami building features a hotel-like public lobby, expansive pool deck and mezzanine, modern fitness facilities, club lounge, and coworking space. The amenities are designed to be interconnected so that the people are in the same space while doing different activities. Affordability

is a general issue across the country and we are trying to bring a solution with these types of projects. What is your overall outlook for Miami’s real estate market and Propery Markets Group in 2019 and beyond? We’re in a nice spot from all senses, and we have more activity and projects going on today than we ever had going on in the past fourteen years. We have more partners, more capital, more resources, better staff and everything is bigger and better at this moment in time. We are going to be in good shape, and we’re going to grow in Miami, South Florida and all the other markets where we operate.

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Gregory West CEO ZOM Living

The federal Tax Cuts and Jobs Act is attracting a lot of wealthy, out-of-state buyers to the South Florida Region. How do developers like ZOM Living work to navigate this type of wave? Individuals in this category are generally consumers of high-end housing who also relocate their business with some of their employees while also recruiting locally. As developers, we carefully watch what kind of companies choose to move to the city and exactly where in the city they decide to move. That way, we can work to create housing specifically designed for them. Another trend we have observed is the arrival of international developers from places such as Turkey, Russia and China to take advantage of capital flight. We are noticing that trend is most prevalent in the condominium market. People far and wide are recognizing that Miami has truly developed into a 24-hour global gateway city. What is your outlook for the development of Miami’s downtown corridor and the real estate market for 2019 and beyond? Something people are just starting to understand and appreciate is the fact that Downtown Miami has become a more significant part of the city’s identity than it has been historically. Miami’s downtown corridor has, over the past decade, evolved into a true hub of constant, 24-hour activity that is on par with similar hubs in other major cities around the globe. As such, it should come as no surprise that the real estate market there has seen a period of significant supply. We might have to deal with softness in the marketplace going into 2020, but I predict the market there will remain stable due to the fact that the downtown corridor has steadily and reliably absorbed product.

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( ) Palm Island. We hit another record in Coconut Grove for $19 million on Matheson Avenue. People are just finding that it’s more worthwhile to move here and save on taxes.” One notable trend from last years is the leveling off of new single-family home listings, which dropped 9.3% in April 2018 alone, indicating a housing shortage. This shortage is linked to numerous factors, particularly a dearth of qualified construction workers and an increase of high-earning professionals. With all of these factors at play, price increases have been steep and are likely to continue rising. The silver lining is that Downtown Miami remains an excellent place to rent, thanks in part to a spree of overbuilding of rental units that has resulted in a glut of supply and a renter’s market. Luxury, residential performance Among the hottest trends in Miami’s residential real estate market is the surge in luxury properties from some of the world’s premier architects. Miami is home to the Renzo Piano building, which is capped with a $68 million penthouse; the One Thousand Museum Residences, designed by Zaha Hadid, with units ranging from $5.8 million to $21 million; the Jean Nouvel-designed Monad Terrace, which will offer units between $1.7 million and $12 million. In addition to these high-profile projects, other notable architects working in Miami include Bjarke Ingels, Antonio Citterio, Rem Koolhaas, Piero Lissoni, and Richard Meier. As is usually the case with real estate, location is key. Miami boasts a climate and geography that makes it a magnet for premier architects and developers, as well as the wealthy clientele who desire luxury homes. Miami also still has enough room to build these ambitious projects. Another key element fueling the growth of the city’s luxury real estate segment is the EB-5 visa program. The EB-5 program provides a visa and green card to any foreign national who invests at least $500,000 in a U.S. project that promises to create at least 10 long-term jobs. Pre-purchasing a condo before construction is completed counts as an EB-5 investment. Overall, Miami’s housing market is valued at $864.2 billion, the fourth-most valuable in the country, as of 2017. Miami has experienced a steady increase in median sales prices of single-family homes over the past five years. Although prices leveled out at the end of 2018, the reality is still a market in which a shortage of homes has resulted in prices that most


REAL ESTATE OVERVIEW

Among the hottest trends in Miami’s residential real estate market is the surge in luxury properties.

people struggle to afford. Consequently, sales dropped off precipitously throughout 2018, to a five-year low of 2,692 in October 2018. In fact, properties in Miami stay on the market an average of 91 days compared to the national average of 43 days. In the first quarter of 2019, Miami also saw about 88% of homes sell only after the initial price was cut. Knock CEO Sean Black told Bloomberg, “This seems like an interesting telltale that the market is shifting in favor of buyers. Florida is a popular secondary home destination so it tends to drop faster in a downward market because it’s losing buyers, both domestically and internationally.

Everybody needs a primary home. Not everybody needs a second home.” Rentals For many Miami residents, renting is becoming a favored option. The number of rentals surged in 2018 and, after a brief dip in January 2019, reached a record high of 2,753 in March 2019. This amounts to a 68:1 renter-to-homeowner ratio in Miami, beating both New York and Los Angeles. Along with this uptick in demand for rentals comes a predictable increase in price, with the median rent in Miami climbing ( )


®

oundtable: Opportunity Zones

REAL ESTATE OVERVIEW

The tax reform introduced at the end of 2017 provided incentives for developing economically distressed communities, called Opportunity Zones, across the country’s cities. The goal is to fuel economic development and generate jobs within the zones. Miami has 67 such zones and Invest: asked business and political leaders what impact the zones will have and which neighborhoods are seeing the greatest demand.

Ronald Fieldstone

Partner Saul Ewing Arnstein & Lehr LLP

Which Miami-Dade Opportunity Zones are seeing the most demand for development? There are areas in Miami, particularly near Downtown, that are already being re-gentrified. As a result, there’s tremendous development and opportunity in the Opportunity Zone (OZ) areas. For instance, the area extending from the west side of Biscayne to the railroad tracks up to 36th Street is a booming Opportunity Zone. Most of Overtown is OZ, and you will see a lot of residential and multifamily development there. Local CRAs have supported development of the area through grants. All of North Miami is OZ as well, and there is an almost 200-acre, mixed-use project being developed there. What are the primary benefits of these zones? First, if you invest capital gains from the sale of any source — it could be real estate, stocks or business sales — that capital gains tax is deferred until Dec. 31, 2026. Second, if you keep the investment in the OZ for seven years, you get a 15% reduction in the tax. Third, if the deferral is done properly, the entire appreciation in the investment as a capital asset is tax-free and the term limit is 30 years. It’s called a “step-up in bases.” What efforts are being made to help those concerned about being displaced? I am taking part in an initiative where we’re working to approach high-end government officials to try to encourage them to get the government involved in providing necessary subsidies and services.

50 | Invest: Miami 2019 | REAL ESTATE

Oliver Gilbert

Mayor City of Miami Gardens

What is your outlook on the new federal Opportunity Zone legislation? I think it could be helpful. I like to focus on the contiguous zones, not necessarily the zones where the numbers are, but the zones associated with them. The reason why I focus on them is because a lot of times those zones usually have vacant property and large abandoned properties. They’re underpopulated areas, and it’s easy to develop. There is also the possibility for Opportunity Zones to be transformed. But as we go through different iterations of our Opportunity Zones and we change the law, one of the things we have to better understand is that we create opportunities for people not necessarily just in the area where they live, but in the areas that are close to them. Land availability is a major determining factor. What type of developments are creating the highest demand for the city? We need market rate condos and market rate rentals. On average, Miami Gardens has a higher home ownership rate than the county. However, we need to provide more options to young professionals who aren’t looking to buy homes. Going forward, we need that younger population as they transition out of market rate, rental apartments into condos, and later on into a single-family homes or townhouse. We also want to create a walkable environment, and look at our major commercial corridors to figure out how we can create an environment where people are not dependant on thier cars.


REAL ESTATE ROUNDTABLE REAL ESTATE OVERVIEW

Jennifer Wollmann

Commercial President Miami Association of Realtors

What is the significance of the Opportunity Zone legislation for Miami-Dade? Miami-Dade real estate has been on a tear for the last several years, yet certain areas have been bypassed by the growth. The Opportunity Zone designation is just going to jumpstart economic investment. For example, investment in Miami Gardens had been picking up recently and will probably accelerate with the Opportunity Zone designation. Eventually, economic development would have come to most of those areas since Miami is still drawing investment both from people and companies relocating from high income tax states as well as from international investors, but this legislation is making it happen much faster. Do you find that people are responding favorably? Yes, people are responding extremely favorably. It seems like every association and publication, including CRAs and cities, is putting on workshops to show what they’re doing to promote investment in the Opportunity Zones within their areas. Miami Gardens is a prime example. Even before the Opportunity Zone legislation, they’ve been doing multiple things to stimulate investments within their city. Some of the areas, such as North Miami Beach and Little Haiti, were hot spots in 2018. I think those are going to continue to draw interest with the Opportunity Zone designation. However, we are going to see more activity moving forward this year in areas that haven’t drawn as much interest such as Miami Gardens, Cutler Bay and Homestead where the land is a little cheaper.

Avra Jain

CEO The Vagabond Group

What have you observed regarding the Opportunity Zones legislation? I’m getting calls weekly regarding interest in the city’s Opportunity Zones (OZ). There’s a section of Biscayne Boulevard between Edgewater and Midtown that was designated as an OZ, and we’re already seeing the effects. Our group is working on our third project in the area. Miami has some of the best OZs because there are many areas close to the core of the city that are designated as OZ and the same cannot be said for cities like New York. Furthermore, the OZ zoning was determined using census data dating back to 2010, with now-trendy areas like Midtown being classified as disadvantaged based on that old data and yielding new development interest as a result. What makes the MiMo Biscayne Boulevard Historic District a prime location for your work? It’s the story. Miami is a relatively new city, but it still has a sense of place due to its roots, history and context. We focus on incorporating aspects of the past into our projects while also making them relevant for the future. Take the Vagabond, a motel built in 1953 in the Biscayne Boulevard/MiMo District, that we’ve converted into a boutique hotel. The hotel attracts a diverse clientele ranging from young people to corporate professionals. The history of MiMo is an integral part of Greater Miami’s history. I feel that many business leaders underestimate how much a sense of place matters to people. The success of the Vagabond and the MiMo District as a whole speaks to that.

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REAL ESTATE OVERVIEW

The 62-story One Thousand Museum skyscraper designed by Zaha Hadid topped out at 700 feet.

(

) to $1,183 in the first quarter of 2019. The founder of WeRentBrickell.com, Diego Valencia, affirms that the demand for rentals in Brickell has grown significantly in the last few years. “The addition of Brickell City Centre has made a lot of people want to move here. The area has grown tremendously in popularity, with both domestic and international clientele leading to rapid population growth and increased demand for rental units in Brickell and Downtown Miami,” said Valencia. Short-term rentals demand increased in 2018 as well. “I’ve watched these properties substantially increase in value,” Sean Greco, broker/owner of RE/MAX Paradise told Invest:. “Buildings that legally allow short-term rentals in the proper zoning are trading higher than buildings that don’t. The short-term rental submarket is huge.” he said. The overall average monthly rent for an apartment in Miami is $2,233, a 4.9% increase on the previous year, according to data from March 2019. A one-bedroom

on average rented for $1,893, up 3.16% from last year, while rent for a two-bedroom was an average $2,454, or 3.12% more than in 2018. A further indication of the demand for rentals in Miami is the city’s 2017 vacancy rate of 7.87% compared to the statewide rate of 9.16%, according to the latest data available. Commercial segment Miami is a powerhouse when it comes to commercial real estate. The city’s location on the Atlantic coast makes it a bustling node of trade and transportation between North, Central, and South America, and with Europe. A steady stream of positive returns also attracts domestic and international investors, ranking Miami 11th among top U.S. commercial real estate investment markets, according to HFF Securities. Vacancy rates for all types of commercial real estate are low in Miami. Office space boasts a vacancy rate of 8.6%, which is the highest among the different types of commercial real estate. Yet, demand for high-end ( )

Miami is a powerhouse when it comes to commercial real estate.

52 | Invest: Miami 2019 | REAL ESTATE


REAL ESTATE INTERVIEW

Patient approach How staying behind the demand curve proves a smart strategy

Stuart Wyllie President – Graham Companies

What are your plans for the AIG loan you received for refinancing properties in Miami Lakes? The proceeds of that loan will be used for various things, including a new residential development in the local town center that will consist of about 397 residential units, some retail and some office products. We recently completed two 40,000-square-foot industrial buildings, and we have plans to start a 220unit senior project out on the west side of Miami Lakes, on Graham Dairy Lake. The city has always waited until there was significant demand, and considering the shortage of land that we have in Dade County, we’re really constrained. The fact that we had some developable land in Dade County that we held for all of this time was useful, as demand became significant. How do you address the lack of developable land? Land availability is a major issue in Dade County, so we really need to encourage people to live where they work to get them off of the roads. I hope to see residential development added throughout the county while keeping that in mind. Miami Lakes was built with a work here, play here mentality. Kids can go to school here, and that keeps traffic off of the Palmetto Expressway and off of I-95. What are some of the community partnerships Graham has curated? We’re working with Miami Lakes to solve some traffic issues. We were able to go to the county and get some traffic impact fees that would otherwise be spent somewhere and redirect them toward several projects in Miami Lakes. That was an effort that took a lot of work and coordination between us, the town and the county. There are two projects that are on the drawing board now, one of which is a computerized

synchronization of all the traffic lights on 154th Street. Another project currently being pursued is the widening of Ludlam Road just south of the Palmetto. What role will Graham be playing in the development of the area outside the American Dream Mall project? We were approached by the Ghermezian family, who developed the Mall of America in Minnesota, about six years ago. They focused on a site for development for the American Dream Miami Mall, the majority of which was our property.They have approval for a 6-million-square-foot project on 174 acres that will be north of 180th Street, east of the turnpike and west of I-75. Our development will be immediately south of the mall.

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REAL ESTATE INTERVIEW

Relative rates How interest rates are likely going to move steadily higher, putting buyers and sellers on a different plane

Scott Lunine Vice President & Regional Manager – Marcus & Millichap sense right now, so you’ll likely see — at least in the short term — buyers and sellers on different planes. It’s going to take them a while to create equilibrium. My first real estate deal — a fourplex in California — was financed at 17.8%, so I laugh when people say that interest rates are high. Relatively speaking, they’re not high. They were just artificially low for five or six years. Furthermore, certain product types are going to be more affected by interest rates than others. High interest rates are not necessarily negative for multifamily projects, which are good inflation hedges. On the other hand, if you have a shopping center or an office building with long-term leases, things are going to be a bit tougher. Overall, I think rising interest rates are actually good for the market in terms of creating equilibrium.

What is your view of the current property market given the level of interest rates? If you look back at 2005 and 2006, which was arguably one of the hottest markets prior to 2008, interest rates were just as high, if not higher, than they are now. The problem is that a lot of investors are hoping for caprate compression instead of acquiring quality assets with good fundamentals. We’re going to have to start paying for some of these tax cuts, and we’re looking at inflation for the first time in 15 years. How do you see the interest rate environment playing out going forward? I think we’re going to see a steady increase in interest rates. Deals that made sense a year ago are not making 54 | Invest: Miami 2019 | REAL ESTATE

What advice do you have for people who want to invest in real estate? When I first moved to Florida in November of 2017, I’d go into client meetings saying, “I’m new to Miami, but if you’re thinking about selling your property in the next few years, I’d suggest not waiting too long because I don’t think you’re going to be in a better position than you are today.” The advice I’m giving people today is the same advice I gave people 15 years ago: When you’re looking at your real estate investments, there are three things I’d recommend. You need to figure out which properties you want to hold for 10 years or longer, get rid of underperforming properties or properties you don’t want to own for the long term and build a war chest to give yourself flexibility for acquiring assets. Put money away for any shifts in the economy. If you see any bargains out there, you want to be in a position where you have money to buy them.


REAL ESTATE OVERVIEW

( ) office space is increasing, with several new spaces opening, including 2 MiamiCentral, 3 MiamiCentral, Canal Park, Giralda Place-West Tower, and Sunset Office Center. The average asking rate for office space in Miami also is rising, but slowly enough to be considered stable at $35.65 per square foot. Finally, the annual net absorption rate of office space in Miami is holding at approximately 369,000 square feet. “We expect our corporate office, workplace, retail and healthcare sectors to expand rapidly throughout Miami and the Florida region,” said Nik Middleton, RIBA, Founder & Senior Partner / CEO of Cube3, an architecture and design firm. The industrial real estate market in Miami is a strong performer, with vacancy rates down to 4.2%, and declining. This drop in industrial vacancies can

be attributed to high-profile projects and move-ins. Asking rates for industrial property have climbed to $7.54 per square foot, and the rate is projected to continue increasing for the foreseeable future. The absorption rate of industrial real estate stands at 1.7 million square feet per year. Retail boasts the lowest vacancy rate, at 3.8%. Miami is a retail laboratory where the newest innovations in mixeduse development and hightech integration are being implemented to impressive effect. This cutting-edge retail environment has fueled retail growth in Miami, along with the city’s and the surrounding region’s large and diverse pool of consumers. As these factors drag vacancy rates down, they buoy asking rates, which have risen to $39.59 per square foot, a 15% yearon-year increase. The absorption rate is similarly ( )

The average asking rate for office space in Miami also is rising, but slowly enough to be considered stable at $35.65 per square foot.


REAL ESTATE INTERVIEW

Affordable crisis How the affordable housing crisis has made Miami the country’s No. 1 metro area for cost-burdened renters

Matthew Rieger President & CEO – Housing Trust Group

considering its connection to the Health District, Wynwood, the Design District and Edgewater. By building affordable housing in these markets, HTG is getting ahead of the curve. How has tax reform impacted the funding of affordable housing developments? Affordable housing properties are primarily financed with the low-income-housing tax credit. The Treasury Department allocates tax credits every year to the different states on a per-capita basis. States then create a qualified allocation plan (QAP), which the governor signs off on. Every year, developers such as myself compete for these tax credits, of which there are two types: 9% tax credits and 4% tax credits. For example, Princeton was financed with a 9% taxcredit equity, and most of the money that is used for building Princeton is tax-credit equity. The other How dire is Miami’s current need for affordable housing? Miami is currently in a crisis. The city is growing exponentially, but we are not keeping up with the need for affordable housing. According to a JCHS Harvard University study, 61% of Miami renters are currently cost-burdened when it comes to housing costs, meaning they are spending over 30% of their income on rent. This makes Miami the No. 1 large metro area in the country for cost-burdened renters. What areas of the city are currently prime for affordable housing development? With land development in the area moving north and west, Overtown is the next logical location, especially 56 | Invest: Miami 2019 | REAL ESTATE

side of the capital stack here is debt. Typically, on a 9% transaction you’ll have 80 to 90% of the money to build the property coming from equity and only 20 or 10% coming from debt. It’s almost the exact opposite of a typical market rate transaction structure, where about 20% to 25% is equity, meaning 70 to 75% is debt. On a 4% tax credit transaction, those tax credits are less valuable, as it makes up about 40% of the equity needed to build the development. With 40% tax credit equity, and 40% of funds coming from debt, I still have a 20% gap. That right there is exactly why we have an affordable housing crisis. We don’t have enough sources for financing to fill that 20% gap.


( ) substantial, with 55,000 square feet of space being absorbed per year. “In the last couple of years, we’ve had an enormous amount of very high-end retail built,” Jeff Robertson, senior vice president and managing director of Northmarq Capital told Invest:. “Miami supports retail better than any other area in Florida. I think that Miami’s retail is probably going to consistently be stronger than the majority of any other area in Florida will be. We have economic drivers down here,” Robertson said. Another reliable metric of a city’s commercial real estate performance is its unemployment rate; the more jobs, the greater the need for commercial space. In March 2019, Miami boasted a 3.4% unemployment rate after recovering from a peak of 13% in 2009 following the Great Recession. The U.S. unemployment rate stood at 3.8% in March and fell to 3.6% in April. A factor closely related to unemployment is population growth, which also helps stimulate an area’s economy. Miami is growing fast. It is the 40th fastest-growing city in the U.S. Its population increased 2.7% between 2016 and 2018. This is a long-established trend in Miami, where the population has expanded between 1.2% and 3.25% each year since 2010. The 2017 Tax Cuts and Jobs Act also provided tax breaks to investors who place their capital gains into funds that invest predominantly in low-income areas, or Opportunity Zones. “There is still a lot more to learn, but there is a lot of excitement around Opportunity Zones and a ton of capital has been raised,” the president and CEO of Metro 1, Tony Cho, told Invest:. “I am interested to see how the venture side of the Opportunity Zone legislation plays out. You can invest in businesses within Opportunity Zones, and if there’s a proper incentive mechanism to invest in these businesses — which are really the lifeblood of the community — that’s a great thing,” he said. By incentivizing investment in these specific areas, the law is expected to redistribute existing wealth among areas that desperately need it. There are 67 Opportunity Zones in Miami; if the program is successful, it will have a marked impact on the region. Miami-Dade trends South Florida in general, and Miami in particular, have long been enormously attractive to foreign investors. Miami edged out Los Angeles and Manhattan for the most international buyer transactions in 2017. Foreign money tends to land in South Florida for a number of reasons, including incentives like the

Edgardo Defortuna President & CEO Fortune International Group

Why are branded hotel development projects attracting so many buyers to Miami? Miami is considered the “branded” capital of the world. For instance, we are building the Ritz-Carlton residences, a residential project where the residents feel as if they are in a luxury hotel environment while still having an exclusive residence of their own. The concept really enhances the overall quality of life for the residents. Brands like Ritz Carlton have a unique understanding of how to manage and operate these types of service- and lifestyle-oriented properties, and the services they provide. Ritz-Carlton, for example, requires employees to take part in 120 hours of training each year. Many of the other new projects we are involved in are also focused on the overall experience and lifestyle. Prospective residents want to be able to feel like they are enjoying Miami without limitations. What is your general outlook regarding Miami’s real estate market for 2019? This year should be a solid and stable year for our market. I don’t foresee many new developers starting new projects. I do, however, foresee a lot of successful completions, and buyers are going to continue to be attracted to what is already in place or under construction. While there has been a lot of construction of new condominiums in the recent cycle since 2012, many of the buildings currently under construction or nearing completion are 80-100% pre-sold before a single shovel is put in the ground. However, overall I feel that the city’s market is in its infancy and still very attractive from a value perspective. The price of a luxury residence here is one-third that of New York or L.A., and the world has quickly caught on to this. My prediction for 2019 is that while there won’t be as many new residential projects launched on a regular basis, developers are going to start becoming more strategic regarding the timing and locations of new projects.

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REAL ESTATE OVERVIEW

Andrew Burnett Senior Principal – Stantec Architecture

According to our regional market study, around 20% of Florida’s population will be senior citizens by 2020 and 25.5% by 2040. We are trying to anticipate what that market is going to expect and what type of housing products we should have available to meet their needs. We are working on taking the concept of assisted living facilities and combining it with our experience in the hospitality, healthcare and high-end residential industries. Bringing those knowledge sectors together allows us to reshape how we approach the senior market and provide a more diversified product.

EB-5 visa program that affords foreign investors an opportunity to acquire a visa and green card through their investment, as well as the simple fact that Florida has ideal weather and a great location. “Miami has always been a great market to invest in, but it wasn’t until after the great recession that the city was designated by institutional investors as a first-tier market for investment. As such, I’ve observed more institutional buyers than private buyers coming to the city since,” said Hue Chen, president of Saglo Development.

Foreign investment has kept the luxury condo segment going to an extent, but that market has also shown signs of cooling.

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Given Florida’s geographic location, investment in the region has historically flowed from Central and South America. The rapid growth of the Chinese economy in the 21st century has also led to an increase in Chinese investment activity in the area. The No. 1 source of foreign investment in South Florida’s commercial real estate, however, is Canada. In 2017, Canadians invested $775.6 million in commercial real estate and by August 2018, the figure already totaled $389.3 million. This is an offshoot of Canadian investment in residential homes for the


REAL ESTATE OVERVIEW

winter. With many Canadians already living in the area for part of the year, real estate experts say it is only natural that Canadian commercial investment follows. Another important variable is the emergence of Canadian banks and businesses in South Florida, such as Natbank and Desjardins Bank, Bombardier, and Apotex. The presence of their local banks makes Canadians less hesitant to invest in real estate here. South American countries such as Argentina and Brazil that topped the charts for commercial real estate investment as little as five years ago, are now no longer even in the top five, a trend that is also evident in the residential market. Investments from South America has slowed as the spending power of investors from those countries decreases. Investors from South America and the Caribbean still made up 46% of foreign investors in South Florida’s residential property market in 2017, but Canada climbed to 19%. One of the main drivers of foreign investment in South Florida from Europe and Canada appears to be skyrocketing housing prices in cities like Toronto and Paris, from where much of the foreign investment is flowing.

many districts throughout the Miami region. Three neighborhoods stand out: prestigious Coconut Grove, East Edgewater, and Downtown Miami. One factor fueling the growth of Coconut Grove is the considerable rise in retail and office space in the area, which is making it possible for residents to live, work, and play without ever having to leave their community. “The entire retail and office landscape of Coconut Grove is being redeveloped,” Jay Parker, CEO of Douglas Elliman Real Estate told Invest:. “There’s a significant number of baby boomers who are living in large homes and are reaching a stage in life where relocation makes sense. This creates opportunities for new buyers and developers,” Parker said. In addition, CocoWalk is adding an openair plaza, as well as new stores and restaurants, to the longestablished shopping and dining center in another push toward a more walkable and interconnected community. However, prices are going up along with the neighborhood’s appeal, with properties that cost $800 per square foot in 2012 going for upwards of $1,200 per square foot in 2018. East Edgewater is another popular neighborhood, thanks in part to its proximity to both the Design District and Miami Beach. Similar to Coconut Grove, East Edgewater is seeing an uptick in new restaurants and shopping, which further adds to its appeal. How hot is the neighborhood? It includes the new Aria on the Bay, in which Grammy Award-winning producer

East Edgewater is seeing an uptick in new restaurants and shopping, which further adds to its appeal.

Hip neighborhoods In a city where the population is growing and investment is pouring in, hip neighborhoods will inevitably emerge. Millennials, transplants, and local professionals are all spurring the growth of

Marc Suarez Director – Hunt Real Estate Capital

Everyone is talking about Allapattah, “the next frontier.” I’m interested to see how the Allapattah story plays out because you’ve typically seen most of the growth come east of I-95, south of the 836. The dynamic of Wynwood and what made Wynwood attractive has become unaffordable for what started it, which was the local arts community. As a result, you’re seeing more affordable housing being developed in Allapattah, along with a migration of the art, culture and talent that can no longer afford to live in Wynwood.

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Market voices: Developing Miami

Alan Ojeda CEO Rilea Group

When an important area like Brickell still has empty pieces of property and pieces of land that are not well-utilized, as it does currently, that’s an indicator that we are still a young city that needs more development. The large amount of development taking place in Wynwood and the Design District calls for a connection between the two areas, which geographically will result in a more developed and connected downtown. People tend to confuse the condo market with the real estate market as a whole. Real estate is much bigger than condos, and there are many other types of real estate seeing high demand in these areas, ranging from apartments to hospitality to office buildings.

Over the last two years, we were able to invest nearly $100 million in land strategically located in what we believe will be primary areas for growth in Miami: the Miami River District, the Health District and the Design District. Miami has the second-largest Health District in the U.S. Despite this, I feel there’s a lack of medical offices in the city and thus there’s room to grow. There are many investors coming from New York and overseas, which provides opportunities as well as challenges, as this trend is bringing more sophistication into the market.

David Arditi

Principal & Co-Founder Aria Development Group

CEO, Managing Partner Black Salmon Capital, TSG Group

We will continue to see demand in regards to development for anything that’s oceanfront. The issue is it’s very hard to find sites that are available for development or available for development at a reasonable price. Too often we see sellers that have ambitions of evaluations that are unreasonable relative to construction costs and where the market needs to be to support the prices they are requesting. That being said, it continues to be an area that people love and will continue to pursue.

We’ll plan to start building a new attainable housing project in late summer 2019. There’s a lack of these types of projects in the area, and we look to fill that need. The apartments will feature high-end amenities, although 20% of the building will be comprised of attainable housing units. We want to bring an affordable option to the people of Miami, especially to those in need, so that they have the chance to have their own apartment. We’re very proud of this project, which will help the community as well as our local workforce.

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Jorge Escobar

Henry Torres

Founder, President & CEO Astor Companies


Timbaland bought a home. It also boasts a three-story penthouse priced at just under $13 million. One of the hottest neighborhoods in Miami is Downtown Miami itself. Like other modern downtown areas, Downtown Miami offers peerless walkability, with restaurants, bars, shopping, sports arenas, parks, numerous museums and other amenities. Not only is a car not required to get around downtown, but the Brightline train will now connect Downtown Miami to Fort Lauderdale and West Palm Beach, making it possible to enjoy those locations without having to drive. Downtown Miami is also linked to another transcendent neighborhood at its southern border: Brickell. The rapid evolution of this neighborhood has attracted some high-profile projects, including Canvas, a 37-story tower offering 513 fully finished apartments. Affordable housing One of the salient drawbacks to Miami’s hot housing market is the fact that housing is becoming more difficult for many people to afford. This problem is particularly acute in many of the up-and-coming neighborhoods, where longtime residents are being priced out through the process of gentrification. In response, the City Commission of Miami passed a measure in November 2018 that would require developers to set aside a certain proportion of units in new residential towers for low-income residents. This special “inclusionary zoning” will only apply to a limited area that sits east of Overtown and west of Northeast Second Avenue and the Arsht Center for the Performing Arts, but as the first such measure in Miami-Dade County, it will likely inspire more such rules throughout the region. The proposed zone covers 30 city blocks where high-rise construction is booming, and will therefore likely lead to thousands of new, affordable dwellings in relatively short order. Millennials Millennials, generally considered to be those people born between 1981-1996, are attracting attention when it comes to real estate for a number of reasons. First, there are a lot of them. In fact, millennials are projected to outnumber baby boomers before the end of 2019. This generation also comprises the largest proportion of the U.S. workforce, accounting for approximately 35% of all working Americans. Most importantly for the real estate market, this massive cohort of workingage people is finally beginning to buy homes after a long delay thanks to coming of age in a cataclysmic recession with an unprecedented amount of student

Rodrigo Azpurua CEO Riviera Point Invest + Develop

What is your view of the EB-5 program which has helped support the luxury property market in Miami? The EB-5 program has a few problems. The first is the lack of certainty. The program’s original expiration was in 2015, and since then it has been given short extensions of a year or less. We don’t know how long the current rules are going to last, which of course will make the program less popular. The processing time is the other issue. In 2011, our clients would file in February and get their green cards in August. Now, wait times can last up to two years, which has discouraged a lot of people. We still have international investors, but now they’re looking for the investment, not a green card. If they make the requirements tighter for the EB-5 program, it will be a good thing. There have been some bad apples in the program, which has caused problems for the rest. By adding more restrictions, the process can be smoother and cleaner. How are millennials influencing the hospitality segment? In the hospitality industry, everything is focused on millennials. That group is spending more and taking up rooms, so we need to satisfy their needs. We focus on hotel brands that focus on pleasing those millennial travelers. The experience of the hotel used to be a comfortable bed and a hot shower, but now it’s about the lifestyle. The decoration of the hotel needs to resemble the location. What trends are you observing in development of office buildings? Office users want to be in a sustainable, open space. Ten years ago, each person was allotted 250 square feet of room. Today, one person takes up about 120 square feet. Because of this trend, we need more parking than we used to, which is impacting development costs.

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REAL ESTATE OVERVIEW

Brickell City Centre is a $1.05 billion shopping and mixed-use project in Miami that spans up to five blocks west of Brickell Ave.

loan debt. Now that millennials are buying, real estate experts and investors are interested to see where they choose to do so. Miami appears to have made the cut for major millennial destinations. These young professionals are buying property in some of Miami’s most notable up-and-coming neighborhoods, including Brickell, Edgewater, Wynwood, Downtown Miami, Coconut Grove and Miami Beach. Many of these are the same neighborhoods listed as Miami’s hottest and fastestgrowing. That’s no coincidence – as millennials flock to these areas, they tend to bring about gentrification and a focus on mixed-use development and walkability.

Looking ahead The outlook for Miami’s real estate market is promising, but there are warning signs on the horizon. Miami has a low unemployment rate and a growing population, which have helped to lower vacancy rates across the board. However, positive growth in real estate has a flip side: scarcity. When there is not enough vacant property, prices tend to go up, which makes it even more difficult for people to enter the market. Foreign investment has kept the luxury condo segment going to an extent, but that market has also shown signs of cooling.

David Diestel Regional President, South – FirstService Residential

One significant trend we have seen is that existing communities are investing within themselves, thus driving up property values to stay current with new development in the market. Currently, we are overseeing more than 50 capital projects, representing more than $250 million in capital investments in existing communities, all within South Florida. More than half of that is in Miami-Dade County — roughly $150 million.

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Construction, Utilities & Environment: Residential development remains the top driver of construction in Miami, and there is no slowdown in sight. Foreign investors continue to see the city as a safe haven for their money, spurring a steady increase in additional development despite the apparent saturation of luxury condos. Construction of high-end units, priced at $1 million and above, generally slows as developers wait for the market to absorb existing properties. Yet, in 2018, seven high-profile condo projects broke ground or entered presale.

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CONSTRUCTION, UTILITIES & ENVIRONMENT OVERVIEW

Construction in numbers:

Source: Miami-Dade County Department of Regulatory & Economic Resources

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CONSTRUCTION, UTILITIES & ENVIRONMENT OVERVIEW

Source: Miami-Dade County Department of Regulatory & Economic Resources

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Building boom: Residential construction is set to show year-on-year growth with several notable projects underway Residential development remains the top driver of construction in Miami, and there is no slowdown in sight. Foreign investors continue to see the city as a safe haven for their money, spurring a steady increase in additional development despite the apparent saturation of luxury condos. Construction of high-end units, priced at $1 million and above, generally slows as developers wait for the market to absorb existing properties. Yet, in 2018, seven high-profile condo projects broke ground or entered presale. “Miami’s condo market is still strong, there is a shortage of high-end office product, and the demand for multi-family rental projects continues to increase. Whatever the particular mix is from year to year, construction activity in Miami looks to remain high for the foreseeable future,� said George Cuesta CFO of Cuesta Construction. The numbers speak for themselves: Market volume in the residential and commercial real estate segments grew to $8.4 billion and $3.2 billion in 2018, respectively, from $7.8 billion and $3.1 billion in 2017. Although commercial construction is projected to dip slightly in the next two years, residential could see growth of 19.4% 66 | Invest: Miami 2019 | CONSTRUCTION, UTILITIES & ENVIRONMENT

year over year in 2019 and 11.4% in 2020, according to project manager Cumming. Exceptional growth is also forecast for the infrastructure and public construction markets. Miami also placed among the top 10 U.S. metropolitan areas in 2018 for commercial and multifamily construction starts, according to Dodge Data & Analytics. Ranked by dollar amount, Miami was fourth at $8.2 billion, up 19% versus 2017. The data covers office buildings, stores, hotels, warehouses, commercial garages, and multifamily housing. Despite the overall positive landscape, there are pain points that need to be addressed; specifically, the lingering dearth of skilled construction workers. The employee pool has not yet recovered from the mass exodus of skilled labor in the wake of the 2007-09 Great Recession, and more than 90% of general contractors across the state of Florida are actively hiring. Ambitious development The shortage of skilled labor has not prevented developers from pushing forward with ambitious projects across the city. In addition to residential


CONSTRUCTION, UTILITIES & ENVIRONMENT OVERVIEW

At 85 stories, Florida East Coast Realty’s Panorama Tower is the tallest high-rise in Miami.

construction, a frenzy of infrastructure projects helped push market volume growth up 5.4% in 2018. This is projected to advance another 10% in 2019. Miami has seen a number of high-value, high-profile development projects over the last couple of years, among them: Hyperloop One, Miami to Orlando ($31.1 billion); SMART Rapid Transit Plan ($6 billion); Miami Herald Redevelopment ($3.1 billion); JW Marriott Marquis Miami ($1.5 billion); the Freedom Park MSL stadium ($1 billion); and the Magic City Innovation District ($1 billion). Furthermore, foreign investors are privately financing several big-budget developments, including 57 Ocean, Okan Tower and Monaco Yacht Club Residences.

Labor market Miami is enjoying a healthy employment environment. Since a 2009 peak of 12.4%, unemployment has steadily declined. In March 2019, the jobless rate in MiamiDade was 3.4%. The downside is that the labor pool is tighter. In the construction sector, this means fewer skilled workers available to fill open positions, which has sweeping effects on the sector’s productivity. “One of the main challenges in the construction and architecture industries is the scarcity of qualified talent. We take great care in selecting who is a member of our team and who we partner with in engineering and construction. We take good care in keeping those collaborations constant and continuous,” said Eduardo S. Egea, vice president and managing principal at LEO A DALY, an international planning, architecture, engineering, interior design, and program management firm. Some see the skills shortage lasting through the remainder of 2019 and into 2020. More than half of contractors are offering higher wages and more fringe incentives than ever before to entice skilled candidates back to a sector. Attempts are also being made to find other solutions, such as partnering with area colleges and universities, including Florida International University and Florida Atlantic University, to offer attractive programs that will lead to jobs in the construction sector upon graduation. Financing trends The oversupply of luxury condos in Miami has had a curious effect on financing trends in the city and the surrounding region. With enough luxury condo supply to last more than five years, many developers have cooled on new construction of such properties. However, Miami’s continuing reputation as a reliable place to invest has caused a number of foreign investors to pursue or provide financing for large luxury condo developments. For example, the Coto family of Argentina closed on a $200 million construction loan toward the end of 2018 to be used for the completion of the Aston Martin Residences. The 66-story, 391-unit waterfront tower will be located at 300 Biscayne Boulevard Way and will

With enough luxury condo supply to last more than five years, many developers have cooled on new construction for such properties.

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Wasim Shomar CEO The Lynx Companies

What are some challenges currently you identify that are facing the construction industry in Miami? One of the challenges facing construction is cost. When you negotiate your construction costs, it’s usually a year or more ahead of the actual implementation of the project. In that time, the cost of labor, materials and equipment can change, and tariffs can be implemented. There is also a huge demand for projects, so we are all competing for the same talent, and that comes with a cost. Miami is a conscious city that is prepared for what’s coming next. The beauty of that is we’re going to continue to grow in terms of population and maturity of our infrastructure, our buildings and our cultural and art places. We are seeing construction across the board. However, a challenge that comes with this growth is affordable housing. Land is becoming more and more scarce, and there’s a lot of demand because of our population growth. We have a demand, and we have a lot of foreign investment, and that raises the prices, which is good for the economy but makes it challenging for the people who live here. What are some of the driving factors for the population growth Miami is currently experiencing? More people are coming to live here, and our tourist numbers are increasing as well. Our universities are attracting more students, especially international students, and we are becoming one of the top cities in the world. Miami is being named alongside New York, London, Los Angeles and Tokyo. We have overcome the idea that we are just beaches and warm weather. We are showing people that we are an international city with opportunities in every sector and amazing arts and culture. This is a very exciting time for Miami.

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Although commercial construction is projected to dip slightly in the next two years, residential could see growth of 19.4% y/y.

offer units with price tags ranging from $800,000 to $50 million when it is completed in 2022. Another development financed by a South American interest is 57 Ocean, an 18-story, 81-unit luxury tower in Miami Beach. 57 Ocean is the third luxury condo development in Miami-Dade courtesy of Brazilian firm Multiplan Real Estate Asset Management. Then there is Okan Tower Miami, a mixed-use project that will bring condos, a hotel and ample retail space to the Downtown area. The ambitious project is the first U.S. development for Turkish firm Okan Development Group. Finally, there is the Monaco Yacht Club. The ritzy address will offer 39 fully finished waterfront units distributed among 11 floors. The project is being financed by Optimum Development USA, the Miami branch of Optimum Asset Management, which is based in Luxembourg. Residential shifts The construction of residential real estate in Miami is characterized by a perplexing trend: continued foreign investment in high-profile luxury condos despite a large surplus and a shortage of modest and affordable residential properties that contractors are having


Manny Varas President & CEO MV Group

trouble correcting due to a dearth of qualified labor. These factors can make Miami a somewhat tricky but still immensely profitable place to invest. As evidenced by the more than 24 cranes towering over the city’s skyline, there is still much being built to accommodate demand for housing in a constantly growing city. As developers step back from luxury condos while the market struggles to absorb more than five years’ worth of supply, mixed-use and transitoriented development is coming into favor. Developers are building to accommodate the increasing demand for walkable communities characterized by interwoven commercial and residential spaces that are in proximity to public transit, allowing residents to traverse the city and get back home with ease. One example is Giralda Place in Coral Gables, which will consist of 33 luxury condos and 100,000 square feet of commercial space. The project will also have easy access to Coral Gables’ trolley system, which, in addition to Uber and Lyft, has helped to lessen residents’ reliance on cars to get around Miami and enjoy all it has to offer. Giralda Place represents the possibility of overcoming the surplus of condos in Miami by pairing such residences with the kind of mixed-use offerings ( )

What types of construction projects are currently seeing the highest demand in the area? Branded development projects with fashion brands such as Giorgio Armani will continue to grow. These global brands understand what buyers are looking for, and they’re offering a high-quality product and service that’s extremely important to consumers. Buyers see the value of these types of projects. I see this trend growing for the next 20 to 40 years, particularly in Miami, where there are many second- and thirdhome buyers, people want to have the confidence and comfort of buying products from brands they know and recognize. We’ll see an increase in the values of those units as opposed to non-branded projects. What’s your outlook for the city’s condo market? Although there has been a slowdown within the condo market, I see the right projects and developments continuing to thrive. Buyers are taking their time to make better decisions, a process which often comes down to considering a project’s interiors ― our focal point. They’re seeking out developers with strong track records as well as the quality of interiors and finishes that they’re looking for and can count on. Projects such as Paramount Miami Worldcenter that emphasize interiors will continue to thrive. Investors who have become more sophisticated as a result of the internet as well as the amount of supply on the market will pose a challenge to more commercial developments, however. What is your outlook for the company in 2019? All of our departments are growing. This year, we’ll start working on Miami Worldcenter, where we’ll do all the interiors of the commercial spaces. That project will do very well. Because of their high demand in South Florida, our custom homes will continue to thrive, especially in the ultra-luxury waterfront market.

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Getting stronger How activity is gaining steam in the rail, transit and airport segments while challenges remain on the human talent front

Luis Lugo SVP/Regional Manager Southeast U.S. & Latin America – Hill International big market for us, and it’s a space in which we excel. Which areas of Miami are currently witnessing the most new construction and redevelopment projects? There is a lot of vertical construction in the City of Miami, specifically in the Brickell area. It hasn’t really slowed down, and there are many projects being planned. We are building office buildings, condominiums and apartments. There is a little less activity on the commercial real estate side, but there’s still a healthy mix. In the City of Coral Gables, there is a big, mixed-use development for the Agave Group in which we’re also involved.

Where are you currently seeing the most demand for construction in Miami? There’s a lot of construction activity around rail, transit and airports. Especially at Miami International Airport (MIA) and Fort Lauderdale International Airport, which will soon start major expansion and modernization projects. MIA is expected to release a procurement later this year for the next phase of their capital improvement program. The SMART program, which is part of Miami-Dade Transit, is expected to start picking up steam, too. And the Florida Department of Transportation is always a big spender when it comes to transportation, roads and bridges. We also do a lot of work with the hospitality industry. We’re building about a dozen hotels throughout the region. That’s a 72 | Invest: Miami 2019 | CONSTRUCTION, UTILITIES & ENVIRONMENT

What were some notable changes in Miami’s construction industry over the last few years? The volume of construction in South Florida has generated some challenges with hiring and retaining staff. There is a finite number of high-level superintendents and project managers, making them difficult to find. Hiring skilled labor is another problem, and the more construction we have, the more challenging that becomes. Whether you’re a designer, a builder or a project manager like Hill International, in the end we are all competing for similar resources. What is your outlook for Miami’s construction market in 2019 and 2020? A little slowdown is expected; however, construction is going to pick up in 2019 and continue to be strong. I see growth in aviation, rail and transit, as well as infrastructure projects such as roads and bridges. Florida’s population grows at about 3% per year, and as the community grows we need to maintain our transportation systems.


CONSTRUCTION, UTILITIES & ENVIRONMENT OVERVIEW

A related theme in new residential construction is demand for improved luxuries and amenities.

( ) that buyers are seeking. The unique accessibility, walkability and proximity to retail offerings of Giralda Place help to distinguish it from the rest of the condo inventory, and other developments that follow its model are likely to experience similar success among investors and homebuyers alike. A related theme in new residential construction is demand for improved luxuries and amenities. Consumers today are much more selective and demand luxurious and well-appointed units. Buyers want smart-home technology, the most advanced and stylish fixtures and spaces filled with accents and quality materials that give a home character. Developers who are willing to invest in such amenities in their new construction are much more likely to have success. Consumers also want developments that are transitoriented. This means mixed-use developments that are adjacent or very near to public transit stations and lines. The proximity to public transit reduces residents’

reliance on cars, which has positive impacts on the environment, traffic and the resident’s pocketbook. “Nowadays, it’s very common for young professionals living in Miami to not have a car,” said Tere Blanca, chairman and CEO of Blanca Commercial Real Estate. “The urbanization trend that’s happening in major cities around the country is happening here as well.” Blanca adds that geography plays a role. “Because our community is so spread out geographically, with the Everglades on one side and the ocean on the other, there’s a certain degree of constraint in terms of land. Because there’s still a lack of mass transit options to promote east-west connectivity, one can bet that over the next 10-20 years every municipality’s leaders will continue to try and make their own communities into more walkable urban centers.” Notable examples of transit-oriented developments that are planned or underway around Miami include the Downtown Dadeland mixed-use urban district; South

It’s very common for young professionals to not have a car.

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Miami Beach still attracts a wide variety of retail outlets to set up brick and mortar locations.

Miami station’s proposal for a Class-A office building along the South Dixie Highway, with ground-floor retail and a 99-unit residential building for University of Miami students; and a mixed-use urban hub at the Douglas Road station that would include 1,000 to 1,500 apartments and a 22-story, 280,000-square-foot office building with ground-floor retail. “The 3 MiamiCentral project was delivered in December 2017, and within six months we were 95% leased to Viacom, MTV Latin America, HNTB, Atlantic Pacific Communities and Brightline,” said Blanca, chairman and CEO of Blanca Commercial Real Estate. “The 2 MiamiCentral also was very quickly leased to 95%. 2 MiamiCentral tenants include Venevision International (Cisneros), Regus, Carlton Fields, Ernst + Young and Fortress. Both projects comprise a total of about 300,000 square feet. It’s certainly one of the areas in Miami that’s evolving faster than any other neighborhood, especially now that everyone’s experiencing the train and the station, and understanding what this kind of connectivity in Downtown Miami means for the community. Tenants have embraced it.” Commercial contraction 74 | Invest: Miami 2019 | CONSTRUCTION, UTILITIES & ENVIRONMENT

In terms of total market value, construction of commercial property has been contracting in recent years after spiking in 2016. In fact, commercial construction experienced a whopping 23.2% increase in market value in 2016, only to be followed by the much more modest 4.6% increase in 2017. In 2018, that figure fell further, to 1.9%. Growth is projected to be negative in 2019, down 0.9%. However, there is still a great deal of notable commercial construction taking place. “In Wynwood, RedSky Capital is developing creative Class A office projects such as Wynwood Cube, which leases two floors to Regus for its spaces concept,” said Blanca. “Other global companies are flocking to Wynwood driven by the neighborhood’s authenticity. What we have found is that, historically, office development follows residential construction in a big way, so now that residential offerings abound in Wynwood, employers are excited to have quality office space available. Employers are going to follow the workforce to attract and retain that talent. Another prime example is Optimum Group’s Class A office tower at 3480 Main Highway in Coconut Grove. The tower will offer 44,000 square feet of office space and a 6,500-square-foot ground-floor restaurant.


CONSTRUCTION, UTILITIES & ENVIRONMENT OVERVIEW

There will also be a rooftop bar offering panoramic views of Biscayne Bay and the Coconut Grove treetops. Moreover, there is a great deal of nonresidential construction taking place. Notably, infrastructure, healthcare and education building are all projected to experience positive market growth over the next two years. Infrastructure, in particular, is expected to see double-digit growth. The healthcare segment, in particular, is expected to see a strong rebound after declining in 2018, when market volume dropped 2.7%. It is forecast to grow 6.6% in 2019 and 6.3% in 2020. “We are seeing growth in healthcare, both in senior living and outpatient care. In several cases, we have been asked to design bed wings or patient rooms that can provide acute as well as intensive care. This type of layout allows healthcare facilities to have flexibility and adjust to the demand,” said LEO A DALY’s Egea. Other trends could spark more development, including in the restaurant sector. “There’s high demand in the restaurant industry,” says Michelle Gonzalez, broker/ owner at Floridian First Realty. “The Miami Modern (MiMo) area is continually growing and the whole Biscayne Corridor is changing because of its proximity to key areas such as the beach and the downtown. Downtown Miami is changing and re-shaping the neighborhood with trendy restaurant concepts such as juice bars and cafes, new hotels and breweries, and the revamping going on in the area will change

its look and feel. We’re a global city and will continue changing, but it’s important that the downtown flavor sets itself apart from the rest of the city.” Looking ahead Overall, the outlook for the construction sector in Miami is positive. Despite a saturation of luxury condos that the market is languidly absorbing, residential construction is set to show year-on-year growth thanks to continued foreign investment and demand for mixed-use development. Commercial construction is projected to slow in terms of market value over the next couple of years due to concerns over a potential recession, but there are still several notable projects underway or in the planning stage, indicating that while there is need for caution, there is still opportunity. Infrastructure remains one of the safest nonresidential construction sectors and is set to experience a 10% increase in market value in 2019. By far the greatest challenge faced by Miami’s construction sector is the ongoing shortage of skilled labor. Contractors are pulling out all the stops in an attempt to attract talented people with limited results. The wide variety of incentives offered, however, should eventually begin to revitalize the talent pool. Until then the labor shortage will act as the major impediment to a construction sector trying to keep pace with growing demand in Miami.

Miami is seeing high demand in the restaurant industry.


Balancing act: Community leaders eye sustainable improvements to ensure strong future Miami-Dade is wrestling with how to balance growth, build infrastructure and protect the quality of its air, oceans, wetlands, roads and beaches. Florida Gov. Ron DeSantis’ $2.5 billion environmental budget plan allocates $625 million annually for water resource protection and monies for the Everglades Agricultural Area Reservoir Project, Tamiami Trail, storm- and wastewater upgrades and other waterquality improvements. DeSantis also appointed a chief science officer to oversee environmental concerns. Solar solution Sunshine is one of Florida’s greatest commodities, so it’s no surprise that solar initiatives are playing a role in the region’s growth. Studies show a 70% rate of full or part sunshine in Miami, the highest for a major city in Florida, with an average of 249 days annually. In early 2019, Florida Power & Light (FPL) announced its 30-by-30 plan to install more than 30 million solar panels by 2030, making Florida a worldwide leader in solar energy production. FPL, in conjunction with NextEra Energy Resources, has aspirations to be the largest utility owner and operator of solar energy in 76 | Invest: Miami 2019 | CONSTRUCTION, UTILITIES & ENVIRONMENT

the country. The company, which operates 18 large solar power plants in the U.S., plans to generate more than 40% of its electricity emissions-free by 2030. In February, FPL brought its 450-acre, 300,000-panel Miami-Dade Solar Energy Center online. This is one of four new power plants the company has brought online in the past year. A collaborative effort between FPL and Miami-Dade County, the center is the largest solar installation ever built in South Florida. Each of the four plants cost an average of $103 million, and each site will generate 200 jobs, for a total of 800. The company also is readying its Solar Together project to offer South Floridians a way to subscribe to solar energy, earning solar credits that apply to their electric bills. In March 2019, FPL was ready to file a petition with state regulators to sell solar subscriptions. The new solar power would go to FPL’s grid. In another development, Miami-Dade set up a new solar co-op in January 2019. More than 1,200 homeowners in the county have already joined solar co-ops since their inception in mid-2017. FPL and Miami-Dade’s Tourism and Ports Committee have also reached an agreement for the installation, ( )


CONSTRUCTION, UTILITIES & ENVIRONMENT INTERVIEW

Powering ahead How Florida Power and Light Company is energizing Miami-Dade County

Eric Silagy President & CEO – Florida Power and Light Company (FPL) FPL recently brought its Miami-Dade Solar Energy Center online. What does this signify for the county? We were excited to welcome the FPL Miami-Dade Solar Energy Center to our solar portfolio earlier this year, encompassing about 300,000 solar panels over more than 450 acres. This is one step closer to our goal of adding more than 1 million solar panels in MiamiDade County – part of a partnership with the County that will continue to make Miami one of the best places to live, work and raise a family. We also have several solar installations at museums and parks around the County, including the Frost Museum, who is here with us today, Zoo Miami, Tropical Park – and we’re working on 10 additional parks across the County. What innovations have been made in FPL’s smart-grid technology usage? FPL continues to invested heavily in smart grid technology and hardening the grid to improve reliability for our customers while keeping bills among the lowest in the nation. The advanced smart grid technology and thousands of intelligent devices installed across the state help us monitor and manage the health of the energy grid, detect and prevent issues before they happen, and get life back to normal faster when outages do occur. We’re also integrating emerging technology, including small and large drones, robots and augmented reality, to help locate potential power issues and fix the problem before it affects our customers. These innovative investments improve service reliability for our customers while reducing operating costs and increasing efficiencies – which again, helps keep bills low. What is your outlook for local energy in 2019? FPL continues to move forward with a state-of-the-art

battery project in Wynwood, which we expect to be up and running later this year. The FPL Wynwood Energy Project will use cutting-edge battery technologies to enhance power reliability for thousands of customers in and around the Wynwood neighborhood today, as well as support the area’s continued growth. This project will also help us better understand how battery storage could transform the way high density, landlocked areas are powered in the future. We are also making progress on many of the exciting collaborations with Miami-Dade County planned for the next several years. Additional solar and battery storage projects are in development, including one battery project that would directly support the County’s Metrorail public transit system.

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Gilda Pereda President Emerald Construction

Where are you currently seeing the most demand? Miami-Dade has been still our strongest area of demand. Most of our clients are still moving forward with their hospitality, restaurant, self-storage and multifamily sector projects. The belief is that self-storage facilities were undersupplied in regard to increase population growth, and this would result in demand that propagates more self-storage. I believe this to be short-lived and would give it 2-3 more years before the market takes a drastic shift. Multifamily projects are also shifting. It’s going from traditional, Class-A rentals to projects that qualify for the Opportunity Zones. Hospitality seems is still strong South Florida marketplace as the comps have continued to increase.

( ) operation and maintenance of solar energy at Miami International Airport (MIA) through a nonexclusive license. FPL plans to unveil solar trees in mid-2019 in Miami’s Coral Gate Park as part of its SolarNow project. Throughout the year, a number of these solar trees and canopies will be unveiled in Miami. Environmentalists also hope to plant 1 million live trees through an environmental program called Street Tree Master Plan. The county has committed to planting 30% of the 1 million trees, with the rest coming from donations. Meanwhile, FPL is getting larger. In early 2019, FPL’s parent company, NextEra Energy, Inc., officially acquired Gulf Power from Atlanta-based Southern Company. The closing was part of a larger $6.5 billion deal. Gulf Power serves 450,000 customers in Florida’s Panhandle.

How is Emerald Construction using technology to it’s benefit? Our project management and accounting software is 100% cloud based, so that allows us to basically deploy in any location. It allows managers the ability to work in the field all day. Our field supervisors create their daily reports on our system throughout the day and upload photos on the fly. We’re also able to issue unlimited licenses to allow other outside team members, subcontractors, architects and even owners to go into our systems to see the documentation on the job. It encourages overall ease of team communication.

Turkey Point Amid concerns about saltwater leaking from the Turkey Point Nuclear Generating Station’s cooling canals into the adjacent Biscayne Aquifer, the Federal Emergency Management Agency (FEMA) conducted a Radiological Monitoring and Decontamination Drill at the facility. Environmentalists have been concerned about pollution from Turkey Plant seeping into Biscayne Bay for quite some time. In early 2019, Miami-Dade commissioners created the Biscayne Bay Task Force to help maintain the Biscayne Bay National Park. Biscayne Bay serves as South Florida’s largest source of drinking water. FPL is also working on modernizing Turkey Point. It hopes to add solar and battery storage near the nuclear plant to help create a diverse clean-energy complex. Miami-Dade and FPL have partnered to develop a system that would reuse county wastewater at Turkey Point, delivering up to 60 million gallons daily to a reclaimed-water facility where it would be cleaned further and reused at the power plant.

What is your outlook for construction in Miami? 2019 is going to be very similar to 2018 when it comes to revenue. There will be a significant impact to those companies that are dependent on very large projects as we won’t see many. Foreign interest will continue as well as the trend towards live-work-play developments. Too often in our industry we are our own worst enemies, we are surrounded by negative news, and we pray that nothing happens, but at the same time we secretly expect the worst.

Moving water Miami-Dade Mayor Carlos Gimenez has sounded the alarm about the danger of rising sea levels to countyowned property. In early 2019, he said that county leaders need to prepare for a two-foot sea level rise by 2060. Potential changes would impact roads, rivers and canals. Another goal is to move more water south in South Florida to Everglades National Park, alleviating concerns about high-water emergencies. The South ( )

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CONSTRUCTION, UTILITIES & ENVIRONMENT INTERVIEW

Strong energy How NextEra Energy’s acquisition of Florida City Gas is better addressing the needs of Miami-Dade residents and beyond

Carolyn Bermudez VP & General Manager – Florida City Gas

What were some of the highlights for Florida City Gas in 2018? Florida City Gas joined NextEra Energy, Inc., in July 2018. NextEra is a clean energy company widely recognized for its efforts in sustainability, ethics and diversity, and has been ranked No. 1 in the electric and gas utilities industry in Fortune’s 2019 list of “World’s Most Admired Companies.” We continue improving our gas delivery system with the Safety, Access and Facility Enhancement program, investing nearly $10 million in 2018 to replace and relocate older pipes with newer, technologically advanced, plastic pipes that have a longer useful life. Additionally, we’re excited to be part of the continuous growth in the use of Compressed Natural Gas for transportation. It will have a significant role in the reduction of the carbon footprint. How has the utilization of natural gas developed in Miami? As Miami-Dade’s communities continue to grow, and demand for natural gas service increases, Florida City Gas must meet our commitments to deliver clean, safe, reliable and affordable natural gas to our customers. We’re seeing some of the lowest prices for natural gas that we’ve ever seen, and because of that, natural gas is being used more often as a fuel source for the production of electricity by the utilities. We have more than a 100-year supply of natural gas, so with supply and demand being as high as they are, we remain optimistic about the price remaining consistently low. What’s more, natural gas also happens to be among the precious few commodities that have actually gone down in price. Due to the large supply available, natural gas has been decreasing in price for many years.

Are you looking at plans to expand your infrastructure to ensure accessibility to as many local communities as possible? We’re always looking for opportunities to expand. Growth in our residential and commercial segments has been driven by strong economic development in Florida, and we’ve expanded our infrastructure for the past five years in new areas such as Homestead, Brevard County and Vero Beach. Locally, many South Florida residents are considering switching to natural gas to power their lives. Florida City Gas is offering substantial rebates for residential and commercial customers who switch to natural gas or replace old natural gas appliances.

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CONSTRUCTION, UTILITIES & ENVIRONMENT OVERVIEW

Dionne Polite Director of State Operations – AARP

Here in Florida, there are 8 million Floridians that are over the age of 50, with AARP representing almost 3 million of those individuals. What it means is that we will see families of four, five or even six generations all existing at one time. That’s really important to take note of because each generation will have specific needs, and as Miami develops leaders must have a large focus on making sure that builders and developers address the needs of multigenerational families possibly living under the same roof. This is really going to change the country as a whole, not only Florida.

( ) Florida Water Management District (SFWMD) used controlled detonations in late 2018 to start redirecting water flow. SFWMD is also planning for potential water shortage conditions. FPL and Miami-Dade County are also working together to create an advanced reclaimed water system that would enable the reuse of up to 60 million gallons a day of wastewater that is currently being disposed of by the County in the Atlantic Ocean or through underground wells. “This state-of-the-art facility would be co-located with a large solar and battery

Source: Energy Information Administration, Electric Power Monthly

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storage plant and would have the ability to be further expanded so even more of Miami’s wastewater could be converted to clean, drinking-quality water and then be used to refresh and replenish the Everglades and Biscayne Bay,” Eric Silagy, president and CEO of FPL told Invest:. “In Miami-Dade in particular, it’s critical that we continue to support smart growth in the region in a comprehensive and forward-thinking manner through innovative projects like these,” he added. In 2018, SFWMD received an Environmental Excellence Award for its refurbishment project of


the Lainhart and Masten Dams. The $2.5 million project was designed to maintain the hydrology of the floodplain ecosystem. According to models, without the dams, upstream water levels would be about 1.5 feet lower, which would drain the freshwater swamp and allow saltwater intrusion. The Miami-Dade Water and Sewer Department (WASD), the largest water and sewer utility in the Southeast serving nearly 2.3 million residents, has begun a capital improvement project to upgrade water and sewer infrastructure in South Florida. This multibillion-dollar project will involve thousands of miles of pipes, pump stations and water and wastewater treatment plants, with work being conducted over the next two decades. WASD is in year four of the program, with 775 projects completed and another 861 in the planning or construction phase. In total, the project is expected to generate 17,000 new jobs and an economic output of about $24.9 billion over the next 10 years. Communications hub Miami is a hub for the IT and communications industry. One of its top assets is the NAP (Network Access Point) of the Americas data center, with highspeed connection for voice, data and video traffic. Equinix’s NAP is the primary network exchange between the U.S. and Latin America. Located in Downtown Miami, Equinix continues to expand its footprint and completed the first of two construction phases on the fifth floor of the NAP of the Americas in early 2019. The $60 million phase will add more than 1,000 cabinets and 4 megawatts of power. 5G technology will also be in the spotlight in 2019 as major wireless carriers start to roll out the service. While Miami is not on a confirmed list for any of these carriers, it was a test site for Verizon, leading many to hope 5G service is on its way. However, to support the technology, Miami-Dade will need to lay the groundwork, which means constructing a network of thousands of small cell towers. Looking ahead Although 2018 was a year of growth for Miami-Dade, the region’s future will depend on solid infrastructure. County and city governments, utility companies and environmentalists are all together to make modern, sustainable improvements and implementing reliable technological advancements to ensure a strong foundation for Miami’s emergence as a truly global city.

Mauricio Gonzalez President & CEO LEAD Engineering Contractors

How has LEAD Engineering Contractors helped address the transportation issue in Miami? Our No. 1 concern as a community should be transportation; investment in infrastructure is vital for maintaining the community’s growth. Our firm, LEAD Engineering Contractors, focuses on the transportation market, particularly heavy civil infrastructure projects. We were responsible for the reconstruction of the MacArthur Bridge to Miami Beach, as well as a few other projects throughout the city for the Department of Transportation and will continue to work with the county on infrastructure development. What are some of the ways Miami-Dade County is supporting infrastructure development? Nowadays, gas taxes are sufficient to sustain our investment infrastructure. User fees, or tolls, are what have been sustaining the reconstruction and safety improvements we have seen in the community over the last number of years. Another big component to improving our infrastructure is supplementing our road systems with sound public transportation programs. Miami-Dade County has been actively engaged with improving our transit, and Miami-Dade Department of Transportation and Public Works Director Alice Bravo has done a great job at promoting that. In addition, the Florida Department of Transportation just sent out a record amount of $10 million of construction money to the municipalities within the state. If one considers the fact that this area of development creates thousands of jobs both directly and indirectly, it’s a field people should look into for employment. The labor shortage in our industry is the No. 1 concern for all of us in the engineering business. With that being said, 2019-2020 looks like a very strong market, both in terms of vertical construction and heavy civil infrastructure construction.

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City of Miami: The City of Miami is an engine that powers much of the success in Miami-Dade County and throughout the state of Florida. The city is among the fastest-growing in the nation, and it’s projected to be home to 474,474 residents by July 1, 2019.

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Golden coast: The City of Miami is transforming its future with real estate projects, technology and major global events Miami is an engine that powers much of the success in Miami-Dade County and throughout the state of Florida. The city is among the fastest-growing in the nation, and it’s projected to be home to 474,474 residents by July 1, 2019, according to Population USA. The U.S. Census Bureau reported that Miami — the ‘Magic City’ — ranked 14th in population gains from 2015 to 2016, adding 12,715 people during that one-year period. According to USA Today, Florida was the top state in population gain from 2016 to 2017, reaching 21 million — making it the third-largest state in the country. The City of Miami attracts most of this gain, luring every type of visitor from air passengers and cruisegoers to those who are attracted by an ever-growing number of commercial and residential mixed-use developments as well as the irresistible appeal of its more traditional neighborhoods. And the city will be on the world stage again soon, as Super Bowl 2020 will be held on Feb. 2 at Miami Gardens’ Hard Rock Stadium, ensuring that Miami’s hotels, businesses and attractions will keep a good part of the expected $500 million economic windfall. 84 | Invest: Miami 2019 | CITY OF MIAMI

International and multicultural Miami is more than the sum of its parts. It is home to a population of almost 500,000 residents and the greatest number of international banks in the U.S. — banks that are doing robust business. Indeed, it’s considered the financial capital of Latin America. As, told Invest:, “We have made a huge investment in Miami these last two years,” said Fernando Beyruti, CEO of Itau Private Bank. “We brought in about $1.4 billion in net new assets last year, and this year we are expecting to bring $1.6 billion.” The city also has a wildly diverse population: about 58.6% of its people speak Spanish, according to DataUSA.io, a repository of public U.S. government data. A large segment of the population, some 16%, consists of people 68 years or older. But it is far from being a sleepy retirement city; it is vibrant, growing, high-tech and thoroughly unique. According to DataUSA, the city’s population is growing at a consistent rate — 1.8% annually from 2011 to 2019. During this time, it grew each year between 1% and 3%, adding between 4,673 and 12,715 people annually. Today, Miami’s metro area is the eighth largest in the ( )


CITY OF MIAMI INTERVIEW

New narrative Despite all the recent growth and development, Miami still has enormous growth potential

Francis Suarez Mayor – City of Miami

What should potential investors know before they move to Miami? Miami is a hotbed for entrepreneurism. According to the Kauffman Foundation, we’re No. 1 for startups. We are doing more to help startup businesses scale up, and we are a growing market and venture capital environment. We’re also emphasizing technology. Additionally, we have a significant amount of growth ahead of us; we are 90% underdeveloped according to our zoning code. At the same time, we’re making Miami the most resilient city on the planet when it comes to all types of shocks, thanks in large part to the Miami Forever General Obligation Bond program. Lastly, we had a 51-year low in homicides last year. It’s the safest time to be in Miami in my lifetime. What is the city’s top business goal for next year? My top goal is to continue changing the narrative around Miami. It’s not just a sun-and-fun place; it’s a vibrant city and a great place to start a business and really grow it. I think Miami’s already a not-so-wellkept secret. Just the fact that we’re one of the places where Amazon may build its second headquarters has put us on the technology map. We have to build on that and attract anchor tenants like Amazon. What would you say is your biggest challenge in the coming year? We have two challenges. One is that people counterbrand against us, meaning that they’ll go out and warn others in national publications to not invest in Miami because it’s going to be underwater. So we decided we were going to spend $200 million to make Miami the most resilient city on the planet when it comes to climate change and other ecological phenomena.

Where do you see the city going in the longer-term? Miami’s a different city than it was 15 years ago, and I don’t see the rate of change slowing down anytime soon. Thanks to the federal tax law, which is bringing a lot of investors from high-tax cities to Florida, a lot of that money is making its way down to Miami, with Opportunity Zones acting as a robust vehicle for investment. Is there anything else that you’d like to tell the leaders in business that read our publication? I don’t think there’s a better city on the planet. We’re creating the kind of place we’d like to be around for our children’s grandchildren. That’s why our theme is Miami Forever.

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Ken Russell Chairman Miami City Commission Chairman Omni Community Redevelopment Agency

What have been some highlights for the CRA over the last year? The big story for the Omni CRA is the turnaround that’s happened. Over the last three years, we have really fought to get back on track with the true mission of what the CRA stands for, and one of those big missions is historic preservation. The CRA took on a nearly million-dollar project in the Dorsey Library, which was an historic African American library that had been completely gutted, fully renovated and put it back in action as a resource for the community. The other historic preservation effort was the Citizens Bank building. We bought the 1920s structure for a little over $4 million and we’re investing a little over $4 million to bring the structure back to life. What has been the impact of your business incentive program? It has been great. There are 15 businesses we’re concentrating on, everything from co-working spaces to food and beverage establishments and restaurants. We’re helping them with everything from façade grants to equipment. This is bringing restaurants to this area that would not have come otherwise. It’s part of what’s sparking all of the activity that’s making this area a community and not just a place that people leave in the morning and don’t see again until nighttime. It’s bringing life back to the streets. Looking to the future, what is your outlook for your district in 2019? I want to see the quality of life of residents just keep improving. The CRA has the greatest concentration of homeless people in the city and county. We’re helping support the shelters that exist, and we’re working with a local shelter to offer those who live there a one-year job-training employment program. This is something I’d like to grow citywide.

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Miami’s Design District is home to over 130 art galleries, creative services, luxury fashion stores, cateries and more.

( ) U.S. in terms of population, and the City of Miami is home to some 466,000 residents. According to the most recent U.S. Census, 70% of the Miami population is Hispanic or Latino, giving the city’s culture a unique Latin flavor. But Miami is incredibly diverse, a fact that is immediately obvious to the casual visitor. Before land owners Julia Tuttle and William Brickell convinced industrialist Henry Flagler to extend his railroad to Miami — thereby turning South Florida into a tourist destination — Bahamians had already settled in the area. Indeed, of the 368 people who voted to incorporate Miami in the late 1800s, 162 were black, many of them Bahamian. Today, Little Havana, Little Haiti and West Coconut Grove (an enclave of Bahamian culture) are key starting points for discovering the global crossroads that the city has become. As much as Miami has thrived as an international city, it is also vulnerable to environmental hazards. Miami Mayor Francis Suarez is one of 28 government, business and community leaders named to the Global Commission on Adaptation — which is focused on addressing climate change and preparing a report for the 2019 United Nations Climate Change Summit. His role places the City of Miami front and center in efforts


CITY OF MIAMI OVERVIEW

and strategies to fight climate change. Enchanted history Miami is a multinational city, and you can see why by studying its origins. In the 1560s, Spanish explorers claimed the area for Spain. Tequesta and Seminole Indians were native to the area, and colonial struggles followed between Spain, Britain and the U.S. for hundreds of years. The Seminole Wars culminated in 1819, turning over ownership to the U.S. In 1896, the City of Miami was incorporated with a population of just over 300. The early 1900s brought substantial change to the area. The first mayor of Miami, John Lummus, was elected in 1915, and beginning around that time, many interesting and unique towns grew and prospered in Miami. The second-oldest continuously inhabited neighborhood of the Miami area after Coconut Grove, for example, is Overtown, a black community that bustled with business activity and is home to the famous Lyric Theatre (completed in 1913). Since its earliest days, Miami has been home to a large Jewish community, too, stretching back to 1565. Today, more than half a million Jews call South Florida

home. But perhaps the event that had the greatest impact on the City of Miami was the Communist revolution in Cuba. In 1959, after dictator Fidel Castro came to power in Cuba, many of that island nation’s citizens began pouring into Miami. In the 1960s, Little Havana, a focal point of Cuban social, cultural, and political activity just west of Miami’s downtown, was born, and the Latin influence in Miami has only grown since then; the most recent U.S. Census found that 35% of Miami’s population has Cuban roots. Every year, Carnaval Miami, held on the iconic Eighth Street, or Calle Ocho, celebrates the city’s Hispanic culture — and it has become the largest Hispanic festival in the nation. Building a resilient future The $400 million Miami Forever Bond initiative, approved by voters in 2017, is key to Miami’s future. Miami Forever aims to fund a series of projects in five categories focusing on the city’s most pressing needs: sea-level rise and flood prevention, roadways, parks and cultural facilities, public safety and affordable housing. The City of Miami kicked off the first of dozens of innovative Miami Forever infrastructure projects in

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CITY OF MIAMI OVERVIEW

2019, led by the city’s capital improvements office. The general obligation bonds enable Miami Mayor Francis Suarez and the city administration to tackle flooding and rising sea levels. This year, the city will spend $10 million on six pilot projects that will inform and lead the way to future expenditures. The Fairview Flood Mitigation Project, with its focus on reducing flooding in the low-lying Fair Isle neighborhood, is the first pilot project in the program and broke ground in early 2019. Overall, nearly $200 million of the Miami Forever Bond is dedicated to mitigating the impact of rising sea levels. At the kickoff of the Fairview project, Mayor Suarez underscored the critical goal of the Miami Forever Bond: to ensure that Miami remains a beautiful, livable city for future generations. It is fitting that the Fairview Flood Mitigation Project is the first in a series of similar projects. The early March groundbreaking will begin two phases of construction. Eventually, a drainage collection system, a stormwater pump station, drainage wells and backup generator will be installed. The Miami Forever Bond is structured as a $400

million obligation. The major priorities are $192 million allocated to flood prevention and sea level rise mitigation, $100 million for affordable housing and economic development, $78 million for parks and cultural facilities and $23 million for roadway improvements. A total of 48% of the bonds will be for climate resilience. The housing cutout will be focused on the Coconut Grove and Liberty City neighborhoods, officials said. For the parks segment, Miami is considering funding for the Underline (an urban, 10-mile linear park being built in phases under the elevated Metrorail) and a Miami River promenade. Building a better city for all The Omni Community Redevelopment Agency and the Southeast Overtown/Park West Community Redevelopment Agency (Miami CRAs) are citysanctioned organizations designed to redevelop neighborhoods and fund economic development programs in Miami’s urban core. The Miami CRAs’ goals are to diminish urban blight and re-establish regional cultures and entertainment hubs. They offer programs for both businesses and residences.


CITY OF MIAMI OVERVIEW

Andrew Hellinger Co-Founder, Principal – UrbanX Group

River Landing is a mixed-use multifamily residential, retail and office project being developed in Miami’s Health District. The area was overlooked for years as developers focused on the Brickell and Biscayne corridors, as well as the beaches. We felt that the area offered the opportunity to build density to a captive audience. There are 70,000 people who come to the Health District every day. There had been some multifamily development in the area previously, but it wasn’t integrated into a sense of community. By doing so we would encourage other developers to invest and further develop the area. We were able to convince big-box retailers that tend to gravitate toward suburbia to come into the urban core and pay rents worthy of being in the density of an urban core.

Opportunity zones are another key factor in the City of Miami’s financial future, pumping capital into locations that have redevelopment potential. Former Gov. Rick Scott designated 427 communities across Florida as low-tax Opportunity Zones. They enable investors to receive a multitude of tax incentives and benefits, including deferral of capital gains payments until the end of 2026. Plus, capital gains taxes can be reduced by as much as 15% or avoided altogether if the investments are held for at least 10 years. In Miami-Dade, The Beacon Council plans to be an active participant in the Opportunity Zones by marketing the specified areas. Michael Finney, CEO of The Beacon Council, said he is preparing a roadshow to promote the zones throughout the county. He has already been involved in several well-attended roundtables on Opportunity Zones.

are offering some 300 dockless rental scooters in the downtown, Brickell, Coconut Grove and Edgewater. The companies hope their product becomes a popular and affordable transportation alternative around the city. For those seeking another environmentally-friendly option, traveling by trolley is now another option in Miami. City of Miami commissioners have voted to try the CrossBay Express trolley service connecting Miami and Miami Beach. It will have a one-year test period and connect these two vibrant communities.

Reinforcing the concept of residential properties being located within walking distance of mass transit is the priority of the Transit Oriented Development projects.

New options for transportation Starting in April, electric scooters became available for rent in Miami as a part of a six-month trial program. Six scooter companies including Spin, Lime, Bird and Bolt

Real estate deals and developments Real estate projects are vital to Miami’s future growth. Miami Worldcenter is a major mixed-use development on the north side of downtown. It includes 1,875 residential units, 300,000 square feet of retail space, 500,000 square feet of office space, 500,000 square feet of exhibition footage and 2,050 hotel rooms. Miami Worldcenter occupies nearly 30 acres and is in the center of Downtown Miami. One exciting segment of the project is a 348-key

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citizenM hotel, only the third U.S. property for the Netherlands-based chain. The 12-story hotel will comprise 128,000 square feet, complete with a sun deck, swimming pool and rooftop bar. citizenM paid $10.75 million for the land parcel for the hotel. The hotel chain plans to break ground in 2019 in Miami’s Brickell financial district. Another feature of the multiuse project is the Paramount Miami Worldcenter high-rise tower in Downtown Miami. The 500 condos in the 55-story building range in price from $700,000 to $2 million. Reinforcing the concept of residential properties being located within walking distance of mass transit is the priority of the Transit Oriented Development (TODS) projects. The idea of Miami-Dade’s rezoning plan is to generate more residential developments along the six Strategic Miami Area Rapid Transit (SMART) Plan corridors. The goal is to generate more revenue from the transit tax zone, or locations within the zone near the SMART

corridors. It is projected that the transit tax zone could generate $1.8 billion during the next 30 years. As developers build more desired projects near public transit, the government receives more taxes in return. Not only is this a financial win, but the new zoning helps create more walkable neighborhoods near mass transit and helps revive urban areas. Another major mixed-use project is One River Point in Miami. It consists of two 65-story residential towers near the Brickell financial district. Construction is scheduled to begin this year, with 2022 as the expected completion date. One River Point is designed as a luxury mixed-use project, included in the fourth phase of the six-parcel Miami Riverfront development. The project is located near a rail hub, giving access to Downtown Miami. The complex, in addition to the residential condos, will also feature retail space, hotel suites, restaurants, a spa and other amenities.

As developers build more desired projects near public transit, the government receives more taxes in return.

The Little Haiti Cultural Complex hosts a variety of events throughout the year, with over 100,000 people visiting per year.

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Miami’s Brickell financial district was once like any financial district of any major city: a nighttime and weekend ghost town. But not anymore. In fact, this is an area geared to attract young professionals to luxury residences, restaurants, shops and other amenities. One recent article called Brickell the “coolest block” in Miami. Unbound Miami was held in late 2018 at the Mana Wynwood, located in the heart of Wynwood, Miami. This “innovation festival” features “future-focussed speakers,” grassroots technology and experts in fintech, artificial intelligence, eCommerce, robotics and other tech fields. Real estate challenges While the building of mixed-use projects is accelerating in Miami and new construction projects are seemingly planned everywhere, the 2019 outlook for real estate is a mixed picture. According to the Miami Association of Realtors (MIAMIRE), in the first quarter of 2019, Miami’s condo sales rose by 2.4%, home sales by 12.9% and single-family home sales by 2.1%. Reflecting all the new construction, Miami’s condo volume jumped by 40.8% year-over-year in 2018. There were more allcash transactions and Miami condo pending sales are up by 13.6% — suggesting a bright future. Total sales in Miami skyrocketed by 17.8% to $1.19 billion, and existing condo sales grew to $565.4 million. One factor in all this is Florida’s no-tax status. According to MIAMIRE’s June 2018 report, median single-family home prices increased from $335,000 to $355,000 over the previous year; and condominium prices rose by 2.1%, from $235,000 to $240,000. It was the 78th consecutive month of growth. Meanwhile, in historic Coconut Grove, town leaders have adopted a 10-year Master Implementation Plan managed by the Business Improvement District (BID). It was created in 2009 by property owners and merchants to maintain the special culture of the district, oversee the funding of its marketing projects and make capital improvements. The Grove BID does many things to keep this neighborhood looking great, from tree trimming to landscaping. The BID also plays an important role in keeping Coconut Grove in sparkling condition, drawing tourists and serving full-time residents. The neighborhood was founded by an eclectic mix of pioneers, artists, intellectuals and adventurers seeking a creative tropical lifestyle, and today it still offers an oasis from hectic city life. Coconut Grove offers boutiques, galleries and gourmet restaurants as

Cornelius Shiver Executive Director Southeast Overtown/ Park West Community Redevelopment Agency

What have been some of the major milestones for the CRA this year? I think one of the major highlights of the SEOPW CRA over the last year is the work that we have undertaken to extend the life of the SEOPW CRA. CRAs have a life expectancy, and currently ours sunsets in 2030. So we’re working to extend the life of the SEOPW CRA to 2042, and that’s very powerful because that gives the SEOPW CRA more time to carry out its mission of eliminating slum and blight and improving the quality of life for Overtown residents. What are the top goals of your CRA currently? One is to create jobs and job training opportunities, and to attract job generating projects; second is to create affordable housing; and third is fostering safe neighborhoods. If you concentrate just on affordable housing, without concentrating on job creation or training, then you’re building housing for others outside of the community. Currently the SEOPW CRA has 4,006 housing units in the pipeline, meaning we have 4,006 units that are planned, permitted, under construction and/or completed. What’s your biggest challenge in accomplishing this goal? Miami-Dade County is probably the least affordable county in the nation, and the challenge we have in Overtown is that while the median income in MiamiDade County is about $50,000 or more, the median income in Overtown is around $18,000. Our challenge is what is considered affordable in Miami-Dade County, is not considered affordable in Overtown. The reason why CRA’s are thought of as one of the most powerful community redevelopment tools is that we can develop an affordable housing strategy that includes Overtown residents.

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Kieran Bowers President Swire Properties Inc.

What valuable community partnerships has Swire cultivated, and how have they helped to further the company’s development goals in the area? The City of Miami has a strong vision of what it wants to be and where it is going. The county has also facilitated bringing our vision to life, and we are very grateful for their continued support. We work closely with commissioners and governing bodies, and we are hopeful that the SMART Plan will bring the concept of integrated public transport, so familiar in Asia, to Miami. We’ve also developed a strong partnership with the Underline, which is breaking ground just down the road. I sit on the board of that project, which will be transformational for the area and a huge asset to the city. What steps is Squire taking to further its commitment to diversity and inclusion? Diversity and inclusion are core values at Swire. Here in Miami, five out of seven of our executives are female. Our primary focus is on merit and on ascertaining the best candidate for the role. Miami is a huge melting pot of people originating from different countries. This is probably the city’s greatest strength. Our people are and will continue to be representative of that fact. What are some of the biggest challenges facing commercial real estate developers in Miami today? It is well known that the city is prone to climate-related issues. The city requires a very clear strategy on how it is going to tackle those issues going forward. That applies to the county, as well; all the individual parts need to fit together in one cohesive strategy. It’s something I feel should be front and center of the city’s plans going forward. The second are the city’s transportation issues, which the SMART Plan addresses.

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well as boats anchored in a majestic bay. BID seeks to keep it that way. All is not positive. Higher mortgage rates, reduced access to loans and mortgage financing red tape are all seen as factors. Another issue is that some Generation X homeowners, aged between 35 and 50, have not fully recovered from the 2008 market crash. In fact, a new Zillow report finds that 9.9% of Miami and Ft. Lauderdale homeowners with a mortgage still have negative equity in their homes. Yet, the report finds that Miami homeowners with mortgages are still doing better than the national average. And leading investors remain committed to Miami. Israeli American businessman Moishe Mana, the single largest landlord in Miami with some 45 properties on or near Flagler Street, has invested about $350 million in acquiring Downtown Miami real estate — and he is moving forward with an abundance of plans for Wynwood and Downtown Miami despite reservations about local fees and taxes. Miami’s health Miami is home to world-class healthcare organizations, most notably Jackson Memorial Hospital, the community’s public safety net hospital, located near downtown. JMH is a tertiary care teaching facility and the major teaching hospital of the University of Miami Leonard M. Miller School of Medicine. Jackson Memorial currently has about 1,550 licensed beds and is the center of a thriving medical center that includes the Miami VA Medical Center, the University of Miami Hospital (formerly Cedars of Lebanon Medical Center) and the University of Miami Miller School of Medicine, with its numerous research affiliates and laboratories — including the world-famous Miami Project to Cure Paralysis. At the University of Miami Diabetes Research Institute, scientists have been able to engineer “suicide genes” in order to safely grow insulin-producing beta cells from stem cells. The approach may help advance cell replacement therapies for Type 1 diabetes. The institute is world renowned and draws interest from an international community of scientists. If the clinical study is successful, it would have a far-reaching impact beyond diabetes alone, the institute said. The technology could also be tailored for heart or liver cells. Another major provider, Baptist Health South Florida, a faith-based, not-for-profit healthcare organization and clinical care network, operates seven hospitals, about 50 outpatient and urgent care centers,


CITY OF MIAMI OVERVIEW

Frederick Reinhardt Chairman & CEO – Brickell Bank

Technology in banking, in my view, is no longer back-office. It’s front-office. Technology and the ability for all generations to avail themselves of banking products and services on an iPhone in the blink of an eye — that’s a front-office matter. No longer does technology account for the operational side of a bank. The beauty about technology, at least for us, is that it puts Brickell Bank on a level playing field with the larger banks, and I think that is a real disruptor for the banking industry.

several community health programs. Meanwhile, over at the Nicklaus Children’s Hospital, a program offering free EKG testing to young athletes is making a difference. Since the program was founded in 2011, 14,466 EKGs have been administered and 627 have identified abnormal EKG readings. Nine interventions resulted from those abnormal readings, the Nicklaus Hospital reported. Arts and culture Miami’s international appeal is based on its active arts and culture community. Miami International University of Art & Design plays a big and creative part in maintaining that appeal, as does the New World

Marine life has long attracted people from all over to Miami.

School of the Arts (NWSA), which recently celebrated the Merce Cunningham centennial with its “Dances On Film Series.” This is a newly created series presented by Charles Atlas, who pioneered the art of choreography for the camera, along with Merce Cunningham. He worked with Cunningham from 1975 to 1981 and was a filmmaker-in-residence at the Cunningham Company. With support from the Merce Cunningham Trust, Merce’s work and ideas will be brought to Miami. NWSA is an educational partnership of Miami-Dade County Public Schools, Miami Dade College and the University of Florida. Every second Saturday of the month, the Wynwood Art Walk provides a stage for local Miami artists. Among many Art Week events held throughout Miami, Basel House held its annual Mural Festival in December. It involves viewing street murals by top street artists from around the world, displayed throughout the Wynwood Arts District. This is a free exhibit with 30,000 square feet of mural wall space. Activities include live painting, live music and mural tours. Other key cultural and entertainment draws in Miami include Museum Park, which is host to many large-scale events that attract as many as 45,000 people; the Arsht Center, one of the largest performing arts centers in the U.S.; the Phillip and Patricia Frost Museum of Science, a science museum, planetarium and aquarium; the Perez Art Museum Miami, a contemporary museum that houses a permanent collection of more than 1,800 works, particularly 20th- and 21st-century art from the Americas, Western Europe and Africa; and the annual Overtown Music

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Miami has the country’s third-tallest skyline, with over 300 highrises.

and Arts Festival, which often draws top, Grammywinning artists. Heading for the future To see what the future holds for the City of Miami, look no further than billionaire and entrepreneur Richard Branson, founder of the Virgin Group. Think of his planes (Virgin Air), trains (Virgin Trains USA) and cruise ships (Virgin Voyages) connecting the dots — Miami, Orlando, West Palm Beach and Tampa — and transforming the way Floridians live, work and play. A new terminal in PortMiami by 2021, an expansion of the state’s high-speed train line that will connect south Florida to Disney in Orlando and additional planes for international travel are all in the works.

Someday soon, passengers will be able to take a train from Disney to Downtown Miami and then PortMiami for a cruise; Branson has already secured funding for the expansion. Meanwhile, the Super Bowl returns to town in 2020, showcasing Miami on the world stage once again. But there will be much more to show off in the city’s future; with foreign investment continuously in play, Miami is positioned for a bright future. From innovative real estate projects to solid infrastructure developments, the city is well equipped to handle the pressures of today and the challenges of tomorrow. Coupled with ingenuity in both the public and private levels, the City of Miami continues to set the pace for Florida and beyond.


City of Doral: Located just outside some of Miami-Dade’s most vibrant and noteworthy municipalities, the City of Doral is minutes from Miami International Airport, major expressways and top natural attractions such as the Everglades and Miami Beach. With more than 64,000 residents, Doral is one of the fastest-growing cities in Florida, having seen its population almost triple since it was founded in 2003.

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Bright future: The city that began as a country club is one of the fastest-growing cities in the United States and a flourishing hub for business Located just outside some of Miami-Dade’s most vibrant and noteworthy municipalities, the City of Doral is minutes from Miami International Airport, major expressways and top natural attractions such as the Everglades and Miami Beach. With more than 64,000 residents, Doral is one of the fastest-growing cities in Florida, having seen its population almost triple since it was founded in 2003. It is also elevating the standards for modern Florida towns: Last year, it became the first city in the state to be inducted into the Global Cities Registry with a platinum certification by the World Council on City Data. The fact that it’s also investing heavily in several key areas — technology, infrastructure and housing — makes it an attractive home for young entrepreneurs and families, as well as established professionals. Today, its unemployment rate stands notably lower than the county average. And the growth continues: Doral is predicted to grow another 20% from 2018 to 2020, to 76,668 residents, accompanied by the continued, fast-paced construction of new homes. Much of this anticipated growth is due to the influx of immigrants from 96 | Invest: Miami 2019 | CITY OF DORAL

Venezuela. In 2017, 27,629 Venezuelans petitioned for citizenship and the number of Venezuelans in Miami continues to grow steadily. The rise in development has particularly impacted the demographics of Doral. Many Venezuelan immigrants are flocking to the city due to economic instability and have been since 2013. The investment in affordable housing is making it possible for many families to rebuild in Miami. In Doral, Venezuelans make up 32% of the Hispanic population. The rate of growth has caused some distress in terms of traffic and housing. Doral launched a public program to help new residents adjust to the cultural and economic differences in the U.S. and Venezuelan residents who have established their lives in Doral are helping to welcome recent immigrants and provide them with the support to transition smoothly. However, there is still much to do before Doral has the infrastructure to accommodate the fast pace of its own population growth. Country club dreams It all began with one man’s dream. Born in Poland, (

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CITY OF DORAL INTERVIEW

Innovative city Doral’s mayor sees business momentum continuing, but also a better quality of life and more connectivity for its residents

Juan Carlos Bermudez Mayor – City of Doral

What were some of the high points of 2018? The highlights included the continuous growth of Downtown Doral and the downtown overlay district; the voters’ approval of a $150 million park bond, which I think was a sign of confidence in our government; recognition at the national level by Money magazine, which named us one of the top 25 places to live; and being on Amazon’s top 20 list of places they’re considering for their second headquarters. So there were a lot of exciting things that happened in 2018 that demonstrated that the city’s on the right path to the right type of growth. To what do you attribute the city’s business growth? Well, I think the proximity to the airport obviously gives us a great advantage. We’re also a very diverse community and one that has very large corporations — Fortune 500 corporations such as Carnival, Univision, World Fuel and Perry Ellis. But we also have a lot of midsized businesses and startups. If you’re in South Florida and you’re looking for a place to start your business — whether you’re in logistics, technology or healthcare — one of the better, more central, reasonably-priced areas you should consider is Doral. Can you tell us about the city’s innovative transportation initiatives? Our trolley system is free and, besides going around the city, it now goes to Florida International University, and it connects to the Metro Rail as well as to the new county rapid bus transit depot by the Dolphin Mall. We also have FreeBee — the free ride-hailing service, which is sponsored by businesses in Downtown Doral. So we’re doing a lot of creative things. We’re doing our part to improve connectivity and public transportation, as our trolley is extensive and it’s ever-

growing. But the key to improving South Florida traffic in the long run will be for cities and counties to create better connectivity between them, which should start getting people out of their cars and onto public transportation. What are trends you’ve noticed in the local real estate? When we did our original master plan, we wanted to create more green spaces and parks; now we have world-class parks. We also wanted to make sure we had a balance between our residential, commercial and industrial areas, which allows us to keep taxes low and the quality of life high. We have that. When it comes to trends, the most obvious trend in Doral has been that incorporation has been good for our property values.

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Ana-Marie Codina Barlick CEO Codina Partners

What plans does Codina Partners have for Doral? When we complete Downtown Doral, it will make Doral a completely different place. There’s already a paradigm shift there; people are looking at it differently. Some of our tenants have mentioned that they feel a shift in how much small businesses, restaurants, tourists and content providers are all of a sudden paying attention to Doral and getting curious about what’s happening there. Doral and a part of western Miami-Dade County are underserved, and we want to bring more options to the area. People are looking for high-quality entertainment, dining, fitness, arts experiences and more. Right now they have to leave their city in order to access that. We’re filling a need that has existed for a very long time. What has been the economic impact of the Downtown Doral development? We’re just starting, and we’ve already had a tremendous economic impact. The number of housing units we’ve added — more than 1,000 — will triple by the time we’re finished, and their owners will all pay property taxes. There are also new commercial buildings, also paying property taxes. So I think what we’ve done to Doral’s tax base is enormous, and that’s just one aspect of the economic impact we’re having. Being able to keep discretionary spending dollars in Doral, as opposed to seeing the residents get in their cars and go spend them in Coral Gables, has been important as well. And that’s only going to get better as we open some of these other, more unique components and experiences we have planned. The economic impact of the jobs that we’re helping to create and the income streams that will be generated through property taxes will make a huge impact on the local economy.

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In January 2003, 85% of the voters in Doral voted in favor of incorporation, officially creating the City of Doral.

( ) developer Alfred Kaskel bought 2,400 acres of swampland just northwest of Miami’s airport in the late 1950s for about $49,000. His dream: To build a world-class golf course and hotel on the site. He and his wife, Doris, whose first names were combined into Doral, opened the Doral Country Club and Hotel in 1962, a highlight for the then-rural area that immediately began drawing visitors and eventually started drawing families looking to escape the bustle of Miami’s city life. Its first residential growth spurt began in the 1980s, when Doris’ and Alfred’s grandson Bill developed Doral Park with Lennar Homes, followed by his own Doral Estates. Both communities were named after the hotel, a trend that was to be repeated many more times. Still, the town remained mostly rural until 1985, when a building ban was lifted and the focus shifted from protecting farmland to providing better infrastructure for a small yet growing population. Incorporation efforts began in 1995 with the realization that residents were paying a very high price for services received, though it wasn’t until 2003 that residents finally got their way and established a city. In January of 2003, following a seven-year battle, 85% of the voters in Doral voted in favor of incorporation.


CITY OF DORAL OVERVIEW

Since electing its first mayor, Juan Carlos Bermudez, Doral has consistently attracted well-educated, highearning residents attracted by its appealing and often affordable developments, central location and growing economy. And the Doral Country Club, with its famous Blue Monster golf course, continues to draw visitors from around the world. Economic outlier

Today, Doral attracts Fortune 500 companies and thousands of new residents each year. The average age of a Doral resident is 34, and many have children since nearly 30% of the population is under the age of 19. Some twenty% of residents have earned graduate or professional degrees and 90% of the population is bilingual. These demographics help color in the picture of Doral as an excellent location for entrepreneurial and generally innovative people. “Doral is one of the best locations to live, work and play. It has the parks, restaurants and amenities, and it’s located between the major highways and near the airport,” said Rich Guertin, regional vice president of PS Business Parks, which owns Miami International Commerce Center, a 3.5 million square foot business park that is home to some 350 businesses in Doral. “A lot of major companies are headquartered in Doral, and many of the industrial players are located in the city as well. The government is very approachable and they understand business needs.” Between 2010 and 2013, the city saw exponential growth in both its population and its job market, and this growth is not anticipated to slow down anytime soon. Currently, Doral has a projected job growth of 6.51% between 2017 and 2022; and the city is on pace to reach this goal. One challenge Doral has faced is the lack of jobs offered to local residents when new businesses move in. International cruise giant Carnival is headquartered in Doral, as are many other large and well-known businesses, but many companies hire from out of state or out of the area. The city’s leadership is looking to address this issue and increase opportunities for Doral residents, therefore incentivizing new settlers. A new ordinance

Carlos Rodriguez CEO – Driftwood Acquisitions & Development

Doral is thriving with plenty of room to grow. The changes I’ve seen have been remarkable. The challenges on the development side have shifted to managing that growth, as it can take a long time for the city to issue permits. Building my first hotel in Doral took seven months from breaking ground to opening day. Now, one would be lucky to finish in 18 months. While the increased red tape due to the growth in Greater Miami is difficult, there are many positive attributes, making it a great place to live, work and invest!

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enacted last August, for example, requires certain businesses relocating to Doral to hold local job fairs; hire at least 10% of their on-site workforce locally; and award a certain percentage of their contracted services to Doral’s businesses. Whatever they’re doing seems to be working. In 2015, the city was named Florida’s No. 1 city for startups; and the same year NerdWallet named it the top place to invest in real estate in America. And the boom hasn’t ended. Real estate and upscale services in demand As one of the fastest-growing cities and top real estate markets in Florida, Doral is currently in a mad dash to increase both residential and commercial development. One of the reasons for its irresistible appeal is an average home price of $320,000 — less than half of that in nearby upscale neighborhoods such as Coral Gables and Coconut Grove. With the real estate market booming, more than 9,000 new residential homes and 2 million square feet of commercial land is approved to begin construction. Housing values have jumped dramatically — by more

than 60% between 2003 and 2013 — and will likely jump again through 2023. This extreme boost in property values, combined with a steady population growth and moderate prices-per-square foot placed it at the top of a 2013 list of Florida real estate markets. At the same time, the city is addressing the demand for multi-family and affordable housing options with the development of age-restricted condominiums, rentals, assisted living facilities and single family homes. This approach is informed by Doral’s unique position as a hotspot for young millennial-led families looking to establish roots and grow. Currently in the works are four new apartment complexes that include retail space for shopping and dining. Sanctuary at Doral will include 44 homes made for local, young professionals. In total, Doral is adding more than 1,800 new apartments to welcome potential residents looking for a less expensive way to enjoy the transformation of northwestern Miami-Dade county. Other communities under construction are Grand, Avalon and Landmark, which will include a mix of luxury and standard townhomes, rental apartments and lots of retail and dining space — more than 258,000


CITY OF DORAL OVERVIEW

square feet in current projects under construction. Doral’s city plan also includes a new downtown area, parks, shopping, dining and a new entertainment center, along with several residential communities surrounding the downtown. The hope is that it will attract more residents who want to live, work, learn and play in Doral. Another important aspect of Doral’s growth is its innovative approach to infrastructure development. The city is centering its approach on data-driven design that weaves AI technology with fiber optics and public service upgrades. Its Smart City roadmap aims to transform its digital infrastructure so as to create and support improved city services, including a network of apps that will include emergency alerts, transportation and parking help, and other local information. The plan will also integrate business services, fusing city resources and emerging technologies to support a growing community of tech-focused local businesses. Sustainable urban planning will also be improved with the utilization of geographic information systems that will be capable of mapping out regions of the city using layers of spatio-temporal information. The city also will introduce Smart Benches that feature USB device charging stations; and kiosks offering free Wi-Fi, local directories and the ability to contact emergency services. One of the most interesting infrastructure upgrades consist of selfmonitoring technologies that will report on buildings’ structural soundness, making it possible to diagnose potential issues ahead of time. Cars and trollies Doral is also the home of Collection Suites, a luxurious, high-tech complex where car collectors can safeguard and admire their prized vehicles. Featuring 38 private and innovative suites boasting a variety of upscale features, the suites can also be used as showrooms to house collections of art masterpieces or sophisticated wine cellars. “Doral is an excellent location for the complex due to its close proximity to Miami International Airport and several main highways, yet it remains far enough from the saline water that could potentially hurt the cars,” said Juan Manuel Fayen, Collection Suites’ founder. “It’s also only 25-30 minutes away from the hustle and bustle of downtown and Miami Beach, which means that people can travel to the city and pick up their cars on the way to the beach.” Several major roads in Doral are being widened in

The City of Doral hosts many family-friendly events, further encouraging a work, live, play environment.

order to alleviate the city’s traffic and make its central location even more ideal for businesses like Collection Suites; planned upgrades include the expansion of some two-lane roads into four-lane thoroughfares. Traffic is a major concern for everyone in MiamiDade, and Doral’s main road, NW 25th Street, has become a headache for anyone heading back and forth from work. City officials are working with the Florida Department of Transportation to divert traffic from this main route to alternate roads. Public transit plays a big part in Doral’s plan to mitigate roadway congestion, too. The aforementioned free trolley system is already in place and will be expanded; the system includes real-time tracking on a city app. Opportunities in healthcare With the anticipated arrival of 10,000 new residents during the last two years of the current decade, the city needs its own hospital. And it will finally get it in 2020: Miami’s Jackson Memorial Hospital is building the 100-bed Jackson West Hospital on the 27 acres it purchased in Doral for $38.5 million. ( )

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CITY OF DORAL INTERVIEW

Sailing ahead How Carnival is leading the way for the global cruise industry from its high-tech headquarters in Doral

Arnold Donald President & CEO – Carnival Corporation & plc

Operations Center in its Doral headquarters. This state-of-the-art monitoring and support center is the cruise industry’s largest and most advanced facility of its kind. We have immediate access to the status of our fleet and we can communicate with our ship teams. As needed, we can also collaborate on real-time decisions on a wide array of issues, ranging from up-to-theminute weather changes to engine performance to constantly updated sea conditions. It’s an exciting innovation and a part of our deep commitment to safety.

What have been some of the highlights for Carnival Corporation in Miami over the last year? We began our company in 1972 in Miami, and today Miami remains our world headquarters for both Carnival Corporation and our namesake brand, Carnival Cruise Line. That’s very fitting, as South Florida is the epicenter of the cruise industry. Overall, we’re a global enterprise, with 120,000 dedicated employees and nine world-leading cruise lines sailing our guests to more than 700 ports around the world. So while we have operations around the world, we’re proud to have such a major operation in Miami, one of the world’s most exciting and vibrant cities. In the past year, our Carnival Cruise Line brand opened a stunning, 35,000-square-foot Fleet 102 | Invest: Miami 2019 | CITY OF DORAL

How have you navigated the challenge of finding available local talent in the area? We’ve found that Miami and the greater South Florida region has a deep and talented pool of professionals across many industries. This is especially true of the tourism sector, which of course has always been such an integral part of the economy in our hometown. And on those occasions when a person who’s the right fit for an opportunity is from out of town, recruiting top talent to move to and live in Miami is an easy sell. The fact that we’re based in a great community such as Miami is a strong factor in our favor. Through our Carnival Foundation, we established the Carnival Gold Scholars program at the Chaplin School of Hospitality & Tourism Management at FIU. This program awards renewable full-tuition scholarships, including room and board, to five new qualifying students every year. We also created Carnival Bridge Scholars, an annual program that supports junior and senior students at FIU who are in jeopardy of not graduating due to financial constraints. The endowment enables them to complete their education.


( ) The site is slated to open in 2020 and is highly anticipated. Although Doral has many urgent care centers to serve its residents, the closest hospital is now more than seven miles away. The new hospital is also likely to bring many medical and other hospital jobs as well as opportunities for student learning. And, as the medical technology industry grows, Doral could be an excellent location to incubate more innovative technology in the healthcare field. Budding arts culture Doral isn’t neglecting the arts, either. The Doral Contemporary Art Museum is setting its sights on a grand entrance into the South Florida arts scene. Its first exhibit drew national attention. Marcelo LLobel, the creator of Concrete Space art gallery, launched a new art showcase in Doral to help inspire other local artists and grow the budding arts culture in the city. Art Industry Movement (AIM) brings together artists from Florida International University and the Greater Miami area. During 2018’s Art Basel, Doral revealed its unique Urban Art Project. Sponsored by Codina Partners, it featured artistic traffic signs that have found their permanent homes throughout Doral. The signs provide an inspiring and interactive, creative touch to the community. New educational resources Every self-sufficient community needs quality options for education at every level. Miami Dade College’s west campus in Doral features a School of Engineering and Technology where students can also benefit from many cultural events and special programs. Nearby Doral College is a newer, small arts college that offers college-level courses and certifications to high school students who need help transitioning into higher education. West Coast University is another small college ranked No. 18 among nursing schools in Florida by the South Florida Business Journal; and No. 47 in the country by ranking site Niche. It offers both professional degrees and quality medical training for students looking to enter the healthcare field. As Jackson Memorial expands its operations into Doral, it’s likely the two will work together to help students gain real-world experience and find job opportunities after graduation. Doral has a large stake in the current battle between

Joseph Roisman Executive Vice President Perry Ellis International

What are some of Perry Ellis’s efforts to recruit local talent? I’m on the executive board of the Miami-Dade Beacon Council, and one of the recruitment platforms that the Council has been working on for the last five or six years is the “One Community, One Goal” initiative. Some of the efforts support the local educational ecosystem and the creation of high-skilled, high-wage jobs in targeted industries. We are working closely with the presidents of local universities and colleges to make sure that what’s being taught in the academic institutions is applicable to the real world. We have numerous employees that started with us as interns and are working full-time now. We’re partnering with the colleges, and we go to career fairs to make sure that we recruit the right talent. How do trends like the growth in e-commerce affect Perry Ellis International? A lot of people are saying that brick-and-mortar stores have their days numbered, but I don’t think so. There are still going to be stores. A lot of consumers are buying more and more online because of the convenience it brings, so the percentage of online sales is increasing. However, many people like to see products and have the experience of going to the stores — especially when it comes to apparel. They like to try on the clothes, so there will always be people going to the mall. What are some leading innovations being rolled out by your brands? One of the innovations that we’re working on involves 3D technology. We are implementing 3D applications in design so that both our sales people and our customers can see a silhouette in 3D as opposed to 2D. This is extremely cost efficient and saves us the cost of samples. We’ve already implemented digital selling in several brands, and it has proven to be successful.

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CITY OF DORAL OVERVIEW

Miami-Dade public schools and charter schools over state-appointed funds. Doral is home to several large charters such as Downtown Doral, which has received an A rating for three consecutive school years; and Doral Academy Charter, which was ranked 18th in the state and 167th in the nation in 2018. The city’s public schools are also rated well; several received A ratings. Guarding against environmental forces South Florida is at a high risk for some serious environmental hazards, ranging from hurricanes, flooding and soil erosion to high water temperatures that lead to the formation of dangerous bacteria. To mitigate against some of these concerns, cities across the county are working to create floodproof buildings and stormproof infrastructures. Doral has created a strategic plan to address these threats to the community, including managing water in high-risk areas and identifying other dangers before they strike. The city is also positively impacting the environment by building more parks and walking trails, nature installations, community common spaces and

athletic complexes to provide its citizens with more competitive amenities. This is made possible in part by a $150 million bond that was approved by voters. Doral has also partnered with Millennia Atlantic University to create additional green areas for public use. Looking ahead Everything about Doral speaks to its positive and noteworthy trajectory as a forward-looking, fastgrowing city. In many ways, the city represents the future of South Florida and a model to be replicated. Now may be an excellent time to invest in this budding metro area, particularly as the entry price for residential and commercial property remains drastically lower than the county averages. For families considering a permanent home, there are plenty of options for housing and schooling, and as development continues, the job opportunities are also likely to increase as well. In addition, the town’s affordability, forward-looking planning and high-tech initiatives make Doral one of the state’s most innovative and attractive places to live.

Doral has created a strategic plan to address threats to the community, including managing water in high-risk areas and identifying other dangers before they strike.


Transportation, Infrastructure & Logistics: Miami-Dade has made myriad strategic investments in local transportation and infrastructure, from Miami International Airport’s cold-storage capabilities to the expansion and deepening of PortMiami. Officials throughout Miami are also continuing to address and improve the city’s traffic infrastructure while utilizing ride-sharing as a first- and last-mile link to public transit.

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TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

Transportation in numbers:

, ,

6,081,556 mi

Source: Tom Tom

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TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

Source: Tom Tom

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Connected future: Miami-Dade bolsters its reputation as a global gateway thanks to strategic investments in local transportation and infrastructure Miami continues to stay ahead of the growth curve by expanding and connecting infrastructure for air travel, cruises, international freight and “gold standard” highspeed rail. The city also is embracing sustainability and SMART options to meet its demanding mobility needs. In 2018, Miami International Airport (MIA) recorded a record 45+ million passengers — almost 1 million more than in 2017. Air freight jumped 2.7% to 2.3 million tons. PortMiami enjoyed a 4.7% increase in cruise passengers, to 5.6 million. Ocean shipping tonnage grew 5.8%. “Many people don’t recognize the contribution that Miami and the entire state of Florida make to the national economy,” said Bill Johnson, president of the World Strategic Forum, which unites top world leaders, economists and experts to address the central issues facing the world economy. “Florida is the most international of our 50 states and Miami-Dade County is truly an international global community. As a state, we’re blessed to have 15 seaports — more than any other state. We’re blessed with 19 commercial airports, including Miami International, which is one of the 108 | Invest: Miami 2019 | TRANSPORTATION, INFRASTRUCTURE & LOGISTICS

busiest international airports in the nation. Miami International and PortMiami are responsible for well over $90 billion in direct annual impact to the economy and hundreds of thousands of high-paying jobs.” U.S. Department of Commerce statistics show that in 2017, Miami was second only to New York in international port of entry arrivals. MIA was the busiest airport nationally for international freight and is the third-busiest in the United States for international passengers. All of this means more traffic and congestion for MIA, PortMiami (now home to 22 cruise lines and 55 ships) and Miami-Dade County’s myriad roads. To combat this increased congestion, Miami is reinvesting in its infrastructure to support a busier future. Tech transition MIA, PortMiami, and the transportation complex are transitioning to new technologies, including facial recognition, blockchain logistics, digital ledger technology, smart contracts and freight management. As a major port of entry for international visitors, Miami enjoys a booming freight business, especially


TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

from South American countries. The region is focused on integrating air travel, cruising, multicity rail and surface travel. Miami is host to a number of special conferences designed to educate aviation, freight and cruise line executives about the newest blockchain technologies. The result is an ability to handle more freight, move more passengers, re-engineer heavier vehicle traffic and strategically use high-speed rail to link Florida’s key cities and airports. In January 2019, Miami hosted the Foundation Supply Chain 2.0 Conference that detailed how blockchain and the Internet of Things (IoT) can be applied to real-world issues. Attending were executives from PortMiami, the City of Miami, the Miami-Dade Beacon Council and MIA. The Florida Blockchain Foundation hosted the Miami-Dade Beacon Council Trade and Logistics Committee. Flying high MIA’s passenger and freight count are both growing. In 2018, passenger traffic grew 2.21% to over 45 million, according to the Miami-Dade Aviation Department. Freight increased 2.71%, to more than 2.3 million

tons. Both international (+1.88%) and domestic air passenger totals (+2.52%) also rose. MIA is the thirdbusiest U.S. airport for international passengers and is first in international freight. Its economic impact on Miami-Dade County totals $30.9 billion in annual revenue. A transformative development at MIA was its designation as the first pharmaceutical freight hub in the United States by the Geneva-based International Air Transport Association. The airport has used the classification it achieved in 2015 as a “great marketing tool that allows us to brand ourselves as a viable pharma hub airport around the world,” according to the airport’s chief of marketing, Jimmy Nares. “It shows that we have the appropriate capabilities for handling pharmaceuticals, and helps us gain the confidence of global pharma shippers that want to know their products will be handled with the greatest care and expertise.” Last year, he said, the airport saw $4.6 billion worth of pharmaceutical products come through the airport, with the last two months of data for 2018 still pending. In other developments, four more international carriers will fly out of MIA in 2019: Norwegian, Royal

Miami International Airport is the third-busiest airport for international passengers and the first in international freight.

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TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

Air Maroc, LOT Polish Airlines and Corsair. In 2018, cargo carriers Southern Air, Ethiopian Airlines and Amazon Air launched services from MIA. New passenger airlines added were Air Italy, GOL of Brazil, Flair and Sunwing. American Airlines expanded its hub for both international and domestic air service. United Airlines began daily service to Washington Dulles, and Viva Air, an existing carrier, began flights to Santa Marta, Columbia. In June 2019, Corsair will launch four weekly flights to Paris. In February 2019, Lufthansa launched biometric facial recognition technology for exits at MIA, the airport’s first biometric exit system. Through a partnership with MIA, Lufthansa, U.S. Customs and Border Protection (CBP) and SITA, a global IT provider, a photograph taken at the airline’s boarding gate (initially on flights to Munich) will confirm the identities of passengers and their authorization to travel, resulting in improved accuracy and speed. Airport officials expect to see more facial recognition technology in the future.

tenants, saving time and costs for approved importers or exporters. The airport also introduced an expedited shipping service program by the Brazilian Post Office for international express global shipments to Brazil via Miami. The program, named Compra Fora (Buy Outside), is a first-of-its-kind international service that allows e-commerce packages of all sizes to be shipped to MIA. The packages are then pre-cleared by the Brazilian Post Office on site and arrive in Brazil as domestic cargo within days. Previously, this could take weeks or months. MIA was chosen by Brazil as its first partner in this expedited service because the airport ranks first for cargo flights to Brazil and maintains 38% share of the entire MIA-Brazil air trade market. Brazil generates more than 1.5 million travelers and $12 billion in cargo shipments annually through MIA. The program bodes well for MIA because global e-commerce totaled $2.29 trillion in 2017, according to researcher Statista, and is expected to double in the next four years. In Latin America, e-commerce is expected to reach $64.4 billion in 2019. Brazil accounted for 65% of the region’s e-commerce revenue in 2018. Another innovation is the first-ever ocean-to-air

In 2018, passenger traffic at MIA grew by more than 2% to over 45 million.

Air cargo MIA’s entire land parcel has been designated a foreign trade zone (FTZ) magnet site. This defers or eliminates airport tariffs for existing or prospective airport


TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

Aileen Boucle Executive Director – Miami-Dade Transportation Planning Organization

The Strategic Miami Area Rapid Transit (SMART) Plan includes six countywide rapid transit corridors. In 2018, the Miami-Dade TPO Governing Board made two critical project decisions by adopting a Locally Preferred Alternative (LPA) for the South Dade Transitway and North Corridor. The South Dade Transitway received $100 million in new State transportation funds to help advance the project. The North Corridor is proceeding with the environmental documentation process, and is being evaluated for the selection of the appropriate technology. The Beach, East-West and Kendall Corridors are anticipated to seek approval by the TPO Governing Board this year.

perishables shipment program, which enables speedy shipments of produce and other perishables arriving by sea to be trans-shipped by air via MIA. Customized Brokers received approval for the program, which calls for expedited processing of the ocean shipments before air departures. Already, several produce shipments from Latin America have been trucked from Port Everglades to MIA and then quickly dispatched to Europe and other destinations. Port of call MIA is also benefiting from the increase in PortMiami’s passenger count, ships, cruise lines, dominance in freight and trans-shipment of goods from ocean to air. Key to the port’s success are infrastructure improvements to relieve surface traffic and interconnect with rail. The PortMiami Tunnel (POMT), built by the State of Florida, Miami-Dade County and the City of Miami, steers close to 80% of port-generated vehicular traffic away from Downtown Miami streets. The On-Dock Intermodal Rail system connects the port with the national rail system, helping PortMiami freight reach 70% of continental U.S. markets within four days. PortMiami is reinforcing the success of MIA with its strongest year ever in 2018, handling 5,592,000 cruise

passengers during the 12-month period ending in September. That represented a 4.7% increase over the prior year. In cargo, PortMiami, during the same time period, grew 5.8% to 1,084,000 container cargo units (equivalent to 20-foot units or TEUs). For the fourth consecutive year, PortMiami surpassed the 1 million TEU mark and reached $24.3 billion in value. Helping drive the growth in freight was the Panama Canal expansion, which offers a deeper sea draft. On the cruise side, port officials cited added sailings, expansion of winter season cruises and the addition of three new cruise lines: Viking Ocean Cruises, Victory and Seabourn. In 2018, PortMiami had 22 cruise lines and 55 total cruise ships. Based on its growth, the port is reinvesting in the future. In September 2018, it received a $3.9 million FSTED (Florida Seaport Transportation and Economic Development Council) Program grant. The 50-50 grant forms a partnership between the state and its seaports. PortMiami contributes more than $43 billion annually to the local economy and supports 334,500 direct, indirect and induced jobs. The funding will be used for cruise terminal improvements, upgrades to existing facilities and berths and to help finance three new cruise terminals in the future. In 2018, in recognition of its growth and quality, ( )

PortMiami contributes more than $43 billion annually to the local economy.

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TRANSPORTATION, INFRASTRUCTURE & LOGISTICS INTERVIEW

Driving growth The provider of rental trucks and transportation management products says e-commerce will shape its future growth

Bob Brunn VP of Investor Relations, Corporate Strategy & Product Strategy– Ryder System, Inc. moving towards a semi-autonomous world that makes truck maintenance much more expensive and complicated. There are also severe labor shortages in the kinds of employees that we provide for customers, mainly professional drivers and trained vehicle service technicians. We have a large employee base of commercial drivers and maintenance technicians.

In what areas of service is Ryder seeing the most growth? One of the things we’re most excited about is that we’re seeing very strong growth across all of our contractual businesses, including commercial vehicle leasing, maintenance, driver management and supply chain logistics. Last year, we saw our highest rate of growth in the supply chain solutions segment of our offerings, such as warehouse management. Our fleet management business has also grown as the cost and operational complexity of vehicles have increased dramatically. This is partly due to mandated changes that include reducing truck pollutants and improving fuel efficiency, as well as additional safety technologies like lane departure warnings. We’re 112 | Invest: Miami 2019 | TRANSPORTATION, INFRASTRUCTURE & LOGISTICS

What impact does the rise of e-commerce have on the work you do? We’re enthusiastic about the growth of e-commerce and the opportunity that it provides for Ryder to help shape that market and drive it. We are establishing an infrastructure for e-fulfillment delivery, so if a large retailer or consumer goods company wants to sell products on its own website rather than through a third-party site, we will act as the fulfillment arm in delivering those products to the end consumer. We are initiating this with a network of three facilities in different parts of the country that will provide a two-day delivery window covering 95% of the U.S. Eventually, we’ll expand that and shorten the delivery time as well. That’s an exciting new opportunity for the company, and it’s a bit of a disruptor as it relates to how consumers buy goods in the e-commerce market. What is your outlook for Ryder, and Miami’s economy as a whole, in 2019? We have a positive economic outlook for Miami. The city has great transportation and infrastructure capabilities, given the port and airport, and it’s really a hub for distribution, particularly for the Caribbean and South America. We’re expecting another strong year of growth; in fact, we had the strongest January sales month we’ve ever had. And the trend of outsourcing transportation and logistics will continue.


TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

( ) PortMiami received Porthole Cruise Magazine’s award for best U.S. port for the second consecutive year. Additionally, ZIM Integrated Shipping Services selected PortMiami for its Canada Florida Express service (CFX). A new 1,300-TEU-capacity vessel makes a Kingston-Miami-Halifax-Kingston rotation. ZIM ranks among the world’s leading shipping carriers and operates a fleet of 80 ships. Running on rails As MIA and PortMiami grow, rail is vital to relieve road congestion and create links between West Palm Beach, Fort Lauderdale and the hub of Miami. A north segment might link West Palm Beach to Orlando in the future. A Tampa-Miami connection is anticipated. There has also been talk of eventually creating more connecting routes to the Treasure Coast and Jacksonville, with trains operating at speeds of up to 79 miles per hour. The big news in 2019 is the creation of Virgin Trains USA, a venture combining U.K.-based Virgin with Brightline. Virgin plans to leverage its international name in passenger rail to the downtowns of the cities along Brightline’s route. The strategic partnership and

trademark licensing agreement between Brightline and billionaire Sir Richard Branson’s Virgin Group could change the future of transportation in Miami and the rest of Florida. Virgin is not unknown to Florida. Virgin Atlantic airlines opened its Miami-London route in 1986 and Virgin Voyages will debut a cruise ship at PortMiami in 2020. A rebranded Virgin Trains USA had scheduled an IPO for early 2019 then canceled it. Initially, it was seeking to raise more than $500 million from the sale of 28 million shares at $17 to $19 apiece. The SEC filing, however, provided insight into the company’s plans, stating the net proceeds of $539 million were to be used to maintain existing service and add Orlando and Tampa extensions. The entity was also exploring $2.3 billion in debt financing, bridge loans and private placements, according to the SEC. The company said the availability of alternative financing had allowed it to remain private. Virgin Trains USA is designed to bring passengers from downtown to downtown and help Miami’s restaurants, art galleries and other attractions flourish. It would also ease road congestion. The project could


TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

be funded by bonds. Plans show that the company hopes to complete a rail corridor to Orlando within three years. In November 2018, Virgin Trains received State of Florida approval for a right-of-way for the proposed Tampa expansion. Virgin may have arrived just in time. Brightline, in its first 18 months, posted losses of $87 million on revenues of just $5 million. Yet South Florida businesses say this could be an eventual game changer for Miami and its surrounding urban centers. The new company is seen as the solution to completing Florida’s high-speed rail system. It is also eyeing a new line between Los Angeles and Las Vegas. In Florida, it hopes to deliver high-speed rail between West Palm Beach and Orlando International Airport by 2022. Virgin hopes to stabilize operations and improve ridership by 2023 or early 2024. It projects a passenger load of 6.6 million annually and 2.9 million additional passengers on the completed Orlando and Tampa extensions. In total it hopes to achieve $810 million in total annual revenue, including $697 million in ticket revenue alone by late 2023 or early 2024.

Downtown expansion The South Florida Regional Transportation Authority’s (SFRTA) Tri-Rail is scheduling a third-quarter or late-2019 opening for its first-ever Downtown Miami station. It will be offering passenger rail service that links its northernmost stations in Palm Beach County to Miami Central Station in the Government Center area. The nine-mile extension is known as the TriRail Downtown Miami Link (TRDML). It will offer a passenger connection between the South Florida Rail Corridor (SRC) at the territorial Metrorail Transfer Station to the Florida East Coast (FEC) railway sector into Downtown Miami, providing improved rail mobility in the South Florida region. The expansion would also open a larger labor force pool to employers. Partners have invested some $70 million to fund the Downtown Miami Link. A planned 26 daily Tri-Rail trips are expected to attract about 2,000 riders from Fort Lauderdale and West Palm Beach. Half of those riders are anticipated to be firsttime passengers, and a majority are expected to be Downtown Miami workers. The project has been delayed due to the installation


TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

Lorena Sandoval Director FCLA Cargo Sales – American Airlines Cargo

We are committed to meeting our customer’s expectations, and we continually evaluate to improve our service. Additionally, we continue expanding our network. In June, we’re adding a new flight from Miami to Cordoba, Argentina, which will represent new opportunity, not only for passengers, but for cargo as well. 2019 will be a more stable year with lots of opportunities for us to work on e-commerce and perishable demands.

of Positive Train Control, a federally required safety system. A new Tri-Rail station is being completed as part of the MiamiCentral complex and has a direct link to Metrorail and Metromover. Overall, the Downtown Miami Link is a segment of a larger transit-oriented development strategy. MiamiCentral is connected to other rail systems that bring passengers to Downtown from the county’s south side, and a Tri-Rail shuttle train is scheduled to run directly to the airport. CNG fleet Miami-Dade is replacing its aging fleet of Metrorail cars and is introducing new compressed natural gas (CNG) buses. Of the 136 railcars ordered, the Transportation Department said 56 are already here and 44 are in use. At its peak in February 2019, about half of the cars being run are new, it said. The remaining 80 railcars should arrive by spring 2020. Of the 300 CNG buses ordered from one manufacturer, 181 had arrived by early 2019 and 162 were already rolling. By September, the remainder is expected to arrive. Additionally, another manufacturer will begin delivering 120 CNG buses with five arriving weekly beginning in October. The new rolling stock is part of Miami-Dade County’s

Greenprint sustainability initiative to reduce fossil fuel consumption. The goal is to lower the county’s gasoline consumption by 30% and its diesel by 70% by 2028. Sharing economy One trend to watch is the impact of Uber, Lyft and other private ride-hailing services. Total ridership in Greater Miami has fallen on MetroBus, Metrorail and Metromover every year since 2014, the same year Uber arrived. In 2017, when the Uberpool option came into the market, drops in ridership accelerated. There was a 9.6% decline in 2017 as individuals and groups chose the private ride-hailing service over mass transit. Miami-Dade transit ridership has been down 19% since Uber arrived despite population growth. The transition from trains to scooters is quite a stretch, but in Miami all forms of transportation are part of a larger plan. The Miami City Commission has given the greenlight to a pilot one-year dockless motor scooter program, which includes the Brickell and Coconut Grove neighborhoods of Downtown. The scooters are designed to offer greater mobility to residents and fill in gaps in the public transit system. Both LimeBike and Bird initially marketed ( )

There was a 9.6% decline in public transit use in 2017 as individuals and groups chose private ride-hailing services over mass transit.

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oundtable: Transportation

TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

Miami-Dade officials and business executives have big plans and projects in the works that will change the way residents conduct business and lead their lives. And they’re optimistic about the local economy’s prospects for further growth.

Alice Bravo

Director Miami-Dade Department of Transportation & Public Works How has Brightline impacted the local transportation sector since its 2018 arrival? Brightline’s arrival on the scene got everybody talking about transportation, and I think that’s what ultimately led to all the momentum for the Strategic Miami Area Rapid Transit (SMART) Plan. The next thing that we’re working on is trying to figure out how to provide a commuter service on the Brightline corridor by having intermediate stations. We’ve been talking to Brightline about how to make that happen. We hope to have an official plan by next year. People have been talking about this corridor for over 30 years. The tracks are there, so we really want to take this to the finish line. What have been some of the highlights for the department’s work in 2018? We achieved very important milestones in implementing the SMART Plan. Technologies are changing a lot in terms of what’s going to happen with autonomous vehicles, so on the south corridor we’ve put in the very first batch of smart signals, which has helped us enable transit-signal priority for our buses, giving them faster passage through intersections. The 20 miles between Florida City and Dadeland, where the Metrorail begins, used to take the express bus 67 minutes, but with transit signal priority in place, we were able to reduce travel time by 25%. Technology is making a big difference, and it’s a lot quicker and less expensive to implement that technology than widen roads or alter the existing infrastructure.

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Juan Carlos Liscano

Vice President American Airlines Miami Hub

Tell us about American Airlines’ growth at Miami International Airport. How do your operations contribute to the local economy. When we established a hub here, we had 16 flights a day and 200 employees. Today, we’re at 369 flights and 13,000 employees. This makes American Airlines the third-largest private employer in South Florida. The city’s aviation sector contributes around $7 billion to the local economy. Miami is a center of aviation for many countries in the Caribbean and Latin America. How is the hub actively maintaining and strengthening the city’s ties to the Caribbean? There are a lot of markets in the Caribbean, and our reach there has been key to American Airlines’ growth here. The hub recently added a direct route to Georgetown, Guyana in addition to St. Vincent and the Grenadines. This year, we will also start direct flights to Santiago, Cuba. We have been flying to Cuba for quite some time, previously as a charter operation. What is the hub’s outlook for the local aviation sector in 2019? This past December, American Airlines had its busiest schedule ever. We broke our all-time daily record for passengers boarded, and we remain committed to continuing this growth in a very methodical way. Demand for travel continues to grow as economies flourish throughout the international regions we serve. Miami International Airport will continue to be a center of growth and of employment for years to come.


TRANSPORTATION, INFRASTRUCTURE & LOGISTICS ROUNDTABLE TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

Art Noriega

CEO Miami Parking Authority

Patrick Goddard President Brightline

What are some of the biggest challenges facing the Authority today? Technology is both the biggest challenge and opportunity for us. There has been so much disruption to our business, from ride-sharing to autonomous vehicles to the proliferation of parcel and food delivery. Technology is changing the way we are going to commute and how we obtain and acquire goods and services. We are already seeing the disruption in the way Amazon deploys delivery vehicles, for example, as well as the high number of people that use delivery apps. We’re adapting to those changes and taking these innovations into consideration when it comes to planning for the future.

Now that Brightline is operational in South Florida, what have been the most significant highlights? 2018 was a phenomenal year for Brightline. In January, we launched our business between West Palm and Fort Lauderdale. In May, we opened our downtown transit hub, MiamiCentral. We announced a trademark and licensing deal with the Virgin Group in November, and we have already started the brand transition process. Ridership has steadily increased since we opened. In the first quarter of 2019 we carried almost 250,000 guests. We recently completed the financing activities for our expansion to Orlando and expect to commence construction in mid-summer.

What were the highlights and significant pieces of legislation for the MPA in 2018? Earlier this year, the Miami City Commission approved a measure to raise parking rates for spots on the street and in city-owned garages. The additional revenue will be a great resource while providing us with borrowing flexibility. That was probably the most significant legislative news this year, but we’re always looking to do projects that promote economic development opportunities, whether they involve offices, retail or housing and construction. There is a huge need for workforce housing, and we are trying to facilitate these types of projects. Right now we’re building the Regatta Harbour garage in Coconut Grove, and our Coconut Grove Playhouse project is in the pre-development stage.

How has the South Florida region experienced change due to Brightline and what are your expectations for the future? There is a significant amount induced activity and development as a result of launching this convenient and reliable service. People are making different decisions about where they’re working, where they’re going to live, and which markets they are going to enter. We have started an important first step toward making South Florida a region rather than three individual cities. There is significant commercial, residential and retail development occurring around our three South Florida stations. As a result, the areas are becoming more urbanized, which makes it easier for people to move from county to county for business or leisure.

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Virgin MiamiCentral marks the first major transition to Virgin Trains USA.

( ) their fleets of dockless scooters to Miami neighborhoods in 2018 but removed them after receiving cease and desist letters from the city. Now under the new program, they can bring back the scooters. SMART transit Miami-Dade’s transportation board voted in 2018 on a Strategic Miami Area Rapid Transit (SMART) plan for South Dade. The board voted in favor of a 20-mile $243 million system of Bus Express Rapid Transit (BERT). County leaders project that this could be operating within three to four years and serve as a gold standard for bus rapid transit. BERT was selected over a $1.3 billion Metrorail project. The next step is to apply for a $100 million federal grant to cover much of the cost, with a state and county sales tax making up the difference. The SMART plan was launched in 2016, and MiamiDade now plans to spend some $15 million on studies through 2020. SMART offers a comprehensive plan of projects to address mobility needs, relieve congestion and provide future economic growth in Miami-Dade County. It focuses on new transit options in six transit corridors that today have limited mobility options.

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Transit-oriented development In early 2019, the Miami-Dade Board of County Commissioners approved zoning changes to allow for more urban development density along six SMART plan corridors. The goal is to stimulate more transitoriented development (TOD). The new zoning would allow developers to build mixed-use projects within one-quarter mile of the corridors. Commissioners hope TOD will result in more mass transit ridership and protection for sensitive lands, as well as incentivize state and federal transit funding. TOD reduces automobile use, resurrects older urban areas and creates more walkable neighborhoods near mass transit. To make all of this work, Miami rolled out a new Electronic Plan Review program in December 2018 to speed up permit approvals with the goal of stimulating faster development. The new program enables developers to move through multiple city departments simultaneously. This fast-track e-system also enables the city to electronically review and correct plans. Miami has spent roughly $7 million on overhauling its building department. Most funding was spent on software, hardware, IT consultants, licensing and permitting. Now ePlan permitting is cutting lead time.


TRANSPORTATION, INFRASTRUCTURE & LOGISTICS OVERVIEW

The Loop and the Underline Miami-Dade is making a commitment to responsible urban land use. In 2018, the county spent $24.6 million to purchase the land parcel needed for the 5.6mile Ludlum Trail. This urban trail was funded by a combination of Florida Department of Transportation (FDOT) grants and road impact fees. It represents a key part of a planned 225-mile trail network called the Miami Loop. The plan is for the Loop to eventually connect to the Underline, a 10-mile linear park located under Miami’s Metrorail that hopes to become a world-class urban trail and living art destination. The goal of the Underline is to turn the underutilized land under the Metrorail into 120 acres of open space to exercise, bike and run. Construction on the project started in late 2018. Its Phase One is projected to cost $16.5 million, with a target completion date of June 2020. The initial area is in the Brickell Backyard neighborhood, from the Miami River to Southwest 13th Street. Phase Two will cost $18 million and is in the pre-design planning stages, with a completion date yet to be announced. Costs for the other six phases will range from $6 million

to $26.5 million. Monies to fund it are being collected by Friends of the Underline, a nonprofit organization. The Miami-Dade County Commission will also vote in 2019 on legislation to preserve 2.76 acres of open waterfront land behind the American Airlines Arena. This represents one of the last remaining slivers of undeveloped waterfront land in Downtown Miami. Looking ahead While there have been monumental transportation advancements this year, much work remains to be done if Miami-Dade is going to achieve its longer-term transportation goals. One of the ongoing objectives, county leaders said, is to improve accessibility to healthcare, recreation, education, employment and cultural facilities — in other words, to continue building the connections that promise to make the greatest impact on peoples’ lives. To do that, officials aim to address the city’s traffic issues and improve its infrastructure, while encouraging the use of alternative modes of transportation. A quick perusal of ongoing transportation projects around Miami-Dade provides an intriguing and promising look into its future.


City of North Miami: Conveniently located between Miami and Fort Lauderdale, North Miami provides easy access to the best of South Florida in a suburban setting just 10 miles north of Downtown Miami. Besides its strategic location on Biscayne Bay, residents have easy access to the area’s international airports, bustling downtowns, PortMiami and the I-95 expressway.

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Revitalized city: North Miami blazes new trails in urban planning and environmental preservation Conveniently located between Miami and Fort Lauderdale, North Miami provides easy access to the best of South Florida in a suburban setting just 10 miles north of Downtown Miami. Besides its strategic location on Biscayne Bay, residents have easy access to the area’s international airports, bustling downtowns, PortMiami and the I-95 expressway. The fast-growing city is also the home to two prominent colleges, Florida International University and Johnson & Wales University, as well as Florida’s largest urban park, Oleta River State Park. And its rich and diverse culture is one of the city’s strongest selling points. The city is home to a large number of Haitian residents, along with many Cubans, Dominicans and Bahamians. One of the city’s up-and-coming, potential cultural hotspots will be the Chinatown Cultural Arts & Innovation District, the brainchild of North Miami’s District 4 councilman, Alix Desulme, Ed.D., with support from the city council. Development is slated to expand across 16 blocks of commercially-zoned land, replete with parks, green space, rooftop gardens and other amenities. There are also rumors of the possible 122 | Invest: Miami 2019 | CITY OF NORTH MIAMI

inclusion of an innovation incubator in the area — something that would entice researchers and other cutting-edge industries to invest in North Miami. Popular events in the city that highlight the area’s cultural diversity and energy include Black History Month, Haitian Heritage Month and Hispanic Heritage Month celebrations. The ever-popular Brewfest, which features more than 75 different craft brews, is a mainstay that draws in people from across the state at the start of November. As North Miami continues to grow, a renewed focus is being placed on policies and practices that foster further development and innovation. North Miami has benefited significantly from the federal Opportunity Zones program, as real estate developers and associated investors move into the area to take advantage of the perks. Rich history of growth North Miami has a rich history dating back to the 1800s. It was officially incorporated as the town of Miami Shores in February 1926, an event that was quickly followed by a bond issue that raised enough ( )


CITY OF NORTH MIAMI INTERVIEW

On the move North Miami is ‘open for business’ with a bright economic future that includes a big demographic shift

Dr. Smith Joseph Mayor – City of North Miami

What are some of the highlights from last year? One of the milestones is the rehabilitation of the Iron Manors Park. As you know, Iron Manors Fountain was built by our early settlers and has been designated a historic structure by the Miami-Dade County Historic Preservation Board. We’re very proud of that. Another highlight involves the Museum of Contemporary Art and MOCA Plaza. We recently completely renovated MOCA Plaza, which is a very beautiful sight now after going through some growing pains. Also worth mentioning is our Community Redevelopment Agency, which is very strong. We’re letting the business and the investment community know that North Miami is open for business. We’re changing people’s perception of what our city is and what it can become. We want North Miami to be a city where you can work, play, bring your family and conduct business. What are some real estate trends you’ve noticed, and what has led to these changes here? I see a lot of millennials moving to North Miami, and we hope to attract many more young people here. We’ve made the city more inviting to them. We realized millennials bring some very positive attributes to the table in the twenty-first century. It’s the century of technology, as you know. So, for example, I made our downtown revitalization concept plan a very, very important initiative during my tenure. And I’ve fought for projects that have made this happen. For example, there’s a new building being erected at the intersection of Northeast 9th Avenue and Northeast 138th Street which is going to be a mixed-use, live-work space blending residential, commercial and other things. We also have a resolution in our codes that states that whenever residential builders come in, they need to allocate a certain percentage of the space to affordable

housing. Some of these projects are going to come to fruition after I leave, but you asked me how these changes came about and I think it’s our behavior on the dias. What’s your vision for North Miami’s future? There has already been a 180-degree change in how the media perceives North Miami. And people are knocking on our doors. We are attracting interest and business from companies such as the Related Group, and even the Trump organization has reached out to us. Big companies are looking at us. And that’s because we’re pretty much telling those corporations that we want their business. We’ve changed our codes and our charter, creating new possibilities for North Miami.

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CITY OF NORTH MIAMI OVERVIEW

North Miami boasts many community events, furthering its attractiveness as a family-friendly suburb.

( ) money to pay for streets, sidewalks, a town hall and other basic utilities. Growth in the area blossomed after World War II as veterans and their families moved into the area. The 1950s were marked by rapid expansion. By 1951, North Miami had become one of the fastest-growing towns in the United States. Faced with a burgeoning population, citizens decided to usher in a new charter and new name (the City of North Miami) in 1952, setting on a path of growth and expansion which continues to the present day. Today, a trip through North Miami is a chance to see the largest concentration of midcentury modern buildings in the state, a bustling arts community, and beautiful, serene parks. The population of Greater Miami has been growing consistently at an average rate of almost 1.5% annually. This accompanies a business growth rate of 2%, which is more than twice the national average of 0.7%. With about 62,225 citizens as of the 2010 census, North Miami is the sixth-largest city in Miami-Dade County. North Miami maintains a diverse and varied population, too — roughly 60% is African American, a third of whom are of Haitian descent, and another third are white and/or Hispanic. Today, North Miami also has a variety of plans and initiatives designed to revitalize the area and strategically plan for the future. All major development concerning land in North Miami is governed by a comprehensive plan, and projects in the works generally revolve around neighborhood improvements, changes to public spaces and infrastructure improvements. 124 | Invest: Miami 2019 | CITY OF NORTH MIAMI

Among them is the construction of the Cagni Park North Athletic Complex. Urban planning One of the city’s most recent endeavors is the Downtown Revitalization Initiative, which aims to make architectural and urban design changes to North Miami’s downtown and the area along Northeast 125th Street, its principal urban corridor. Planning based on the initiative has emphasized the building of outdoor dining opportunities and landscaping in and around the urban core of North Miami. The new plans will only add to a popular and bustling downtown filled with restaurants and nightlife options, even as the general culture of the city maintains its appeal to those looking for an attractive and affordable home base away from central Miami. Indeed, North Miami is increasingly popular among those looking for inexpensive housing and rentals, since prices there are vastly lower than what’s available near the center of Miami. As the city continues to add to and enhance its parks and open spaces, city employees have an attractive incentive to get out and explore. NoMi Wellness Circle is the wellness program for city employees. The program offers education (lunch and learns), physical activities such as yoga, Zumba, power walking, bike rides, weight training, and challenges (weight loss, A1C), This, combined with other morale-boosting activities, provides a more positive and healthier workplace, which in turn leads to better customer


service and more productivity. The growth of the city has led to passionate and focused discussions about transportation-oriented developments, too. These plans revolve around the idea of placing high-density developments around transit stations, with the long-term goal of increasing pedestrian activity and cutting down on car ownership and use. In coordination with various State agencies, the city has embarked on various pedestrian and bicycle friendly projects focused on reducing congestion in North Miami while moving in this direction. Real estate surge Housing development in the city is expected to be heavily impacted by the continued development of SoLe Mia, an ambitious 184-acre mini-city right on Biscayne Boulevard. In January, developers began leasing twin 17-story apartment towers called The Shoreline with 397 rental units, ranging from studio apartments to three-bedroom penthouses. SoLe Mia has made headlines for its variety of extravagant features, including South Florida’s first man-made lagoon, a seven-acre blue pool and an exclusive island for the mini-city. Developers said the new rental units and the construction of several stores are the first steps of the $4 billion development, which will take about 10 years to complete and eventually include 500,000+ square feet of office space, a school and enough property for 4,000 residents to enjoy. The next project phases include the construction of a 33-story condo tower and seven stories of apartments that will be placed up for rent. “We have a great relationship with the City of North Miami,” said Jackie Soffer, CEO and chairman of Turnberry Associates. “I think that they look at the SoLe Mia project as positive change and an upgrade to the community overall. They understand the economic impact it will have, and they’ve been great partners for us.” Many believe the SoLe Mia development will spur massive growth in the northern Miami region, especially since its location was previously one of the largest pieces of undeveloped land east of Biscayne Boulevard in the entire county. Earlier failed projects on the site include an amusement park (1960s) and a ski slope (1990s). More generally, North Miami is known for competitive rent prices that present an attractive option for those looking to rent or buy in the area, especially for millennials who are looking for cheaper ( )

Larry Spring City Manager City of North Miami

What progress has been made on the SoLe Mia project since last year? The developer has actually delivered the first phase of the project, which includes a 400-unit, two tower residential building and a very unique lagoon; as well as the opening of a Costco store on the property. They’ve made great progress in a year’s time. Can you tell us about your transit-oriented development efforts in North Miami? We’ve made huge strides. We’re encouraging what we call mobility hubs, which are locations with several modes of transportation, surrounded by work, live, shop and play spaces. Our North Miami Mobility Hub & Transit Oriented Development (TOD) Strategic Plan provides guidelines for future redevelopment surrounding 125th and 123rd streets, and the Florida East Coast Railway Corridor. How has the recent Opportunity Zone legislation affected North Miami? We now have three Opportunity Zones within our municipal boundaries, and we’d like to see lots of redevelopment in these areas now that we’ve got that additional tool in our tool box. There’s a lot of energy around the Opportunity Zones all over Miami right now and we’ve come to realize that we’re one of the few cities that already has done the upzoning in our Opportunity Zones to help encourage new investment in these zones. So we’re kind of ahead of the eight ball with regards to that. What’s your outlook for the city’s growth and development in 2019 and beyond? We’re very excited. We’re starting to see an uptake in small- and midsized mixed-use development in the city. I’m excited about what that means for the future of North Miami.

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CITY OF NORTH MIAMI INTERVIEW

Cultural shift How Miami has tranformed into a more vibrant, culturally important city over the last 15 years

Jackie Soffer CEO & Chairman – Turnberry Associates

after my father, and classes will start in September. What progress has been made with the SoLe Mia project in North Miami? We opened our first multifamily apartment complex, The Shoreline, recently. It consists of two residential towers connected by a pool deck. The largest feature is the seven-acre, crystal-clear tropical lagoon with a beach that residents can enjoy. The response from the community has been strong, and we are renting much quicker than we had expected. We expect it to be fully occupied by the end of the year. As a result, we’re now actively moving forward with plans for a second residential development on the property. In addition, we recently opened a Costco, and the University of Miami will be building a medical facility there as well. We have plans to add retail, office and landscaped outdoor leisure areas.

From your perspective, how has the City of Aventura changed over the last decade? Overall, the community has definitely upgraded in every regard. The area is now more populated by young families, and the locals are more health-driven and active. Aventura has also become somewhat of a vacation destination; while it’s not quite Miami Beach, people still want to visit and spend time here, partly because it’s a well-known shopping destination. We’ve grown the mall, which is easily one of the top malls in the country and has changed for the better in terms of its sophistication and quality of tenants. And we are continuing to expand Aventura, with plans for new hotels and an office building. Furthermore, the city now has its own charter high school, which was named 126 | Invest: Miami 2019 | CITY OF NORTH MIAMI

To what do you attribute the growth in popularity of Miami’s real estate market? People genuinely want to live in Miami. The tremendous growth we’ve seen can be attributed in part to the fact that Miami has become much more important culturally than it ever has been. Even in terms of restaurants, this market never had the selection it currently has. And South Florida has many cultural attractions, including the Institute of Contemporary Art (ICA) — which has opened a new location in the Design District — PAMM, Wynwood Walls and the de la Cruz Collection. There’s also more competition in the retail sector than there used to be, and there are retail areas such as Wynwood that did not exist 15 years ago. There’s a lot more to see and do in Miami, and that’s attracting more people who want to live and/or work here, as well as vacation.


CITY OF NORTH MIAMI OVERVIEW

( ) housing options than typically found in Downtown Miami or Fort Lauderdale. Average prices of single-family homes in the city are about $235,000, as of early April. Housing and infrastructure development in North Miami is bolstered through the city’s Single Family Housing Rehabilitation Program. Those eligible for the program don’t have access to the resources required to make home repairs. The city offers $25,000 grants for this purpose to a limited number of applicants who meet its requirements. Infrastructure and healthcare moves North Miami city officials are also working hard to enhance current transportation options throughout the city. As part of the “Smart Plan,” the Miami-Dade Transportation Planning Organization is working to bring a train station to North Miami to provide local passenger rail service to link North Miami to stations from West Palm Beach to Downtown Miami. Expanding service would permit more pedestrian travel to different destinations on the route while making it much easier for residents of North Miami to travel to downtown using public transport. Local transportation options such as the NoMi Express, a free bus service in North Miami, offers residents a way to travel around the area, too. Meanwhile, the area’s healthcare options will be augmented by the construction of a new, 10-acre medical center by the University of Miami Health System, slated for completion by early 2023 in SoLe Mia. UHealth is reserving some 225,000 additional square feet of space for future expansion. The center will plug a big gap in the healthcare sector of North Miami, where many families have long struggled to find treatment for urgent problems. In an effort to meet this need, a few urgent care centers have opened up in north Miami-Dade County, too, albeit with the help of public funds.

Since 2018, MOCA has focused on making contemporary art accessible to diverse audiences. The museum’s facility was designed by Charles Gwathmey of GSNY, and its newly renovated plaza home to free monthly Jazz at MOCA concerts. Recent exhibitions have included surveys of cutting-edge contemporary art by Caribbean, Latinx and Native American artists; and the museum’s exhibits have attracted national attention and international interest. The museum originated a survey of work by the AFRICOBRA collective that was selected for the Venice Biennial in 2019, and will be the first South Florida museum to present at that prestigious international exposition.​ Visitors and residents alike often have a great experience at the Annual NoMi Music Fest, a signature Black History Month concert, formally known as Music In the Plaza. This highly anticipated event is an unforgettable night of classic old school music and a lively outdoor atmosphere, featuring past performances by 112, Monica, Chanté Moore, Dru Hill and more. NoMi Fest is just one of many popular and energetic music events hosted and promoted by the city. North Miami is also regarded as a hub for film and music. The area has more than 70 businesses focused on all aspects of video production. Well-known music studios there include historic Criteria Studios, historically known as The Hit Factory, Afterhours and Audio Vision and TV shows such as Burn Notice, Graceland and Miami Vice have been filmed in the area, leading many to refer to the city as the film capital of the South. City officials have taken steps to offer incentives for filmmakers who relocate to the area, too; any production that spends more than $50,000 with North Miami businesses are eligible for reimbursements, free parking and other perks, while productions staffing more than 12 people with budgets over $30,000+ can get their city filming and usage fees waived. However, Florida drastically reduced incentive money for filmmakers under former Governor Rick Scott, which has placed a big damper on the film and TV prospects for North Miami. While some industrious communities have taken steps to innovate and attract those looking to film, many still worry the days of the big film or TV industry might be coming to an end.

North Miami is regarded as a hub for film and music.

Vibrant arts scene North Miami is home to a bustling and vibrant arts and culture scene anchored by the Museum of Contemporary Art (MOCA), which is currently experiencing an extraordinary revival under the leadership of a new executive director, Chana Sheldon, and Board Chairman William Lehman, Jr.

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Steven Zelkowitz Managing Partner Fox Rothschild

What are some of your projects with the North Miami CRA? Our big focus with the CRAs is on public-private partnership projects. In North Miami, we are reviewing a mixed-use project consisting of a parking garage with retail on the first level, for example. We’re seeing a lot of rehabbing activity in apartment buildings and a number of mixed-use projects, mostly focused on rental units. We are also seeing Naturally Occurring Affordable Housing (NOAH) projects. In these types of projects, the CRA will typically donate the land and provide either direct grants, loans or subsidies for the different end-users. How is the North Miami CRA working to develop its Chinatown? The city has engaged consultants to provide a master plan for the area. They have rezoned the property to allow higher-density redevelopment, especially along the I-95 corridor. The challenge is that the properties within the area are owned by multiple owners, and there are large-scale developers who want to come in and buy up a number of properties. Although this can represent a challenge, there’s enough interest by the local government and interested developers to overcome this hurdle. What is your general outlook for North Miami’s growth and development in 2019 and beyond? North Miami has an evolving and ever-changing landscape. It is primed for major development at this point. The beach and downtown areas have reached a saturation point and that has brought more activity north, towards the I-95 and the Biscayne Boulevard corridor. With the new zoning code and its availability of properties, the North Miami area is going to see high-intensity growth over the next five to 10 years.

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Education options The growing population in North Miami presents great prospects for the area’s two premier universities, Johnson & Wales and Florida International University. While city officials have devoted an abundance of time and energy to higher education, a variety of city programs are tailored towards high school students in the area. The well-known Wertheim ArtSci Conference made its North Miami debut in 2018. It created an opportunity for students in K-12 to learn more about the creative arts and sciences if they express an interest. The conference is filled with dynamic presentations, activities that are hands-on, and a variety of demonstrations which are designed to build on each other. The city’s Youth Opportunity Board, funded by the U.S. Department of Housing and Urban Development, works to place income-eligible students into various city internships, giving them exposure to all facets of local government. Student interns in the program are paid for 20-hour work weeks and have the ability to work more on a voluntary basis. The North Miami Educational Foundation was established as a non-profit to offer scholarships to high school graduates in the area. The program is the only one of its kind to offer scholarships exclusively to residents of North Miami. Scholarship money is also available for people interested in night school or classes in English as a second language. The initial scholarship funds were generated due to a lease agreement with Oleta Partners, LLC, the developer of the SoLe Mia project. Environmental stewardship With a location right on the water, North Miami has long been a steward of the environment. The city’s Green Business Rehab Grant Program offers economic incentives for energy conservation and the reduction of greenhouse gases, and it helps businesses retrofit existing buildings to be more energy efficient. The program targets smaller businesses that have seven employees or less. Its funds are earmarked for the installation of energy efficient lights, new insulation and automatic timer/smart devices. The program helps North Miami businesses to “go green” and start to recoup retrofitting costs. North Miami is also one of a few U.S. cities to receive consulting and grant money to implement environmentally-friendly and organic policies in their management of parks and fields. Support for the program was provided by Stonyfield Organic. Organic


management plans include the eventual use of nontoxic replacement products for weed reduction and insect control. The U.S. Forest Service has also partially funded the planting of 96 new trees to foster the growth of a healthy urban tree canopy and further promote general environmental sustainability. City officials put on an annual Green Awareness Fair that features activities revolving around different aspects of environmental awareness. Longer-range plans include the promotion of public and private development that can boost energy efficiency and protect the environment. Looking ahead Northern Miami-Dade County remains attractive to investors for a number of reasons. Florida is one of the seven states in the U.S. that doesn’t impose an income tax, though individuals still have to pay their federal income taxes; and those doing business in the state can qualify for other tax benefits, too. The city has taken several concrete steps to make the area an attractive and affordable home for young professionals, families as well as seniors, and these efforts are slated to continue. In March 2019, the North Miami City Council approved a $50 million mixed-use senior apartment complex with units at affordable prices, for example. However, several challenges remain. Key among these is the risk of gentrification, which isolates longtime residents and eliminates some of the vibrant and longstanding cultural atmosphere of the city. Development has long been a tough sell for North Miami since a 1970s ban on four-story buildings came into effect. Even though zoning has gotten looser in recent years, the downtown still largely consists of smaller buildings. Current development projects sometimes oscillate between trying to tackle blight and other issues, and placing time and money into projects that may not have long-term viability. This has led to resident backlash against certain types of projects, causing headaches for city officials. Still, sparks of good news continues to make it through the noise in North Miami: Recently, city executives announced the development of new programs to teach young residents the basics of coding and other hightech skills, helping equip its future workforce for a 21st-century job market. It’s just another step toward putting North Miami on a pathway to greater future prosperity.

Robert Finvarb Founder & CEO Robert Finvarb Companies

What are some of the highlights for your company over the last year? We acquired an additional three acres in North Miami, so now we have about just over six acres in which we plan to develop up to 800 or 900 residential units, together with retail spaces and perhaps a platform for the train — either Brightline or Tri-Rail. Millennials don’t want to deal with traffic, they don’t want to leave their neighborhoods if they don’t have to, and we can provide them with amenities inside their building. Do you also feel there’s a need for housing options that are a bit more affordable? We’ve been working on building workforce-type, attainable housing along the railroad tracks on 151st Street. We’ve also continued to work on our property in North Beach, which will get redeveloped into multifamily and retail spaces. And we have three new hotel opportunities, two on college campuses and a significant one in the Brickell area. Why are you focusing on the North Miami area? And why now? It’s in the heart of where all the growth is coming. With what they’re doing in SoLe Mia, there’s just a tremendous amount of momentum in that area. And when you combine that with the maturation of Aventura, Sunny Isles, Bay Harbor, Bal Harbor, Surfside, Miami Shores and Miami Beach, then North Miami is the next logical area for growth and development. What is your outlook for the city’s real estate market in 2019 and beyond? I think we’re going to go into a bit of a slowdown, but Miami is economically resilient. All you need to do is open the newspaper to see that Miami continues to be a safe haven for foreign capital.

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Banking & Finance: The unabated inflow of foreign and domestic capital augurs well for Miami’s banks. Loans for luxury and commercial real estate developments provide another strong source of business while private equity deals are also on the rise and helping to stimulate the local economy. But a recent consolidation trend will almost certainly continue in South Florida, as larger, regional banks acquire local community banks to expand their footprint in the area.

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Banking on success: Miami’s banks and financial firms find new ways to adapt to market trends and technologies Miami-Dade County is both the financial capital of Latin America and home to the largest concentration of domestic and international banks anywhere on the East Coast, aside from New York City. As of 2018, this massive banking sector supports 3,052 companies employing 40,691 people. Some of the biggest financial players in Miami-Dade are Assurant, BankUnited, Wells Fargo, Bank of America, Visa International and Itau Private Bank. The key drivers of MiamiDade’s resounding success as a financial center are its strategic location as the “Gateway to Latin America” and port to the Atlantic, as well as its cultural diversity and strong, diverse economy. “We are actually seeing movement in new banks entering the market. In fact, we have a new member, Abanca, a bank from Spain whose license is effective — which is a big change,” David Schwartz, CEO of Florida International Bankers Association told Invest:. “We worked with the Office of Financial Regulation to update the international banking statutes and make them more business friendly. This bank is the first one to come in under the new regulation,” Schwartz said. However, an interesting side effect of South Florida’s 132 | Invest: Miami 2019 | BANKING & FINANCE

diversity is that it is making the banking market less diverse overall, as larger out-of-state institutions buy up smaller local banks to gain a toe-hold in the lucrative South Florida market. In the third quarter of 2018, there were only 118 distinct banks in Florida, down from 135 banks just one year earlier and 276 at the pre-recession peak in 2007. Growing profits Numerous indicators illustrate the health of a region’s financial sector, including the total number of loans made by area banks. The 41 banks based in South Florida posted a combined 2.7% growth in total loans between the second quarter of 2017 and the same period in 2018, accounting for an additional $1.64 billion loaned. The loan categories that experienced the biggest growth were commercial real estate ($629 million), commercial and industrial lines of credit ($535 million) and home mortgages ($283 million). Notable, however, were large declines in balances for multifamily loans and construction loans of $147 million and $117 million, respectively. Miami-Dade made a laudable but mixed contribution to ( )


BANKING & FINANCE INTERVIEW

Higher visibility A milestone acquisition solidifies market position, boosts brand visibility and community commitment

Jorge Gonzalez President & CEO – City National Bank

How did your acquisition of TotalBank increase City National’s visibility and help to diversify the bank’s offering? The acquisition was a significant milestone for us because TotalBank had been serving the market for over 40 years. When we acquired TotalBank it was one of the larger community banks in South Florida totaling about $2.8 billion in assets. At that point in time, we were about $10 billion in assets, so it represented almost 30% growth for us. The merger has allowed us to solidify our position relative to market share, and brand visibility in the markets. Combining their experience with our own has allowed us to further demonstrate our commitment to this community. And the most visible change has been the addition of the City National Bank logo to the Miami skyline now that it sits on the iconic Miami Tower. In addition to the growth and increased visibility, we’ve kicked off a couple new initiatives: First is our wealth management platform. We’ve always had a very strong private bank, but we felt that adding a wealth management component would complement our core strategy. Second was our five-year plan. We will invest over $15 million in digital transformation for the organization. This will ensure that we continue to be innovative as well as impactful through improving our client experience. How are you handling cybersecurity within City National Bank? When we invest in technology we are also investing in strengthening our cybersecurity. The investment is not just in the technology, but also in bringing on the right people who have the experience and talent to be able to instill their knowledge throughout the organization. We’re also continuing to educate our entire workforce

on what to look for in regards to cybersecurity, because so much of it is about making sure that the procedures in place are being properly followed. Our approach is multifaceted and constantly changing. What are some notable challenges facing the banking and financial industry in Miami? This economy is a little long in the tooth, meaning it’s been a long positive cycle. All the indicators continue to look pretty positive. Still, we’re making sure we are conservative in our approach because at some point there is going to be a slowdown, although we don’t expect it to be anything of significance. Economies, just given their natural cycles, have certain flows that you have to be conscious of.

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Jorge Villacampa South Florida Regional Bank President Wells Fargo

What are the fastest-growing segments of Wells Fargo’s offerings in Miami? A lot of people are reaching retirement age. As a result of that, they have accumulated wealth that they don’t realize they have, for example in retirement plans, and now need to figure out what to do with that wealth. We have also continued to grow in the general market. Customers continue to visit us and enjoy coming into our branches, which offer one-on-one as well as digital options. Our branch traffic continues to do well. What industry trends have you observed? We continue to see growth in consumer lending, both in regards to home equity and regular personal loans. We also see growth in small business lending. We have done very well there, and particularly with the Small Business Administration. Miami is very dependent on small businesses, and we have to make sure that the small business community is supported by the services that banks like us provide. We have a growing number of dedicated small business lenders and all members of our branches are trained to deal with the basic needs of small business customers. What is your outlook for Wells Fargo and Miami’s banking sector as a whole in 2019? Our outlook continues to be very positive. We are opening an additional branch in Homestead, which is coming later this year; and we’re looking to open a second branch in the Design District in 2020. We’re making investments in those communities because we see potential for growth. My banking colleagues see the same potential, and that’s why we’ll continue to see expansions of banks like Chase and TD in the area. Miami is a growing community with lots of opportunities, both in terms of foreign investment as well as the growing local population, all of which translates to more growth for the industries here.

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( ) this performance, with Miami Lakes-based BankUnited enjoying the most substantial loan growth of all local banks at $405.7 million. Amereant also posted a strong performance during this period, adding $271.3 million to its loan portfolio. However, several of the area’s banks also experienced declines in their loan portfolios, including Miami-based Ocean Bank ($81 million), Miami-based Eastern National Bank ($13.1 million) and Coral Gables-based BAC Florida Bank ($7.8 million). Profits are another important — and intuitive — metric for banking sector performance. Bank OZK, Bank OZK, an Arkansas-based financial institution and the largest bank in the state of Florida, earned $110.7 million in the first quarter of 2019, down 2.2% from the year-before period when the bank posted a whopping 27% increase year on year. The bank was strong on total loans, lending $17.5 billion compared with $16.6 billion in the first quarter of 2018, which represented a 5.2% increase. Finally, Bank OZK also received $18.5 billion in total deposits, a 3.6% increase over 2018’s deposits and an impressive showing in another key performance indicator. Most bank executives Invest: interviewed were optimistic about the local economy, too. “We have economic drivers down here,” said Jeff Robertson, senior vice president and managing director of Northmarq Capital. “I think that Miami’s retail is probably going to consistently be stronger than the majority of any other area in Florida.” Competitive landscape Last year was a banner year for bank acquisitions in South Florida, driven by rising interest rates. Higher rates give banks sufficient profit margins to justify good selling prices, while giving buyer banks more cash on hand to make acquisitions. Some of the most high-profile mergers and acquisitions from this past year included North Carolina-based First Citizens Bank’s purchase of Coconut Grove-based Biscayne Bancshares for $119 million; Miami-based City National Bank’s acquisition of TotalBank for $528 million; Sunstate Bank’s purchase of Intercontinental BankShares for $29 million; and Georgia-based Synovus Financial Corp.’s purchase of Weston-based Florida Community Bank for $2.9 billion. These mergers are part of a major trend in Florida in which the total number of banks calling the state home have decreased by some 60% since 2007. There are two sides to this situation: on the one hand, it’s a clear indication of the strength and attractiveness of


Florida’s financial market; on the other hand, it also reflects the frustrating reality for fledgling banks in the state — it’s difficult to start a bank in Florida and grow into a large regional player before being purchased by an already-large regional player. The major impetus for this trend is the expense and difficulty of dealing with the onerous regulations imposed on the banking industry by the federal government, which have a greater impact on local, smaller institutions with fewer resources. It simply makes more sense for these banks to sell to one of the big players who can handle the regulations. Recent easing of some of these regulations by the Trump administration has improved the plight of many, but not all, of these banks. “We expect to see continued consolidation due to the difficulty of smaller banks to comply with new regulations as well as the cost of cybersecurity,” said Brian Hagan, Florida market president of First American Bank. “It’s an expensive proposition.” Growth drivers Private equity deals are a significant driver of growth in general and particularly in Florida. Private equity deals (PEDs) are buyout-like transactions used to either stimulate the growth of companies or rally those that are financially distressed. A record 145 such deals were completed in Florida during the first half of 2017, and a slightly reduced, but still strong, 118 PEDs were closed in the first half of 2018. Some 449 companies throughout the state were backed by PEDs in 2018, up from just 73 in 2000, and many of them were started in Miami thanks to its growing and increasingly diverse economy. There are now more than 60 private equity firms engaged in deals of this kind. Commercial lending has also been a significant driver of banking growth in Miami in recent years, but 2018 saw a noticeable slowdown in this trend amid fears of a global recession and an influx of alternative commercial lenders, such as insurance companies. Consequently, even though loan originations for commercial real estate projects are actually on the rise, lending is declining overall. However, Miami has proven fairly resilient to this downtrend and has remained a hotbed of commercial real estate investment along with New York City. In fact, Bank OZK loaned $259 million in 2018 for the Turnberry Ocean Club high-rise tower in Sunny Isles Beach. Encouraging investment Florida’s geographic location makes real estate (

)

Israel Velasco Florida Region Executive Popular Bank

How did 2018 unfold for the bank? We’ve continued to realize tremendous commercial loan growth. Popular Bank has booked over $500 million in new business in the last year, and all of the growth has been organic. We are also at the tail-end of our retail transformation strategy, that is, transforming our retail network into modern facilities with universal bankers and a digital environment. We’ve given the customer the ability to conduct business the way they want, while delivering a great customer service culture and experience. We are growing in many areas, including opening our second private banking office in South Florida, and we’ve also expanded our mortgage program. What made Miami a worthwhile city for expansion of the bank? Miami offers important opportunities – a dynamic and diverse business environment that strategically fits with our vision to support small business, commercial lending, association lending and the ability to serve a unique retail demographic. It has allowed us to grow organically. We are also going to look at potential acquisitions in the very short-term. What valuable community partnerships has Popular cultivated in the area? We have a big corporate partnership with Junior Achievement of Greater Miami. The program instructs students on how to write a resume, conduct an interview, dress for an interview and operate in the business world. Volunteers from the bank go into the classroom and teach the students about financial literacy. We also work closely with the Chapman Partnership and the Center for Financial Training. In addition, we have the Future Bankers Camp, which is an annual camp for high school students from the inner city who want to become bankers.

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BANKING & FINANCE INTERVIEW

Foreign cash An influx of international money is chasing a strong economy, safe banks and a stable government

Tony Coley Regional President - South Florida – BB&T banking in Miami? Miami is a very different environment because of its large international aspect. For a lot of large companies, Miami is the gateway to the rest of the world. More specifically, Miami is the Gateway to Latin America. Trying to understand the unique dynamics of our international clients can sometimes be challenging for banks. There are also regulatory limitations that can sometimes make it difficult for banks to help all international clients, but we certainly can help most of them. Miami provides some unique challenges that we do not have in other parts of the country within our organization but we welcome the challenge because the diversity here in South Florida is what makes it such a great place to conduct business. What is the key to running a successful bank in the current economic climate? When I wake up, everyday I think about our clients Why has South Florida seen such an influx of international money as of late? The geopolitical issues that some South American countries have recently been experiencing has caused this phenomenon and has resulted in these folks wanting to come to the U.S. and invest their money. They choose to invest it here because our economy is strong, our banks are safe and our government is stable. That overall stability is what attracts dollars from all across the world to South Florida. Why wouldn’t you choose to invest in South Florida? It’s a beautiful place with a ton of opportunity and diversity. Overall, it’s just a wonderful place to live.

and our associates and how we can make their lives

What are some of the challenges that are unique to

experience to the clients.

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better. BB&T does a fantastic job of taking care of its associates because the associates are the ones who take care of our clients. We try to provide an environment where our associates can learn, grow and have fulfilling careers at BB&T. Happy associates typically make for happy clients. For us to successfully grow our organization and acquire additional market share, I think it’s important for us to take care of the associates first. Our main goal is to make sure we’re fulfilling our mission of trying to make the world a better place, and that starts with our associates giving the best possible


BANKING & FINANCE OVERVIEW

( ) investment a tricky affair — the beautiful weather and warm climate, picturesque coasts and vibrant culture make it an ideal place to live or operate a business, but Florida is also extremely susceptible to natural disasters, especially hurricanes and floods. How does the Florida real estate market, particularly the Miami market, boom in the face of this considerable risk? An equally-booming insurance industry. Thanks to a $10 billion insurance industry that protects property owners against natural disasters, Florida continues to be considered a relatively safe investment environment, even in the face of growing concerns over the natural environment. The $10.8 billion in premiums paid by owners of Florida property cover an estimated real estate value of more than $2.1 trillion. A corollary industry has developed around this insurance market in the form of insurance-linked securities (ILS), which insure $90 billion worth of property globally. This allows insurers to transcend the act of protecting property from the risk of disasters and turns that risk into a valuable investment opportunity. The most common ILS product is the catastrophe bond, which collects investment capital to be used as reinsurance that covers the insurance companies that cover Florida real estate. The process consists of placing a portion of the premiums they collect from their insured in trusts in countries with favorable tax rates, which then raise additional money from investors who are willing to cover a predetermined range of losses in the event a disaster strikes Florida. If there’s no disaster, these investors keep the forfeited premium and make a nice profit. This extra protection encourages investors to continue pumping money into Florida while easing concerns about potential disasters.

branches a thing of the past. Beyond customer convenience, banks are also using blockchain technology to increase security. Blockchain uses a digital ledger that is distributed among users to ensure that no single user possesses the complete means to access the data, meaning that compromising one user will not compromise the data itself. The information in the ledger cannot be edited. The use of blockchain in banking provides several benefits, including added security, additional regulatory accountability and increased efficiency of transactions through the elimination of traditional intermediary steps. Another technological advancement receiving growing attention is cloud computing, or the storage of data in a “cloud” of remote servers accessed via the internet rather than local servers stored onsite. The advantages of this approach for banking are similar to those in other industries: cloud computing facilitates greater digitization, helping banks to keep better records and provide better customer service. In addition, more sophisticated applications and Artificial Intelligence-driven services that rely on the cloud can be offered and banks can reduce security risks by no longer relying on servers located within branches or bank offices to store data. Some larger financial institutions such as Barclay’s Bank and J.P. Morgan are even starting to experiment with the even more sophisticated innovation of quantum computing to revolutionize their services and security. Finally, banks are relying more on biometric identification technology to increase the security of their customers’ data and money. Old security measures, such as PIN numbers and passwords, are going by the wayside in favor of these more reliable biometrics.

Banks are using blockchain technology to increase security.

Cutting-edge advancements The banking sector remains on the cutting edge of technological advancement. For instance, consider the advent of mobile banking. Many banks already have their own apps that allow users to check account balances, transfer money between accounts, set up automatic bill payments, wire cash to third parties and even deposit checks from anywhere using their phones’ cameras. The convenience of these features is obvious, and banks continue to add even more sophisticated features that make long waits at local

Banking superstars Still at the top of the list of largest banks in south Florida is Miami Lakes-based BankUnited, which now boasts more than 100 branches throughout Florida. BankUnited is not just recognized as one of the best banks in Miami and Florida; it’s also well-known across the nation, making the Forbes’ “Best Banks in America” list this year and topping Global Finance’s list of “Best Regional Banks in the U.S.” It also earns a five-star rating from BauerFinancial. BankUnited

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David Schwartz CEO – Florida International Bankers Association

Compliance is a challenge, plain and simple. It consumes a vast amount of our financial institutions’ resources. Banks are turning to technology for a solution. I sit on the board of a regulatory technology company that uses artificial intelligence and machine learning to try and make compliance monitoring more efficient. The new technology, however, is expensive. Regulators recently issued a joint statement on this new technology, encouraging innovation in compliance, but it continues to be our primary concern.

achieved its primacy through a large catalog of toprated services. In particular, wealthy clients favor it for its concierge banking, which offers a suite of elite services. City National Bank, founded in Miami Beach in 1946, is also at the top of the list after its acquisition of TotalBank, with about $14 billion in assets, 800 employees and 31 locations from Miami-Dade County to Orlando. It also earned a 5-star “Superior” rating from BauerFinancial. Like BankUnited, Branch Banking & Trust (BB&T) is not just one of Florida’s top banks, it’s also one of the premier banks in America. The North Carolina-based bank operates many branches throughout Florida, including Miami, and has more than $219 billion in assets. Despite its size, BB&T frequently receives high client satisfaction ratings, thanks to the personal touch with which it delivers fullservice banking and financial services. No list of major banks operating in Miami and the rest of Florida can exclude SunTrust Bank. The massive Florida institution maintains more than $205 billion in assets and operates 133 branches in Florida while maintaining a strong presence throughout the entire Southeast and Mid-Atlantic regions. In large part, SunTrust owes its success to its balanced banking service that helps people budget better and avoid overdrafts, its simplified, online LightStream consumer-lending division, and a suite of checking-account services.

Among the state’s community banks, Florida Community Bank (FCB), recently acquired by Synovus, maintains some $9.1 billion in assets, ranking thirdlargest among all Florida-based banks. Though based in Tampa, FCB operates branches throughout central and southern Florida. Alongside its customized services, a strong community focus helps FCB remain one of the state’s best community banks. Another formidable community bank is Centennial Bank. Like FCB, Centennial Bank seeks to forge strong, lasting relationships with its customers and surrounding community, which has helped it to secure customer loyalty. The bank offers competitive online and mobile banking services, budgeting tools and calculators to improve customers’ financial literacy, and certain special-benefits clubs, such as the Christmas Club Savings Account and the Diamond Club travel group.

Banks are expected to benefit from the Tax Cuts and Jobs Act’s reduction of the corporate tax rate.

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Burdens, risks and challenges Many banks in the Miami banking sector are benefiting from recent legislation geared at easing regulatory challenges. The Economic Growth, Regulatory Relief and Consumer Protection Act, signed by President Trump in May 2018, promised to reduce the regulatory onus on many banks by scaling back the Dodd-Frank Act. The key provision of the new law raises the threshold for being designated a “systemically important financial institution” from $50 billion to $250 billion in assets. The new definition allows many additional banks, some quite large, to


BANKING & FINANCE OVERVIEW

avoid the strict and often expensive oversight imposed by the Dodd-Frank Act in 2010. The law also provides federal regulators with additional discretion when it comes to the application of Dodd-Frank provisions, such as when to require stress tests to measure capital adequacy. Other regulatory updates following the paradigmshifting 2018 midterm elections include changes by the Democratic Party-led House Financial Services Committee on issues relating to consumer and investor protection, financial system stability and responsible innovation in financial technology. Meanwhile, the Republican-run Senate Banking Committee will continue to focus on shoring up other areas not addressed by the consumer protection act. Banks, like other businesses, are also expected to benefit from the Tax Cuts and Jobs Act’s reduction of the corporate tax rate from 35% to 21%, as paying fewer taxes will directly increase their net revenue. Many banks have even elected to pay their employees sizeable bonuses as a result of the windfall, in addition to making various investments. Bankers see other benefits, too. “The limitation on

deductibility of state and local taxes at the federal level is making residents of higher tax states consider changing their domicile to Miami or Florida,” said Jack Christian, managing director of GenSpring Suntrust Private Wealth. “The creation of Opportunity Zones and the associated tax incentives is resulting in increased investment in startup businesses and real estate development in those targeted areas of our community.” Security breaches are always a risk for the financial services sector, too. Banks and other financial institutions handle millions or even billions of dollars in customer deposits and internal bank assets, which make attractive targets for criminals. As banks continue to do more business online and via the cloud, the risk takes new forms. As evidenced by the Equifax breach in 2017, digital bank data is highly sought after, and its breach can have a devastating impact. Some technological measures mentioned above, such as blockchain and biometrics, are a good way to increase the security of sensitive data. As banks grow in assets and expand into new regions, they are becoming more reliant on third parties for


Jeff Klink Regional President Valley

What makes Miami a unique market for Valley? Regarding deposits, Miami-Dade is a very unique and high-powered market. We have an office in Brickell that houses upwards of $300 million in deposits. About half of those deposits are tied to international clients, something that is very unique to Miami-Dade County; the foreign national and international deposit base in the market is very strong. As such, we have a specialized bilingual team that works with our international client base. Speaking generally, how does Valley work to cater to its expansive international client base? When it comes to international clients, an experienced compliance team that understands the market is critical. In terms of regulation, the foreign national market has more regulatory overlays. The international banking team at Valley is made up of about 10 international bankers, and as a group they speak over 10 languages. As such, we’re able to accommodate international clients in a very comfortable and efficient way. Many of our clients split time between Miami and their respective countries. What unique challenges and opportunities does Miami-Dade provide? Because Miami has such a diverse landscape and population, Valley needs to have the type of resources and banking team members who can articulate our banking products and make these products accessible to folks from all over the world. In Miami-Dade, there are many domestic consumer and business account opportunities. Specifically, half of the deposits at Valley in the Miami market are domestic deposits, and we must continually make sure that we’re servicing both international and domestic clients because, from a business standpoint, each segment of the deposit base is equally important to Valley.

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support, exposing them to additional regulatory risk since regulators hold banks accountable for the actions of third parties with which they contract. To combat these risks, as well as stay ahead of regulatory changes, employees must be properly trained and regularly retrained to ensure that they are ahead of the cybersecurity curve. “We all have to understand that regardless of the size of the company, everyone is vulnerable to cyberattacks,” said Efrain Sora, president and CEO of Sora Global Insurance. “Even Google has been effectively attacked in the past. Many smaller businesses think that, due to their size, they are not at as great of a risk, but nobody is exempt. We need to educate both business owners and lower-level employees. I partner with several IT companies and work in conjunction with them in order to educate prospective clients. Education is the key.” Future money Cryptocurrency is any digital or virtual currency that relies on cryptography to prevent counterfeiting. A key feature of most cryptocurrencies is their reliance on blockchain technology. Its decentralized nature makes cryptocurrency appealing to many individuals and institutions who would prefer a currency that is not issued by a central authority and therefore technically immune to government interference and manipulation. Cryptocurrencies work by facilitating the secure payment of online transactions using a virtual “token” that represents entries in a blockchain ledger. The “crypto” in cryptocurrency refers to the fact that various encryption algorithms and cryptographic techniques are used to keep the currency secure. Some of the top cryptocurrencies include the original Bitcoin as well as Ripple, Ethereum, Litecoin and Stellar. The rapid emergence of cryptocurrencies has created several legislative and regulatory challenges. For example, some regulators worry that cryptocurrencies may be increasingly used for money laundering, tax evasion, the financing of terrorism and all manner of fraud. The debate over the viability and value of cryptocurrency is still raging, but some state and national governments are beginning to take actions to guard against these potential issues. Florida has taken limited steps to regulated cryptocurrency. In Florida, Gov. Rick Scott signed House Bill 1379 into law in June 2017, expanding the Florida Money Laundering Act to include “virtual currency,” thus expressly prohibiting the laundering of cryptocurrency. The state also ( )


BANKING & FINANCE INTERVIEW

Capital goals Capital Bank Florida is committed to growing the bank’s market share by meeting the needs of Miami-Dade’s local economy

Jeff Jackson Florida Market President – Capital Bank

What is your outlook for the bank’s expansion throughout Florida? We have about 32 locations in South Florida, 10 of which are in Miami-Dade or Broward counties. As we’ve hired all our market leaders, we’ve grown our loans from 834 to probably 950 just in five months. We’ll probably hit over a billion dollars by the end of June 2019, with a goal of trying to get to $2 billion in five years. Miami’s is the largest market in the area and we just hired a great local president, Roberto Munoz. We’re having early success with our private client offerings, and we’re working on building the brand and giving back to the communities. Capital Bank has made a commitment to increasing our presence due to the growing needs of the South Florida region. What industries in South Florida are currently providing the most opportunity? Miami’s real estate and healthcare sectors continue to grow and they represent a big opportunity for us. We’re starting to partner with local hospitals and sponsoring events in the healthcare industry; there are numerous healthcare-related businesses that are moving to the area, and large healthcare companies are seeing Florida as a business-friendly environment. We’re already seeing other types of businesses move here, too, especially from the northeast, where businesses are highly taxed. What are some of Capital Bank’s initiatives to help educate clients and employees on technology and cybersecurity? We have a few educational initiatives, including a group that informs clients about cybersecurity issues and tells them about the variety of products we offer to cope with threats such as wire and ACH fraud.

Another one of our educational programs is Operation Hope, which provides free credit counseling to lowand moderate-income youth and adults in an effort to disrupt poverty and facilitate their journey to financial independence. Our counselors work with them to increase their credit scores, coach them to reach their personal aspirations and help them overcome life’s challenges. What are you doing to market the bank in South Florida? We’re trying to get our name out there with radio and TV, but also by being known as a company that cares about the communities we serve. The important thing is to give back to the community.

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BANKING & FINANCE OVERVIEW

oundtable: Finance

Miami remains a magnet for high net worth individuals from all quarters of the world, and local wealth managers are equipped with the knowledge and skills to service these accounts.

Lars Jensen

Head of Americas Legg Mason International

What have been some of the highlights for your work in Miami in 2018? We continue to see an increase in international investment in Miami. Miami is a mecca for international clients who are drawn to its culture, weather and reputation as the gateway to Latin America. Miami’s diversity has elevated its importance within the business community, in not only Latin America, but also the rest of the world. We’ve been able to help clients cope with the challenges presented by difficult markets because of the breadth of capabilities we offer. Headquartering our Latin American business in Miami gives our clients the convenience they need. What brought about the desire to renovate your office space to make it more tech-forward and efficient? It’s all about how you interact with your clients, as well as shifting the mindset of the sales agent. We’re much more consultative. We want to understand what our clients need, and we talk about the capabilities of Legg Mason rather than products that we have on the shelf. The revamp of our office was very much about the clients and welcoming them into more collaborative spaces where open dialogue is encouraged. Technology allows us to conferencein portfolio managers and product specialists and overall works to further accessibility. We’re also thinking about employing Alternative Distribution Strategies (ADS) to help clients build out their digital presence. We’ve launched something called Allego, an interactive program that helps to train our people and share best practices. Cybersecurity is very frontof-mind for us, and we conduct an annual training on it for all employees. With so many international investors coming to Miami, competition is picking up significantly. As such, it is important to differentiate yourself, and the office is a great example of that.

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BANKING & FINANCE OVERVIEW BANKING & FINANCE ROUNDTABLE

Michael Origlia

Managing Director, Branch Manager Raymond James & Associates

What is the significance of your Miami branch to Raymond James & Associates? We took a flagship location on Ponce De Leon early last year, and we’ve attracted some of the most talented financial advisers in the area. The Coral Gables branch is Raymond James’ largest in the country. We have several advisers who have been with the firm for decades. They’ve seen it grow from a small firm to an international one. We have representatives in Canada and Europe, and serve clients all around the world. Here in Miami, we’re focused not only domestically but also on the Latin American market, including the Caribbean islands and Mexico. We’re lucky to have those accounts here at Raymond James and we’re focused on this area for growth. Do you have local community partnerships? We’ve partnered with the Coral Gables Community Foundation and have had a long-standing relationship with the United Way. When I arrived at this branch, I also started a monthly charitable program. Every month, we make a contribution to a different charity or local 501(c)3. What differentiates this firm in a crowded and growing marketplace? This firm has such a great — and long — runway ahead of us. The firm focuses on building the client-financial adviser relationship, and we’ve never deviated from that model. When lending becomes more profitable than the brokerage business, brokerage companies get in trouble. Raymond James will always keep our brokerage business in the forefront for our clients. While other firms are exiting the brokerage protocol, which only hurts clients and protects the firms’ profits, our firm wholeheartedly believes not only in the protocol but also in building the next generation protocol, 2.0, and that focus comes from the top.

Jack Christian

Managing Director GenSpring SunTrust Private Wealth

What unique challenges do your wealth managers face in this city? We’re focused on making sure we’re properly serving families in the community — in the way they want to be served — and to deliver the resources necessary to help them achieve their goals. At SunTrust, we have teams of experienced advisers who work with clients across the wealth spectrum. In addition, we have specialty groups that are focused on serving international, legal, medical, or sports and entertainment communities. We have a highly developed approach to the market, with distinct client experiences and specialty groups. How has tax reform impacted the work you do? The new tax law impacts our families in many ways, and while we don’t give tax advice, we work very closely with our families’ tax advisers to ensure we’re prepared from a legal, fiduciary and tax standpoint. The limitation on deductibility of state and local taxes at the federal level is making residents of higher-tax states consider changing their domicile to Miami or Florida. And the creation of Opportunity Zones and the associated tax incentives has led to increased investment in startup businesses and real estate developments in those targeted areas. How is GenSpring working to engage the local community? GenSpring and SunTrust are extremely active throughout South Florida with our teammates volunteering their time and talent in the community. We focus our efforts on our main purpose — lighting the way to financial well-being — and frequently support programs and organizations centered on financial literacy and wellness, workforce development and education. Financial literacy and education are critical, and too many individuals and families don’t have the knowledge to make confident financial decisions.

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( ) appointed a Cryptocurrency Czar in 2018 who is tasked with supervising the state’s cryptocurrency industry and protecting investors from fraudulent actors. While states continue to grapple with the reality of cryptocurrencies, individual investors, institutional parties and even retailers have shown an interest in the field, and some experts are projecting that cryptocurrencies may outperform all traditional assets in 2019. Looking ahead The outlook for the Miami financial and banking sector is positive, even as several transformational trends are changing the industry. The consolidation trend, for example, will almost certainly continue as larger, regional banks continue to acquire local community banks in Miami to extend their reach in the area. This will both increase the volume of large regional and national institutions in Miami while decreasing the overall number of institutions. At the same time, community and midsize banks that start in Miami-Dade will need to continue working on how to successfully grow past the point at which they are attractive targets for acquisition to become large regional banks themselves. Another looming challenge for banks is what some experts are now characterizing as an all-butimpending financial recession. Banks are traditionally among the hardest hit by recessions, so institutions and investors should have the state of the global and national economies in mind when acting. “Miami is a completely different place than it was

during the last crisis that we had in ‘08 and ‘09, so it’s hard to look at the past and try to predict the future. We have to be much more cognizant of the dynamics and the fundamentals that exist in South Florida today, and we must be strategic in how we approach the business that way,” said Jorge Gonzalez, President and CEO of City National Bank. Beyond this, Miami continues to grow thanks to an influx of new residents and the inflow of foreign and domestic capital to the region. Latin America, China and Canada all remain meaningful sources of investment capital particularly in real estate such as luxury condos. And these global clients are critical for Miami’s banks. “We must continually make sure that we’re servicing both international and domestic clients because, from a business standpoint, each segment of the deposit base is equally important to [us],” said Jeff Klink, Valley Bank’s regional president, explaining that only half of the deposits at Valley in the market are domestic funds. The construction of luxury and commercial real estate are a huge source of business, too, as a result of the accompanying construction loans. Private equity deals are also on the rise and helping to stimulate the local economy by aiding local businesses, all of which spurs growth in the financial sector. Finally the continued advancement of technological innovation is changing the face of the banking industry in South Florida, with digital services and increased cybersecurity a top priority for all players in the field. Banks will have to continue providing the digital and cloud services customers demand, while working diligently to maintain air-tight security of that data.


Health: Miami-Dade is highly ranked as a healthcare provider. Technology and innovation are underpinning its efforts, buttressing the county’s reputation as a health-industry leader. While challenges remain on many fronts, Miami’s healthcare institutions are taking steps to bolster the sector and introduce better care to more people.

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Healthy moves: Miami’s healthcare industry is a pioneer in clinical care and research. To secure a healthy future, innovation remains crucial Miami-Dade is highly ranked as a healthcare provider. Technology and innovation are underpinning its efforts, buttressing the county’s reputation as a healthindustry leader. While challenges remain on many fronts, Miami’s healthcare institutions are taking steps to bolster the sector and introduce better care to more people. A Robert Wood Johnson Foundation study showed the county’s healthcare system is among the leaders when it comes to producing positive outcomes. The March study looked at how the county’s network of healthcare providers impacted measures such as mortality, readmission rates and patient experience, which determine the relative success of local care. Miami-Dade’s system, which is ranked in the state’s top 10, provides healthcare services for about 2.7 million people. The county is home to leading healthcare facilities and hospitals, including Baptist Health, Jackson Health System/Jackson Memorial Hospital and Mount Sinai Medical Center. However, Miami’s residents also represent pressing social and health risks. Miami-Dade’s population is diverse. Hispanic communities make up more than 146 | Invest: Miami 2019 | HEALTH

68% of the population, followed by African Americans at 16% and non-Hispanic whites at 13.2%. Most of the population is between the ages of 24 and 64. Although veterans make up only 1.8% of the Miami-Dade population, they are among the most at risk for mental illness. According to the RWJ Foundation rankings for Miami-Dade, the uninsured population is 19% while adult obesity reaches 23%. Innovative alliances The ratio of primary care physicians available to Miami-Dade residents is 1,250-to-1, compared with 1,390-to-1 for the state. A report by the Forces of Change Assessment, says key factors that affect health in Miami-Dade are social/mental health, lack of affordable housing, the Opioid Epidemic, lack of coordination, lack of data driven decision, gun, violence, healthcare immigration policy change, lack of fully integrated sharing system. During community meetings, participants engage in brainstorming sessions to identify forces, such as trends, factors or events, that could impact community health and quality of life or the effectiveness of the local health


system. By understanding and preparing for those forces of change, Miami-Dade can act to minimize or prevent threats while looking for ways to improve community health outcomes. The 2018 Forces of Change Assessment found that access to care, chronic disease prevention, healthcare disparities, and infectious diseases were the biggest challenges facing the county. Miami-Dade’s population growth is another top challenge. Healthcare systems such as Nicklaus Children’s Hospital, Mednax, Baptist Health, and Mount Sinai all launched expansion plans last year, and some of these expansions are creating innovative alliances between the healthcare industry and private companies. One example is the Miami Heat Sports Medicine Center, located in Coral Gables, a collaboration between Baptist Health and the Heat. Other expansions include Nicklaus Children’s Hospital’s new campus near Overtown and Allapatta. The hospital bought the campus for $30 million from the now-bankrupt Miami Medical Center and is looking to build a nine-story learning center and office building. Among other developments, Mount Saini opened its new hospital in January. Skolnick Surgical Tower cost $275 million and includes 154 rooms for patients as well as an emergency department. The expansion helps to serve Miami Beach’s 92,000 residents. Primary care services are also receiving a boost in the southwest and northwest areas of Miami-Dade: Sanitas Medical Center is scheduled to open five new locations this year, three in the City of Miami. They will be dedicated to expanding access to preventative and general medical care. Growth and development These expansions have a direct impact on the area’s healthcare industry growth and employment picture. Florida is expecting to create 150,000 jobs this year, and healthcare is at the top of the list of industries seeking qualified applicants. Baptist Health has pledged to create more than 200 jobs in Broward County as a result of a new facility; in Miami-Dade, the new Belmont Village Senior Living project also will generate new healthcare positions. Telemedicine is another growing segment. America’s largest telemedicine provider, MDLive, which allows anyone to access a board-certified doctor, dermatologist or counselor remotely, attracted a $50 million investment from some of the largest U.S. healthcare businesses. The investment in medical

Penny Shaffer Market President Florida Blue

How can health insurance be more accessible for Miami-Dade residents and what role is Florida Blue playing in that effort? Miami-Dade County has the highest enrollment numbers in the country when it comes to the Affordable Care Act. Some would call our community “ground zero” in terms of individuals who have moved from being uninsured to having insurance. We are all celebrating the amount of education and work that has been undertaken in the community to make this happen. The current cost of living is very high, so insurance premiums that many deem affordable are not necessarily affordable to everyone — even with available subsidies. However, we have made and will continue to make inroads to make insurance more accessible and affordable for everyone. How does Florida Blue address healthcare costs for its local client base in South Florida? Our primary focus is affordability, which means working with partners, providers, lawmakers and the community to move towards more and better valuebased arrangements. It involves the moving from an illness model to a wellness model that rewards and incentivizes prevention. This means encouraging consumers and patients to visit their local doctor at least once a year to have a physical and health risk assessment, and to receive age-appropriate screenings. The idea is to treat someone’s health maintenance like a guided missile that only needs small corrections over time. Ultimately, this works to keep patients well for a longer period of time. The doctor and patient are not waiting until intervention is needed for something severe. We are also helping consumers achieve better patterns of utilization, which also helps with affordability as well as achieving favorable patient outcomes.

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technology could help reduce healthcare costs and maintain the county’s top ranking in the sector. A newcomer to the space, CloudCare, which added 40 jobs to the Miami-Dade healthcare market last year, launched its telemedicine platform in 2017. Despite the new wave of tech investment in healthcare, telemedicine’s biggest obstacle are insurance companies that are reluctant to pay for the service. The top bipartisan issue in national healthcare is coverage for pre-existing conditions, as most U.S. citizens are invested in keeping these protections, originally introduced by President Barack Obama’s Affordable Care Act (ACA). Between 2016 and the end of 2018, cuts to advertising for the ACA have reduced the visibility of deadlines for registration in the program. Additionally, alternative plans introduced by the Trump administration have limited the benefits it provides. Medicaid expansion is another top priority for voters. More than half of residents in the 14 states where Medicaid has not been expanded want to see the program broadened. The 31% of this group who state they are happy with the current program would

Mental heath care providers are working to provide alternative treatment for their patients such as group psychotherapy.

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prefer to change their position if work requirements are introduced. In contrast, one in three U.S. citizens living in states with expanded Medicaid say the expansion has benefited their healthcare. On March 4, 2019, the Title X family planning program was finalized. This program will shift the availability of federal funds, making them unavailable to providers who offer abortions. Statewide challenges Florida ranks 48th for healthcare access and 34th for healthcare overall. This may be influenced by the state’s decision not to expand Medicaid. Florida Senator Debbie Mayfield introduced the Health Insurer Authorization bill this year, which would help protect patients from receiving the wrong medication and broaden providers’ ability to introduce more therapies at their discretion. Additionally, Senator Keith Perry introduced a bill that would allow patients to refuse opioids as a treatment. This is meant to reduce the rise in opioid addictions that impact Florida and the U.S. One of the most fiercely debated policy issues on the national, state and county levels is drug pricing. The Trump administration has mentioned placing


HEALTH OVERVIEW

restrictions on drug costs and setting prices based on worldwide averages. With Pfizer and other companies delaying price increases to avoid a political backlash, many states are considering enacting policies that place a cap on drug prices. Among the most expensive and commonly used drugs, Humira, which treats autoimmune diseases, can cost patients up to $50,000 a year. Health insurance With 553,941 uninsured individuals in Miami-Dade, there is a gap in coverage for many adults and families. The lack of coverage is due to several factors, including a large immigrant population that is unaccustomed to paying for health insurance. Additionally, according to a 2018 eHealth survey, average individual short term health insurance premiums in Florida are $115 a month, with a $4,945 deductible. For family plans, these numbers are $285 and $9,371. Only six providers are available through Florida’s Health Insurance Marketplace in Miami-Dade. However, more options for coverage are emerging as small- and midsized companies have been entering the market to fill the gap. Small businesses in the insurance industry mean more options and competition for wellestablished providers. Another factor in consumers’ favor is the elimination of the penalty for not having health insurance. This will do away with the $600 fine many faced last year for lack of coverage. Cancer technology Sylvester Comprehensive Cancer Center has over 300 experts in cancer care and research, adding to its reputation as one of the best cancer facilities in the U.S. Sylvester offers a much wider range of therapies for patients and invests in cutting-edge technology. It is the fourth facility to incorporate an MRI radiation therapy system, a first-of-its-kind technology. It is also the first company on the East Coast to use an Ablatherm robotic high-intensity focused ultrasound to remove cancerous prostate tissue. Children’s health There are approximately 658,000 people under the age of 21 in Miami-Dade County, and of these, 21.5% are living below the poverty line. Low-income children are more likely to go without health insurance. MiamiDade’s child population without health coverage is 9.7%, just a few points higher than the state average. Organizations such as the Consortium for a ( )

Boris Reznik Chairman Biorasi

Florida is very vibrant in terms of clinical research. While most large CROs [or contract research organizations, which provide services to the pharmaceutical, biotechnology, and medical device industries] are headquartered elsewhere, they all have some remote employees based in South Florida. The pharmaceutical and biotech industry in South Florida grew in a series of waves. The first wave came in the 1990s, with people like Phillip Frost, who built a prodigious number of small pharma companies that largely ended up being acquired by out-of-state corporations. These acquisitions left behind a lot of talent and a lot of pharma-minded capital looking for an outlet. The second wave grew out of this pool of talent and capital, and was shepherded by Jeb Bush. During his time as governor, Bush really put a lot of time and energy behind building a sustainable pharma and research hub in Miami. That effort has really panned out over the last decade, and Miami is beginning to come into its own in this industry — we’re seeing a ton of new pharmaceutical companies open their doors and many large, established players opening up regional offices or manufacturing facilities here. Clinical research is obviously an important part of the pharma industry, and Biorasi has been able to double in size from 2017 to 2018 by capitalizing on this growth. South Florida is well on its way to becoming a full, self-sustained biotechnology hub. With that being said, it’s still not easy to find good Clinical Research Associates (CRAs). One effort we have made to mitigate this is our partnership with NovaSoutheastern University (NSU). We approached NSU with the idea of a partnership that would work to create CRAs in the local community. This was due in part to how broad and diverse its health sciences department is. The university approved a CRA track, and now we’re working to approve the project management track. We hope to acquire students graduating from these tracks.

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HEALTH INTERVIEW

New technology How Tenet Health is elevating medical care through innovative solutions

Jeffrey Welch CEO – Tenet Health Miami-Dade Group

Medical Center’s parent company, Tenet Healthcare, is exploring more ways to integrate telemedicine, which will help expedite patient activity and reduce patient readmissions. Tenet’s strategy for telehealth focuses on areas of psychology and behavioral health, as well as dermatology and general medicine. I forsee the possibility of implementing telemedicine into emergency care, too. The idea is to keep people healing at home where they’re comfortable; to keep them healthy at the same time.

How are new technologies shaping your work? In healthcare, technology is transforming the way we take care of our patients. Technology assists both medical professionals and patients in so many ways, and provides faster and more effective solutions that can lead to healthier individuals living in healthier communities. In today’s healthcare industry, it’s important to be focused on providing and utilizing technological advances. Every one of our hospitals in the area has at least one robot that can be used for thoracic general surgery, gynecological and colorectal procedures. The goal is to utilize technology to provide minimally invasive treatment options that can reduce recovery time and get people their lives back, so they can do what they love. In addition, Florida 150 | Invest: Miami 2019 | HEALTH

What strides has Tenet taken to serve the local aging population? The aging population has very specific needs, and we’re tailoring our offerings to better accommodate this group through the amenities we offer as well as staff training. Our hospitals have branded Senior Care Emergency Departments with nurses who are NICHE-certified. NICHE stands for Nurses Improving Care for Health (system) Elders. These emergency rooms feature an age-friendly environment for the elderly that is focused on safety and management of emergency geriatric conditions for seniors. Our team of physicians and clinicians have specialized training in geriatric emergency medicine, enabling them to provide comprehensive ER care specifically designed to fit individual needs. Some of the features of our Senior ERs include specialized nurse and physician training to improve care for the elderly, large-faced clocks, calendars and information boards, oversized keyboards on telephones, nonskid floor surfaces, additional handrails to help prevent falls, soothing lighting, sound resistant walls and thicker, more comfortable mattresses. This initiative has been very well-received in the community.


HEALTH OVERVIEW

Miami residents’ lack of coverage is due to factors including a foreign population unaccustomed to paying for health insurance.

( ) Healthier Miami-Dade have launched a multiyear plan to increase the health of babies born in the county. The Florida Healthy Babies Initiative works with partner organizations to tackle the many factors that influence child health, such as parent education, housing, and poverty. Opioid addiction The South Florida Behavioral Health Network facilitates the link between 39 mental health providers in the county and is tackling several high-priority risk factors. One that is receiving national and local attention is opioid addiction. “Last year, 72,000 people in the U.S. died of opioid overdoses, so this issue can’t be ignored or kept under the radar any longer,” said Bruce Hayden, CEO of Banyan Health Systems, an integrated healthcare provider in Miami and throughout south Florida. “Right now, the city simply cannot support the population of people struggling with opioid addiction. However, we can work to solve this issue through both collaboration and education.” To that end, between 2016 and 2017, a total of $508,234 in grant funds were dedicated to supporting

the implementation of a wide-spread overdose prevention program throughout Miami-Dade. A pilot program called the Opioid Additional Program will assist mental health workers, social workers and paramedics in reducing the number of overdoses from opioids. In 2017, Mayor Carlos A. Gimenez, in partnership with State Attorney Katherine Fernandez-Rundle, the Department of Children and Families, the Florida Department of Health and Miami-Dade County’s Board of County Commissioners Chairman Esteban Bovo, founded the Opioid Addiction Task Force, charged with developing an effective action plan that addresses the reduction of opioid and heroin addiction, prevents overdose deaths and improves the quality of life in our community. The next year, the U.S. House also approved a bill to increase funding to fight the nationwide epidemic with $27 million in grant funding; Miami-Dade received $2.5 million to implement a program that treats addicts with medicine. Others working to ameliorate the crisis include the Healthy Start Coalition of Miami-Dade, Dade County Medical Association, the Florida Department ( )

Last year, 72,000 people in the U.S. died of opioid overdoses.

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HEALTH OVERVIEW

oundtable: Healthcare

Miami’s healthcare institutions are continually raising the bar to address the ails of their citizens. From mental health to geriatric care, the county’s health systems are pushing forward with new technologies and techniques to tackle every day risks.

Jeffrey Freimark President & CEO Miami Jewish Health

What are some of Miami Jewish Health’s accomplishments over the last year? We have a major project underway called the S. Donald Sussman EmpathiCare Village. It will be wildly innovative in terms of its free-range open living environment for people with neurocognitive disorders. It will be similar to a village in that residents will have the liberty of walking around in a safe, secure environment. We also invested about $4 million in the renovation of a few of our major buildings, including our long-term care facility. The renovation consisted of a complete remodeling and restructuration, with a strong emphasis on resident-centered care. How is Miami Jewish Health addressing care innovation? Miami Jewish Health has a reputation for being innovative in the delivery of healthcare for the elderly. Florida PACE Centers (Program of All-Inclusive Care for the Elderly) is a great example of an innovative program — it is designed to keep people out of institutions and living at home. Our PACE Centers, which are responsible for the delivery of all primary, acute, longterm care and supportive services, continue to grow and expand. We also have a home health agency in conjunction with Mount Sinai Medical Center. Both programs are designed to keep people in their home or community, as opposed to in a facility. What are some significant challenges you face? The most significant challenge for all of us in healthcare is maintaining a strong workforce. Regardless of what industry you’re in, workforce issues are a big challenge. Because we take care of people who are typically in very fragile stages of life, we’re very focused on maintaining a strong and significant workforce that treats our patients right. We’re committed to listening to our employees.

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HEALTH OVERVIEW HEALTH ROUNDTABLE

Bruce Hayden

CEO Banyan Health Systems

What is one of the biggest challenges currently facing Banyan Health Systems? Banyan Health is a comprehensive behavioral and physical healthcare system that places a strong focus on substance abuse disorders — and we are currently in a growth industry, which is not a good thing. Right now, society simply cannot support the population of people struggling with opioid addiction. However, we can be supportive of solving this issue through both collaboration and education. How is Banyan Health Systems addressing the opioid epidemic? We need more collaboration throughout the medical community, both locally and nationally. In January we hosted an opioid panel discussion that brought together several influential departments and people from the community, such as the police departments, as well as doctors and researchers from the region. It was a proactive and eye-opening discussion that applied to the community as a whole. Hopefully we will continue to see more of those conversations in the future. Last year, 72,000 people in the U.S. died of opioid overdoses, so this issue can’t be ignored or kept under the radar any longer. How has the industry changed due to an increased need for specialization? Given the current healthcare climate, the industry is now a world of mergers and acquisitions. There is an increased need for specialization and the ability to offer a continuum of services, which is one of the things we have strived to do as an organization with our community partners. There is not enough treatment in the county to support the local population of people struggling with opioid addiction, and it is difficult to expand and establish new facilities due to zoning issues.

Gayle Brooks

Chief Clinical Officer The Renfrew Center

What are the programs that are seeing the most growth or demand today? While we treat all types of eating disorders at The Renfrew Center, recently we have seen an increase in patients struggling with binge eating disorder. This disorder requires specialized treatment and is recognized as a psychiatric disorder. As a result of implementing the evidence-based Unified Treatment Model five years ago, our research demonstrates that patients are significantly improving. Another area where we are seeing an increase is patients who are dealing with Avoidant Restrictive Food Intake Disorder, often described as “picky eating.” This eating disorder is characterized by a high level of sensitivity and aversion to certain foods. The Renfrew Center of Coconut Creek is part of a national network of eating disorders treatment centers for women and adolescent girls. At the center, we offer residential as well as out-patient care for individuals who are battling anorexia, bulimia and binge eating disorder. What has been the impact of the Virtual Therapy Group? Virtual therapy is an area of significant growth in the mental health field that allows us to reach people who live in areas where there aren’t therapists or treatment facilities for eating disorders. We recently launched a telehealth therapy group in Florida that provides support to anyone in the state who is struggling with any eating disorder. We’ve received an excellent response from patients in that program. Virtual therapy is especially helpful for our patients who finish treatment at our facility, but still seek to receive continuing care. If there is no day program offered in their area, they can join this virtual group. This program works for two types of people: those who discover that they need a higher level of care, or those who use it as a tool for their continuing care.

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( ) of Health, HealthPartners and Jackson Health System. AIDS Mami-Dade remains No. 1 for new HIV diagnoses in the U.S., with an infection rate that is four times the national average. The Florida Department of Health is launching a Pre-Exposure Prophylaxis (PrEP) program that would offer the protocol free or at a very low cost. PrEPis a preventive HIV pill that can stop HIV from taking hold and spreading throughout the body.

health professionals in the county. Looking ahead To remain a leader in the healthcare industry, MiamiDade County will have to continue investing in longterm solutions to challenges such as lack of access to healthcare, affordable housing, and prescription drug costs. Technology will play a role as more startups recognize the profit potential of healthcare products and services. As the health insurance industry catches up with the pace of change, more telemedicine options are likely to become available; and artificial intelligence technologies are already being integrated into healthcare practices. One example is Plantation, Florida’s CarePredict, which developed an AI wearable that helps seniors detect when they are in need of emergency care. In January 2019, the company announced it had raised another $9.5 million after attracting $4 million in a December 2017 seed round. Continued growth and innovation at revered local institutions such as the University of Miami Miller School also are likely to fuel continued improvements in the healthcare system.

Miami-Dade invested $6.2 million to establish a mental health department.

Mental health A major initiative for mental health treatment is also underway in Miami-Dade County, with a new mental health department for Miami-Dade public schools. The investment comes after Florida’s senate voted to increase the availability of mental health services for students and teachers. The county invested $6.2 million to establish the department. It will increase the availability of providers to assist educators in screening and identify students who may be suffering from mental illness. As of 2017, there were 2,610 mental health and behavioral

Technology will play a role as more startups recognize the profit potential of healthcare products and services.

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Education: Miami is a renowned college town. More than a quarter-million students attend the city’s public and private institutions of higher education, where they receive rich, practical educations focused on developing the skills that students need to succeed in their fields. Miami-based colleges and universities are particularly focused on maintaining strong relationships with the local business community to develop collaborative curricula and provide extensive internship and workforce training programs.

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Higher learning: Miami’s renowned educational institutes are working with local businesses to shape tomorrow’s skilled workforce Miami is a renowned college town. More than a quartermillion students attend the city’s public and private institutions of higher education, where they receive rich, practical educations focused on developing the skills that students need to succeed in their fields. Miami-based colleges and universities are particularly focused on maintaining strong relationships with the local business community to develop collaborative curricula and provide extensive internship and workforce training programs. This dedication to workforce development is evident in both public and private institutions in Miami. For example, Florida International University boasts a 76% job placement or re-matriculation rate among its bachelor’s degree graduates within one year of earning their degree. “We are beginning to develop lifelong learner programs, including weekend programs, justin-time programs and certificate programs related to technological and data-literacy development,” Mark Rosenberg, president of Florida International University told Invest:. “Skill sets are increasingly becoming multidisciplinary in almost all areas. It’s a whole new world out there, and we want to make sure 158 | Invest: Miami 2019 | EDUCATION

that our students are at the cutting edge of that,” he said. In addition, Miami Dade College, arguably the gold-standard for community colleges and the largest university in the country, confers a tremendous number of associate’s and bachelor’s degrees annually – 13,000 students graduated in May 2019. Miami Dade College has developed into more than simply a large community college under the leadership of Eduardo Padron, who is retiring before the end of 2019; it is a premier school by any standard. In recognition of Miami Dade College’s quality, it received the coveted $1 million Aspen prize for excellence in community college performance for providing its students with a “clear path to economic and social mobility.” Miami is also home to high-performing private universities, such as the University of Miami, located in Coral Gables. University of Miami is a nationallyrecognized private research university with 16,000 students participating in hundreds of active studies, with a particular focus on research in the crucial areas of medicine, marine science, and engineering. “We helped further the UM brand to the South Florida workforce by offering various in-demand certificates ( )


EDUCATION INTERVIEW

Out in front How Florida International University is taking their students to the next level

Mark Rosenberg President – Florida International University

What does the school’s Student Success Initiative signify for students and the community? There is a huge cost associated with higher education today, and we want to do better in terms of graduating students in a timely yet affordable manner. 85% of our students work full- or part-time, so we’re trying to find more and better ways to ensure that even while students are working, they can get access to the education they need and graduate more quickly. Our goal is to achieve a 60-70% four-year graduation rate. To help do this, we have hired student advisers and installed improved technological systems that help ensure students can keep up with their courses in a timely manner, that they are scheduled correctly and that their progress can be monitored. We will eventually work to customize educational pathways for every student. We offer around 10 pathways through the university depending on whether our students start as freshmen or transfer in from state colleges or other universities. How is the university working to shape students for the modern, technologically-driven job market? We are conveying to our students that, while they may not want to be students after they complete their bachelor’s degrees, they are going to need to be lifelong learners due to the rapid changes in the structure of our workforce. We are beginning to develop lifelong learner programs, including weekend programs, justin-time programs and certificate programs related to technological and data-literacy development. We are increasingly asking our English majors to make sure that they learn how to code, and we’re asking our engineers to make sure that they know how to work in teams and develop strong communication skills. Skill sets are increasingly becoming multidisciplinary in

almost all areas. Earlier this year, we even established a bachelor’s of science in the Internet of Things degree program where students can gain knowledge and expertise in modern digital communication devices. How is the university working to solve environmental issues in the area? By 2030, 25-30% of Miami-Dade’s drinking water will be in jeopardy because of saltwater intrusion. 30% of our landmass could be compromised as a result. As such, we have to find solutions. FIU is a cluster of talent. We have a large group of people who have been studying and finding solutions for these issues for decades. We have anywhere from 65 to 85 full-time scientists who work on elements of water and sea-level rise.

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oundtable: Education

EDUCATION OVERVIEW

A first-class city is expected to have first-class education, and Miami-Dade is taking on the challenge in stride. From addressing brain drain to the jobs of tomorrow, the University of Miami is planning for the career paths of Miami’s future.

Guillermo Prado

Dean University of Miami Graduate School

What’s the most important role played by graduate schools? We like to train our students in what the university president likes to call the ‘T-shape.’ We oftentimes forget to train our students in competencies that cut across different disciplines, such as leadership, project-management and negotiation skills. That’s the significant role that the graduate school plays — training these students through various workshops and other training opportunities related to these competencies. What are the ways the Graduate School is encouraging community involvement? A lot of our graduate students are doing active field work and engaging with different community partners, such as the Miami-Dade Public Schools and the Miami-Dade County Parks and Recreation System. Our students are very engaged and interested in the creation of knowledge and innovative ideas. Ultimately, what we are most interested in is taking the knowledge we create and translating it to community practice. How is the school innovating to serve a new generation of students? There are some very exciting new degree programs in the works that will be launched very soon. One centers on climate change and health. It’s an interdisciplinary program that cuts across many of the schools and programs, including the Miller School of Medicine and the Rosenstiel School of Marine and Atmospheric Science. 160 | Invest: Miami 2019 | EDUCATION

Patricia White Dean University of Miami School of Law

What are some of the key programs and curricula offered by the school in high demand? We pride ourselves in being a distinct leader in the innovation, interdisciplinary and international arenas to prepare 21st century lawyers and better meet the expectations of those who hire our graduates. We’re listed among the top four law schools in the country according to the leading Innovation Index, and we’re consistently named as one of the most innovative law schools in the United States and internationally. When it comes to the interdisciplinary arena, we’ve established joint degrees with University of Miami schools covering at least 10 specialties. Many of our curricular offerings in substantive areas such as human rights, immigration and environmental justice are deeply interdisciplinary. The clinics, many of them award-winning, give law students the opportunity to gain significant skills while representing real clients who would not otherwise be able to afford legal services. How has the school navigated the trend of international students? For us, it’s not a trend; rather, it’s an integral part of our existence. We have more than 40 countries represented in our student body. Most of the international students are foreign-trained lawyers who want to take part in our international Master of Laws (LL.M.) programs. The school now has five international LL.M. programs, plus two specialties and an intensive English program for foreign lawyers who first need to improve their English language skills.


EDUCATION ROUNDTABLE EDUCATION OVERVIEW

John Quelch

Dean Miami Business School

What do you attribute to your enrollment growth? Our graduate enrollments are up 12% for the 2018-19 academic year. Most MBA programs are flat or down in enrollment this year. We attribute our growth partly to the increasing recognition of Miami as an attractive destination. We see many more young people interested in coming to Miami for higher education with plans to start and continue their careers in South Florida. The city and the region are getting many accolades for an entrepreneurial spirit and balanced lifestyle, and we’re obviously benefiting from that. What new degree programs, courses and curricula are being developed? We have revamped curricula across our programs. For example, we have a new 10-month M.S. in sustainable business program that is starting next August. That will be the first STEM-certified M.S. in sustainable business degree in the country. We have also integrated our bachelor and master’s programs so that you can now do a BBA, an MS and an MBA in four years and seven months. In conjunction with that, we have launched a new concept that we have trademarked called the ‘flipped MBA’ where, instead of the traditional general curriculum coursework in year one, students have the option of taking specialty courses leading to an M.S. in year one and can add general management courses leading to an MBA in year two. Our No. 1 graduate program right now is the M.S. in business analytics. This area is seeing the highest demand in the market.

Rebecca MacMillan Fox

Dean University of Miami Division of Continuing and International Education What new innovative curricula and programs has the division established over the last year? We helped further the UM brand to the South Florida workforce by offering various in-demand certificates and programs. Our offerings include more than 60 professional development programs that are available on campus, online, or in hybrid formats. Through our Distance Learning Institute (DLI), we are fully resourced to develop online programs, which allows us to be extremely nimble and responsive to the markets’ needs and expectations of convenience, which is critical, especially for busy professionals and international learners. What unique offerings does the division provide for international students? For 67 years, our Intensive English Program has served students from all over the world. Many of these students are conditionally admitted to the University of Miami after completing the program. We are working to reach out to consulates so that we can better serve both the students and their families. We want to make this an appealing place for people to come and show people that there are places in the community where they can acquire a language, and we will customize our programs to fit any language. Regarding South Florida international business community, we provided custom language training in English, Spanish and Portuguese, often with a business focus for small, midsize, and large entities.

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John Murray Provost Barry University

What were some of the highlights for Barry University in 2018? One of the things that Barry has done that has been particularly exciting is our intentional focus on producing student success. We opened a center called the Center for Academic Success and Advising (CASA), which incorporates professional, intrusive advising, providing a one-stop shop for our undergraduate students and all of their academic planning needs. Also, we have really strong athletic teams at Barry, and this year alone we earned two Division 2 national championships, which brings us to a total of 20. In addition, we launched our dual enrollment program and have made connections with two local high schools, Christopher Columbus High School and Doctor’s Charter School, which is on our campus. We’re also actively creating relationships with other high schools, which can be a valuable recruitment tool for Barry. What advantages does Barry’s location in Miami provide? I’ve been at Barry for almost three years, and it’s amazing in terms of student diversity — and by that I mean diversity in many ways, including ethnic, religious and geographical diversity. We have students from all over the world who come to Barry to pursue higher education, as well as students from other parts of the U.S. Students at Barry are truly reflective of the Miami community, and we’ve been able to cultivate some excellent community partnerships in the area to serve our students, such as our Baptist Bond program in partnership with Baptist Health South Florida, which allows students to get a degree through Barry but train onsite at Baptist Hospital. The city will soon also be home to Cristo Rey Miami High School, which will be built next to our campus. We look forward to partnering with them in the future.

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More than a quarter-million students attend the city’s public and private institutions of higher education.

( ) and programs. Our offerings include more than 60 professional development programs that are available on campus, online, or in hybrid formats,” said Rebecca MacMillan Fox, Ph.D., dean of the University of Miami Division of Continuing and International Education. Barry University is one of the Southeast’s largest private Catholic universities, offering over 100 distinct bachelor’s, master’s and doctoral degree programs to an average student population of approximately 8,000. “We have students from all over the world who come to Barry to pursue higher education, as well as students from other parts of the U.S.,” Dr. John Murray, provost of Barry University told Invest:. “We’ve been able to cultivate excellent community partnerships in the area to serve our students, such as our Baptist Bond program in partnership with Baptist Health South Florida, which allows students to get a degree through Barry but train onsite at Baptist Hospital,” he said. St. Thomas University, situated in Miami Gardens, is another private university offering degree programs in a wide variety of areas, including business, justice, ministry, science and other fields. Finally, Florida Memorial University is a historically black university that offers 41 undergraduate programs and four master’s programs. Promoting the continued ( )


EDUCATION OVERVIEW

Source: U.S. News & World Report

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EDUCATION INTERVIEW

Medical minds How University of Miami Miller School of Medicine is educating the doctors of tomorrow

Dr. Henri Ford Dean & Chief Academic Officer – University of Miami Miller School of Medicine a lot of evolution in the field since then, and we believe we have an opportunity to innovate and help lead in that domain. What unique challenges and opportunities does the school’s location provide for medical research? The area has and will continue to attract the most prolific researchers because the city is a fascinating melting pot. We have access to a broad ethnically diverse population, which is extremely beneficial to anyone doing clinical research trials. It allows us to study a wealth of environmental and genetic factors and how these influence responses to various treatments. We don’t have any problem attracting people to come here to conduct research; we just need to continue to develop our infrastructure in order to promote and expand these opportunities. If we do, I have no doubt that the Miller School is going to be the preferred destination for the best clinicians, scientists, and medical students seeking the most innovative advances in biomedical research and clinical care. What new curricula or programs is the medical school developing? Our medical school is actively engaged in completely revamping our curriculum, such that we are in the process of designing a Miller-specific curriculum that we believe will be the model that other institutions will mimic for years to come. The basis of it is a focus on using what we call “entrustable professional activities” to determine the competency of a medical student, as opposed to the traditional four-year structure. This approach will allow our students to complete the transition from medical school to residency earlier. For too long, we’ve been caught up in the inertia of the growth of the field, and the current approach to medical education was defined in 1910. There has been 164 | Invest: Miami 2019 | EDUCATION

How do diversity and inclusion play into the school’s mission and work? You cannot have excellence without diversity and inclusion. When it comes to healthcare, diversity is important in that you need to be able to train a diverse workforce that can relate to, and care for, a heterogeneous population. I am proud to say that we have one of the most diverse faculties in the country. I am not satisfied with the percentage of African American and Native American students we have, and we can still improve in terms of helping economically disadvantaged students. We are actively looking for solutions to these issues, and we have made a lot of progress in doing so.


EDUCATION OVERVIEW

( ) growth of Miami’s venerable institutions of higher education is a key factor of The Beacon Council’s “One Community One Goal” (OCOG) plan to stimulate Miami’s economy and job market, thereby leading to a more vibrant community overall. One of the ways OCOG links higher education and business to promote mutual growth is through the creation of the Academic Leaders Council. The council consists of the presidents of the six institutions above and the Superintendent of Miami-Dade Public Schools. The council meets quarterly to ensure that curricula at all levels are geared toward providing students with an education that aligns with the needs of the business community and prepares them to enter the workforce with the necessary skills to land high-paying jobs. OCOG also created the Talent Development Network, a platform that promotes graduate retention in Miami by matching students with employers for paid

internships that can lead to lasting careers in the community. Thanks to OCOG and the individual efforts of Miami’s institutions of higher education, the city continues to attract world-class students and produce world-class workers, which in turn leads to more jobs as companies flock to Miami to tap into its educated workforce – a virtuous cycle that benefits everyone.

The Talent Development Network is a platform that promotes graduate retention in Miami.

Back to Business Business schools in Miami are taking higher education to the next level. From expanding their curriculum to including programs geared toward innovation to partnering with global organizations, Miami’s business schools are reinventing themselves to meet the future needs of tomorrow’s global leaders. For example, University of Miami Business School will launch a new Master of Science in Sustainable Business in August 2019. The


EDUCATION OVERVIEW

full-time program unites business, science, theory and practice to provide a forward-thinking foundation for those focused on where the world is headed. In addition, Florida International University (FIU) Business has entered into an academic partnership with Georgetown University’s McDonough School of Business to deliver a specialized International Business and Public Policy Program. With Miami being a destination for international students, and a prime gateway to Europe and Latin America, local business schools provide their students with key tools to succeed in the global marketplace.

graduate student enrollment increased by 12% in 2018, demonstrating the draw of its academic programs and location. With its location in a major center for international business, the school is acclaimed for its global perspective, student and faculty diversity, and engagement with the business community. Miami Business School is the new American partner of OneMBA®, the only global executive MBA delivered in partnership by five premier international business schools. The mission of the Miami Business School is to develop innovative ideas and principled leaders that transform global business and society. It strives to be a thought leader that redefines business knowledge and practices in the broadest possible terms, shaping business scholarship and how business is conceived, and to set the standard for business education. University of Miami’s Miami Business School is taking strides to address Miami’s robust small business and startup community via direct funding

Miami is a destination for many international students.

University of Miami - Miami Business School Founded in 1929, the University of Miami’s Miami Business School is a leader in preparing individuals and organizations to excel in the complex, dynamic, and interconnected world of global business. The school offers undergraduate, master’s, doctoral, and executive education programs. Its


and curricula changes. “We are much more integrated into the Miami entrepreneurship ecosystem than we were one or two years ago. We have made significant upgrades to our business plan and hope to soon launch a Canes Angel fund that will be directed at startups involving our students and alumni. We’re also upgrading our entrepreneurship curricula to include more experiential learning and case-based teaching. If funding is forthcoming, we expect to open a center for entrepreneurship by 2020,” said John Quelch, dean of University of Miami, Miami Business School. Florida International University College of Business Since FIU College of Business opened its doors in 1972, it has played a pivotal role in the development of global business leaders. With more than 10,000 undergraduate and graduate students, FIU Business is widely recognized for its expertise in international business, real estate, data analytics, entrepreneurship, healthcare management, and a broad range of financial services. The College of Business is among the 5% of elite business schools worldwide accredited by the Association to Advance Collegiate Schools of Business, also known as AACSB International. In October 2018, the U.S. Department of Education awarded FIU $1.1 million to establish a Center for International Business Education and Research (CIBER). The CIBER at FIU Business intends to create and support more than 50 programs focusing on three themes: developing a bridge between Latin America and the Asia-Pacific region, fostering global intercultural fluency, and facilitating interdisciplinary impact and connectivity. St. Thomas University - Gus Machado School of Business (Expected to open in Fall 2019) The Gus Machado School of Business provides ready access to industries defining the new business frontier: cybersecurity management, accounting, finance, international business, and marketing. The School’s sports administration program is recognized as one of the nation’s best. Having started the first sports administration undergraduate program in the nation in 1973, St. Thomas University has long been a recognized leader in the business of sports. The Gus Machado School of Business at St. Thomas University emphasizes hands-on learning via internships, and promotes an interactive learning environment to give students real-world skills that they can apply as soon as they graduate. Their network of over 1,500 alumni (bachelors, masters, JD, DBA) have careers in nearly every aspect of the sports industry.

David Armstrong President St. Thomas University

You just became President last year. How has your start been? A lot of exciting things have happened since I became president last August. In October, we established the Mendelson Institute for Data Science and Analytics, a major highlight given that data analytics is a huge area in today’s market. In November, we named Tamara Lawson dean of our law school, making her the first woman of color to serve as a permanent dean of a law school in South Florida. In January, we announced we’d start building the Gus Machado School of Business; and in February, our law students won the National American Bar Association Labor Law Trial Competition for the second year in a row. We’ve also raised $250,000 through the Boras Group, a baseball sports agency, which will help us build a new grandstand for our nationally-ranked baseball team. In addition, we’re starting scholarship football, a marching band and a choir. We will be bold and dream big. How are you engaging the city and community to facilitate the university’s growth? St. Thomas is committed to the academic and professional success of our students, who we prepare to become ethical leaders in the global community. I’m all about making community connections to get the word out about St. Thomas University. We will be driving community partnerships that enrich our students’ experience. Our students in data analytics, for example, are working with FedEx to develop plans to improve the company’s logistics process, which gives our students valuable experiential learning at the same time. We’re actually working to make experiential learning a requirement for graduation. We’re creating co-ops, internships, service learning projects and study-abroad opportunities, helping our students get real-world experience before they graduate.

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Miami Dade College: When iconic Miami Dade College President Eduardo Padron announced he would step down in August 2019 after nearly 25 years in that position, it offered a special opportunity for the newly realigned board. It has the difficult but critical task of selecting someone who can guide the vibrant, growing and influential institution with so many ties to Greater Miami and beyond into the future.

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Leading the way: A lifetime of service and the legacy of leadership is driving Greater Miami’s economy with vibrancy When iconic Miami Dade College (MDC) President Dr. Eduardo J. Padron announced he would step down in August 2019 after nearly 25 years in that position, it offered a special opportunity for the newly realigned board of the school. It has the difficult but critical task of selecting someone who can guide the vibrant, growing and influential institution with so many ties to Greater Miami and beyond into the future. MDC is the largest and most diverse institution of higher education in the nation, with eight campuses, some 165,000 students representing 192 nations and more than 300 programs of study and distinct degree pathways. It confers degrees in fields as diverse as technology, education, nursing and film. It has also grown in international stature as well. It offers job training in 21st century fields such as virtual reality, cloud computing and cybersecurity. With the leadership of President Padron, MDC has added a virtual college as well as the New World School of the Arts, the Honors College, countless industry partnerships and much more. The school has notable alumni in professional sports, international businesses and Greater Miami government and law enforcement 170 | Invest: Miami 2019 | MIAMI DADE COLLEGE

agencies. In fact, no institution has impacted the leadership of the city more than MDC. Earlier this year, MDC Alumni Hall of Fame inducted 313 new members. As inductee Dr. Claudio Miro, of Miro Dental Centers, recalled, “When they called me and they told me that I was going to be inducted, I was amazed. I know what MDC does for this community, and I know that if we want to get the kids off the streets and build a better future for the country, we need to give them the tools and education they need to get ahead. That’s what it did for me.” Another Hall of Famer is 2018 recipient Luis E. Diaz, the president and managing partner of Sharff, Wittmer, Kurtz, Jackson & Diaz, a top public accounting firm based in Coral Gables. “I decided to study accounting because of a professor I had at Miami Dade,” he recalled. “MDC is a special place. It was my first stepping stone, and without that foundation, I don’t know where would have ended up. When I began studying at Miami Dade, I never thought I’d be in this position.” Growing impact MDC opened its doors in 1960 with 1,428 students. (

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MIAMI DADE COLLEGE INTERVIEW

Secret weapon Under prudent leadership, Miami Dade College has become one of Miami’s key economic drivers

Eduardo Padron President – Miami Dade College

To what do you attribute the rapid growth and expansion the school has seen over the last few years? The secret to our success is our ability to link and partner with the major players in business. This applies not just to businesses in Miami, where we have an incredible connection to many companies ranging from healthcare to urban development, but also some of the national firms that are leading the way such as Google, Facebook, McKinsey, Amazon and Tesla. All of these partnerships are making it possible for our students to get the most updated education and training, while also opening up opportunities for future jobs. Today’s tech industry is so fast-paced that it’s hard to keep up with new trends. It helps us and our students to have executives from top companies contributing to our curriculum and providing up-todate training and internship opportunities. Business leaders need to understand that the best way to compete in the innovation economy is through talent. In developing that talent, they’re helping themselves. Many of them appreciate that there are institutions in South Florida doing a good job training people for their businesses. What does the expansion of the school’s Medical Campus signify for the school and community? The Medical Campus is very important to us, first because healthcare is one of the most important industries in the area, and second because the need for healthcare practitioners is growing exponentially. We have a variety of different programs in the field. We’ve invested more than $90 million in creating a state-ofthe-art simulation center that will be inaugurated this year and will feature the latest simulation technology. We’ve also graduated more nurses than any college or university in the country. The new investment in the

expansion of our facilities will help to accelerate that. What makes the school’s American Dream Scholarship Fund unique? The program guarantees that every Miami high school student who meets certain requirements has the opportunity to receive at least two years of free education at MDC. Thousands of students have benefited from the program given the almost prohibitive cost of higher education today. You cannot find a more affordable institution than this college, and yet there are still too many people in the city who live on the margin and don’t have the resources to pay the tuition—which is why we have this program as well as many other sources of funds.

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Lilliam Lopez CEO – South Florida Hispanic Chamber of Commerce

Miami Dade College has made significant contributions to the community with their eight campuses and 21 outreach centers within the county; they provide an education to many people in the county that eventually stay here and contribute to the local economy. It’s important to stress that the majority of people that go to Miami Dade College stay in Miami after they graduate. The greatest impact of the college is the contribution of talent that stays in the county and gives back to the community.

( ) President Padron oversaw and led that growth and influence since 1995. By 2015, the student body numbered more than 145,000. It was Florida’s first integrated junior college, with many African American students and Cuban exiles who could not afford other schools. As president, Padron oversaw the name change from Miami Dade Community College to MDC, and is credited with lifting the school into a position of national prominence among the top colleges in the nation. MDC ranks first nationally in conferring degrees to Hispanics and fourth to African Americans. Padron has been honored with the Presidential Medal of Freedom in 2016 from President Barack Obama. He has chaired the American Council on Education, the Association of American Colleges and Universities and the Business/Higher Education Forum. Currently, he serves on the Council on Foreign Relations and was recently inducted into the American Academy of Arts and Sciences, among other prominent appointments. In fact, he has been appointed to national posts by six U.S. presidents. Matter of faculty MDC has been recognized as a great college to work for by The Chronicle of Higher Education. In 2018, the higher education publication named the college for the 10th consecutive year as one of the top schools to work for in the nation, alongside the University of Notre Dame, Quinnipiac University and the University of Southern California to name a few top institutions. In more recognition, five MDC faculty members were named to be 2018 Endowed Teaching Chairs. This is a distinctive faculty honor and one of the college’s most prestigious and valued traditions. Since the Teaching 172 | Invest: Miami 2019 | MIAMI DADE COLLEGE

Chair Program started in 1992, more than 300 faculty members at the college have been recognized. Recipients receive a $7,500 annual stipend for three years to explore new teaching methods and develop projects. The college’s faculty has truly been at the core of many of its national accolades. Loyal and notable alumnus From Miami’s bankers, entrepreneurs and educators to its healthcare administrators, government officials and business executives, MDC alumni are at the helm of all major industries and organizations, both public and private, that make Miami the business and cultural epicenter it is today. No other institution has had more positive impact on leadership of a major metropolitan city than MDC. In fact, 17 bank presidents are MDC alumni. MDC alumni, employees and students directly contribute more than $3.3 billion to Miami-Dade County’s economy, supporting nearly 40,000 jobs. These alumni positively impact Miami’s tourism, hospitality, trade and logistics industries. PortMiami Director and CEO Juan Kuryla leads the largest cruise port in the world. Lester Sola, director of Miami International Airport, is taking this economic engine responsible for more than 200,000 jobs to new heights. Entrepreneurial success stories include Manny Medina, founder of eMerge Americas and Cyxtera; Alfredo Salas, who owns 300+ Pizza Hut restaurants in South Florida as CEO of Koning Restaurants International; Ernie Diaz, a top executive with TD Bank; and Jorge Perez, who has transformed Miami’s skyline as founder of the real estate firm The Related Group and is one of Miami’s most ardent supporters of the arts.


MIAMI DADE COLLEGE OVERVIEW

Prominent Miami lawyer Cesar Alvarez is credited with transforming Greenberg Traurig LLP into an international powerhouse and the largest firm in the U.S. Ariana Fajardo Orshan became the first female to fill South Florida’s top law enforcement position as U.S. attorney. Katherine Fernandez Rundle is the MiamiDade state attorney. Madeline Pumariega became the first woman and Hispanic to lead the Florida College System as chancellor. Nearly three quarters of Miami-Dade County’s nurses are MDC graduates, and more than 80% of all public safety professionals in Miami-Dade County have been trained at its School of Justice. MDC alumni whose service has led to positive change are also found in City Halls across Greater Miami. Elected leaders include Miami-Dade County Mayor Carlos Gimenez, Miami-Dade Commission Chair Audrey M. Edmonson and Aventura Mayor Enid Weisman. Across the entertainment and sports industries, MDC alumni include the Tony Award winner for the Broadway production of Hamilton, Alex Lacamoire; artistic director of the Alvin Ailey American Dance Theater, Robert Battle; playwright Nilo Cruz; actors Andy Garcia and Oscar Isaac; music producer Emilio Estefan; singers Jencarlos Canela and Jon Secada; and baseball legends Mike Piazza and Placido Polanco. Students who graduate from MDC know they have been to a special educational institution with a vast network. The school holds an annual Alumni Hall of Fame Fundraiser and, in 2018, it raised more than $2 million for the second year in a row. Partnerships One reason why MDC has grown exponentially has been its ability to partner with global, leading-edge companies. In fields such as technology and finance, as well as many other areas, these partners are seeking to develop talent while at the same time MDC is providing its students with real world experience, making them job ready upon completion. Tesla’s START training program will begin at MDC in fall 2019. Tesla, a leader in electric car design, chose the college as its first institutional partner for its START program. The 12-week accelerated program has a goal of training students to become Tesla automotive technicians. They will participate in START in a new facility being constructed at Miami Dade’s West Campus. START pays students as they learn and train how to become electric car technicians. Tesla provides the

vehicles, equipment, instructor, tools and curriculum for this hands-on training. To date, more than 125 students from around the country have graduated from Tesla’s START. Tesla will select up to 12 MDC students this summer for the first class in the fall. Thereafter, 16 students will graduate from the program each year. Amazon Web Services (AWS) has also partnered with MDC to facilitate a special training program. Held at the college’s Eduardo J. Padron Campus, the Cloud Essentials course is an introduction to the basic principles of cloud computing. The college also offers an Enterprise Cloud Computing track as part of its Associate in Science in Networking. The concept is for MDC and AWS to offer a gateway for students to become next-generation IT and cloud professionals. For the 2019-2020 academic year, the college is scheduled to launch an Associate in Science in Cloud Computing at its first Cloud Computing Academy. Cloud computing training was also available to faculty members last summer, enabling them to earn certifications, including the highly regarded AWS Cloud Architect designation. Students are also being trained for the AWS Cloud Practitioner certification. Among the college’s big-name partners is also Facebook. The primary focus in this program is developing real-world skills in the field of digital marketing. Students will earn a certificate when they complete 18 credits in the program. The partnership came out of the Facebook Community Boost two-yearold initiative, which offers digital skills and training for those seeking employment in this field. The goal of the program is to empower small business owners

The first Miami Book Fair took place in 1984 and has since been recognized as the nation’s finest literary festival.

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The Miami Culinary Institute offers an educational experience that is at the forefront of the industry.

nationally, and its curriculum will concentrate on real-world learning. Professors at the college are collaborating with Facebook and already received training. Facebook will train the trainers while MDC faculty will teach the courses. The MDC WORKS: Apprenticeship Program is an initiative in which the college partners with the U.S. Department of Labor, the Florida Department of Education and major companies such as Commercial Jet. The goal is to develop a skilled workforce by offering on-the-job training and related technical instruction. It aims to create an apprenticeship hub in South Florida, all culminating with job placement. Goldman Sachs sponsors the 10,000 Small Businesses Program with MDC. The college is now accepting applications for the program’s Cohort 17 project, held at the Wolfson Campus. It offers classroom-based, practical business education for entrepreneurs, including clinics, advice and workshops. It also includes the opportunity to pitch business ideas to potential lenders and investors. It has already graduated 435 students since inception. Scholarships One of the goals of MDC is to be an educational gateway for minorities and individuals in need of financial help to attend college. Scholarships are key to the program’s success. A few examples: American Dream Scholarship is funded by an anonymous $10 million donation to MDC. It provides high school students in Miami-Dade County the opportunity to receive a college education without having to incur debt from student loans. Since its inception, 17,000 students have qualified for the American Dream Scholarship. An impressive 55% 174 | Invest: Miami 2019 | MIAMI DADE COLLEGE

of recipients graduate within three years and 88% of students who receive it enroll in the subsequent fall term. A John S. and James L. Knight Foundation $500,000 Grant For NWSA is given to graduates from the New World School of the Arts at the college. It offers funds for training and mentorship. The five-year grant supports international art immersion trips, giving students knowledge of foreign cultures and the history of art outside of the U.S. This is an invaluable firsthand exposure to the larger world. Some $10 million in federal STEM Awards over the course of the five-year grant were made to the MDC School of Science. The school received the STEM Strategic Pathways to Academic Completion and Excellence (STEM SPACE) in the amount of $5.8 million. It also received $4.7 million for the STEM EnginE (Education, Intern and Employ) award. The monies are for undergraduate research, life skills training, academic advisement and faculty. Another $2.5 million in federal grants were received for high school and college completion. This grant was made to support Upward Bound programs designed to help low-income students finish school. Just recently, a record seven MDC students received the prestigious Jack Kent Cooke scholarship, the most ever awarded at one time to one institution. Moreover, MDC leads the way in Jack Kent Cooke scholars. The Idea Center The Idea Center at MDC is the college’s hub of innovation, the place where students from all disciplines can gather, collaborate and take advantage of resources and training to develop their entrepreneurial ideas. Through cuttingedge entrepreneurship education, professional development and experiential learning, students and community members can acquire the tools needed to identify challenges and develop solutions. The Idea Center has several components including MarketHack, CREATE accelerator, CodePro, The Startup Challenge and the Innovation Lab. Cybersecurity Center of the Americas One of the College’s most recent groundbreaking endeavors, its state-of-the-art Cybersecurity Center of the Americas, was created to address an increasing demand for professionals in the cybersecurity sector. Currently, MDC is the only institution of higher learning in Florida with a Cyberbit range. The range provides students and working professionals in


the community access to hands-on cybersecurity education and simulated training that mirrors real-life cyberattack scenarios. A cyberattack occurs every 39 seconds in the U.S. All the while, there are an estimated 285,000 unfilled cybersecurity jobs across the country including 12,000 openings in Florida alone. Trainees at the Center face real-world hacking and cyberattack scenarios within a highly complex network that rivals the size and scope encountered at the professional level. MDC Medical Center One of the most impactful forces at MDC is the Medical Campus, which will open its new multistory Center for Innovation, Learning and Simulation in fall 2019. The facility features state-of-the-art simulation labs that will employ hands-on teaching methods to mimic real-life scenarios, in areas including operating room, emergency room, labor and delivery suites, respiratory care and more. Students and working professionals will benefit from the latest technology. The Medical Campus enrolls more than 7,000 students annually. The Benjamin León School of Nursing has trained three quarters of nurses in MiamiDade County. In the third quarter of 2018, students seeking licenses after receiving training and education at the school achieved an 80% pass rate. To the local community, it offers low-cost student clinical services. MDC’s award-winning Physician Assistant Program is 27 months long and enables students to become licensed healthcare professionals who practice medicine in collaboration with their physician partners. They conduct physical exams, diagnose and treat illnesses, interpret tests, assist in surgeries and write prescriptions. Within the physician-PA model, they can be autonomous in medical decision-making and may offer diagnostic and therapeutic services. The Physician Assistant Program celebrated its 20th anniversary at MDC in December 2018. Climaxing the graduation program is the White Coat Ceremony, where graduating students receive their coats and take an oath of practice. More than 750 students from 18 classes have graduated from the program, and some 95% of them stayed and practiced in the local area. Culture and the arts Miami Book Fair is a Wolfson Campus-based event which offers the community an opportunity to meet successful authors. Last Fair headliners included Tina Brown, April Ryan and Pete Souza. Other headliners have included Doris Kearns Goodwin and Sally Field.

Jorge Perez Chairman, CEO, Founder Related Group

What have been some of the highlights for Related Group in Miami over the last year? With the completion of three major condo projects — the 450-unit SLS LUX Brickell, the 410-unit Hyde Midtown and the first two towers of our Park Grove property — 2018 was a major year. Fortunately, each of those projects nearly sold out and was completed without any major issue or delay. Each property is stunning in its own way, each quickly becoming key landmarks in their respective neighborhoods. In addition, construction loans for each of them were paid off in full shortly after delivery. What areas and types of projects are seeing the most demand in Miami today? All of Miami’s diverse neighborhoods are seeing a major boom, with each becoming more unique. Brickell continues to solidify itself as the beating heart of downtown; Wynwood is evolving from a retail and entertainment hub to a true neighborhood; Edgewater is quickly establishing itself as one of the city’s most desirable waterfront communities; and Coconut Grove’s architectural pedigree is on a global par, yet still retains its bohemian, small-town charm. Demand for condos and market rate rentals has slowed somewhat due to the large amount of available inventory, but I expect that demand to pick back up as the city continues to grow and attract more residents. How do you feel your experience at MDC helped to pave the way for your career success? Miami Dade College played a key role in my success. It served as my first home after moving to the U.S. from Colombia and exposed me to the American way of life. I had incredible professors who imparted lessons I still follow to this day, and advisers who helped me apply to other schools and secure scholarships. I don’t know what I would have done without their guidance.

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Eric Montes de Oca President & Partner Grycon, LLC. President Latin Builders Association

How do you feel your experience at Miami Dade College helped to pave the way for your success? Miami Dade College (MDC) played an integral part in my development. It gave me structure and discipline with my studies, which helped me move on to graduate from Florida Internataional University’s construction management program with honors. The foundation MDC gave me enabled me to first succeed as a manager in a construction company, which is the same company I work for as president and partner today. How have you worked to maintain a relationship with the college since you graduated? As the president of the Latin Builders Association (LBA), which has a charter academy for high school students, I’ve worked closely with President Padron. He has given our school much guidance on setting up mentorship and dual enrollment programs so that our students are well-prepared to go straight to MDC when they graduate. For those high school students who have decided they’re not going to college, the LBA Academy provides the training they need to go into the workforce, earn a living, take care of their families and not be relegated to a minimum wage job. What impact do you feel the college has had on the local construction industry? The old adage was, ‘you have to go to a university to be successful,’ but that no longer holds true. The reality is that there may be a greater need for tradesmen than people realize. There are shortages of workers in the construction industry and many students don’t understand how much money they can make in these fields. Miami Dade College is training individuals for skilled trades — classes which aren’t taught at most universities. They’re helping these students go out into the workforce and start earning money for themselves and their families.

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In 1990, MDC launched the series now known as Live Arts, which is celebrated as Miami’s most eclectic performing arts series. MDC Live Arts presents groundbreaking artists from across the globe who push boundaries and celebrate traditions that resonate with Miami’s diverse communities including Esperanza Spalding, Paquito D’ Rivera, the Spanish Harlem Orchestra, Kyle Abraham, Ravi Shankar, Branford Marsalis, and Lila Downs, to name a few. Educational components are always incorporated into MDC Live Arts programming as well. MDC has also significantly expanded its visual arts programming, especially through its Museum of Art and Design (MOAD), which hosts major exhibitions showcasing acclaimed contemporary artists whose works relate to, and resonate with, the Miami experience. Located inside MDC’s National Historic Landmark Freedom Tower, MOAD also oversees several permanent galleries within the Freedom Tower, including the Kislak Gallery of Exploration and Discovery and the Cuban Diaspora Cultural Legacy Gallery, a special ode to the tower’s history. The Miami Culinary Institute of MDC creates chefs at the Wolfson Campus. The Chef’s White Coat Ceremony at graduation marks the beginning of a students’ journey toward a new career. Miami Fashion Institute creations range from avant-garde to vintage, all showcasing the hard work of students. Looking ahead In April, the Aspen Institute recognized MDC for its “clear path to economic and social mobility.” Graduates typically earn more than $40,000, which is about 23% higher than new hires in the South Florida region. It was another mile marker for how far Miami Dade has come under Padron — and how limitless its potential may yet be. Two weeks later, MDC received the Lumina Education Innovation Prize, a top national distinction, for the college’s efforts to help adult learners earn credentials that lead to further education and employment in a rapidly changing economy. MDC was specifically recognized for the “earn and learn” launch of the Tesla START program this coming Fall. Fortunately for the school and the city, Padron has already pledged his ongoing support. Shortly after announcing his retirement earlier this year, he said, “There is still much work to do, and I look forward to serving the college and especially Greater Miami in new capacities.”


Tourism, Arts, Culture & Sports: Miami is coming off a record-breaking 2017-2018 tourist season — and there’s no slowdown in sight. Miami International Airport and PortMiami set records in air passengers and cruisers, and hotel room rates rose faster than those of any other major U.S. city. Over 23.3 million tourists visited Miami in 2018, and the travel industry seems optimistic about the future.

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TOURISM, ARTS, CULTURE & SPORTS OVERVIEW

Tourism in numbers:

Source: Greater Miami Convention & Visitors Bureau

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TOURISM, ARTS, CULTURE & SPORTS OVERVIEW

Source: Greater Miami Convention & Visitors Bureau

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TOURISM, ARTS, CULTURE & SPORTS OVERVIEW

Tourism in numbers:

Source: Greater Miami Convention & Visitors Bureau

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TOURISM, ARTS, CULTURE & SPORTS OVERVIEW

Source: Greater Miami Convention & Visitors Bureau

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Enticing city: Miami-Dade expects a breakthrough year in 2019 for tourism, port expansion and preparing for one particularly big event Miami-Dade is anticipating another breakthrough year following a spectacular 2018. Last year, tourism rose as Miami International Airport and PortMiami set records for air passengers and cruisers. Some 16.5 million overnight tourists and 6.8 million day-trippers arrived in Miami during 2018, both milestones. These tourists, mostly international visitors, accounted for $18 billion in revenues, a 31% drop from 2017, although that is likely due to the new research methodology used. Hotel revenue per available room, or RevPAR, rose 6.3%, resulting from higher room rates as well as increased occupancy rates. In Florida, tourism represents some $90 billion in spending, including $24 billion in Miami-Dade alone, according to the Greater Miami Convention and Visitors Bureau. Visit Florida said 126.1 million tourists from outside of state visited Florida in 2018, the eighth-consecutive record year and a 6.2% jump from 2017. Visit Florida itself is being rewarded for the results, with Governor Ron DeSantis proposing to spend $76 million for its marketing efforts next year. Meanwhile, the #FoundInMiami branding campaign highlighted the most popular cultural destinations 182 | Invest: Miami 2019 | TOURISM, ARTS, CULTURE & SPORTS

in Miami-Dade, including South Beach, Little Haiti, Coral Gables, Little Havana and Coconut Grove. The overwhelming majority of Miami-Dade visitors, or 86%, come to Miami on vacation. International visitors also play a key role in the area’s popularity, accounting for about half of all visitors to the county. Indeed, international tourists spent $7.91 billion in 2017, according to Statista Research. Hotels and convention centers Hotel room rates in Miami grew faster than any other major city in the nation from January to November of 2018, according to Smith Travel Research. The average hotel room fetched $193.97, up 6%, while RevPAR rose 6.8%, the second-highest in the U.S. Miami was ranked ninth in the U.S. by occupancy and fifth by room rate and RevPAR in 2017, according to the Visitors Bureau. And the next three years promise tens of thousands of additional rooms and hundreds of new hotels. In 2019 alone, 23 more hotels and 3,200 hotel rooms are expected to open for business. In2020,thehotelindustrymayhaveanevenbiggeryear, however, as 26 hotels with more than 4,127 rooms ( )


TOURISM, ARTS, CULTURE & SPORTS INTERVIEW

Port of call How Norweigian Cruise Line is upping its cruising game in Miami and beyond

Andrew Stuart President & CEO – Norwegian Cruise Line

What is your outlook for the new PortMiami terminal that is currently in development? We are very excited to be changing the landscape in Miami. Miami has been Norwegian’s home since 1966, and our first cruise sailed from this great city. Having a terminal that tells our story to the city is very exciting. It is a big commitment to the city as well, assuring officials that we will maintain a large number of ships here well into the future. This will contribute to the local economy, as each of these ships will be bringing thousands of people into the city regularly. And it will enhance the guest experience; our objective is actually to move people through it as quickly and efficiently as possible. The port and the team there have done a great job for us and all the other cruise lines building terminals in the port. They are working to make sure Miami is a great cruise hub for the industry as a whole — not just our line. What valuable community partnerships has Norwegian Cruise Line cultivated in Miami? We have a long-standing relationship with Camillus House as well as the Boys and Girls Club of MiamiDade, where I am on the board. We are very excited about our relationship with the Boys and Girls Club, and we are planning some exciting things to further that relationship. We have worked with the Miami Learning Experience, a school for children with special needs, where we are the main sponsors of their annual fashion show, which is a truly inspiring event. What are some noteworthy trends in the cruise industry? Taking ships to a broader range of destinations is one trend. For example, we have big ships in the Baltic, Alaska and all the way down to the Caribbean. There

has been tremendous pressure on the industry to up its game in other ways, too — whether that is in regards to dining, entertainment or other amenities. Norwegian continues to address those changing consumer demands. Technology can also enhance the guest experience, but it also needs to be balanced to offer a range of options to guests who may not want to interact with technology too much while they are on a cruise. It’s a matter of learning what people want and adapting to that. Some people use their cell phones to control just about everything, so our job is to figure out how to help them enjoy their experience through a digital platform, such as our app, in a way that is still personal and individualized.

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William Talbert President & CEO Greater Miami Convention and Visitors Bureau

What made 2018 record-setting for Miami tourism? Our marketing and partnership programs are clearly working. Partnership is the core of our success. We have offices on the ground in Brazil, Germany, Columbia, Argentina and others. Miami International Airport is the only airport in the country served by more than 100 airlines. Considering 96% of our visitors come by air, that’s the most important real estate we’ve got in town. We have new air service as well, including direct service from Ireland, Israel and soon Austria and Morocco. What is the significance of the Convention Center Hotel, and what does the approval mean? The hotel will have 800 rooms and will be seamlessly connected to the Miami Beach Convention Center itself. It is significant for the city in that it showcases how we’re back in the convention business. We already spent a significant amount of money to update and expand the convention center, including the addition of the new 60,000-square-foot ballroom. We basically didn’t have a ballroom before, so this is important. We now expect to see a dramatic increase in the convention center’s activity overall. What makes your bureau’s work unique when compared to bureaus in other cities? We’re not only involved in tourism sales, but also in capacity building and neighborhood development. We added a Multicultural Tourism and Development Department to facilitate these activities. No other convention bureau is doing this. We also recently launched a partnership with the Miami Dolphins, called Football Unites, that encourages Dolphin players to engage with youth in local neighborhoods. It’s a great program for the kids.

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The 250,000-square-foot Phillip and Patricia Frost Museum of Science is is a science museum, planetarium, and aquarium.

( ) are expected to open their doors. Rolando Aedo, COO of the Visitors Bureau, said there are currently 55,970 rooms in Miami-Dade, a number that is expected to grow to 65,000 by 2021. Some of that is driven by the re-opening of the refurbished Miami Beach Convention Center and its plans for 800 new hotel rooms. The convention center, which recently completed the main phase of a threeyear, $620 million renovation, has 263,000 square feet of additional space and 10 new meeting rooms. Among the improvements is the facility’s stylish new exterior, designed by Fentress Architects and Arquitectonica, that includes more than 500 giant fins of aluminum and glass to create an undulating, wavelike appearance. The aquatic theme carries into the center’s refurbished interior of the 60-year-old facility. Plans for the 17-story, 190-foot hotel include a skybridge to the convention center. The hotel rooms will be on levels six through 16, with a restaurant, retail stores and a meeting/ballroom on lower levels. Building it represents one of the largest construction projects in Miami’s recent history. The Visitors Bureau commissioners voted in early 2019 to jump-start work on the hotel, which they hope will be completed by the fall of 2022. Miami-Dade


TOURISM, ARTS, CULTURE & SPORTS OVERVIEW

officials say the hotel will help make the Miami Beach Convention Center more competitive in its effort to bring larger conventions to the Miami area. Michael Hooper, general manager of the Hilton Miami Airport Blue Lagoon, said that, as a result of the convention center renovation, his company expects to see the return of many organizations that had held

previous events and conferences in Miami-Dade. “Any time large events or meetings come to the city, we see an increase in demand,” he said. “Miami is an international and exciting destination, which attracts lots of events and tourists, which certainly helps the hotel industry.” And there’s much more to come. A future 27-acre

Frank Steslow President & CEO – Phillip and Patricia Frost Museum of Science

The first year for the museum was really defined by us testing our assumptions. We made assumptions about the audience, product and interest. I looked at the first year as a proof of concept. We were doing a lot of listening on social media and conducting surveys, trying to understand who the audience is and what they like. Year two is really about the adjustments. What is it we want to do to change in response to that evolution? We’re a science museum, and science is about gathering and assessing data and making more valuable assumptions moving forward. We’re trying to practice what we preach.

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TOURISM, ARTS, CULTURE & SPORTS OVERVIEW

Located west of Brickell, Little Havana is noted as a center of social, cultural and political activity in Miami.

development north of downtown called Miami Worldcenter will include 2,050 hotel rooms along with $2.7 billion worth of mixed-use development. Among its attractions will be the Marriott Marquis Miami Worldcenter, which Marriott says is poised to establish its place as another leading convention hotel. The hotel will boast 1,700 rooms and more than 600,000 square feet of meeting, exhibition and event space. Several new hotel chains will arrive in South Florida soon, too. A new hotel brand, Mr. C, will open its third U.S. hotel after openings in New York and Los Angeles; Yotel plans to bring 250 rooms to the downtown; CitizenM, a Netherlands-based hotel chain, will introduce 700 rooms and three hotels; and Marriott’s new, seven-story, $73 million Moxy on Washington Avenue in South Beach will be the first of its kind in Florida and add 202 rooms to Miami Beach.

Last year, South Florida had a 340% increase in hotel purchases, which amounted to $2.8 billion in deals, according to Colliers International. Institutional and private equity funds financed the deals. In the most expensive hotel transaction in Miami since 2016, Spain-based Grup Peralada purchased the Hall South Beach hotel for $58.2 million. There are also expansion and refurbishment projects in the works. One is the well-known Redbury in South Beach, which has budgeted $18 million to expand from 69 guest rooms to 138. And at the famed Fountainbleau Hotel in Miami Beach, a multimilliondollar renovation of its Bleau Bar is underway. According to analytics group STR and Tourism Economics, there will be a RevPAR increase of only 2.3% this year, and more slowing in 2020, when it projects a 1.7% growth rate. It also calls for a flat occupancy rate of about 67% this year, dropping to about 66% in 2020. The strongest room rate growth will be in the luxury segment, it said. Headwinds causing the downward revision include a slowdown in U.S. and international economic conditions, more restrictive Federal Reserve policies and drops in the gross domestic product in other countries. One factor inhibiting Miami-Dade hotel growth is the emergence of Airbnb. In 2018, South Florida participants in that rental program took in $315 million from 1.47 million guests. Miami-Dade hosts made $204 million from 954,000 guests. The tri-county area consisting of Miami-Dade, Broward and Palm Beach counties made up 38% of the $810 million revenue that Florida hosts made in 2018. At a time of rising occupancy at Miami’s hotels, Airbnb is in litigation with Miami Beach over the city’s new ordinances regulating short-term rental properties, which require

Guy Forchion Executive Director – Historic Virginia Key Beach Park

Historic Virginia Key Beach Park has a great value as a community center, particularly for local youth. The YMCA opened a summer camp here focused on marine biology before we even opened up to the public. Two years ago, we added two other summer camps. In addition, the HistoryMiami Museum brings students and schools through for tours of the park as well, which is truly the future of the park — being able to tell its story to young people and educate them about its history.

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TOURISM, ARTS, CULTURE & SPORTS OVERVIEW

Franklin Sirmans Executive Director – Perez Art Museum

Art Week is an incredible week, and we are very fortunate to have partnerships with Art Miami, Art Basel, Design Miami, NADA, UNTITLED, and others. We try to do as much as we can to participate. It’s amazing to be in a place that gets to be in the international art spotlight with an intense focus for a sustained period of time. It is very unique and means a lot to us as an arts institution. The outlook for Miami’s art scene in 2019 is bright. I foresee a lot of collaboration between the local arts institutions, which will further elevate the recognition of the civic and cultural landscape.

hosts to obtain licenses and pay additional taxes. Airbnb is planning an IPO by late 2020 and has been valued at $31 billion. The world’s cruise capital A $43 billion annual contributor to the Miami-Dade economy, PortMiami is preparing for robust growth in cruising in 2019 and beyond. In 2018, the port attracted a record 5.6 million cruise passengers, 22 cruise lines and 55 cruise ships, making Miami the definitive cruise capital of the world. Miami-Dade also benefits from pre- and post-cruising expenditures. Miami-Dade Mayor Carlos Gimenez said he expects to see 7 million cruise passengers a year by 2020. In late 2018, PortMiami debuted its new Terminal A, which was built especially for Royal Caribbean International. It opened just prior to the arrival in January of the cruise line’s latest ship, the Symphony of the Seas, the largest passenger cruise ship in the world by gross tonnage. Terminal A incorporates state-of-the-art facial recognition technology and other innovative features into the boarding process. The $250 million terminal was a partnership between Miami-Dade and Royal Caribbean. Meanwhile, European cruise ship company MSC has signed a nonbinding letter of intent with PortMiami for two new terminals, which are scheduled to be completed in 2022; Richard Branson’s Virgin Voyages will require another terminal, to be completed in 2021; and Norwegian Cruise Line will get another terminal by February 2020. A $3.9 million Florida Seaport Transportation and Economic Development Council program grant is helping to fund the new terminals and other renovations, and it is estimated that all the

construction will generate 334,500 new jobs in MiamiDade by the time it’s complete. Arts, culture, entertainment and retail The factors drawing visitors to Miami are evolving. More and more, visitors are coming for South Florida’s entertainment options, according to hotel executives and managers. “Miami continues to be a popular destination, and the leisure opportunities offered in Miami are amazing. But in addition to that, there are the arts, entertainment and culture,” said Robert Hill, general manager of InterContinental Hotel Miami. “The city has seen the growth of its hotel-room inventory, and occupancies continue to be in the midto high-70s.” Among recent, top-drawing cultural events was the Fashion in Film Festival, a mix of cinema, fashion and art that resulted from a collaboration between the Miami Arts District and Miami Dade College’s Film Festival. Held in March, the event also boasted the participation of Central Saint Martins, University of the Arts London. Art Basel was held in the refurbished Miami Beach Convention Center last year, and it’s scheduled to take place there again between Dec. 5 and 8. Art Basel generated a 6% increase in global art revenue in 2018, making $67.4 billion, according to the 2019 Art Basel and UBS Global Art Market report. The event typically features more than 200 art galleries representing artists from many countries who showcase and sell their modern, contemporary work. The event is a sister fair to another Art Basel, held in Switzerland. During the same week as Art Basel, Miami Art Week involves many other art fairs, exhibits and events

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TOURISM, ARTS, CULTURE & SPORTS INTERVIEW

Super city How Miami is preparing to host football’s biggest event in 2020

Rodney Barreto Chairman – Super Bowl Host Committee

How is Business Connect, the Super Bowl’s new supplier-diversity program, working to encourage diversity within Miami-Dade? Miami is a melting pot, and the committee has always emphasized that Miami has the necessary talent pool and resources to carry out this event. We have worked hand-in-hand with the NFL to promote local minorityowned, women, LGBT and disabled veteran businesses and get them involved with the event. The Business Connect program has evolved a lot over the years, offering opportunities for smaller vendors to attend seminars that provide guidance on how to do business with the NFL. We encourage these smaller vendors to partner up with other similarly sized vendors under the program to contract with the NFL and provide services.

Tell us about the committee’s LIV Miami campaign. Miami has not had a Super Bowl in 10 years, so when partners come into our community they are going to see just how much about the city has changed since then. Super Bowl LIV will highlight the world-class improvements to the newly renovated Hard Rock Stadium. The $550 million renovation touched every aspect of the facility. The campaign will work to showcase all of these new developments and open up everyone’s eyes to the new Miami. One of our main efforts in doing this is the first ever, free block party, Super Bowl Live—a downtown waterfront city park that will offer concerts, family-friendly activities, interactive games and NFL exhibits.

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What is your outlook for the economic impact that the Super Bowl will have on the area? If you were to look at the stats for other cities that have hosted the event recently, such as Minnesota and Atlanta, the cumulative economic impact is around $500 million, which is about what we are expecting. We are excited about the opportunities it will provide for the community and local businesses here. Nearly every sector from will reap the benefits. Super Bowl LIV guests will pay top rates for hotels across Dade, Broward and Palm Beach and spend their leisure time enjoying the area. With the event bringing in over five thousand media from all over the world and broadcasting to 170 countries, it will generate a wealth of free PR for local businesses. We will have local news outlets broadcasting live from places like Miami Gardens and North Miami, further showcasing the city’s neighborhoods and development.


around Miami, many of which are free. “Art Week is an incredible week,” said Franklin Sirmans, director of the Perez Art Museum Miami. “We try to do as much as we can to participate. It’s amazing to be in a place that gets to be in the international art spotlight with an intense focus for a sustained period of time. It’s very unique and means a lot to us as an arts institution.” Among other recent headlines in the arts world, the Adrienne Arsht Center brought back its ever-popular Flamenco Festival Miami, among many other special events and concerts; the New World Symphony honored composer/musician John Williams at the New World Center; the Ultra Music Festival relocated to Virginia Key for its 2019 edition, which provided the electronic music festival with increased capacity and extended operating time; and the Miami City Ballet went on the road to take its “Heatscape” performance to the Kravis Center in West Palm Beach, while partnering locally with the Bass Museum’s Dance & Art Spring Camp to teach young children about dance and the arts. Pérez Art Museum of Miami (PAMM) held its fifth annual Art of the Party, raising $1 million to support Miami arts education. Artist Christina Quarrels was announced as the first recipient of the Pérez Prize by Jorge and Darlene Pérez. Grammy winners and Latin music superstars Marc Anthony and Alejandro Sanz attended the event. The Phillip and Patricia Frost Museum of Science has also had a full schedule, which included its event “A Conversation with Smithsonian Scholars,” a book reading and sleepover at the museum; a “Mission To Mars” planetarium show; and more. President and CEO Frank Steslow said the museum has formed partnerships with both the University of Miami and Florida International University. The UM donated $10 million to form the collaborative partnership. “The idea is for the museum to be able to work with the content and science experts at the university to bring high-quality programs and exhibitions to the museum, and it benefits the university by providing a public output to showcase their research and academic programs.” Meanwhile, the Coconut Playhouse project has been the subject of a legal tussle between the City of Miami Historic and Environmental Preservation Board and Miami-Dade County. In March 2019, the preservation board denied the county’s application to move forward with renovation plans of the historic theater. Meanwhile, the Miami-Dade Commission is awaiting $3 million in state grant funds before proceeding with

Tom Garfinkel Vice Chair, President & CEO Miami Dolphins & Hard Rock Stadium

What can we expect from the organization this year? We’re very excited about hosting the Super Bowl at Hard Rock Stadium for the 11th time in the history of South Florida. We’ve seen a lot of change within the Dolphins this off season, including hiring new Head Coach, Brian Flores. We’re excited about the future of our football organization as we continue our push to sell out every game as we have the last few years. What has been the initial impact of hosting the Miami Open, and what is the expected long-term impact? The Miami Open had been in Key Biscayne for a long time and was potentially going to leave South Florida. Miami Dolphins & Hard Rock Stadium Owner Stephen Ross had a vision to keep it here and do something at the stadium that had never been done before, which was to hold a global major tennis tournament at a football stadium. We put a stadium court inside the stadium, created an entire tennis center outside the stadium for over $70 million, and the feedback that we received was overwhelmingly positive. It was an exciting year one of a 30-year deal and we believe it will have significant economic impact on South Florida for years to come. How are you preparing for Super Bowl LIV? The Miami Super Bowl Host Committee, led by Rodney Barreto, is one of the more experienced in the country. This will be their third Super Bowl so they are bringing a lot of experience to it; the NFL will also have a heavy hand in running the event. We’ve been working very closely with both the host committee and the NFL, and educating both groups about the newly renovated stadium and the things we can do here. We fully expect this to be the best Super Bowl in the history of South Florida.

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Matthew Jafarian EVP of Business Strategy Miami HEAT

What new innovations has the organization introduced to improve the fan experience? One of the fundamental problems in sports is not knowing who the fan is. Paper & PDF tickets are largely anonymous and not knowing your customer can be challending for any organization. Last season, we upgraded to digital ticketing. Now 85% of our fans enter HEAT games with mobile tickets. We were the first in the NBA to do that, and according to Ticketmaster, we now hold the record for highest mobile ticketing usage across any venue in the NBA or NHL. Fans can access tickets three ways: the Ticketmaster app, the Ticketmaster mobile website or the Miami HEAT app. One in every three HEAT fans visits our arena using our app, which allows the organization to develop a close relationship with them. Now that we have this platform, we’re exploring ways to make the fan experience even better, potentially through upgrading our existing mobile payments feature to a full loyalty program. We’re also researching Near Field Communication based tickets, so one day fans can just tap their phones to get in the building. How does the HEAT’s digital strategy align with the organization’s business goals? Understanding our fans allows us to create truly personalized experiences that matter to our customers. We can’t send just one message and expect that to resonate with everyone. If you always get the Papa John’s Meal Deal special, we should let you know the next time it’s available. If you prefer highend Premium experiences, you’ll want to know what culinary selections are available next game. Fans are looking for information that is relevant to them, and our digital strategy can improve the fan experience. In the end, our goal is to use technology to strengthen the connections between our fans, our team and our arena, so fans keep coming back.

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six library projects costing $31.1 million. The projects would include additional branches and renovations. Wine and food festivals in Miami, especially South Beach, are ingrained in the culture of South Florida. The South Beach Wine & Food Festival headlines a list of year-round food and wine festivals in Greater Miami, including the Tuscan Festival Food and Wine Tasting in Doral, Florida, the Las Olas Wine and Food Festival in Ft. Lauderdale, Sip and Shop at Vacillate Wine Bar in Miami, Miami R&B Soul Wine Expo in Miami, Sicilian Wine and Street Food Tasting at Italian Food Hall in Miami, Wine Lovers Tuesday in Miami Beach, and Food Truck Tuesdays in Haulover Park on Miami Beach. Perhaps the biggest entertainment project in all of South Florida, however, will be built where highways I-75 and the Florida Turnpike meet. Developer Robert Gorlow of American Dream Miami says he is building a “fusion of entertainment and retail.” When completed, the $4 billion project will span more than 5 million square feet, with dining, retail and entertainment spaces. Gorlow anticipates it will have a “permanent theatrical acrobatic venue, as well as many other themes and attractions, such as a massive indoor water park, an NHL-sized skating rink, a fashion court with botanical gardens, a submarine lake with a destination aquarium, an art deco village, a theme park and even a ski slope, among other things. Film studios will be on-site, too.” Gorlow estimates that American Dream will bring about 25,000 full-time jobs and 25,000 temporary jobs to the county. Championship city 2019 marked a momentous year for the 35th edition of The Miami Open as the two-week event kicked off in it’s new home at Hard Rock Stadium in Miami Gardens, Florida. The overall tournament attendance hit a record 388,734 which shattered the previous 2012 attendance record of 326,131. Winners included Men’s Singles champion Roger Federer who won his fourth Miami Open title, Ashleigh Barty who took the title in this years Women’s Singles, Men’s Doubles champions Bob and Mike Bryan and Women’s Doubles champions Elise Mertens and Aryna Sabalenka. Upon the conclusion of the two-week tournament, the economic impact for South Florida was said to be in the $390 million range. Miami’s Super Bowl LIV will dominate the headlines at the end of 2019, even though it will not be held until Feb. 2, 2020 at Hard Rock Stadium in Miami Gardens. The big game will coincide with a celebration of the


TOURISM, ARTS, CULTURE & SPORTS OVERVIEW

National Football League’s 100th season. Jim Allen, chairman of Hard Rock International and CEO of Seminole Gaming, believes the economic impact to South Florida could reach nearly $500 million. Atlanta, which hosted the most recent Super Bowl, saw an economic impact that some have estimated to be as high as $185 million. In Miami, that number could be higher. Showcased at the Miami event will be the $550 million in renovations at Hard Rock Stadium. MiamiDade will share hosting duties with Broward and Palm Beach counties; all three national airports will coordinate air traffic. The goal is for all regional transportation businesses, hotels, restaurants, retailers and attractions to coordinate and thereby succeed. Meanwhile, the Miami Marlins’ new owner, the Sherman/Jeter group, is planning enhancements at the ballpark with the goal of drawing more millennials. They want to present the stadium as an entertainment venue, not just a ballpark. On the field, the team will show off a new look: midnight black jerseys with a design in “Miami blue, client red, slate gray and midnight black.” In basketball, the Miami Heat had a 44-38 record in 2017-2018, finishing sixth in the Eastern Conference. The team lost in the first round of the Eastern Conference playoffs, but it has a popular online app, “Miami Heat Mobile,” which gives fans a real-time source of information on the team’s performance. The team continues to draw well, too: In 2018, it was ranked sixth and in 2017 it was ranked seventh. In football, Miami will be home to the College Football

Playoff National Championship on Jan. 11, 2021. The game will determine the champion for the 2020 season. It will also be played at the Hard Rock Stadium. The Miami Dolphins fired their coach and traded their quarterback after a disappointing 7-9 season last year. They have signed a “caretaker” quarterback, Ryan Fitzpatrick, to an $11 million, two-year contract. He’ll replace Ryan Tannehill, at least until the Dolphins can draft their franchise quarterback. Soccer will also get a lot of attention. Miami Freedom Park is a dream for soccer great David Beckham and his business partner Jorge Mas, who are hoping to build a 25,000-seat stadium for Miami’s new soccer team, Inter Miami. Two other events are sure to make headlines in the coming year: a Formula 1, Miami Grand Prix event could happen as early as 2020, according to the sanctioning body, and Capital One Orange Bowl plans are well underway for 2020. Looking ahead While the past few years have brought many challenges, the road ahead looks clearer. Miami is coming off a record-breaking 2017-2018 tourist season, and those tourists’ preferred destinations haven’t changed much over the years: the beaches, South Beach, Bayside Marketplace, Lincoln Road and the downtown. By the end of 2019, Miami is likely to have more hotel rooms than ever as well as record visitors and cruise ship passengers. And the cherry on its cake will be Super Bowl LIV followed by the College Football National Championship.


TOURISM, ARTS, CULTURE & SPORTS INTERVIEW

Home run An updated ballpark promise, fresh excitement for fans of the Miami Marlins

Adam Jones Chief Revenue Officer – Miami Marlins

they experience the new re-imagined Marlins Park experience. We have been encouraged by the high level of fan engagement and enthusiasm through our Dímelo (“Talk to Me”) feedback campaign, which has allowed us to listen to our fans and address their concerns.

What have been some of the highlights for the Marlins since you joined in 2017? Making the commitment to re-connect and re-engage with our community has been a priority for this ownership group and leadership team from day one. Our organization is focused on providing a first-class experience for our guests. We continue to receive positive feedback from our fans and partners as we introduce the new Miami Marlins. Having so many of our local business leaders give us such a warm welcome, realize our vision and commitment, and join our family has been a true highlight. Additionally, the fan excitement during the launch of our new brand was incredible, and we continue to see the same positive response on fans’ faces when 192 | Invest: Miami 2019 | TOURISM, ARTS, CULTURE & SPORTS

What important upgrades and enhancements have been made to the ballpark? We set out this offseason to re-imagine the Marlins Park experience through a variety of ballpark enhancements and re-concepted food and beverage offerings on our Promenade level. We created new options for our millennial audience with The Social presented by Estrella Jalisco in right field and the AutoNation Alley in centerfield. Both offer new vantage points in a social setting for our younger demographic and groups to enjoy the game. Additionally, The Club presented by DEX Imaging is our new premium space and has reset the standard in the industry. The expanded space allows for a more communal vibe, while getting fans up close to the action with views into the Marlins’ batting cages. What new and exciting events and developments are in store for the organization? We have made it very clear that we’re going to be open 365 days a year and need to be a top-of-mind entertainment option in South Florida. We will be holding a college football game at Marlins Park between Florida International University and University of Miami that will see college football return to the former Orange Bowl site and provide a really unique experience. Our immediate outlook is to show growth in all aspects of our business.


Profile for Capital Analytics Associates

Invest: Miami 2019  

Capital Analytics is an integrated media platform that produces in-depth business intelligence through its annual print and digital economic...

Invest: Miami 2019  

Capital Analytics is an integrated media platform that produces in-depth business intelligence through its annual print and digital economic...

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