Palm Beach County Business Magazine (Fall 2013)

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General Aviation | Medical Tourism | Intermodal Centers | Relocations and Expansions

PA L M B E AC H C O U N T Y

Fall 2013

A Quarterly Economic Development Publication

Financial Services A Key Economic Driver

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Financial Services A Key Economic Driver

BDB Luncheon Celebrates Entrepreneurs Entrepreneurs Come Together to Discuss Business

Medical Tourism A Growth Opportunity for Palm Beach County

Intermodal Logistics Centers Moving Palm Beach County Forward

The Many Faces of General Aviation

ON THE COVER:

Supporting Palm Beach County’s Economy

Image by Barry Kinsella

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CONTENTS

News & Events A Regional Update on Economic Development Governor Opens “Tax Cut Tour” BDB Teams With Economic Council on Legislation Aldi Breaks Ground on a New Project A “Top State for Business” Relocations and Expansions

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Welcome from the President TO OUR MEMBERS AND PARTNERS: In reading this issue of Palm Beach County Business, you’ll learn how the general aviation sector contributes to the growth and economic vitality of the region, why Palm Beach County has an opportunity to become an important destination for medical tourism; and why the financial services sector is a one of the county’s strongest assets. Additionally this issue features a brief overview of the proposed Intermodal Logistics Center on 850 acres of industrial land in the Glades Region of western Palm Beach County. I hope you enjoy this edition of Palm Beach County Business which is made possible with the support of the Palm Beach County Board of Commissioners, Workforce Alliance, NextEra Energy, Inc., Florida Crystals, and Suffolk Construction. As we continue to further the growth of Palm Beach County’s wide-ranging economy, please continue to follow us on Facebook and Twitter and watch for our e-newsletters to stay well-informed on economic development and business news and events in Palm Beach County.

Kelly Smallridge President and CEO

Business Development Board of Palm Beach County, Inc. 310 Evernia Street | West Palm Beach, FL 33401 561.835.1008 | www.bdb.org Palm Beach County’s Economic Development Resource

Published by » Passport

Publications & Media Corporation

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A Key Economic Driver Whether providing private banking services, commercial lines of credit, international trade finance, insurance coverage or accounting support, a robust financial services sector is one of Palm Beach County‘s strongest assets. Craig Grant

Frank Compiani

Fabiola Brumley

Chris Havlicek

“The financial industry is a major engine in keeping Palm Beach County’s economy moving forward,” said Craig Grant, regional president for Florida at PNC Bank in West Palm Beach. He added that about 7 percent of South Florida employees are involved in financial services – significantly above the national average. “Financing is what grows both businesses and individuals,” Grant said. “Many Palm Beach County companies have come through the recession quite well. Today, there are many opportunities and options to finance business growth. There is a lot of banking competition here and that works to the benefit of companies seeking a financial services partner that can bring them the best ideas and help with their cash flow and loan needs.” In the past year, Palm Beach County has drawn national attention as a new low-tax, high-quality-of-life home for hedge funds, private equity funds and other investment companies (See related stories.) “From a lifestyle perspective, Palm Beach County has the ocean, the culture, the golf and everything else you could want,” said Fabiola Brumley, Palm Beach market president/Southeast regional executive in commercial banking at Bank of America and former chair of the Business Development Board (BDB). “It’s also a place where you can enjoy a lower income-tax situation, while running business operations in other locations. Having funds relocate from states with high tax rates is a big positive for both Florida and Palm Beach County.” The growth in investment funds also adds to the region’s longstanding strength in serving high-net-worth individuals and families. “In communities like Palm Beach County that have wealthy residents and visitors, people need access to quality financial infrastructure,” said Chris Havlicek, Palm Beach market manager, J.P. Morgan Private Bank. “It is imperative that the professional service organizations represented in our county mirror today’s flourishing business environment as well as reflect our future economic development goals,” said Frank T. Compiani, office managing partner, McGladrey LLP in West Palm Beach and currently the BDB Chairman. “The strength of the financial and professional services in Palm Beach County is excellent. It rivals the professional services available in the large metropolitan areas around the country and includes local offices of most of the premier financial and professional service organizations in the world.”

A Positive Business Climate Palm Beach County’s positive business climate is creating new opportunities for banks to partner with large-scale commercial customers and small and mid-size businesses (SMBs), according to Brumley. “Our commercial lending is up about 40 percent over 2011 and our small business segment is doing well, too,” she said . “We can help businesses with their growth strategies.” She adds that a growing number of Palm Beach County companies are building their import and export businesses, and finding new sources of revenue outside the domestic channels. On the retail services side, Bank of America, Merrill Lynch and U.S. Trust are all thriving in Palm Beach County, said Brumley. “As the economy improves, so do the lives of our full-time and part-time residents,” she said. “We have also seen changes in the behaviors of our customers, who are increasingly using mobile banking services, as well as our other channels.” Another growing financial services provider is PNC, which now has a Palm Beach County network of 51 branches and is expanding into the Broward market. “We have doubled in size in four years in terms of employees,” Grant said. “This is a great market for us. We’re seeing businesses expanding and starting to borrow again, and our wealth management business has grown as well. After years of being very thoughtful about capital expenditures, businesses are now opening up a little more.” On the wealth management side, individuals, couples and families need solid financial advice – now more than ever, according to Havlicek. “Firms that have the infrastructure and horsepower to provide that are able to grow in our region. Havlicek points to the diversity of the county’s market. “We have clients from around the world, and our banking team includes professionals from Geneva, London, New York, Boston as well as many Floridians,” he said. “Today you have to view the world globally more than ever – finances and politics are intertwined.” Currently, JP Morgan and Chase Bank together employ about

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17,000 people in Florida. “We combine retail with our powerful private banking franchise and that creates tremendous growth opportunities,” Havlicek said. “We have hired eight people for my Palm Beach team so far this year, as well as many more around the state. We are also proud of hiring more than 700 veterans here in Florida in keeping with a nationwide J.P. Morgan initiative.”

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Attracting New Talent and Investment

A dynamic financial and professional services sector is a key driver in economic development, according to the region’s professionals. “As businesses consider relocating to Palm Beach County and entrepreneurs consider starting a business, the availability of strong professional organizations to provide support for those businesses is an important criteria in selecting Palm Beach County,” said McGladrey. “Also, a strong professional environment helps attract high-level talent to the area.” Leading financial institutions work closely with the Business Development Board of Palm Beach County, Enterprise Florida and other groups to support expansion and relocation projects. Havlicek, Grant and Brumley say that the work of the BDB leads to better outcomes for the entire community. “I’m a huge fan of the BDB,” said Grant. “Their team does an outstanding job of positioning Palm Beach County in the forefront of the state, and that’s shown by the high level of expansion we’ve seen in recent years.” Brumley adds that having BDB President and CEO Kelly Smallridge serving on the Enterprise Florida board helps Palm Beach County on the state level. “Enterprise Florida and the BDB are clearly focused on what we need to do to take advantage of new opportunities, such as the potential growth in Florida trade following the widening of the Panama Canal in 2014.” Summing up the importance of the sector, Compiani said, “Recent corporate moves to our county demonstrate in part the high level of professional service resources available here in our vibrant business community.”

Camden Capital Finds Warm Home in Palm Beach County

After enjoying the Palm Beach County lifestyle for more than a decade, Rich P. Bursek, partner, Camden Capital, brought the privately held wealth management firm from Los Angeles to Jupiter this June. “Palm Beach County’s demographics are perfectly aligned with Camden’s business model,” said Bursek, who has lived here since 2001. “It’s an excellent location for an affluent financial services firm like Camden.” Established over a generation ago, Camden Capital provides investment advice and legacy planning tailored to high net worth individuals, families, business owners and entrepreneurs. “Our wealth management firm still maintains a substantial office in Los Angeles, but we believe the Florida market has great growth potential for us,” Bursek said. Demographic studies show that Florida has the third highest percentage of millionaires in the U.S. behind only California and New

York. “It also has the highest annual growth rate of millionaires,” added Bursek. “Florida’s tax-friendly structure helps attract successful families and business owners to domicile here. We not only are helping local families improve their financial quality of life, for some, we are guiding them as they make their transition to Florida.“ With more than $1.0 billion in assets under advisement and management, Camden Capital has grown its business primarily through referrals. “We are committed to hiring knowledgeable people who deliver really good client service,” he said, noting the firm has had no problems recruiting a strong workforce for its growing presence. “Palm Beach County is a very sophisticated financial services market with many talented and experienced professionals,” he said. “That gives us a great foundation for building a premier financial service organization.”

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Financial Services Private Equity Firm Looks to Grow After Moving to Boca Raton After relocating from New York to Boca Raton, Kayne Anderson Real Estate Advisors (KAREA) is looking to expand its real estate private equity business. “Palm Beach County has been on our radar for years, so we’re excited to finally make this move,” said Al Rabil, managing partner and CEO of Kayne Anderson Real Estate Advisors. “Not only does the county provide solid economic opportunity for our firm, there is a strong talent pool that can help further our business objectives. We anticipate hiring additional people in the very near term.” KAREA originates, executes and manages private investments in specialized niche real estate sectors, principally off-campus student housing. This summer, the company leased 12,750 square feet of space at One Town Center in Boca Raton. In addition to 20 relocating employees, the company plans to hire additional people over the next 12 months. The BDB assisted the KAREA team with tours of Class A office space, tours of public and private schools, introductions to business

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Delray Beach Investment Firm Focuses on Real Estate

Steven A. Michael has been active in financial and real estate investments for the past 30 years. Now, he's building a firm in Delray Beach that caters to high-net-worth individuals and families. “We have about 15 people here and expect to grow,” said Michael, who helps lead a BDB task force that's recruiting hedge funds, private equity funds and other financial firms for Palm Beach County. After building Stonehenge Asset Management, LLC to be a leader in the alternative asset investment market, Michael sold half of his holdings to another firm, East West Advisors, in order to focus on Hudson Holdings, a real estate investment firm. “We offer a structured fund where the principal is protected by a bond portfolio,” he said. “One of the advantages is that this is a totally liquid fund, unlike many types of real estate investments.” Originally from Chicago, Michael became a fixed-income and bond trader on the Chicago Board of Trade. He then worked for an investment bank in London, before forming a Connecticut firm in 1999 in partnership with another investor. He moved to Palm Beach County in 2001, and has been active in the arts and cultural sector. “I have been heavily involved in Arts Garage, which helps to build the visual, music and performing arts,” he said. “That's important for our lifestyle, as well as in attracting new financial firms to our region.”

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and community leaders, residential real estate options, jobs for trailing spouses and expedited permitting. “There has been a significant amount of interest from hedge fund and private equity companies looking to set up an office in Palm Beach County. Approximately 15 have relocated to the area over the past two years primarily for the tax advantages coupled with the high quality of life,” said Kelly Smallridge, the BDB’s President and CEO. Smallridge spent June 16-18 in New York City meeting with ten additional firms interested in looking at the county. Kayne Anderson Real Estate Advisors is the private equity real estate arm of Kayne Anderson Capital Advisors, a $21 billion investment management firm with more 30 years of successful experience in the energy, infrastructure, growth capital, real estate and middle market credit sectors. KAREA currently has three funds, with commitments of more than $1.4 billion, investing in specialized niche real estate sectors.

Michael, who is principal of Hudson Holdings, said the firm initially focused on acquiring condominium conversion properties, building a portfolio of more than 2,000 units during the boom years of the mid 2000s. “Now, we are acquiring mixed-use lifestyle developments and class A office buildings that are geared specifically toward hedge funds,” he said. “I know what these firms need, and I believe the migration here will get bigger and bigger.” This summer Hudson Holdings closed on a 60,000-square-foot office building in eastern Delray Beach on Linton at Federal Highway (U.S. 1). “We plan to renovate the building and make it an attractive location for investment funds and financial companies,” Michael said. “Every one of our developments has an arts component, as well, because that is so important to the Palm Beach County lifestyle. For example, we might include popup galleries in retail spaces for local artists, or open up the common areas of our building for art shows and displays.” For investment firms, Michael says Palm Beach County offers a high-quality workforce as well as interns from South Florida colleges and universities. “Having three international airports within easy driving distance is another plus,” he added. “You can fly to South America, Asia or Europe, as well as U.S. destinations. That' important in today's global financial world.”

BDB Luncheon Celebrates

Entrepreneurs Bringing entrepreneurs and investors together to launch start-ups and grow existing businesses is one of the keys to stimulating Palm Beach County’s economy. That was the theme of a Business Development Board luncheon, “Celebrating Entrepreneurs in Palm Beach County,“ held June 27 at the Palm Beach County Convention Center. “We all know the value of entrepreneurs to Palm Beach County,” said Kelly Smallridge, president and CEO, Business Development Board, adding that the luncheon’s goal was to focus attention on that sector and celebrate entrepreneurial success. “It all starts with the little guy with an idea,” said keynote speaker Brian Cohen, chairman, New York Angels and author of “What Every Angel Investor Wants You to Know.“ But investors also want to know about execution – how the entrepreneur plans to turn that great idea into a successful business. Cohen outlined the important role that angel investors play in taking start-ups from the initial injection of funds from family members and friends until the point where they are large enough to attract venture capitalists. “Too many companies fail to get to the next level because they run out of money,” he said. “Angel investors can fill the funding gap, usually contributing between $250,000 and $2 million in return for a share in the equity.” While angel investors can find attractive startups in any type of industry, they generally want companies that are scalable and could generate a high return on their seed money, Cohen said. It’s also important to have an exit strategy in place for those investors. By sharing knowledge and best practices, experienced angel investors can quickly spot the difference between “smart businesses and junk businesses” he added. Therefore, start-ups need to understand what appeals to angel investors. “If you don‘t look like a piece of cheese, you wont get a mouse.” After Cohen’s talk, Steve Politziner, general manager, ESPN West Palm and vice president, Good Karma Broadcasting, moderated a panel with six area entrepreneurs: Ray Titus, president, United Franchise Group Chad Folkening, founder, eCorp.com and co-founder, Domain Holdings LLC Zachary Cherry, founder and managing director, Caerus Ventures Zee Aganovic, CEO, HiConversion Matthew Smith, CEO, Shoes For Crews, LLC Sam Zietz, founder and CEO, TouchSuite The panelists discussed issues related to financing their businesses, and fielded questions from the audience. Asked about sources of funding, Titus said, “Palm Beach County has many wealthy individuals and families, but the money can really come from anywhere.” As for the entrepreneurial climate, he said, “We run a national franchise organization, and have found the infrastructure here is fantastic for entrepreneurs. We couldn’t be more pleased with Palm Beach County.”

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News Events A Regional Update on Economic Development

Governor Opens ‘Tax Cut Tour’

Leaders of three South Florida economic development organizations provided their views of the coming year at “Economic Update 2013: Understanding the Road to Recovery,” a program held by NAIOP, the commercial real estate development organization, on July 24 at the IGFA Fishing Hall of Fame Museum in Dania Beach. The session was moderated by Kenneth Krasnow, managing director, CBRE, Inc., and featured comments from Kelly Smallridge, president and CEO, Business Development Board of Palm Beach County; Steve Beatus, executive vice president, The Beacon Council; and Bob Swindell, president and CEO, Greater Fort Lauderdale Alliance.

Gov. Rick Scott opened a “Tax Cut Tour“ at a recent meeting held at the Palm Beach County Convention Center. More than 100 small and mid-sized businesses attended the Sept. 10 event, which showcased the governor’s plan for a statewide reduction of $500 million in taxes and fees in 2014. Among the possible areas for reductions were car registration fees, property taxes, taxes on commercial leases and taxes on mobile phones. Scott also heard requests for additional state spending on small business grants, incentives for biotech firms and support for South Florida infrastructure projects.

BDB teams with Economic Council to set legislative priorities To encourage economic development, the Economic Council of Palm Beach County recently teamed with the Business Development Board on a set of priorities for the upcoming state legislative session. About 100 business and civic leaders including Florida Secretary of Commerce Gray Swoope, state legislators and county commissioners attended the council’s Sept. 12 meeting. Kelly Smallridge, president and CEO of the BDB joined Economic Council CEO Daniel Martell in unveiling the following 10 priorities for legislative action:

Funding for high-performing economic development boards Continuation of the Enterprise Zone program Developing alternative water supplies Regulate soliciting of civil and criminal clients Setting a standard Internet sales tax Eliminating the sales tax on commercial leases Eliminating duplicate business and professional fees Providing funding for Palm Beach County biotech Requiring Bright Futures scholarship recipients to participate in a job shadowing experience Funding for the Palm Beach State College Loxahatchee campus

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Aldi Breaks Ground on New Project

In one of the largest new development projects in Palm Beach County history, discount grocer Aldi recently broke ground on its new 650,000-square-foot distribution center and regional headquarters in Royal Palm Beach. The center is scheduled to open in 2015, and could be expanded to 821,000 square feet if necessary. Located on a 72-acre site at S.R. 7 and Okeechobee Boulevard, the new center will serve more than 50 Aldi stores from Miami-Dade through Indian River County to the north and is expected to create approximately 150 new jobs. Aldi has been awarded $1.3 million in tax breaks over seven years based on its creation of at least 110 jobs in Royal Palm Beach. “This is a huge economic win for Palm Beach County,” said Kelly Smallridge, president and CEO of the Business Development Board. She noted it was the county’s largest economic development corporate construction project since Office Depot‘s 625,000-square-foot corporate headquarters in Boca Raton in 2008. Smallridge said after the ceremony. “We hope to use this site to show prospects who are in the pipeline that Palm Beach County has the ability to handle a facility of this magnitude.”

A ‘Top State for Business’

Area Development magazine recently ranked Florida among the “Top States for Doing Business.” The publication surveys site consultants and ranks the states based on 17 categories, including business environment, labor climate, infrastructure and global access. Florida was listed as the #8 state in the publication’s fourth annual report.

Relocations & Expansions In partnership with Palm Beach County, The Business Development Board of Palm Beach County (BDB) facilitated these companies’ expansion and relocation plans: Etech Global Services. A contact center and technology solution provider, Etech Global Services is moving from Texas to a 10,000 square-foot facility in Riviera Beach where it will hire 200 employees over the next three years and invest $2.5 million in capital expenditures. The economic impact of this project is expected to exceed $21 million. The company will receive Enterprise Zone Tax Credits based on improvements made to the property and jobs created for enterprise zone residents. Workforce Alliance will be working with the company to fulfill its job requirements and facilitate training grants. Palm Beach State College is also working with Etech to deliver customized programs to meet the company’s training needs. Red Hawk Fire & Security. A leading integrator of electronic life safety and security services with a national footprint, Red Hawk Fire & Security serves commercial enterprises in banking and financial services, high-rise office buildings, retail, education, health care and manufacturing. Headquartered in Boca Raton, the company plans to expand its existing office space by 8,000 square feet to accommodate 35 new professional positions. “As our business continues to grow, we look forward to building upon the success of serving customers across the U.S. from our headquarters here in Boca Raton,” said Dean Seavers, president of Red Hawk Fire & Security Services. Belcan Engineering Group, Inc. Belcan provides engineering outsourcing services, specializing in design, analysis, controls, aftermarket manufacturing and tooling. The Palm Beach Gardens company – which serves industry leaders in the aviation, energy, defense, heavy equipment and consumer product sectors – will add 25 new positions. Palm Beach Orthopaedic Institute, P.A.(PBOI). This multi-specialty orthopaedic practice will create 27 new positions and move 72 existing employees into a new, to be constructed,38,000 square-foot medical office/research campus in Palm Beach Gardens. The new facility is scheduled to open in early 2014. The facility will have state-of-the-art diagnostic and treatment services, doctors’ offices, athletic endurance training programs and introduce a complimentary Outpatient Medical Technology Center with clinical and simulation laboratory uses. With the development of the new facility, PBOI has the ability to introduce a complimentary Sports Training Program, known as D1 Sports Management. This holistic training, character building, sports therapy program will provide collegiate-level athletic training and guidance from the participating medical partners, coaches and trainers, as well as the pro-athlete co-owners of the program. Navinta LLC. This technology driven pharmaceutical company based in Ewing, New Jersey, will expand its footprint in Palm Beach County by occupying 20,000-square-feet of manufacturing and R&D space in Boca Raton. The company will hire 25 new employees with an average annualized wage of $50,000. The economic impact of this project is expected to exceed $24 million. Boca Raton Mayor Susan Whelchel said that Navinta will be a great addition to the Boca Raton community and that the company’s pharmaceutical research laboratory facility is another example of the growing number of biomedical and biotechnology companies locating within the city.

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Medical Tourism:

A Growth Opportunity for Palm Beach County With highly regarded physicians, specialty clinics and hospitals, Palm Beach County has a solid opportunity to become an important destination for medical tourism. “Palm Beach County has an excellent reputation for tourism, particularly with snowbirds from the Northeast,” said Renee-Marie Stephano, president of the Medical Tourism Association in West Palm Beach. “Many people who come here for vacations are also interested in medical services, particularly in cosmetics and dentistry. Recently, some area hospitals have started medical tourism programs to build this sector.” For example, Dror Paley, M.D. at the Paley Advanced Limb Lengthening Institute at St. Mary’s Medical Center is known around the world for handling highly complex surgeries for lengthening arms and legs. The institute treats about 1,000 patients a year, including both U.S. and international visitors. Other hospitals with highly regarded programs include Boca Raton Regional Hospital, Jupiter Medical Center and JFK Medical Center. “An increase in medical tourism – including patients and families – would generate additional income for hotels, restaurants, rental car companies, stores, attractions and other businesses,” said Kelly Smallridge, president and CEO, Palm Beach County Business Development Board. “This could be an important component to our tourism sector.” The BDB is planning a November meeting of hospital CEOs and biotechnology researchers from Max Planck Institute and Scripps Florida to discuss a collaborative approach to bringing more life sciences companies and institutes to the area. Stephano, who is also chief editor for Medical Tourism Magazine, said studies indicate that medical tourists may spend five or ten times more than the average tourist, since they travel with family members and stay for longer periods. “The financial impact is substantial,” she added. To attract medical tourists, area clinics and hospitals should develop programs that offer concierge services and package rates for medical services and accommodations during and after treatment, said Stephano. “It’s also important to have a strong Internet presence where traveling patients can get information, and to train physicians and staffers in recognizing the special needs of patients and families.” For Palm Beach County, the key to success is building on tourism assets like warm weather and recreational offerings while promoting high-quality medical services, Stephano said, adding, “I see great potential to tie tourism and healthcare together.”

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Intermodal Logistics Centers: Moving Us Forward to Increase Trade and Create Jobs

By Sherry Howard, Deputy Director Palm Beach County Department of Economic Sustainability

A thriving economy depends, in large part, on an interconnected transportation network of highways, rail, seaports, and airports in order to distribute goods. As highlighted in this issue of Business, general aviation plays an important role by providing more specialized services that boost aviation’s impact on improving overall business efficiency, which the Florida Department of Transportation (FDOT) Aviation Office reports at an annual increase of $94.5 billion. South Florida, with its developing multimodal infrastructure system, now has the opportunity to further connect these transportation modes and transform this region into a major hub for trade, logistics, and manufacturing with the advent of Intermodal Logistics Centers. The terms “intermodal logistics center” and “inland port” refer to one or more facilities that serve as an inland point of intermodal transfer of freight. There, activities relating to transport, logistics, goods distribution, consolidation and other valued activities are carried out and are designed to support or be supported by conveyance or shipping through one or more seaports or freight carriers. Domestic sugar producer, Florida Crystals has proposed an Intermodal Logistics Center (ILC) on 850 acres of industrial land in the Glades Region of western Palm Beach County. The ILC project is a component of the Glades Region Master Plan that Palm Beach County is administering with a team of professional partners pursuant to a grant received from the Department of Housing and Urban

Development. Development of the Plan involves extensive public participation and will serve as a guiding blueprint to enhance economic competitiveness in the Glades, focusing on major employment centers. Plans for the ILC include the receipt and shipment of cargo to and from South Florida ports, provision of off-port cargo storage, consolidation, repackaging and transfer of goods. The facility may also include other intermodal terminals and related transportation facilities, warehousing and distribution centers, and other office, light industrial, and manufacturing and assembly uses. It is important to note that not only could such a facility enhance the growth of the logistics and distribution industry cluster and position the county to increase trade, but very important for the Glades Region is the anticipated 4,000+ jobs it could create in an area which has experienced high unemployment. In January, FDOT, District IV released its US 27 Multimodal Planning & Conceptual Engineering (PACE) Study which investigated the feasibility of developing a multimodal US 27 corridor, incorporating rail that would connect with the Port of Miami. The PACE study concluded that US 27 must be widened to accommodate future ILC traffic and that the addition of rail was indeed feasible. As the proposed ILC site in the Glades sits at a crossroads in this transportation corridor, we look forward to further analysis and recommendations coming out of the study. For further information about this and other components of the Glades Region Master Plan, please look for this icon on the DES home page at www.pbcgov.com/des or contact DES at (561) 233-3600.

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The Many Faces of General Aviation… Supporting Palm Beach County’s Economy

A CEO CONSIDERING MOVING THE COMPANY HEADQUARTERS TO Palm Beach County may fly in and out of West Palm Beach on a private jet. But that’s just one of the ways Palm Beach County’s general aviation (GA) sector contributes to the growth and economic vitality of the region. A student at a flight training school, a mechanic refueling a corporate jet, a helicopter pilot hovering above a Glades farm to prevent the crops from freezing, and a volunteer team carrying emergency relief supplies to the Caribbean all rely on the county’s GA facilities. “General aviation drives construction, fuel sales, technology, serves business, and most importantly provides jobs to the community,” said Bruce V. Pelly, director, Palm Beach County Department of Airports. “The entire airport system has about a $3.5 billion economic impact, according to the last state study, and general aviation is a significant portion of that total.” Palm Beach County’s Department of Airports operates four general aviation airports in Lantana, North Palm Beach County and Pahokee, as well as Palm Beach International Airport (PBI) in West Palm Beach. Other facilities, such as publicly owned Boca Raton Airport, Belle Glade State Municipal Airport, and privately operated Wellington Aero Club, also serve the general aviation sector. “General aviation is basically any flight operation other than commercial airline service, and that covers a lot of ground, such as medical airlift (such as TraumaHawk), gliders, law enforcement, sky diving, and so on,” Pelly said. “General aviation users can be large corporations or your next door neighbor who is a hobby flier.”

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Serving the GA market To meet the needs of the general aviation market, the county makes arrangements with fixed-base operators (FBOs) who provide a wide range of services for jet, propeller (reciprocating engine), and rotary (helicopter) aircraft. There are three FBOs at PBI and one at each of the other county facilities. “The entire airport system in Palm Beach County is self sustaining,” said Pelly. ‘We don’t receive any ad valorem tax dollars or general fund monies. All of our funding is generated from user fees either from airlines, general aviation companies and users, or the travelling public.’ ” PBI has about 85,000 general aviation takeoffs and landings per year, accounting for 60 percent of airfield operations, added Pelly, noting that PBI historically is one of the busiest general aviation airports in the country due to year-round good flying weather and a desirable location. “Palm Beach International Airport offers a truly stress-free and stylish environment for travelers at its main terminal building and its first-class general aviation facilities,” said Jorge Pesquera, president and CEO of Palm Beach County Convention and Visitors Bureau. “It’s a great arrival and departure experience for both corporate or leisure travelers. The county’s general aviation program remains a vast contributor to the destination as these affluent travelers represent significant business for our resorts, hotels, restaurants and attractions.” John Langevin, vice president FBO services, Jet Aviation Holdings

USA, Inc., agrees on the importance of the general aviation market. “By providing convenient access and services for the high profile and influential clients of the business world, FBOs play a vital role in Palm Beach County’s growth and economic development,” he said. In the past 28 years, Jet Aviation has built a worldwide FBO network, including a growing facility at PBI. “We handle domestic and corporate aircraft in a concierge-like environment,” Langevin said. “We train our people in hospitality and they are highly regarded in the aviation world.” One of the company’s strengths is providing consistent customer service at its locations around the world, said Langevin, adding, “We take care of everything from servicing the jets to making sure a limo is ready when the passengers step out of the aircraft.” At PBI, Jet Aviation has five hangers totaling about 160,000 square feet and a team that can handle large cabin-class jets, which may carry sports teams or a group of corporate executives. The company supports about 150 jobs, either directly or indirectly, and most employees live within a 30-minute radius of the airport. During the winter season, Jet Aviation houses more than 60 aircraft. “Many of our clients come to Palm Beach during the winter, open their houses and leave in the spring,” he said. “We do get an increase in traffic for golf tournaments, art shows and other special events.” General aviation supports many aspects of the community, from hotels, restaurants and stores to nonprofit organizations said Langevin, adding that Jet Aviation hosts a January gala for Boys and Girls Club of Palm Beach County that raises about $20,000 a year for the charity.

Investing at PBI With strong demand in the region’s GA market, FBOs are investing in their facilities at PBI. Signature Flight Support Corporation recently opened a $13 million terminal for NetJets, which has about 9,000 flights in and out of PBI each year, serving company executives commuting on business. The new facility near Military Trail and Belvedere Road includes a 10,000-square-foot newly constructed terminal with modern amenities as well as approximately six acres of paved ramp, aircraft movement and car parking areas. “This agreement with NetJets allows Signature to offer enhanced services to NetJets owners and crews while at the same time expanding our capacity at Palm Beach International Airport,” said Maria Sastre, president and chief operating officer, Signature Flight Support, in a prepared statement. “The long-term nature of the agreement further solidifies our valued relationship with NetJets.” Headquartered in Orlando, Signature operates at more than 100 locations in the United States, Europe, South America, Africa and Asia. Meanwhile, Galaxy Aviation recently broke ground on a concrete tilt-wall hanger at Kirk and Southern Boulevard, scheduled to be finished in early 2014, according to Jonathan Miller, EVP and general manager, Galaxy Aviaton of Palm Beach.. The building will include 65,000 square feet of hangar and 10,000 square feet of office space with a secure, private parking lot and entrance. “Many corporate executives and high-networth individuals have their own aircraft or fly privately in some capacity,” said Miller. EVP and general manager, Galaxy Aviation of Palm Beach. “Having space at PBI is a true benefit we can offer these people.” After completing two new buildings in the last few years, Galaxy currently has more than 100,000 square feet of hangar and office space on its 40-acre leasehold at PBI, according to Miller. “Our customers range from single-engine pilot owners to Fortune 500 companies and charter operators,” he said. Galaxy subleases some of its space to flight schools, aircraft maintenance companies and other service providers. In August, Palm Beach County selected Galaxy to take over the FBO facilities at Palm Beach County Park Airport in Lantana staring April 1, 2014. The facility had been operated by Lantana Airport for more than five decades. Along with the changeover, Galaxy will direct a $5.5 million improvement program.

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To the south, Galaxy has more than 100,000 square feet of hangar space at Boca Raton Airport, and to the north Galaxy has a FBO in Stuart. “We are a gateway to the area for people looking to grow and conduct business,” said Brad Kost, vice president of marketing. “We want to be a good ambassador for the community and provide them with the highest level of service.”

North County Airport Located off Beeline Highway, North Palm Beach County General Aviation Airport (North County Airport) opened in 1994, making it one of the newest airports in Florida, according to Rick Collins, general manager, Landmark Aviation. “We serve the North County communities and have from 220 to 300 aircraft based here, including single-engine, two- and four-seaters, as well as single-seat aerobic aircraft and a few busienss jets,” he said. “Most aircraft are privately owned and used for recreation, so someone will drive over and fly for a couple of hours.” Landmark also services the aircraft flying in and out of the area, which increases during the winter season and for events like the Honda Classic. “Many of our business clients love the convenience and privacy of using this airport,” Collins said. “A CEO can fly in, spend the day with a medical company or other partner and fly home that evening.” North County Airport also has two helicopter and two fixed-wing flight schools, training students from around the world. “Because South Florida has such good flying weather, we get many students from places like the UK,” Collins said. “We also have a shop here that provides maintenance on jets, piston engines and helicopters, as well as aircraft radios and other components.” Because of the size of the facility – which includes an extensive natural preserve – FPL uses the airport as a staging area for trucks when restoring power after a hurricane.

Glades Airport Landmark also operates the Palm Beach County Glades Airport, located in Pahokee, which has ten hangars with approximately 10 fixed-wing and helicopter aircraft. “This airport is used for flight training, with aircraft from throughout South Florida coming here for students to practice touch-and-go landings,” Collins said. “We also get visitors flying in to go fishing in Lake Okeechobee.” However, the main function of the airport is to support the agriculture sector. From Pahokee, aircraft can do crop dusting, drive away flocks of birds or hover over the fields, stirring up air to prevent crops from freezing. “On cold winter nights, there might be as many as 50 helicopters staging from here. They take turns refueling and the pilots can sleep in the terminal,” Collins said. “Even though we normally close at night, we keep our crews here and do all we can to help save the crops and keep the local economy going.”

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Palm Beach County Department of Aviation operates four general aviation facilities: Palm Beach International Airport in West Palm Beach, which is served by three FBOs (Galaxy, Jet Aviation and Signature). All general aviation aircraft use the south side of the field.

North Palm Beach County General Aviation Airport west of in Palm Beach Gardens, which serves both reciprocating engine and jet aircraft. It has one FBO (Landmark Aviation). The airport facilities consist of a terminal, a large storage hangar, an aircraft maintenance hangar, and 176 aircraft storage hangars. There are several businesses located on the airport including both fixed wing and helicopter flight schools.

Palm Beach County Park Airport in Lantana, which serves both fixed wing and helicopters, but not jet aircraft. The airport has one FBO (Florida Airmotive Palm Beach County) The field also has several flight schools, aircraft maintenance and a propeller shop.

Palm Beach County Glades Airport, which is located three miles southwest of Pahokee and 35 miles west of West Palm Beach. An uncontrolled airport, it is popular for flight training for both fixed wing & helicopters. The airport has one FBO (Landmark Aviation).

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