Greater Fort Lauderdale / Broward County 2018 An in-depth review of the key issues facing Broward’s economy featuring the exclusive insights of prominent industry leaders
$159.00 ISBN 978-0-9988966-1-8
59999
9 780998 896618
Contents:
44 Market voices: Caroline Fleischer, Co-Managing Principal, Cresa South Florida; Ryan Nee, Vice President & Regional Manager, Marcus & Millichap Real Estate Investment Services of Florida; Michael Comras, President & CEO, The Comras Company of Florida
49 Construction, Infrastructure & Utilities:
7 Economy:
10 Progress on the sea: With yearround sunshine and a favorable business climate, Broward County is attractive for companies and people. Even recent outside influence, both political and natural, has not managed to destabilize the area
of National Sales, Hotwire Communications
29 Perspective: Peggy Nordeen, CEO,
31 Real Estate:
12 Interview: Beam Furr, Vice Mayor, Broward County
population, investor capital has
14 Interview: Bertha Henry, CEO, Broward County
Fort Lauderdale’s real estate market
35: Interview: Dennis Mele, Shareholder, Land Use & Zoning
22 Interview: Bob Swindell, President & CEO, Greater Fort Lauderdale Alliance
24 Technical knockout: “Work in the Cloud, Live in the Sun,” the Greater Fort Lauderdale Alliance advertises, as local companies, government institutions and schools help to make the IT sector an exciting prospect
26 Interview: David Henshall, Director, President & CEO, Citrix Systems
34 Right time, right place: Bolstered
found the right place in Greater
20 Interview: James Donnelly, Chairman, Broward Workshop
52 Viewpoint: Charles “Chip” Reid, CEO, Current Builders
54 Perspective: Gregory Stuart, Executive Director, Broward Metropolitan Planning Organization
55 Interview: Bob Moss, Chairman & CEO, Moss & Associates
56 Perspective: Henry Sniezek, Director, Broward County Department of Environmental Protection & Growth Management
58 Perspective: Thomas Miller, CEO, Miller Construction Company
59 Interview: Thomas Hutka, Director, Broward County Department of Public Works
60 Perspective: Michael Kaufman, President & CEO, Kaufman Lynn Construction
by a thriving economy and growing
25 Perspective: Rehan Khan, President & CEO, Acordis International
51 Interview: Scott MacLaren, President, Stiles
32 Real Estate in numbers
11 Interview: Rick Scott, Governor, State of Florida
Starmark International
50 Quality controlled: With demand for property increasing, the construction industry’s main challenges are shortages of workers and available land. The area’s utilities companies are effective and well run, adding to a robust infrastructure
Executive Vice President
8 Economy in numbers
27 Perspective: Daniel O’Connell,
Chair, GreenspoonMarder 36 Interview: Joseph Kavana, Chairman & CEO, K Group Holdings, Inc. 37 Perspective: Jim Ellis, President, Ellis Diversified; Chair, Riverwalk Fort Lauderdale
63 Transportation & Aviation:
38 Interview: Greg West, Chief Development Officer, ZOM Living;
64 Transportation & Aviation in numbers
65 Upward mobility: With ample airport connections, a new tricounty rail system and a developed road network, Broward County’s transport sector is well positioned to offer support and convenience to the area’s residents
Chair, Urban Land Institute Southeast Florida & Caribbean Region
40 Interview: Ryan Shear, President, Property Markets Group
42 Interview: Michael Weymouth, President, The Las Olas Company
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Contents: 66: Interview: Mark Gale, CEO, Fort-Lauderdale-Hollywood International Airport 67: Interview: Robert Fornaro, President & CEO, Spirit Airlines 68: Perspective: Jason Annunziata, Director, Fort LauderdaleHollywood International Airport, jetBlue 70: Interview: Jack Stephens, Executive Director, South Florida Regional Transportation Authority
74 Perspective: Diana Alarcon, Transportation & Mobility Director, City of Fort Lauderdale
77 Marine & Logistics:
78 Marine & Logistics in numbers
80 Sea of opportunity: Broward’s advantageous position allows the marine and logistics sector to be well served and an essential part of the local economy. Port Everglades is a crucial economic driver for the county, region and state
81 Interview: Steven Cernak, Chief Executive & Port Director, Port Everglades
82 Interview: Patrick Collins, General Manager, Crowley
83 Perspective: Charlie McCurdy, President & CEO, Informa Global Exhibitions 85 Perspective: Jim Hertwig, President & CEO, Florida East Coast Railway
87 Pembroke Pines:
88 Progress in the Pines: With an emphasis on community, Pembroke Pines is building on its strengths as a family-friendly environment with excellent education and medical amenities, while the new Pembroke Pines City Center is adding new dimensions to the area’s offerings
89: Interview: Frank Ortis, Mayor, City of Pembroke Pines
90 Perspective: Mark Doyle, CEO, Memorial Pembroke
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91 Viewpoint: Charles Dodge, City Manager, City of Pembroke Pines
92 Viewpoint: Leah Carpenter, CEO, Memorial Hospital West
94 Interview: Ron Bergeron, Founder & CEO, Bergeron Land Development
95 Interview: David Martin, President, Terra Group
97 Banking & Finance: 98 Banking & Finance in numbers 100 Bank balance: A mixture of national institutions and community banks means Broward County is well served when it comes to financial institutions. Potential new legislation could have a positive impact on institutions in the banking sector as it experiences continuing consolidation 101 Interview: Tony Coley, South Florida Regional President, BB&T 103 Interview: Cressman Bronson, Florida Regional President, PNC Bank 104 Perspective: David Druey, Division President, Centennial Bank 105 Market voices: Shannon Alfonso, Florida Region President & CEO, Marsh & McLennan Agency; Zeb Holt, South Florida Area President, Arthur J. Gallagher & Co.; Rachel Sapoznik, President & CEO, Sapoznik Insurance
107 Healthcare: 108 Environmental health: With an aged demographic and environmental challenges, the area’s medical facilities have their work cut out for them. A number of top-class institutions are ensuring that the area’s residents are well served
115 Market voices: Penny Shaffer, South Florida Market President, Florida Blue; James Repp, President & Chief Operating Officer, AvMed; John Benz, President & CEO, Community Care Plan 116 Perspective: Joyita Garg, Vice President of Florida PACE Centers, Miami Jewish Health 117 Interview: Patrick Taylor, President & CEO, Holy Cross Hospital 118 Perspective: Nancy Humbert, Executive Vice President of Ambulatory Services and External Affiliations, Nicklaus Children’s Hospital
119 Education:
109 Interview: Dr. Wael Barsoum, President, Cleveland Clinic Florida
120 Level best: All levels of education are catered to in Broward County, and the sector is a major employer. International students and locals alike enjoy a high quality of instruction
114 Interview: Aurelio Fernandez, III, President & CEO, Memorial Healthcare System
121 Interview: George Hanbury, President & CEO, Nova Southeastern University
reater Fort Lauderdale / G Broward County 2018 130 Perspective: Roger Moore, CEO, Nautical Ventures Group 131 Interview: Paul Puma, Southern Regional President, Kimco Realty 132 Perspective: Robert Shapiro, President, Master Development 134 Perspective: Dev Motwani, President & CEO, Merrimac Ventures
137 Tourism, Culture & Sports: 138 Everything under the sun: Greater Fort Lauderdale has plenty to offer tourists, with the secondlargest cruise port in the world and high-quality attractions. The area is making the most of trends such as Airbnb and luxury travel as the industry moves with the times 139 Interview: Stacey Ritter, President, Greater Fort Lauderdale Convention & Visitors Bureau
122 Interview: Arthur Keiser, Chancellor & CEO, Keiser University
140 Interview: Lisa Lutoff-Perlo, President & CEO, Celebrity Cruises
124 Interview: David Armstrong, President, Broward College
141 Perspective: Edie Rodriguez, CEO & President, Crystal Cruises
127 Dania Beach: 128 Life’s a beach: Once known as the antique capital of the South, Dania Beach now has much more to offer. It is a logistics base, has a growing IT sector and is a family-friendly tourist destination 129 Interview: Tamara James, Mayor, City of Dania Beach
142 Interview: Matthew Caldwell, President & CEO, Florida Panthers 144 Interview: Kelley Shanley, President & CEO, Broward Center for the Performing Arts
ISBN 978-0-9988966-1-8 President: Abby Melone Chief Financial Officer: Albert E. Lindenberg Managing Editor: Alex Mazonowicz Executive Director: Erica Knowles Editorial Manager: Jared Kimball Art Director: Nuno Caldeira Editorial Assistant, Contributing Writer: Valerie Silva Production Assistant: Michael Gargula Accountant: Andrew Mellet Intern: Mackenna Smith Invest: Greater Fort Lauderdale / Broward County 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: Greater Fort Lauderdale / Broward County 2018, 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.
147 Interview: Bonnie Clearwater, Director & Chief Curator, Nova Southeastern
Photo Credits: Contents:
pg 42 – Comras Company of Florida
pg 4 – City of Pembroke Pines
pg 46 – Metropica
Economy:
Construction:
pg 15 – FEC Railway
pg 49 – Small: Hotwire Communications
pg 18 – Brightline
pg 50 – Miller Construction Company
pg 21 – B roward County Department of Environmental Protection and Growth Management pg 24, 28 – Citrix Systems pg 27 – Wyncode Academy
pg 52 – Kaufman Lynn Construction pg 54 – Master Development pg 58, 60 – B roward County Department of Public Works Transport & Aviation:
Real Estate:
pg 63 – Large: FLL
pg 31 – L arge: Ellis Diversified
pg 65 – Southwest Airlines
Small: ZOM Living pg 41 – Ellis Diversified
pg 72 – jetBlue pg 74 – Spirit Airlines
Marine & Logistics: pg 77 – Large: FLL Small: FEC Railway pg 79 – Port Everglades pg 82, 84 – FEC Railway
Education:
Pembroke Pines: pg 87, 88, 93, 94 – City of Pembroke Pines
pg 130– Nautical Ventures
Banking & Finance: pg 97 – Small: PNC Cressman
Tourism:
Healthcare: pg 107 – Large: NSU Small: Memorial Healthcare System pg 108, 112, 116 – NSU pg 110 – Memorial Healthcare System
pg 138 – Winterfest
pg 119 – Large: NSU Small: Broward College pg 120, 123, 125 – Broward College Dania Beach: pg 132 – Kimco Realty pg 137 – Large: NSU Art Museum pg 140 – Broward Center for Performing Arts pg 143 – Florida Panthers Pg 146 – NSU Art Museum Fort Lauderdale
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Economy: The sun shines strong upon Greater Fort Lauderdale. Employment levels have surpassed pre-recession highs, and targeted diversification efforts are bearing fruit. A growing population is driving up home values along with demand for new construction, and massive capital investment projects at the county’s air and seaports are positioning the two vital infrastructure assets to continue driving the economy into 2018 and beyond.
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Economy in numbers: Broward County employment change by sector, May 2017, (year-on-year percent change):
6
7.6
8.1
9
3.1
3.6
3.8
6
2.1 0
1.5
1.5
3
-0,5
0
Government
Other services
Leisure & hospitality
Education & health services
Professional & business services
Financial activities
Information
Trade, transport & utilities
Manufacturing
Construction
Total non-farm
-3
Source: U .S. Bureau of Economic Analysis
Broward County employment by sector, September 2015:
101,600 Government
42,800
26,600
Construction
Manufacturing
37,700 Other services
178,600 90,800 Leisure & hospitality
799,600
Trade, transport & utilities
TOTAL 18,900 Information
102,600
56,800
Education & health services
Financial activities
143,100 Source: Greater Fort Lauderdale Alliance
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Professional & business services
Languages spoken: City of Fort Lauderdale
Percentage of population speaking the language
Number of speakers
Spanish
21,200
13.3
French Creole
10,200
6.4
French
2,279
Portuguese
Broward County
Number of speakers
Spanish
Percentage of population speaking the language
391,000
23.3
French Creole
95,400
5.7
1.4
French
26,000
1.5
1,802
1.1
Portuguese
24,000
1.4
German
972
0.6
Italian
8,431
0.5
Italian
773
0.5
Chinese
8,159
0.5
Other Indo-European
618
0.4
Hebrew
7,226
0.4
Arabic
501
0.3
Urdu
6,366
0.4
Other Asian
445
0.3
Russian
6,295
0.4
2,533
1.6
Other
45,621
2.7
Other Source: Statistical Atlas
250,000
2011
300,027
285,149
2010
269,820
255,010
300,000
250,639
350,000
317,986
Miami-Fort Lauderdale-West Palm Beach, GDP, 2010-2015 (million $):
200,000 2012
2013
2014
2015
Source: U.S. Bureau of Economic Analysis
Broward County income per capita($):
Greater Fort Lauderdale / Broward County unemployment rate (percent):
46,000
14
44,000
12 10
42,000
8 40,000 6 38,000
4
36,000
2
34,000
0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: U .S. Bureau of Economic Analysis
2007 2008 2009 2010
2011
2012
2013
2014
2015
2016
Source: U.S. Bureau of Economic Analysis
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Progress on sea: With year-round sunshine and a favorable business climate, Broward County is attractive for companies and people. Even recent outside influence, both political and natural, has not managed to destabilize the area Some 15 percent of all trade between the U.S. and Latin America passes through Port Everglades, so Broward County is no stranger to the spotlight at home and abroad. The port sees the highest volume of exports in Florida and is the third-busiest cruise terminal in the world. Throughout 2017, passenger traffic has steadily increased at the neighboring Fort LauderdaleHollywood International Airport (FLL). Flights to Cuba commenced the previous year, and several new marquee airlines have begun offering domestic and international service from the airport. Hoping to reinforce their positions as key drivers of the economy, FLL and Port Everglades are undergoing major upgrades and capital expansion projects. The county’s budget for the 2017 fiscal year increased by 12.11 percent to $4.7 billion, around 28 percent of which is reserved for capital investment projects. Underpinning the county’s economic success are increasing employment rates, rising home values and a rapidly growing population. 10 | Invest:
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Lay of the land Broward is positioned at the southeastern extremity of the continental U.S. and in the middle of the MiamiFort Lauderdale metropolitan area, the nation’s eighthlargest. It covers slightly more than 1,200 square miles, making it smaller than Miami-Dade County to the south and Palm Beach County to the north. With the protected tropical wetlands of the Everglades to the west and the Atlantic Ocean to the east, open space for development is limited in Broward, also generally referred to as Greater Fort Lauderdale. Still, every year, the county sees around 12,600 incoming residents, according to state estimates. Greater Fort Lauderdale consists of 31 municipalities and the Broward Municipal Services District. In the 1975 county charter, the local government’s administrative and legislative functions were distinguished and placed in separate hands. The board of county commissioners is responsible for countywide legislation. It is made up of nine partisanelected members, who represent the districts in ( )
ECONOMY INTERVIEW
Expanding horizons How infrastructure and development are helping with job growth in the State of Florida
Rick Scott Governor – State of Florida Which industries are you targeting for job creation, and what are some of the unique advantages that South Florida has? Infrastructure job growth is a huge focus. The ports of South Florida have become incredibly competitive. Port Everglades just completed its bridge project and is in the process of widening the port for post-Panamax ships, a project that is bringing many jobs to the state. All our airports are adding more international flights, which also creates jobs. We spend some $200 million per year on expanding airports, and Florida is now number two in the country for the total number of flights and passengers in and out. We have excelled in aviation and aerospace, with companies such as Boeing expanding their current facilities. When I took office, we were spending $15 million per year on our ports. Now we are spending more than $200 million and about $25 million per year on tourism. Seven years ago, we had 80 million tourists per year. In 2018, we are expecting that number to increase to 120 million tourists, an increase of 50 percent. How is the Trump administration’s focus on infrastructure and jobs impacting Florida? In 2011, the transportation budget was $5 billion. The budget we just finished in 2017 is $10 billion. We are placing a lot of emphasis on improving infrastructure and transportation in Florida. Improving our roads or seaports or airports is a nonpartisan issue. I have created a good relationship with the Corps of Engineers, and we get our permits 99 percent of the time. Since I became Governor, I have cut 5,000 regulations that we didn’t need, taxes have been cut more than 75 times, which has saved families and job creators more than $7 billion and our revenues are skyrocketing. What we have been able to achieve at the state level provides an opportunity for the Federal government.
What is being done to improve the long-term development of Florida’s workforce and education systems? I am working on making sure all the focus of education is on getting prepared for the next step, whether it is preparing you for a job after leaving high school or going to college and then into the workplace. Everyone wants to find work, so they need to be prepared. In our universities, $520 million, which is some 20 percent of their funding, is tied to performance judged on 10 factors with three main points. What is the cost to get a degree? How many students graduate with the degree? And if you get a job, what is the starting salary? This has made universities more focused. We’re making progress with all of our educational establishments improving and colleges like the University of Florida becoming a top-10 university by the end of 2018. www.capitalanalyticsassociates.com | 11
ECONOMY OVERVIEW
Beam Furr Vice Mayor, Broward County
What is being done at the county level to attract new businesses and diversify the local economy? There are certain target industries, such as aviation, marine and technology, that we are trying to bolster by providing the right conditions. A big part of this is making sure that new businesses can find the right locations in Greater Fort Lauderdale to meet their needs. We are working hard to ensure that we have a labor force that can succeed long into the future. We look to see what industries are interested in coming to the area, then make sure that there is an alignment between the needs of these industries and the skills being taught in our public schools as well as our colleges. To attract and ultimately retain new businesses, we have to do everything we can to make sure that our county is a desirable place to live. What are the biggest priorities for Broward County in 2018? South Florida developed in a car-centric society, so it is a difficult place to live without a car. There is affordable housing in our county, but it is not necessarily located where people want to live. Building more workforce housing near mobility hubs is one approach we are taking to make it possible to live and work without having to use a car. Ensuring that we have an educated workforce, that we maintain both physical and digital connectivity and that we are attracting new businesses will make a huge difference in the future of the county. Many people are finding a lot of economic success here, but a large portion of Broward County residents are still struggling financially. We need to find a way to help make the cost of housing, transportation and high-quality early education more affordable. We have a lot of ambitious goals, and we have a lot of people working to make them happen. Broward County is well positioned for the future. 12 | Invest:
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( )which they reside. Each November the commission selects members to serve yearlong terms as Broward’s mayor and vice mayor. The chief executive officer in charge of governing is the county administrator, and Bertha Henry has served in this capacity since 2008. The local government employs more than 6,200 people through its 60 agencies. County on the grow Approximately 1.91 million residents call Greater Fort Lauderdale home, a 9.2-percent growth from the 1.75 million residents estimated on the 2010 census. According to state statistics, Broward will be home to 2 million residents by 2026 and 2.1 million by 2040. Demographics from 2016 showed that an estimated 21.3 percent of county residents were under the age of 18, while 16.1 percent were aged over 65. As of the following August, 1.04 million people comprised the county’s workforce, 995,948 of whom were actively employed. There are more than 300 miles of navigable inland waterways and Atlantic coastline in Broward County, much of it within the city limits of Fort Lauderdale, the county seat. Fort Lauderdale has been called the “Venice of America” because of its boating culture. Three cities in Broward: Sunrise, Tamarac and Pembroke Pines, were finalists for livability awards presented by the U.S. Conference of Mayors. In 2014 Pembroke Pines was named one of the country’s best cities to live in by Money Magazine, which also listed Coral Springs and Weston as some of the most livable small cities in the U.S. Pembroke Pines, Hollywood, Lauderhill and Pompano Beach have all received the National Civic League’s annual “All-America City Award,” as has Fort Lauderdale. CNN Money included Fort Lauderdale on its list of 100 best places to live and launch a business, and the city came in seventh on FDI Magazine’s 201718 list of “Top-10 Small American Cities of the Future.” “We have kept our tax rate the lowest of the 25 larger cities in Florida, which helps create a better business environment as well as a better residential environment,” Lee Feldman, city manager for Fort Lauderdale, told . From the outside While Miami is sometimes referred to as the gateway to Latin America, foreign influence is also strong in Greater Fort Lauderdale. Economic volatility and political instability in several Latin American countries have sent ripples throughout South Florida. One local sector particularly vulnerable to forces beyond U.S. borders is real estate. Florida is a top
ECONOMY OVERVIEW
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ECONOMY OVERVIEW
Bertha Henry CEO, Broward County
What are some of the top drivers of Broward’s current growth trajectory? Broward County’s population is nearing 2 million people and opportunities for growth have never been as robust as they are now. There are a number of major capital projects in the pipeline, which is great news for small businesses and the local workforce. The Fort Lauderdale-Hollywood International Airport is the fastest growing large hub airport in the country, and we are in the process of completing a multibillion dollar expansion. We are moving forward with plans to expand the Greater Fort Lauderdale/Broward County Convention Center and add a new on-site headquarters hotel. A diverse mix of businesses and industries, including technology, aviation and healthcare, call Broward home. The marine industry is very important here and, with our help, Broward-based universities are doing essential research on marine environments, such as coral reefs, that can improve ecosystems across the globe. We hope to become the center for this kind of research. What is your outlook for Broward for 2018? The outlook for Broward has never been better. The expanded runway at the airport and the presence of new global carriers like British Airways and Emirates have opened the world up to us. Our continuing seaport expansion efforts are boosting our local economy and providing new opportunities for County businesses. We are creating some of the fastest growing entrepreneurial incubator and accelerator hubs in the U.S. In 2018, we will continue to attract new companies to Broward and expect to have one of the highest job growth rates in the state. There has been growth in property values, and the average daily room rates for Broward hotels are increasing. People have always known that we have the sun, the beach and the nightlife. Now we’re also offering the flexibility and support for new generations to be able create their own companies. 14 | Invest:
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destination for international investment, and in 2016 it saw 24 percent of the nation’s residential real estate sales to buyers based outside the country. In Miami-Dade, Broward, Palm Beach and Martin counties, international buyers pay on average $570,000 per residential purchase, compared to the overall average of $352,900 per purchase in the same area. A Miami Association of Realtors survey released in 2017 showed that the total value of real estate sales to Brazilian buyers dropped from $965 million in 2015 to $861 million in 2016. Such sales to Argentinians dropped from $516 million to $468 million in the same period, while those to Colombians fell from $530 million to $405 million. Homes in Greater Fort Lauderdale accounted for 25.2 percent of all closed residential sales in the four counties, but only 16.4 percent of sales to international buyers, buffering Broward somewhat from declines in foreign purchasing power. The dollar volume of foreign buyers’ home purchases in Greater Fort Lauderdale fell by just 7.27 percent year on year: from $1.10 billion in 2015 to $1.02 billion in 2016. The majority of these buyers are Venezuelan, accounting for 18 percent of area residences sold to internationals. Colombians made up 17 percent of such purchases, while Canadians made up 13 percent, Argentinians made up 12 percent and Brazilians made up 10 percent. Port advantage Port Everglades is a critical economic engine in Broward. As Florida’s top seaport in terms of total exports, which totaled $11.7 billion in 2016, Port Everglades is also especially connected to shifts in the global economy. Serving more than 150 ports in 70 countries, Port Everglades sees 15 percent of all trade between the U.S. and Latin America. Because of the port’s prominence, global conditions have a direct impact on economic growth in Greater Fort Lauderdale. In conjunction with a two-day visit organized by the Latin American Presidential Mission and the Global Peace Foundation, Port Everglades hosted former presidents of Uruguay, Bolivia and Guatemala. The Central American nation is particularly invested in the performance of Greater Fort Lauderdale’s trade and logistics sector, as Guatemala is Port Everglades’ number-two partner for imports and exports. The port’s director, Steven Cernak, represented the interests of all Florida seaports at the official opening of the newly expanded Panama Canal in June 2016. He also gave a presentation to the Panama Canal Authority
ECONOMY OVERVIEW
With a strategic location and strong underlying infrastructure, trade and logistics are key drivers of Broward’s economy.
on behalf of the Florida Ports Council. Port Everglades later renewed a memorandum of understanding with the Panama Canal Authority for five years. This will continue to promote trade connections between the east coast of the U.S. and the west coast of South America, as well as ports throughout Asia. In order to meet the growing demand for maritime trade and global logistics solutions, particularly between the Atlantic and Pacific markets, the Panama Canal Authority carried out the $5.25-billion construction of a new set of locks of the Pacific and Atlantic sides of the canal, creating a third lane for ship passage and doubling the canal’s cargo capacity. The new locks are 18 feet deeper and 70 feet wider than before the expansion, allowing for the passage of the newer, larger class of Post-Panamax ships, which can carry up to 14,000 TEUs. The Post-Panamax ships’ maximum cargo load is 180 percent greater than that of Panamax vessels, whose 5,000 TEU capacity made them the largest ships that could pass through the canal. Prior to the completion of the canal expansion in June 2016, the number of container and cargo ship calls at Port Everglades was 1,573 in the first half of 2016. With the increased capacity of the canal facilitating greater flows of traffic, those figures rose to 1,694 in the first( ) half of 2017, marking a 7.69 percent growth
in traffic. The volume of containerized cargo rose by 11 percent in the same period, from just over 5 million metric tons to 5.54 million metric tons. The number of twenty-foot equivalent units (TEUs) passing through Port Everglades totaled 830,130 in the first half of 2017, marking a 5 percent year-on-year increase from the 787,281 TEUs processed in the first half of 2016. With access to a steadily expanding airport, a wellconnected highway system and rail lines capable of bringing goods to 70 percent of the U.S. in just four days, Greater Fort Lauderdale is perfectly situated for international trade. Trading places Port Everglades is located within 1,000 miles of key markets in the Caribbean and Central America, which both topped the list of the port’s trading partners in 2016. In terms of volume, 2.45 million tons of cargo were traded between Port Everglades and markets in the Caribbean and a further 2.23 million tons with those in Central America, while 258,053 TEUs and 272,643 TEUs of containerized traffic passed between the port and the two foreign markets, respectively. South America was the port’s third-largest aggregate market in 2016, with 782,844 tons of goods and 85,091 www.capitalanalyticsassociates.com | 15
ECONOMY OVERVIEW
TEUs passing between Port Everglades and the continent’s west coast. An additional 586,941 tons of goods and 57,759 TEUs were traded between the port and the East Coast. The five foreign export markets with the most outbound trade passing through Port Everglades in 2016 were: Honduras, with 46,476 TEUs, Guatemala with 46,369 TEUs, the Dominican Republic with 44,766 TEUs, the Bahamas with 26,517 TEUs and the former Netherlands Antilles with 23,180 TEUs. The markets of origin for goods coming into Greater Fort Lauderdale by sea were similarly led by Honduras, with 65,568 TEUs, followed by Guatemala, with 57,537 TEUs, the Dominican Republic with 26,725 TEUs, Brazil with 24,861 TEUs and Italy with 21,617 TEUs. The most common containerized import commodity was the group comprising edible fruits, nuts and fruit peels, 73,839 TEUs of which were brought into Port Everglades in 2016. Next were non-knit textile apparel and accessories, at 33,284 TEUs, and wood and related products, including charcoal, at 19,085 TEUs. A total of 16,175 TEUs of vinegar and beverages, including spirits were imported, as were 14,596 TEUs of edible vegetables, roots and tubers. Vehicles and parts, excluding those for rail- or tramways, generated 58,097 TEUs of exports from Port Everglades in 2016, making them the most commonly exported items of the year. They were followed by miscellaneous edible preparations, at 42,113 TEUs and nuclear reactors, boilers, related machinery and parts, at 33,963 TEUs. A total of 22,294 TEUs of non-knit textile apparel and accessories were exported during the year, as were 16,102 TEUs of electric machinery, audio-visual equipment and related parts. Coming and going Following the lifting of restrictions on travel to Cuba from the Obama administration in March 2016, a JetBlue Airbus 320 took off from Greater Fort Lauderdale’s airport and landed in Santa Clara. This was the first commercial flight between the two nations in more than 50 years, and it placed FLL in the headlines. By the end of 2016, there were flights to nine locations in Cuba offered by jetBlue, Silver Airways, Southwest Airlines and Spirit Airlines. However, citing high costs and excess capacity outweighing demand, Silver Airways announced that it would end service between FLL and Cuba in March 2017. Spirit Airlines followed suit in May, while in June, Southwest Airlines canceled flights between FLL and two of its three destinations in Cuba. Greater Fort Lauderdale’s airport nonetheless 16 | Invest:
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Fort Lauderdale’s sunny allure draws in plenty of visitors and businesses to the area.
remains a key link between the local area and the global economy. The number of travelers at FLL in the first half of 2017 reached 16.81 million, an 11.44 percent increase from the 15.09 million travelers that had passed through during the corresponding period in 2016. Approximately 21.38 percent of all travelers at FLL in the first two-quarters of 2017 were internationals, amounting to 3.59 million people. This marked a 19.82 percent year-on-year increase: Only 3 million international passengers had visited FLL in the first half of the previous year, making up 19.88 percent of the total number of travelers. Additional air transit needs in Greater Fort Lauderdale are served by several other facilities. Close to downtown Fort Lauderdale, Fort Lauderdale Executive Airport (FXE) features five full-service fixed-base operators (FBOs) and handles more than 165,000 landings and takeoffs every year. Local flare Residents born outside the U.S. contribute 32.2 percent of Greater Fort Lauderdale’s population, a figure more than double the national average of 13.2 percent, but still far below the 51.7 percent of Miami-Dade residents born abroad. Just 28.7 percent of Broward residents identify as Hispanic or Latino, compared to the 67.7 percent in Miami-Dade. Nearly 31 percent of Greater Fort Lauderdale residents
ECONOMY OVERVIEW
hold a bachelor’s degree or higher and 88.2 percent have graduated from high school, compared to the nation’s respective 29.8 percent and 88.7 percent. U.S. Census data reports a median household income of $51,968 in Broward, which is 8.05 percent lower than the national average of $56,516 per year. Home at last As of August 2017, there are 36 postal codes in the tricounty area in which at least 10 percent of homes have
been valued at or above $1 million, according to the Zillow online real estate database. Broward contains eight of these areas. Weston, Lauderdale-by-the-Sea, Hollywood Beach and two sections of Coral Ridge have had more than 10 percent of homes valued at or above $1 million since 2014. Southwest Ranches and one area of Davie are also on the list, while in Fort Lauderdale Beach near Port Everglades and in the downtown area, homes valued at or above $1 million accounted for a respective 23.1 percent and 25 percent of the total inventory. Approximately 37.9 percent of Greater Fort Lauderdale residents are homeowners; the remaining 62.1 percent rent. This distribution is a near inverse of the average throughout the U.S., where homeowners make up roughly 63.6 percent and renters account for just 36.4 percent. By mid-2017, the median sale price for townhouses and condos in Broward showed an annual increase of 8.8 percent, from $190,905 to $207,670. Supply of these homes stood at 5.9 months, indicating a 3.3 percent drop from the same point in 2016. The county’s single-family housing inventory saw similar year-on-year increases in median value, which rose 8.8 percent, from $378,238 to $411,530. The supply of inventory remained relatively stable, growing just 2.6 percent, from 3.8 months to 3.9 months. One challenge facing Broward, as well as South Florida, is affordable housing. A recent report from the Harvard Joint Center for Housing Studies found that 35.4 percent of renters in the Miami metro area spent at least 30 percent of their incomes on housing costs, giving Greater Miami the highest percentage of cost-burdened renters in the 100 largest U.S. metropolitan areas.
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ECONOMY OVERVIEW
Express rail connectivity between the three urban centers of South Florida represents a major investment in the region.
The average monthly rent of $1,830 in Greater Fort Lauderdale was deemed unaffordable for 78 percent of the area’s renters, according to data released in May 2017 from the Metropolitan Center at Florida International University. The debate concerning the underlying causes of such high costs and how best to address them is ongoing among key stakeholders such as developers, residents and elected officials. Critical movement The average 27.6-minute commute in Greater Fort Lauderdale was found to be the 10th-longest in the state, while Clay County’s 33.5-minute average was the longest, according to a 2016 report from the Florida Department of Transportation (FDOT). Only 3 percent of commutes in Broward involved mass transit, but the county was still found to have the fourth-highest number of commuters using public transportation in the state. Greater Fort Lauderdale’s many drivers do so on the county’s 5,128 miles of public roads. Every day, drivers travel more than 43 million miles on these roadways, which include Florida’s Turnpike and the Sawgrass Expressway, the expansive interstates 95, 75 and 595, and State Road A1A, which runs along the scenic coastline. Meanwhile, the Broward Transit Division’s June 2017 ridership report shows a 9.3 percent year-onyear decrease in year-to-date riders from 27.37 million during the first half of 2016 to 24.82 million during the 18 | Invest:
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same period in 2017. Revenues from Broward’s public bus fares during June 2017 totaled $1.67 million, a 12 percent year-on-year decrease from the $1.89 million in revenue generated during June 2016. Nonetheless, nearly 40 million passengers ride on the Broward County Transit (BCT) system’s 397 busses each year. These run on 42 local and express routes, covering a total of 410 square miles. BCT busses have an average weekday ridership of 130,000. The system operates an additional 50 community bus routes in 18 cities throughout Greater Fort Lauderdale, transporting an average of 700,000 riders every year. Jobs worthy In line with a decline in the U.S. unemployment rate from 4.8 percent in January 2017 to 4.4 percent during August, unemployment in Greater Fort Lauderdale dropped from 5 percent in January 2017 to just 3.9 percent in August, surpassing pre-Great Recession unemployment of 4.1 percent in December 2007. This good news comes just seven years after the county’s unemployment rate peaked at 10.5 percent in August 2010 at the height of the Great Recession. Greater Fort Lauderdale’s 3.9 percent unemployment in August 2017 was the second-lowest in the state, bested only by that of Monroe County, which reported 2.7 percent unemployment during the same month. Between August 2016 and that of the following year,
ECONOMY OVERVIEW
28,733 jobs were created in Greater Fort Lauderdale, accounting for nearly 13 percent of the 221,400 jobs added throughout the state in the 12-month period. A July 2017 report from the Bureau of Labor Statistics at the U.S. Department of Labor put year-on-year job growth in Greater Fort Lauderdale at 3.7 percent, making it the fastest-growing job market among the 38 metropolitan areas measured. The nearby Palm Beach County recorded a 3.3 percent growth in employment between July 2017 and the same month of the previous year, making it the metro area with the second-biggest hike in employment. Meanwhile, the national unemployment rate dropped from 5.1 percent to 4.6 percent in the same period. In terms of job creation, construction was the fastestgrowing sector between August 2016 and August 2017. “The biggest change in local job growth in 2017 has been in construction. Many skilled workers left the area after the housing market crashed, making it a challenge to recruit and train new construction workers,” Mason Jackson, president and CEO of CareerSource Broward, told . With approximately 4,700 jobs added, it grew by 10.6 percent in the 12-month period. Education and health services grew by 5.6 percent,
adding 5,900 new jobs, while leisure and hospitality created 3,800 new jobs, growing by 4.1 percent. Broward’s rates of growth in the two composite sectors outpaced those at the state level. Home-court advantage Like those throughout the rest of Florida, companies in Broward reap the many benefits of the state’s business-friendly tax structure. As guaranteed by Florida constitutional provisions, there is no flat-rate individual income tax. There is also no corporate income tax on limited partnerships or S corporations, and no corporate franchise tax levied on capital stock. In Broward, businesses are exempt from paying corporate income tax on dividends earned from foreign sources, and companies can earn tax credits by hiring individuals from targeted groups. The county offers an expedited permitting process for businesses and is developing a cloud-based platform called ePermit, which will offer added convenience. This is but one example of the county attempting to improve the ease of doing business and attract investments. Several agencies and organizations are available in the area to facilitate business growth. Broward’s official
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James Donnelly Chairman, Broward Workshop Founder & CEO, Castle Group
What have been some highlights of the Broward Workshop’s recent activities? The main successes over the last couple of years have been the addition of the south runway at Fort Lauderdale-Hollywood International Airport and the approval for the deepening of the port for postPanamax ships at Port Everglades. We also played a primary role in getting the Children’s Services Council reauthorized and the school bond issues approved. In 2016, we advocated for a sales tax for transportation and infrastructure. The penny sales tax was not approved by voters, but the need for comprehensive public transportation in Broward County remains. More recently we advocated for the funding of Visit Florida. Through collective efforts, the final amount was $76 million. The Broward Workshop just started a technology committee. We have some great startups in the county, and we need a more robust ecosystem for supporting innovations in new technology. Magic Leap, Citrix, Ultimate Software and others are all based in Greater Fort Lauderdale, and we need to leverage that to help the area become an even greater destination for technology companies. What other areas can Broward focus on with a view to increasing its economic potential? Tourism, the marine sector and real estate development are all cyclical, so our goal is to bring in some counter-cyclical businesses. The targets are technology, aviation and life sciences. A lot of older people are moving here, and they all need specialized healthcare. Broward could become a great destination for healthcare, even at the international level. Aviation has also been a strong area of growth recently. The convention center is exciting, and it’s going to be a great economic driver for the area. It will feature an 800-room hotel, and we hope that the Wave streetcar system will connect with the convention center at some point. 20 | Invest:
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public-private partnership, the Greater Fort Lauderdale Alliance (GFLA), works to enhance collaboration between the public and private sectors in an effort to target economic diversification and otherwise increase competitiveness, with the ultimate goal of promoting the county to companies willing to relocate. The Broward County Office of Economic and Small Business Development works with partners such as the GFLA to stimulate development by attracting, retaining and fostering small businesses, particularly those in targeted industries. Meanwhile, the Greater Fort Lauderdale Chamber of Commerce supports business development throughout the area and advocates on behalf of its members, in an effort to address common challenges and improve the local business climate. Companies in Broward also have access to other organizations devoted to economic development and financing, such as Enterprise Florida, the South Florida Regional Council and the Enterprise Development Corporation of South Florida. Focused on growth Broward’s Board of County Commissioners identified 10 sectors as top-priority for efforts to attract and expand business. The list was developed in collaboration with the GFLA and CareerSource Broward, the administrative entity of the Broward Workforce Development Board. Several targeted sectors already contribute to the foundation of the county’s economy. The list includes advanced materials and high-tech manufacturing, alternative energy and renewable resources, global media and production, headquarters and management operations, human resources and higher education, life sciences, international trade and logistics, aviation and aerospace, global business services and marine industries. Marine industries play a big role in Broward, even compared to that in the region. An estimated 110,000 county residents are currently employed in the sector, which generates an annual economic impact of $8.8 billion. Throughout the region, marine industries account for approximately 136,000 jobs and a total economic impact of $11.5 billion. According to U.S. Bureau of Labor Statistics data from 2016, Broward supports 10,143 aviation and aerospace jobs, which offer an average annual salary of $76,616. Trade and logistics companies in the county support more than 20,000 jobs, with an average annual salary of $66,206. Employment in the sector is projected to rise 4.9 percent by 2020.
ECONOMY OVERVIEW
Bringing in business Greater Fort Lauderdale is home to an estimated 150 regional or global corporate headquarters, which provide work in a diverse range of sectors. AutoNation and Citrix Systems, both based out of Fort Lauderdale, are the area’s two highest earners, with 2015 revenues of $20.86 billion and $3.28 billion, respectively. Meanwhile, global produce giant Chiquita has moved a divisional headquarters to Fort Lauderdale and operates a distribution center at Port Everglades, where it is a major importer. The ultra-low-cost carrier Spirit Airlines has been headquartered in Miramar since 1999, while global logistics giant DHL has its national headquarters in Plantation. The combined workforce of AutoNation, Spirit Airlines and Citrix Systems amounts to approximately 9,200 employees. The GFLA reported 20 relocations and expansions to Greater Fort Lauderdale in the 2015-16 fiscal year. The newly arrived companies collectively added 2,646 high-paying jobs to the local economy and brought around $210 million in capital investments. These companies included the Phoenix-based professional services firm Matrix, which created 60 new jobs after establishing a regional headquarters in Fort Lauderdale, while the international insurer Zurich North America created 80 new jobs at its new office in Plantation. Also among the 2016 newcomers were the major technology firms Hotwire Communications, Magic Leap and Ultimate Software, which established headquarters in Fort Lauderdale, Plantation and Weston, respectively. In January 2017, American Express began transitioning the roughly 3,000 employees at its regional headquarters into a new 400,000-squarefoot facility in Sunrise worth $200 million. The Hard Rock chain of restaurants, hotels and casinos announced in September 2017 that it would relocate its global headquarters from Orlando to Hollywood by the summer of 2018. The majority of the chain was acquired by the Seminole Tribe of Florida in 2007. “When the market is a little slow, we tend to see more vigorous strategic purchases of companies and less private equity acquisitions,” Dennis Smith, vice chairman of Tripp Scott, told . Internet retail giant Amazon broke ground in June 2017 on its new 855,000-square-foot fulfillment center in Miami-Dade County. When the company announced in September that it was looking for a city in which to build its second national headquarters, the GFLA reported that it was preparing a proposal.
Environmental resiliency is at at the top of the agenda both for government leaders and the business community.
Broward County Commissioner Michael Udine laid out the county’s many business advantages in a letter sent to Amazon CEO Jeff Bezos making the case for choosing Greater Fort Lauderdale as the location for the company’s second headquarters, a decision Amazon will make sometime in 2018 following the closing of proposal submissions in October 2017. Natural endurance In late August 2017, Hurricane Harvey devastated Houston and the Gulf Coast of Texas, killing 82 people and causing an estimated $190 billion in damage. Days later, the nation watched with concern as Hurricane Irma approached the Caribbean. Irma quickly intensified into a Category 5 hurricane, with sustained winds of at least 185 mph. These persisted for 37 hours, placing Irma in a tie for the longest-lasting Category 5 in the Atlantic Basin. The hurricane made landfall in Florida September 9, but a late westward shift and decrease in intensity spared Greater Fort Lauderdale and the rest of the Miami metro area the worst of its destruction. Wind gusts of 75 mph were reported at FLL and, at the time of writing, the storm was responsible for 50 deaths in the state. Estimates of Irma’s long-term economic impact greatly vary. U.S. hazard assessment firm Enki Holdings put the cost at around $50 billion, while one analyst at Panmure Gordon forecast an impact of $150 billion. “South Florida needs to be more aware of how exposed it is to natural disasters. More time needs to be spent strengthening infrastructure and investing www.capitalanalyticsassociates.com | 21
Bob Swindell President & CEO, Greater Fort Lauderdale Alliance
What advantages does Greater Fort Lauderdale offer? We have one of the best tax climates in the country for business, and we offer a great quality of life. Our transportation system, airport, seaport and educational institutions offer great advantages. There are 35 colleges and universities within 30 minutes of Fort Lauderdale. Because of our position in the region, we draw employees from Palm Beach to the north and Miami to the south, both of which are within a 35-minute journey. In June 2017, Broward County was the fastest-growing area for employment in the nation. We have special programs for companies moving here to help ease the process of securing the permits they need to get their businesses operational. Through the Platinum Cities program, we work with companies, so that they know what time and effort will actually be required in order to begin operating their businesses in Broward. The cost of real estate here offers great value compared to other places in the office, industrial and residential segments. Fort Lauderdale-Hollywood International Airport is another real driver of our economy. What impact has the alliance had on supporting small and medium-sized enterprises? South Florida was recently named the number one place in the country for small business growth. Part of the reason is the business climate, so we are conducting outreach to small businesses. We have a partner council, whereby all of our cities and chambers are invited to work with us. That group meets every month to discuss how to grow different lines of business. The marine industry in Broward has a huge economic impact. Many people know us for the Fort Lauderdale International Boat Show, and think that the marine industry is primarily a leisure activity for wealthy individuals. However, small businesses support almost every aspect of the industry by employing skilled workers to handle everything from engines to heating, ventilation and air conditioning systems. 22 | Invest:
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The hospitality sector is central to Greater Fort Lauderdale, where visitors and residents alike enjoy world-class amenities.
in new technologies,” Kevin McMinn, executive vice president of mass market energy for Crius Energy, told . In an attempt to expedite recovery, the state Department of Business and Professional Regulation ordered the suspension of fees and requirements that could interfere with vital initial efforts, such as roof repairs. Governor Rick Scott then authorized every state agency to temporarily suspend any similar prerequisites. He also activated the Florida Small Business Emergency Bridge Loan Program and allocated up to $10 million in short-term, interest-free loans for businesses that had suffered damage. On September 10, U.S. President Donald Trump approved a major disaster declaration, making it possible for affected companies in Florida to apply for low-interest loans through the federal Small Business Administration (SBA). Broward numbered among the counties in which businesses and nonprofits were eligible to apply for up to $2 million in both the SBA’s Business Physical Disaster Loan and Economic Injury Disaster Loan programs. “The devastation left by Hurricane Irma was far greater, at least in certain locations, than anyone thought – but amazing
ECONOMY OVERVIEW
people working hard!” President Trump tweeted on September 12. Hurricane Irma’s 350-mile width put the entire State of Florida under a hurricane watch for the first time in history, and as of September 25, propertyinsurance claims had been filed in all of Florida’s 67 counties, nearing $3.6 billion in insured losses. “Our biggest initiative in 2017 is the Transformation of Communities program, aimed at transforming our existing communities and protect the more than $3 trillion in assets that line our coast,” Dan Lindblade, president & CEO of Greater Fort Lauderdale Chamber of Commerce, told . Looking ahead Entering into 2018, Broward’s prospects look bright. Major construction is underway, spearheaded by businesses in many of the county’s economic sectors, and new opportunities for development abound. “The storm definitely acted as a pause button on the hot labor market, but we are already back to prestorm market activities at this point,” Eugene Holzer, managing partner of Ascendo Resources, told . Capital investment projects are ongoing at FLL and
Port Everglades, two principal drivers of the local economy. Progress thus far has underlined the importance of investing in the county’s economic assets, particularly in their long-term competitiveness. As of September 2017, two attempts have been made to repeal and replace the Obama-era Affordable Care Act, neither of which have ultimately succeeded. Perhaps unsurprisingly, many healthcare providers have expressed doubt regarding the future of their industry. Other changes to national policy may also significantly impact the local economy. In Jun 2017, President Trump announced that he would cancel the previous administration’s agreement with Cuba. In September, Secretary of State Rex Tillerson said the administration was considering shutting down the U.S. embassy in Havana. The country has officially withdrawn from the Trans-Pacific Partnership, while initial efforts have been made to renegotiate the North American Free Trade Agreement and the future of the Transatlantic Trade and Investment Partnership remains uncertain. The ultimate direction of federal policy and the subsequent effects on Greater Fort Lauderdale are difficult to predict. What is clear is that Broward is experiencing steady growth is poised to maintain its prominent position within the national and global economies. “We will eventually lose the great individuals who helped shape this county into what it has become, so one of the critical tasks for our business community as a whole is ensuring that the succession of leadership flows from the generation of entrepreneurial founders to one of equally caring visionaries,” Michael Goldberg, CEO of Zimmerman Advertising, told . “Climate resiliency is the number one challenge we face in supporting sustainable growth, and we need to be planning for it now, as it puts our future at risk. Sea level rise in particular is our number one priority, as our official board-adopted estimate is a 26-inch rise by 2060,” Henry Sniezek, director of Broward County Department of Environmental Protection and Growth Management, told . One of the question as of September 2017 is how Hurricane Irma will impact South Florida. With a rising death toll at the time of print, it is far too early to fully consider the damage. It is highly unlikely that insurance companies will fail in the state, having had more than a decade to strengthen since the last major disaster, however they will surely want to put up premiums or even leave the area altogether, with the prospect of such events becoming more frequent. However, the area’s company and institutions have experience similar difficulties in the past and are sure to move forward onto better days. www.capitalanalyticsassociates.com | 23
Technical knockout: “Work in the Cloud, Live in the Sun,” the Greater Fort Lauderdale Alliance advertises, as local companies, government institutions and schools help to make the IT sector an exciting prospect The Miami-Fort Lauderdale Metropolitan Statistical Area was named best in the country on the 2017 Kauffman Index of Startup Activity, which judged factors such as new business creation, startup density and new company size among the nation’s 40 largest metropolitan areas. Increasing opportunity shares and an accelerated rate of entrepreneurial endeavor have allowed South Florida to claim the top spot, after having come in second behind Austin for the past two years. Within the technology sector, Greater Fort Lauderdale was found to have the second-greatest momentum in job growth, out of 50 metro areas included in CBRE’s 2017 Scoring Tech Talent report. Meanwhile, MiamiDade County came in at number four. Innovation first Greater Fort Lauderdale’s pool of skilled tech workers grew by 21.3 percent from 2015 to 2016, after having shrunk by 2.1 percent between 2013 and 2014. Much of this expansion can be attributed to hiring sprees at local high-tech companies, such as mixed reality innovator Magic Leap, which is headquartered in Plantation. With 450 employees, the startup is among 24 | Invest:
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the largest employers based in Broward County. Pioneering technological development is by no means a new phenomenon in South Florida. IBM developed its first personal computer in Boca Raton in 1981, while Simon, the world’s first smartphone, was created with BellSouth in 1994. Technology has since become a key component of the economy in Florida, which is the third-largest exporter of hightech products in the country. The tech sector is witnessing some of the most rapid expansion in Broward. Between 2013 and 2015, Future Energy Solutions, a manufacturer of green energy technology based in Fort Lauderdale, recorded a 367 percent growth in gross revenues, making it the county’s fastest-growing company of any kind. IT hardware services provider Greyson Technologies, also of Fort Lauderdale, was the third-fastest-growing firm, with a gross revenue increase of 135.27 percent, while Miramar-based Acordis International came in fourth, with revenue growth of 128.76 percent. Cloud-based construction management designer e-Builder and custom software developer Chefu, both of Plantation, had the 12th- and 16th-biggest increases
ECONOMY ANALYSIS
during the two-year period, with gross revenue growth of 64.11 percent and 47.61 percent, respectively. The area’s technology landscape is not only a hotbed of new startups and growth-phase firms, it is also home to some of the most established names. Global giants Microsoft and Emerson chose Broward as the site of their Latin American regional headquarters. In addition, multinational software developers Citrix and Ultimate Software are Broward’s fifth- and 11th-biggest employers, with a respective 1,700 and 1,327 members of staff. Innovation employment In Greater Fort Lauderdale, the information sector employs roughly 19,100 people, representing about 2.26 percent of the local workforce. The concentration of skilled information sector employees is 20.86 percent higher than that in the Miami metro area, at 1.87 percent and 22.16 percent higher than the national average of 1.85 percent. One local company using cutting-edge technology to leverage Greater Fort Lauderdale’s appeal is Starmark International. The communications agency created a digital TV platform for the Greater Fort Lauderdale Convention & Visitors Bureau, in order to target a younger, more tech-savvy demographic with 24-hour information about the area, via live, programmed and on-demand videos. Other commercial applications developed by the company involve machine learning, virtual reality and mobile location-based marketing, just some of the innovations companies must adopt to stay relevant in an ever more technologically advanced marketplace. e-Learning Local educators are placing more emphasis on training in information and technology, even at the K-12 level.
The number of students participating in the public school system’s various computer science programs has grown exponentially, with 240 students taking part in the 2013-2014 academic year and approximately 50,000 participating in 2016-2017. Students and entrepreneurs enjoy access to many resources and organizations that aim to foster South Florida’s technology ecosystem. The Innovation Florida nonprofit, the South Florida Accelerator startup incubator and Wyncode Academy, a development boot camp, collaborated with BCPS to hold an eightweek computer coding pilot program for 20 students in summer 2017. Higher ground For those interested in furthering their IT studies at the university level and for companies looking to source talent, there are plenty of options in Greater Fort Lauderdale. In 2007, Ultimate Software partnered with Florida International University (FIU) to create the TechSTARS internship program, which provides promising students with on-the-job experience. Since the internship began, more than 100 TechSTAR participants have joined the growing company as fulltime engineers. In September 2015, a 10-year, $1-million extension of the partnership was announced. Ultimate Software committed to establishing an endowment for the university’s School of Computing and Information Sciences, funding scholarships for students at FIU, which has a campus in Miramar, and supporting area high school programs devoted to science, math and technology. In 1985, the Broward and Palm Beach county commissions joined forces with Florida Atlantic ( )
Rehan Khan President & CEO – Acordis International
The biggest concern in the market right now is internet security, yet most businesses have still not fully grasped the nightmare of these risks. They feel that they understand the risks and that they are already secure. Unfortunately, this is not what we’ve seen. Once a business finds itself in this situation, it becomes difficult to move forward when security breaches do occur. We are looking toward heavily investing in data security. We are even planning to create a separate department for handling ransomware, malware, hacking and database protection.
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ECONOMY INTERVIEW
Grounded in the cloud How Greater Fort Lauderdale is becoming a regional hub for technological development
David Henshall Director, President & CEO – Citrix Systems properties of the cloud is that it turns computing into more of a utility. For Citrix, what are the advantages of Greater Fort Lauderdale’s business environment? Citrix has been headquartered in Fort Lauderdale since 1997. We sit on the board of the Greater Fort Lauderdale Alliance, and together we are looking at how to transform the area around Cypress Creek into much more of a business community. The stability here across issues such as industry regulation, taxation and infrastructure improvement is always critical. One challenge of operating in a state with a major focus on tourism is ensuring a proper balance with the aspects families need in order to enjoy a high quality of life, as those are ultimately what businesses need to grow and thrive. Infrastructure is a critical issue for us. When we see expansion of the airport, the hotel industry and other sectors beyond hospitality and tourism, it is a great sign for us, because it is clear that this is becoming a bigger and better community. How is Citrix driving the migration of commercial customers to a cloud-based model? The great thing about migrating businesses to the cloud is that we can ultimately add so much value by simplifying their infrastructure and delivering capabilities more quickly. This is just the next iteration in the evolution of technology infrastructure. With the gig economy, we need to be able to connect with people and give them the tools and resources to be productive wherever they are, whenever they need it and on whatever device they are using. This creates increased access, and cooperation creates more flexibility from an infrastructure point of view. At the same time, it gives rise to growing challenges concerning security, compatibility and virtual infrastructure management. One of the interesting 26 | Invest:
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What is behind South Florida’s increasing prominence as a tech startup hub? The talent pool is critical in the tech industry. Jobs in the high-tech industry tend to be well-paid and resilient, which slowly creates an ecosystem. Here in South Florida, there is a huge amount of startup capital and other venture capital funding that enables the growth of the local technology ecosystem. The conditions are great, but it still takes time. Florida has been putting a lot of effort into supporting the technology sector. Citrix is involved in the South Florida Technology Alliance to help nurture the hightech community. We can see the results of these efforts materializing with the rapid growth of companies such as Magic Leap, DataCore and several others.
ECONOMY ANALYSIS
( ) University (FAU) to create the Florida Atlantic Research and Development Authority, which sustains large research park campuses in Boca Raton and Greater Fort Lauderdale’s Deerfield Beach neighborhood. The research park at FAU houses 24 high-tech and high-wage companies, and operates the C. Scott Ellington Technology Business Incubator, which is home to the New World Angels investment group, the Florida Institute for the Commercialization of Public Research and the South Florida Technology Alliance, a high-level networking association for the region’s expanding tech community. The strength of Nova Southeastern University’s cybersecurity training has earned it recognition as a National Center of Academic Excellence in Information Assurance and Cyber Defense Education by the National Security Agency and the Department of Homeland Security. This allows federal agencies to sponsor military or civilian personnel for enrollment in NSU’s certified graduate courses. Meanwhile, Broward College’s Department of Computer Science and Information Technology offers 11 certification-level and over 20 associate-level programs in fields such as computer information technology, computer programming and analysis, networking systems technology, computer and network security, technology project management and web development. Community bytes Broward College’s IT department works with the Microsoft IT Academy Program and the National Center for Women & Information Technology Academic Alliance. The department has also partnered with the multinational tech conglomerate Cisco Systems. The community college also hosts an annual
Educational institutions in Broward are supporting the development of IT skills in the area.
hackathon, in which contestants have 24 hours to develop and pitch an innovative solution to a pressing problem, then construct and present a prototype to which they will own the rights. Ultimate Software sponsored the hackathon in 2016. In October 2017, a select group of students from local high schools will participate with groups from colleges and universities across the county in the third edition of the event. Hackathons are not the only tech events in the area. Since 2012, ITPalooza has brought together South
Daniel O’Connell Executive Vice President of National Sales – Hotwire Communications A household served by fiber-to-home infrastructure is worth 3.1 percent more than one served by traditional technologies, so there is an immediate economic benefit for property owners. There are also more home-based businesses in households served by fiber-optic networks than in those that aren’t. People recognize this and are increasingly choosing to move to areas where fiber-based infrastructure exists, which drives tax revenues and economic growth for communities.
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ECONOMY ANALYSIS
The increasing emphasis on IT curricula provides a strong local supply of skilled professionals for the county’s growing tech sector.
Florida’s top IT professionals for networking, product demonstrations, education sessions and hiring fairs. After selling out tickets and exceeding its venue capacity in 2016, the sixth edition of ITPalooza will be held at the Greater Fort Lauderdale/Broward County Convention Center in December 2017. Telit, a multinational design innovator specializing in solutions for the internet of things (IoT), held a symposium for IoT-related innovation at the county’s conference center in February 2017. The event brought together CEOs and IoT leaders from companies such as IBM, Cisco, SAP, Citrix and Verizon Wireless, to discuss such key issues pertaining to the IoT, including the facilitation of smart cities and how to tackle security risks in the realm of IoT. 28 | Invest:
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Data growth Fort Lauderdale is keeping up with new trends in smart city technologies. It uses data collected from geographic information systems in its analysis and response to issues such as hurricanes, flooding and erosion, all of which are critical challenges for a coastal economy largely driven by tourism. The city’s Department of Transportation and Mobility created the LauderServ app to streamline notification of and response to changes in local infrastructure, such as road construction and traffic developments. Fort Lauderdale is also preparing for autonomous vehicles and exploring other tech-savvy ways to improve safety. These might include the integration of smartphones into real-time mobility
ECONOMY ANALYSIS
mapping by leveraging data from apps such as Google Maps and Waze. Access to the internet is becoming crucial for individuals and businesses alike, and Broward County now enjoys connectivity of the finest pedigree. AT&T extended its 1-gigabit connection to the area in 2017. The previous September, Florida Governor Rick Scott announced that residential gigabit internet service provider Hotwire Communications would relocate its headquarters to Fort Lauderdale. Hotwire’s fiberto-the-home network provides the type of highspeed connectivity that any metro area claiming to be a tech hub requires. The company was named the fastest internet service provider in the country by PC Magazine in June 2017. Looking ahead Broward is not the only area of Florida to be recognized for technological innovation. A region known as the High Tech Corridor spans 23 of the state’s 67 counties. Several statewide initiatives have a strong impact on Greater Fort Lauderdale, among them the not-forprofit Internet Coast, an incubator and promoter of innovation. Its structure reflects that of Broward County’s Tech Gateway, a public-private collaboration for support among academic institutions, tech companies and related organizations. Given the strong statewide IT framework, the Greater Fort Lauderdale Alliance is hoping to distinguish the area as an attractive destination, using the slogan: “Work in the Cloud, Live in the Sun.” With an abundance of institutions working to develop the sector, a striking number of tech startups and relocations, and increasing support from the local government and educational institutions, few places could better warrant such a description.
Peggy Nordeen CEO – Starmark International
These days you can operate a business from almost anywhere. The Greater Fort Lauderdale Alliance uses “Work in the Cloud. Play in the Sun” as a promotional line for the growing local tech environment, which is very descriptive of the opportunities here. Add to that our international port and airport, the absence of personal income tax and a friendly corporate tax structure, and it’s easy to see why Greater Fort Lauderdale is so attractive.
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Real Estate: Home values throughout the county are rising, as are asking rents across product types. Developers looking to capitalize on evolving residential trends are creating new, amenity-rich, affordable units for renters by choice. A wave of new hotel and Class A office space development rolling through downtown Fort Lauderdale will be matched to years of pent-up demand. High absorption rates signal ongoing interest in the local market.
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Real Estate in numbers: Broward County rent trends – apartment:
Metro
United States
Year-on-year change
12%
9%
6%
3%
0% 2013
2014
2015
2016
Broward County rent trends – industrial:
2017*
Metro
United States
Year-on-year change
12%
9%
6%
3%
0% 2013
2014
2015
2016
Broward County rent trends – retail:
2017*
Metro
United States
Year-on-year change
8%
6%
4%
2%
0% 2013
2014
2015
2016
Broward County rent trends – office:
2017*
Metro
United States
Year-on-year change
6%
3%
0%
-3%
-6% 2013
2014
Source: Marcus & Millichap Research Services, CoStar Group, MPF Research
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2015
2016
2017*
* Forecast
Source:
Broward County supply and demand – apartments:
Completions
Absorption
Vacancy
5
6% 5% 4%
3 3% 2 2% 1
1%
0
0% 2013
2014
2015
2016
Completions
2017*
Absorption
Vacancy
3,000
10%
2,400
8%
1,800
6%
1,200
4%
600
2%
0
0% 2013
2014
2015
Broward County supply and demand – retail:
2016
Completions
2017*
Absorption
Vacancy
2,000
8%
1,600
6%
1,200 4% 800
Vacancy rate
Square Feet (000’s)
Vacancy rate
Square Feet (000’s)
Broward County supply and demand – industrial:
2%
400
0
0% 2013
2014
2015
Broward County supply and demand – office:
2016
Completions
2017*
Absorption
Vacancy
1,500
20%
16%
1,000
12% 500 8% 0
Vacancy rate
Square Feet (000’s)
Vacancy rate
Units (000’s)
4
4%
-500
0% 2013
2014
Source: Marcus & Millichap Research Services, CoStar Group, MPF Research
2015
2016
2017*
* forecast
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Right time, right place: Bolstered by a thriving economy and growing population, investor capital has found the right place in Greater Fort Lauderdale’s real estate market At slightly over 1,200 square miles, Broward County covers less land than Miami-Dade or Palm Beach counties, but it is the destination for a state-estimated 12,600 new residents every year. According to state statistics, Broward is home to 1.9 million residents and is on track to reach 2 million by 2026 and 2.1 million by 2040. Where to house this growing population and how to best utilize available land are becoming increasingly pressing issues. Appreciation in the value of the U.S. dollar and economic volatility in Latin American markets that traditionally account for large numbers of foreign real estate buyers have had a dampening effect on the local market. A 2016 profile of international homebuyers released by the Miami Association of Realtors showed that sales volume of local residential real estate to Brazilian buyers dropped from $965 million in 2015 to $861 million in 2016, while sales to Argentinian buyers dropped from $516 million to $468 million and those to Colombian buyers from $530 million to $405 million in the same period. While much of Broward’s recent success in attracting investment can be tied to spillover of growth from Miami-Dade, the effects 34 | Invest:
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of these macroeconomic headwinds are somewhat mitigated. Greater Fort Lauderdale accounts for 25.2 percent of total sales in the region, but has only a 16.4 percent share of sales to international buyers. Challenges remain, primarily the need to maintain affordability and the increasing scarcity of developable land. Yet fundamentals show stable growth across market segments in Greater Fort Lauderdale and throughout the county. “Sales in Broward during the first half of 2017 have been performing well. Properties are selling close to asking prices, and the median time to contract for single-family homes in Broward is only 37 days, which is a 2.6 percent decrease compared to the previous year,” Teresa Kinney, CEO of the Miami Association of Realtors, told . In the first quarter of 2017, the number of condo and townhouse sales in the county rose 2.3 percent year on year, while the median price of single-family homes grew 10 percent year on year to reach $319,000. Developing markets Downtown Fort Lauderdale remains the hotbed of development in Broward. After years of having
REAL ESTATE OVERVIEW
only two hotels, 659 new hotel rooms were under construction in the downtown area at the start of 2017’s third quarter, with a further 560 rooms approved and 199 under review. “The 10,000 to 15,000 residential units downtown have mostly been built over the past 20 years, so the evolution of the city has unfolded very quickly,” Jenni Morejon, executive director of the Fort Lauderdale Downtown Development Authority (DDA), told . Space is limited in Fort Lauderdale’s central business district, and 238 of these new hotel rooms will stand alongside 121 luxury residences and 8,500 square feet of retail space at the Kolter Group’s $152-million 100 Las Olas, one of the area’s many new mixeduse developments. Designed to meet diverse needs, these multiuse projects range in location and scope. Sleek urban complexes such as 100 Las Olas cater to the growing number of young professionals and empty nesters looking to move to the city’s core, while sprawling multi-structure compounds are springing up in less congested areas, such as Metropica in Sunrise, Dania Pointe in Dania Beach, the Pembroke Pines City Center and the Atlantic Village in Hallandale Beach. Housing matters Broward boasts a strong residential offering. New high-end condo units are under construction in downtown Fort Lauderdale as well as Fort Lauderdale Beach for the first time in a decade, while larger singlefamily developments offer a quieter life in less densely populated areas, particularly the western suburbs. Redevelopment in urban neighborhoods such as Oakland Park, Hollywood, the Pompano Beach Innovation District and Flagler Village signal attempts to attract both residents and employers. Oakland Park’s once-empty downtown warehouses have been transformed into a vibrant culinary arts district home to such success stories as Funky Buddha Brewery and Switchbox Coffee Roasters. In July 2017, the Broward County Commission approved a 1.35-million-squarefoot multiuse development in Fort Lauderdale’s Flagler Art and Technology (FAT) Village, the appropriately named FATCity. “You can’t just redevelop a single thing, you need to redevelop an entire area. We’re creating vibrant live, work and play environments downtown, which is where the employment is,” Lon Tabatchnick, president of Lojeta Group, told . Reasonable rates Affordable housing remains a major challenge throughout the South Florida metropolitan area. A recent report from Harvard University’s Joint
Dennis Mele Shareholder, Land Use & Zoning Chair, GreenspoonMarder
What are obstacles zoning and planning have presented when redeveloping in areas like Dania Beach? Our team has recently handled and assembled 11 mixed-use zoning projects for different pieces of property in Dania Beach. However, the properties were all zoned in different districts. One issue our team has faced has been that some of the properties were platted, meaning that they had been officially subdivided, while others were not. Developers must be prepared to work with multiple properties when dealing with complex and sizeable redevelopments in South Florida. Additionally, it is difficult to find one party that owns 10 acres of land available for purchase. Most developers are forced to purchase several properties next to each other in order to proceed with their project. An issue that is commonly encountered with the purchase of several properties is that if one seller becomes aware of the situation, they are likely to boost their price. For this reason, brokers might be making numerous offers on many properties without revealing that one entity is buying the property. Trying to get multiple contracts to line up is difficult, especially with due diligence periods and closing considerations. How can good planning mitigate the damage caused by hurricanes and other natural disasters? Our team has already seen adjustments to the ways our clients build along natural waterways such as the beach, taking into account issues such as storm surges. For example, buildings constructed more recently are not habitable on the first floor. Broward County’s new standards will deal with the problem of drainage, an issue that developers need to be wary of and another issue connected with storms and other natural disasters like hurricanes. Engineers must consider storm issues that may result in excessive rain and requires specific accommodation. Developers can prepare ahead of time to prevent damages and losses. www.capitalanalyticsassociates.com | 35
Joseph Kavana Chairman & CEO, K Group Holdings, Inc.
What trends have you observed in the local retail sector? One of the key aspects of Metropica is its immediate access to four of the most important highways in the area. When we originally bought the land, we noticed a migratory trend of people moving from east to west. There were also some major retailers building further west. Today, you can trace a line going south from Sawgrass Mills to places such as IKEA, Dolphin Mall and now American Dream Meadowlands. The retail sector is rapidly changing, and many large stores are closing around the country. However, Class A enclosed malls with anchor stores that are still performing well are not facing the same challenges as the rest of the sector. What challenges do developers face in securing capital support in Greater Fort Lauderdale? Fewer lenders are currently supporting ground-up condominium construction. Banks are much more selective in giving construction loans than they were in the past, especially for condos. Lenders have always been cautious with regards to Florida because of how cyclical our real estate market is, but now they are particularly hesitant to issue construction debt. Developers are increasingly having to look to alternative debt funds in order to finance construction. Banks will feel more comfortable when the most recently built units are absorbed and new supply slows down a bit, moving the market closer to equilibrium. We are currently experiencing a slowdown that began a couple of years ago. In South Florida, this was strongly tied to some of the economic volatility in South America and the strengthening of the U.S. dollar. Those kinds of cycles are typically relatively short, and we are already seeing some of those countries return to the market. It is difficult to forecast the current cycle, but the good news is that we won’t experience anything remotely close to what happened in 2008. 36 | Invest:
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Downtown Fort Lauderdale’s lush waterways create opportunities for property developers and recreational programmers.
Center for Housing Studies found that 35.4 percent of South Florida’s renters spent 30 percent or more of their income on housing costs, the highest percentage of cost-burdened renters among the 100 largest U.S. metropolitan areas for the fourth consecutive year. In El Paso, Texas, just 18.4 percent of renters are considered cost-burdened, the lowest rate among the 100 largest U.S. metropolitan areas. The average monthly rent in Broward is $1,800, which is unaffordable for 78 percent of the county’s renters, according to data from the Metropolitan Center at Florida International University in May 2017. Meanwhile, Broward’s median home price is $330,000, higher than Palm Beach’s figure of $327,000 as well as
REAL ESTATE OVERVIEW
Miami-Dade’s of $320,000. The debate concerning the underlying causes of such high costs, and how best to address them, is ongoing among key stakeholders such as developers, residents and elected officials. Under the new Broward County Land Use Plan, apartment units under 500 square feet will be reclassified as half-units, allowing developers to increase the number of units they build while still falling within maximum density guidelines. In order to address the larger issue of affordability in Broward, another proposed approach outlined by the county commission’s Transportation Concurrency Management System and the county’s Transit Development Plan is to offer substantial credits against fees for projects that encourage transit use and decrease overall transportation costs, such as new affordable housing developments built near public transit hubs. “There are different ways to provide affordable housing, even though buildings tend to be clustered together, and statistics repeatedly underline the problems associated with this pattern. We should look at blending marketrate rentals with affordable units in the same building, in order to spread out the diversity of how and where people can live and work in Broward County,” Kim Briesemeister, principal of Redevelopment Management Associates, told . In an effort to avoid that clustering of affordable housing developments and ensure that they are placed in more accessible areas, incentives have been created for developers to incorporate affordable units into marketrate projects. Such incentives were put forth in the Land Use Plan and the Comprehensive Plan Housing Element, both part of the county’s Broward Next initiative. Fit for a family Data from the Miami Association of Realtors showed 8,137 closed sales of single-family homes during the first half of 2017, a 6 percent year-on-year decrease
Jim Ellis President – Ellis Diversified Chair – Riverwalk Fort Lauderdale Residents who previously moved to the west of Broward are now coming back into the city center. People want to be where there is activity. From downtown Fort Lauderdale you can reach the port, the airport and the beach within a two-mile radius. Residential units downtown first have to be approved through the county, which has been a cooperative partner, and it has watched, nurtured and been a part of our growth.
www.capitalanalyticsassociates.com | 37
Greg West Chief Development Officer, ZOM Living Chair, Urban Land Institute Southeast Florida & Caribbean Region
What level of interest are you seeing in your urban projects? There are two primary resident profiles we most commonly see in our urban projects. We see the younger generation attracted to the kind of housing where they can walk from their home to their workplace or to entertainment. There is also increasing demand from empty nesters who are selling their houses in the suburbs after their children move away and are interested in living in a pedestrian-friendly environment. This second group is also renting. These two groups of people go together. The empty nesters want to be in the same buildings as the younger generation. They might be partially or fully retired, but they’re active in any case. These are not people that are moving somewhere to finish their lives, they’re moving somewhere to be energized. They don’t want to be around only people that are their age and older, they want to be in a place where they’re energized with the youth and vitality of neighbors. How will the Urban Land Institute (ULI) influence economic activities in 2017? South Florida has a population of more than 6 million people, and that includes Palm Beach County, Broward County and Miami-Dade County. This is one continuous urban area, but every statistic tracked for real estate, economics and population is always divided into three sections for those three counties. Our economic destinies are intertwined, and if we communicated like that to the rest of the world and people understood better what the opportunities are, this urban area would have more and better economic growth. ULI will have programming whereby we try to stimulate more communication between the three counties regarding both politics and economic development. We can also learn from other communities around the U.S. about what they have done to be so successful in stimulating economic development. 38 | Invest:
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from the 8,658 sales closed during the same period in 2016. The 5,357 active listings at the halfway point of 2017 put the supply of single-family homes at 3.9 months. According to Sotheby’s, sales of single-family waterfront homes in Broward averaged $185 per square foot, while non-waterfront homes sold for $146 per square foot in the first half of 2017. Firsthalf 2017 sales of higher-priced waterfront homes were most concentrated in Broward’s north end; in this area, 64 percent of sales involved waterfront homes. In East Fort Lauderdale, the breakdown between sales of waterfront and non-waterfront single-family homes stood at 36 percent and 64 percent, respectively. Meanwhile, non-waterfront properties accounted for 78 percent of single-family home sales in Broward’s south end during the first half of 2017. Greater Fort Lauderdale remains a desirable market for luxury single-family homes, and the local portfolio includes a wide range of products and prices. Between January and July 2017, 288 homes in the $1 million to $5 million price range were sold, at an average of $294 per square foot. In the same period, three singlefamily homes in the $5 million to $10 million range sold, at $889 per square foot. One buyer even picked up a house for more than $10 million, at $1,077 per square foot, while an additional 26 single-family homes priced at more than $10 million remained on the market. Meanwhile, 60 homes priced between $5 million and $10 million and 870 homes priced between $1 million and $5 million were still on the market by the year’s second half. In Broward’s south end, the average price of luxury single-family waterfront homes dropped 14 percent year-on-year in Hollywood Beach and 19 percent in Hallandale Beach. However, inland luxury properties in those same municipalities saw year-on-year increases of 9 percent and 57 percent, respectively, during the first half of 2017. East Fort Lauderdale witnessed major bidirectional swings in luxury single-family waterfront prices, with year-on-year increases reaching 61 percent on the Las Olas Isles and 29 percent in Harbor Beach. Meanwhile, price declines on Fort Lauderdale Beach and in Rio Vista hit 46 percent and 67 percent, respectively. Between June 2016 and June 2017, Broward’s north end saw more consistent price gains in the singlefamily market, particularly in high-end waterfront homes. The only municipality in the area to exhibit a drop in single-family luxury waterfront prices was Lighthouse Point. The average price for such properties fell by 21 percent, from approximately $2.28 million in June 2016 to $1.8 million in June of the following year.
REAL ESTATE OVERVIEW
Prices for single-family luxury waterfront housing in Lauderdale-by-the-Sea climbed 42 percent. Yet the most massive hikes were in Hillsboro Beach and Bay Colony, where prices soared from approximately $9.57 million to $20 million and from around $2.60 million to $8 million, respectively. Farther from the coast, Southwest Ranches had the highest average price of luxury single-family homes in the west of the county, at $1.28 million. Weston, which is frequently ranked as one of the best places to live in Florida, saw a 19 percent increase in luxury single-family home prices, making it the fastest-growing market value in Broward’s western suburbs, ahead of Plantation, Sunrise and Parkland.
DDA showed that the inventory of multifamily homes in Broward stood at 197,253 units, with a vacancy rate of 5.5 percent at the end of the first half of 2017. “There are a lot of multifamily units going up right now, which is the highestvalue use of real estate. These are getting filled very quickly, and that is a telltale sign of the growth in Broward,� Alex Brown, co-managing principal of Cresa South Florida, told . As more people are renting by choice, particularly young professionals and empty nesters, the demand for multifamily rental units in the county is surging. A total of 3,444 were delivered in 2016 and 8,697 were under construction by the halfway point of 2017. Rent for multifamily units averaged $1.44 per square foot, representing a five-year growth of 24 percent. This is expected to increase at an annual rate of 2.4 percent. ( )
As more people are renting by choice, particularly young professionals and empty nesters, the demand for multifamily rental units is surging.
One building, many neighbors A summary report prepared for the Fort Lauderdale
www.capitalanalyticsassociates.com | 39
REAL ESTATE INTERVIEW
Demand-drivers How changing demand in Fort Lauderdale is opening up opportunities for the real estate sector
Ryan Shear President – Property Markets Group different cities. In Broward, we are able to focus much more on one target. Fort Lauderdale’s riverfront presents an opportunity for us to develop new residential space in the area with the highest-possible zoning density, and local authorities have made sure that the project meets the needs of the community’s future growth while keeping the process streamlined for us.
Why did Property Markets Group decide to enter the Broward market with a new riverfront project? Broward seemed to be an underserved market, with multifamily construction in Miami greatly outpacing new supply in Greater Fort Lauderdale. The new train station in the downtown area will drive even greater demand for downtown units. Fort Lauderdale is a major market that doesn’t get major attention, so finding a location right on the riverfront made this the right time to enter. The two-phase, multifamily development will target the young professional demographic, which is increasingly looking for housing in the urban core. Miami has a much bigger market, and investors are more familiar with it. However, there is also more competition in the Miami market, and it requires developers to really understand the nuances of the 40 | Invest:
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What was the strategy behind creating rental units, as opposed to condos? This decision was in line with the national trend of renting by choice. We are not building affordable housing, but by building products that cater to young professionals, we are effectively making housing more affordable. Our approach involves offering market units below market rents, and we found that we could achieve this by developing smaller spaces. The young professional target audience is quite often willing to rent a smaller unit for a lower price in order to live in the urban core. The riverfront project reflects that gap. Securing financing for multifamily projects is also comparatively less difficult right now. What is your outlook for the Greater Fort Lauderdale real estate market in 2018? Fort Lauderdale has a lot of interesting opportunities that we can take advantage of, but that won’t be true forever. In 10 years, Fort Lauderdale will probably look a lot more like Miami than it currently does. Large U.S. cities typically follow general macro-level trends, but we are unique here in how rapidly our population is growing. This growth in Broward County and throughout the rest of South Florida shows no sign of stopping and will continue to fuel the local market. New arrivals, as well as those born here, will need housing, offices and amenities, so the outlook from a development point of view is great.
REAL ESTATE OVERVIEW
The walkability factor is becoming a focus of new residential and commercial real estate developments throughout the county.
( ) Of the 8,697 multifamily units under construction at the time of writing, 2,409 were located in downtown Fort Lauderdale. This figure represents almost a tenfold surge in the construction of downtown units in 2017 compared to the 264 delivered in 2016. With the county’s commercial market remaining tight and the national trend of relocation to urban centers holding strong, effective downtown rents in mid-2017 reached $1.66 per square foot. Multifamily rents have increased over the past five years by 27 percent, a rise that is expected to continue at an annual rate of 3 percent. Condo market climbs According to Sotheby’s mid-year market report for Broward, 3,071 waterfront condos were sold in the first half of 2017, at an average price of $174 per square foot, while 3,677 units remained on the market. At a 35.1 percent discount to waterfront condos, 4,912 nonwaterfront units were sold in the same period, at an average price of $113 per square foot. These outpaced waterfront condo sales by roughly 60 percent, while a further 3,993 non-waterfront units remained on the market. Waterfront condo sales saw the biggest gains in East Fort Lauderdale, where units sold in the first half of the year at an average of $663 per square foot,
a 32-percent year-on-year increase from June 2016 prices. In Hollywood Beach, waterfront condo sale prices dropped by 21 percent to $476 per square foot. A smaller year-on-year decline of 3 percent was reported in Hallandale Beach and along Las Olas, where prices averaged $403 and $400 per square foot, respectively. Luxury condos were generally priced more moderately in Greater Fort Lauderdale. A total of 101 condos in the $1 million to $5 million range were sold by July 2017, for an average of $371 per square foot, with 426 units remaining on the market. However, none of the 13 units in the $5 million to $10 million range managed to sell in the first half of the year, nor did the two condos in Broward priced over $10 million. Office space With high demand for housing in centralized, walkable areas like downtown Fort Lauderdale, residential and commercial developers are in strong competition for space. Including Class A, B and C offices bigger than 10,000 square feet, there is a collective total of 59,137,539 square feet of office space in Broward, according to the Fort Lauderdale DDA’s second quarter overview. At the time of writing, the county’s vacancy rate hovers around 10.3 percent. Full-service rents for offices across the county averaged $27.02 per www.capitalanalyticsassociates.com | 41
Michael Weymouth President, The Las Olas Company
What have been some major highlights for The Las Olas Company in 2017? One of the main highlights has been our flagship property, the Riverside Hotel, turning 80 years old. We are doing upgrades to the hotel to improve our brand. The hotel was built in 1936, and the amenities at the time did not meet the quality standards of today. Is there a risk of downtown Fort Lauderdale reaching a saturation point for this type of project? When the constraints on the market four or five years ago subsided, there was an initial flood into the market of a lot of the residential developments that are in place now. There was a major concern as to whether this would saturate the market, but the absorption was incredible. By 2018, there will be eight major high-rise projects going on within a four-block distance of us. Beyond that, the Wave streetcar will also be underway. The amount of investment coming into downtown Fort Lauderdale is tremendous. How well-aligned with the vision for downtown are zoning and land use policies? The underlying zoning policy in the central business district involves a designated area called the Regional Activity Center (RAC). That has been the underlying incentive for all of this development, so I do not foresee a change in zoning, as it has been very beneficial for the city. On the other side of the river from the RAC is a southern equivalent, which was given an official designation around five years ago. There we are starting to see the stimulation of development, because land prices are lower than those in the city center. This allows for the density that developers look for, as well as space for parking. The RAC zoning designation in the city center has been the catalyst for all of the great work that is happening. 42 | Invest:
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Downtown Fort Lauderdale’s main thoroughfares are the target of attention for area residents and tourists.
square foot, while those in downtown Fort Lauderdale averaged $38.71 per square foot. Net absorption of Class A, B and C office space in the county totaled 3,691,523 square feet in the last five years, 535,324 square feet of which were located in the downtown market. In 2016, 1,010,358 square feet of office space were absorbed, while 258,627 square feet were absorbed in the second quarter of 2017 alone. In downtown Fort Lauderdale, the figures tell a different story. For the first time in many years, new Class A office space is being constructed. In 2016, the downtown market absorbed 120,699 square feet of office space, 95,685 square feet of which was Class A. Largely a result of new office and mixed-use developments going up in the central business district, Class A absorption came in at -5,897 square feet and -44,953 square feet, respectively, during the second quarter of 2017. Class A buildings currently make up 60 percent of the downtown area’s office inventory. Rents for such properties on Broward Boulevard averaged $37.25 per square foot, while those on Las Olas averaged $47.31 per square foot. Two office developments have stood out in the first
REAL ESTATE OVERVIEW
half of 2017. In March, the Broward College District Board of Trustees approved a pre-development agreement and ground lease with Stiles Corporation, which will redevelop the community college’s Willis Holcombe Center in downtown Fort Lauderdale. Stiles’ 25-story redevelopment will maintain space for Broward College, while including approximately 370,000 square feet of rentable Class A office space, 17,500 square feet of ground-floor retail and dining and 16,000 square feet of plaza. The redevelopment will also take up an adjacent lot formerly occupied by Bank of America. Pre-leasing is already open for the project to become 201 E. Las Olas, with groundbreaking scheduled for 2018 and projected occupancy by 2020. The other major downtown office development is Two Financial Plaza, spearheaded by the Boca Ratonbased Crocker Partners. The proposed 500,000 square feet of Class A office space on Broward Boulevard would cement the northern movement of downtown Fort Lauderdale’s new development pattern. Movement of ownership in the office market has been notably active over the past year, particularly in downtown Fort Lauderdale. Of all the Class A office sales in the county, 56 percent involved downtown
property, according to the Fort Lauderdale DDA’s second quarter overview. In February 2017, ownership of the 269,804-squarefoot One Financial Plaza transferred from a joint venture between the Crocker Partners and Westcity Realty to a new joint venture between the Crocker Partners and Walton Street Capital for $86.75 million. JP Morgan sold the 408,000-square-foot Bank of America Plaza at Las Olas City Centre for $220 million to Deutsche Asset & Wealth Management in September 2016. In addition, SunTrust Bank sold its SunTrust Center for $90 million in June 2016 to Steelbridge Capital. At the time of writing, TA Realty was listing the 200 East Broward building, which sold for $66.4 million in 2014. Shopping around Despite the proliferation of online shopping channels and e-commerce mobile apps, Greater Fort Lauderdale’s retail market remains robust. Efforts in recent years by groups such as the Greater Fort Lauderdale Convention & Visitors Bureau to brand the area as a global tourism shopping destination through such ad campaigns as “Hello, Sunny” are ( ) www.capitalanalyticsassociates.com | 43
REAL ESTATE OVERVIEW
Market voices:
Commercial real estate
Caroline Fleischer
Co-Managing Principal, Cresa South Florida
The industrial real estate segment is facing a big challenge in Broward due to industrial facilities’ spatial requisites being very wide and developers not being able to build vertically. Most of the remaining opportunities in the industrial segment are in small pockets throughout the county. However, the continual decline of big-box retailers will maintain the pool of opportunities for new offices, office/flex space or even mixed-use developments of offices and multifamily units.
There is a lot of demand for industrial space, from both tenants and the investor community. A big driver of this is the growth of e-commerce. As a subset of aggregate retail spending, this still accounts for less than 10 percent. So in terms of room for growth, e-commerce is huge, and this will continue to affect the industrial market in a positive way.
Ryan Nee
Vice President & Regional Manager, Marcus & Millichap Real Estate Investment Services of Florida
Tenants today are changing a lot. Many are closing or repositioning stores and at the same time, strengthening their omnichannel approach to meet consumer needs. We’re also seeing a number of clicks-to-bricks retailers coming into the market. These are companies whose retail operations started online and are now expanding into physical stores.
Michael Comras
President & CEO, The Comras Company of Florida
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REAL ESTATE OVERVIEW
( ) proving effective, and high retail employment levels continue to boost the market. “Retail is a big piece of the development of Fort Lauderdale, which is why Las Olas Boulevard’s development is so exciting,” Peggy Fucci, president and CEO of OneWorld Properties, told . Triple net leases in downtown Fort Lauderdale reached $29.00 per square foot in the year’s second quarter, showing a 20 percent growth over the past five years. While markedly lower than downtown retail space, triple net asking rents at the county level have grown by 18 percent over the past five years, reaching $20.44 per square foot in the second quarter of 2017. Broward’s inventory of retail spaces larger than 10,000 square feet totaled 83,843,124 square feet at the end of 2017’s first semester. Only 3.7 percent of that total was vacant. The downtown area boasts similar fundamentals, with just 3.3 percent of its overall 3,512,298 square feet vacant at the time of writing. Absorption of retail space remains on an upward trajectory throughout the county and in the central business district. The retail market in 2016 absorbed just over 1 million square feet throughout the county, representing around 23 percent of the total absorption over the past five years. In the second quarter of 2017 alone, Broward absorbed 487,107 square feet, nearly half of the 1,032,894 square feet it took in during 2016. The 74,122 square feet of downtown retail space absorbed in 2016 accounted for over 70 percent of the 105,485 square feet absorbed in the last five years. Meanwhile, several new mixed-use developments under construction downtown pushed second-quarter absorption to -4,162 square feet.
Guest rooms South Florida has a long-standing reputation as the gateway to Latin America. World-famous beaches, top-tier shopping, transit connections to destinations throughout the hemisphere from Fort LauderdaleHollywood International Airport and renowned cruise lines with exotic destinations, including Cuba and the Bahamas, continue to attract visitors to Greater Fort Lauderdale. The average occupancy rate for hotels across the U.S. rose from 65.7 percent in 2016 to 67.8 percent in May 2017. In comparison, Broward’s hotels saw occupancy rates grow from 77.2 percent in 2016 to 83.2 percent in May 2017. For many years, the Riverside Hotel and Hampton Inn were the only two hotels operating in downtown Fort Lauderdale, which often gave visitors little choice but to book rooms closer to the beaches. However, at the start of the second half of 2017, there were a total of 659 rooms under construction in the central business district. A further 540 rooms have been approved, and the 199-room Aloft Hotel project is currently under review. New developments in hospitality offerings are certainly not limited to downtown Fort Lauderdale. The Seminole Hard Rock Hotel & Casino in Hollywood is adding a new $1.8-billion guitar-shaped tower with 800 rooms and an estimated 50,000 square feet of event space, to be completed by late 2019. The nearby Sheraton Fort Lauderdale Airport & Cruise Port Hotel is currently undergoing a $30-million transformation to become Le Meridien Dania Beach. Anticipated to open in fall 2017, the redeveloped hotel will offer 245 guest rooms and 20,000 square feet of meeting space.
Broward’s hotels saw occupancy rates grow from 77.2 percent in 2016 to 83.2 percent May 2017, beating the national rate.
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REAL ESTATE OVERVIEW
Heavy lifting Consistent demand continues to drive absorption in Greater Fort Lauderdale’s industrial real estate market, and record-setting absorption of industrial space in 2016 has carried over into 2017. While more industrial real estate is under construction than ever before in Greater Fort Lauderdale, supply still lags behind mounting demand. The estimated 1.3 million square feet of total product under construction in Broward as of July 2017 is not expected to sit long on the market following completions anticipated over the next two years, according to a Colliers quarterly market report. Demand is particularly strong in southwest and central Broward, where a respective 33 percent and 28 percent of the county’s new industrial space is being built. The nearly 113 million square feet of existing industrial space is located in 3,063 buildings across the county. Rental rates are driven up by factors including declining vacancy rates throughout Greater Fort Lauderdale, the high quality of new industrial space under construction and the backlog of latent demand. Halfway through 2017, the total vacancy rate for the county’s industrial market stood at just 4.1 percent, 30 basis points below the rate at the start of the year and the lowest in the past decade. Meanwhile, rental rates maintained on an upward trajectory in 2017. Average asking rents for Broward’s warehousing and distribution spaces reached $8.29 per square foot at the end of the first semester, an increase of 0.85 percent from the first quarter of 2017, when asking rates were an average of $8.22 per square foot. The average asking rent in mid-2017 showed a 5.1 percent year-on-year increase from the average of $7.89 per square foot reported 12 months earlier. Representing a 170,000-square-foot, 9.1-acre injection of Class A warehouse space into southwest Broward’s industrial market, the Bergeron Distribution Center is currently under construction in Pembroke Pines as part of Bergeron Land Development’s larger Park of Commerce and Industry. The 338,445 square feet of warehouse distribution space under construction in southwest Broward at the time of writing trailed only the 366,144 square feet of product under construction in the northeastern reaches of the county. Further to the north, Butters Construction and Development is building the $40-million Pompano Center of Commerce II, one of the largest new industrial projects currently under development. Consisting of four buildings, the complex will add just over 375,000 square feet of new industrial space, with availability anticipated in November 2017. Sales of existing properties were largely concentrated 46 | Invest:
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Broward is the site of several large-scale mixed-use communities pushing the envelope on 21st century South Florida modern living.
in the City of Fort Lauderdale during the second quarter of 2017. Three of the four industrial properties sold in this period were located within the city’s limits and accounted for just over 245,000 square feet, selling at an average of approximately $136 per square foot. Among them is the 125,534-square-foot industrial Sunrise Business Center, which sold for $13.1 million, representing a 32 percent increase from its sale for $9.9 million in 2015. Looking ahead Many in the South Florida real estate market are turning to alternative sources of financing for new development, as traditional sources of capital from Latin America continue to cool and institutional lenders in the U.S. remain cautious following the collapse of the U.S. housing market nearly a decade ago. One such alternative financial channel has been the EB-5 U.S. visa program, which incentivizes direct capital investment from foreign nationals into new commercial enterprises within the U.S. The investment is made through designated regional centers in exchange for conditional two-year residence visas that can be made permanent if investors demonstrate the economic benefits of their investments. To be considered for the EB-5 program, foreign
REAL ESTATE OVERVIEW
nationals must invest either $500,000 into a “targeted employment area” or $1 million into any other venture that will create full-time employment for at least 10 U.S. citizens. In addition to buying significant amounts of South Florida property, investors from China receive around 85 percent of EB-5 visas granted annually. EB-5 investments in Florida rose from just $10.5 million in 2011 to $150.5 million in 2013, according to Invest in the
USA, the national trade association founded to support the program. There are currently 859 regional centers throughout the country, 84 of which are in Florida, giving Florida the U.S.’ third-highest number of centers after California and New York. One of these, Gold Coast Florida Regional Center (GCFRC), is leveraging EB-5 capital to develop Block 40 and Hollywood Circle, both mixed-use developments bordering downtown Hollywood’s Young Circle Park. “Capital hated real estate in 2010, and little equity was available within the U.S. for real estate projects. We used to raise all of our capital from within the U.S. through banks, equity firms and Wall Street. When those sources went away, the EB-5 program filled in the void,” Chip Abele, chairman and CEO of GCFRC, told While EB-5 investors have provided a vital source of capital for U.S. ventures in the wake of the global financial crisis, the future of the program remains unclear. In May 2017, President Donald Trump extended the program, but only through the end of the year’s third quarter. Given the uncertainty, there may soon be more openings for investment in South Florida’s real estate market. With prices in the region still relatively attractive compared to those of more mature markets like Los Angeles, New York and Chicago, the potential value for investment remains high, particularly in Greater Fort Lauderdale. The Broward County Commission continues to support capital upgrades to key infrastructure. This, coupled with Broward’s thriving, increasingly diversified economy, leaves little room for doubt – the county’s real estate market is on an upward trajectory moving into 2018.
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Construction, Infrastructure & Utilities: There is plenty of new construction throughout Greater Fort Lauderdale. Limited as open space may be, the growing population is driving demand for places to live, work and play. A series of massive mixed-use developments are springing up throughout the county. Major infrastructure investments at the airport and seaport are keeping builders busy, while increased connectivity to improved utility networks is boosting quality of life for locals and visitors.
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Quality controlled: With demand for property increasing, the construction industry’s main challenges are shortages of workers and available land. The area’s utilities companies are effective and well run, adding to a robust infrastructure In the years since the collapse of the housing market, the South Florida real estate sector recovered faster than most had thought possible, and the construction industry was busy. In 2016, construction spending in South Florida reached $10.9 billion, a 3 percent yearon-year increase from 2015. With the administration of President Donald Trump entering office in January 2017, the attitude across the economy was one of cautious optimism. Prevailing uncertainty may explain the construction industry’s sluggish start to the year. According to Dodge Data & Analytics, aggregate spending on construction products was down 20 percent in February 2017, compared to the same month of the previous year. Construction starts fell from $972 million to $776 million during those 12 months, while new project contracts also saw a dip in the early stages of 2017, from the collective $1.66 million awarded in the first two months of 2016 to the $1.43 million awarded during those in 2017. “The overall volume of work in South Florida is beginning to level off, giving us a greater ability to understand and control pricing 50 | Invest:
and scheduling,” Brad Meltzer, president of Plaza Construction, told . At the start of 2017, residential development was reduced across South Florida, yet increased population and added jobs are still boosting demand. The second quarter of 2017 saw a pickup in the region’s construction industry, with $5.66 billion in new starts by the halfway point, a 2.7 percent year-on-year increase from the $5.51 billion in starts by mid-2016. While demand has softened among certain residential segments throughout the Palm Beach, Broward and Miami-Dade tri-county area, construction has picked up in other segments, primarily healthcare, government, education, office, hospitality, retail and warehousing. In Broward, growth has mainly focused on healthcare, office, education, retail and government construction.There were nearly 200,000 square feet of new retail space under construction in the county in the first of half 2017, Colliers reported in July. Rebuilding Broward is the smallest county in South Florida, (
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CONSTRUCTION, INFRASTRUCTURE & UTILITIES INTERVIEW
Downtown rises How developments in the downtown area of Greater Fort Lauderdale are helping to drive the real estate market
Scott MacLaren President – Stiles How do your new projects in downtown Fort Lauderdale contribute to the area’s development? There has been a heavy focus on new developments, perhaps the most notable of which is Amaray, our 30-story multifamily project near Las Olas Boulevard, which was completed in 2016. The success of Amaray proved to the downtown Fort Lauderdale market that there was a demand for larger, higher-end rental apartments with a heavy focus on amenities. The demographic that we saw take interest in Amaray stretched across the age spectrum but averaged around 47 years, which is drastically different from the average in Flagler Village. It was a little bit of a bet on our part, but the risk that we took has paid off. There is continued demand to live and work downtown that we are excited to see, and we are currently planning two additional residential towers in the downtown core. Not long ago, the downtown area emptied after working hours. We used to have to convince our retail tenants to hang on until the residential component came. Now we are seeing this new supply being delivered, and it is forming the critical mass necessary to bring in well recognized, local and national restaurateurs to our urban core. With so much development planned and underway, what is the industry doing to avoid another real estate bubble? Many in the industry are talking about 5,000 to 6,000 new residential units that are coming to the market in one form or another. Though many of these proposed projects will move forward, not all of this supply will materialize. A common theme now is that the best sites with the best sponsors will move forward and succeed. There are some strong sponsors and developers that are planning projects right now, and these are the ones that will achieve their entitlements, get capitalized and move into development.
In general, despite the challenges, this has been a good time to develop, and we maintain that there is going to be a continued demand for responsible, conservative developments of all product types, from retail and office to multifamily and industrial. What tenants do you see coming to the market and to your new proposed building? In the past, we have seen the majority of our tenants come from within the market, looking to upgrade or expand. We are already seeing some of that demand, but we are also hoping to create the availability for tenants from outside of downtown or the market that see the benefit of coming to South Florida and into this evolving mixed-use environment. www.capitalanalyticsassociates.com | 51
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Charles “Chip” Reid CEO, Current Builders
This is an exciting time in the construction industry, but it is not without challenges. Broward’s building boom and the county’s future plans for growth are contingent upon our finding innovative ways around the shortage of skilled labor. At Current Builders, we have been proactive in developing strategies to combat this issue, first, by investing in the newest technologies and second, by investing in educational programs for our workers. With an expected shortfall of 150,000 skilled construction workers nationwide, it is more important than ever to introduce advanced technology to the job. Current Builders has advanced building information modeling, or BIM, throughout the industry. We were an early adopter of the technology and were open to sharing our experiences with colleagues and competitors alike. Today, we are incorporating the use of drones and virtual reality applications to help resolve problems in the field more quickly. One of the additional benefits of implementing these advances is attracting a new technologycentric demographic to the industry. For people who grew up gaming and embraced technology in college, the construction industry has a new appeal. This will help us to expand the industry and meet the exploding demand. However, we need to become even more immersed in the educational process, to ensure that we can continue the anticipated growth in Broward. Seeing this critical need, I established Current Builders University in 2012. The program is something that I am very proud of, and one I feel should be replicated throughout various industries in Broward and the country. As the chairman of the National Center for Construction Education and Research in 2017, we analyze at a national level the impact of the shortfall in skilled workers. While technology will be able to achieve more and more over the decades, investing in human capital should always be an essential part of any company. 52 | Invest:
Despite limited open space for new construction, redevelopment of existing properties in Broward County is keeping builders busy.
( ) and a shortage of developable land poses a significant challenge to new construction. The 471 square miles of such land had a population density of 1,448 people per square mile, while the state had an average density of just 348 people per square mile, according to the most recent statistics from the U.S. Census Bureau. The Targeted Redevelopment Vision, part of the Broward Next program, recognized that the county’s developable land had essentially been built-out and called for a rethinking of the direction construction must take to accommodate the 250,000 new residents projected to settle in Greater Fort Lauderdale by 2040. An increasingly low number of available skilled
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CONSTRUCTION, INFRASTRUCTURE & UTILITIES OVERVIEW
laborers is another challenge faced by Broward’s construction industry, and the lack is similarly felt throughout the country. Aging workers are moving into retirement, creating a gap that is unenticing to younger generations. The U.S. construction industry employed 11.5 million people in 2005, but by 2010, that number had fallen to 10.6 million. South Florida’s real estate market was hit hard by the crash in 2007 that set in motion the Great Recession. When investments in real estate dried up, so too, did payment for the region’s construction companies, which forced many skilled laborers to look for work in a new field or location. A sign of recovery, 31,000 construction jobs were created in Florida during the 12 months following May 2016, according to data from the U.S. Department of Labor. The state’s 6.6 percent year-on-year increase in construction-related employment was outpaced by that of the county, where 3,300 construction jobs were added during the same period, marking a 7.6 percent year-on-year growth, as reported in June 2017 by the Greater Fort Lauderdale Alliance. Around 800 of those jobs were created in April alone, a good indication of the strength of Broward’s construction industry. In June 2017, a further 700 construction jobs were added in the county, temporarily quieting concerns that an end to the current cycle would have a negative impact on employment. Family matters Construction starts for residential projects totaled $704 million during the first two months of 2017, approximately 40 percent less than the $1.2 billion recorded during the same period of the previous year. Yet contractors remained busy at work, building homes for the county’s growing population. At the halfway point of 2017, 8,697 multifamily units were being built, 2,409 of them in downtown Fort Lauderdale.
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Website Metrostudy reported that construction began on 1,386 single-family homes in Greater Fort Lauderdale during 2016, marking a 5-percent increase from such starts in 2015 and a 17-percent increase from those in 2014. Construction began on 441 singlefamily homes across the county in the first quarter of 2017, marking a 52 percent year-on-year increase. Back in the mix Large-scale, mixed-use developments are popular in South Florida. Several such projects are under construction in Broward, both in the urban core of downtown Fort Lauderdale and in less populous areas. K Group Holdings received approval in 2017 to begin work on its new $1.5-billion, 4-million-square-foot planned community called Metropica. The first phase of construction at the 65-acre site in Sunrise will feature 400,000 square feet of retail space, 150,000 square feet of Class A office space, a 240-room hotel and 345 multifamily units for rent. In November 2015, the Metropica project received a combined $38 million in infrastructure financing from Ontario-based Buckingham Charitable Foundation, Nova Scotia-based FCMI Parent and New York-based 1895 Management. Another lender funded $22 million of the project’s retail portion in 2016, while in the first half of 2017 it received a $64.5-million construction loan from Canadian lender Rompsen. The first of Metropica’s eight towers is currently under construction, with another scheduled to be completed during each of the following years.
Construction of commercial real estate projects has helped pick up the slack for slowdowns in building across other product types.
Gregory Stuart Executive Director – Broward Metropolitan Planning Organization
The Broward Metropolitan Planning Organization is currently working with the Florida Department of Transportation on both the express lane system and the express bus. We encourage people to use public transit. The express bus system was in one of our older plans. The reality is that 95 percent of all Broward residents still want to use their cars to get to work. People see it as more convenient and comfortable. Miami-Dade funded the first express lane from downtown Miami north to the Broward County line about 10 years ago. However, Broward has since funded and constructed a lot of the roadwork, including the I-95, I-75, I-595 and the turnpike express lanes.
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Bob Moss Chairman & CEO, Moss & Associates
Where do you expect the most new construction in the county? Since Hurricane Andrew, there has been tremendous growth in western Broward County. Congestion and lack of available real estate are also driving development to the north, so we are seeing a lot more action in Palm Beach County. We should take advantage of what available land is left, but we also expect increasing urbanization to drive a continual repurposing of existing real estate in Fort Lauderdale.
On the beach Further east in Dania Beach, an $800-million mixeduse development called Dania Pointe is being built. A joint venture between Kimco Real Estate Investment Trust, Master Development and Salzman Real Estate Advisors, the complex will occupy 102 acres along Interstate 95 and include approximately 1,000 residential units, 350 rooms in a two-tower hotel, 795,000 square feet of retail and restaurant space, and between 500,000 and 1 million square feet of Class A office space. The first phase of construction is currently underway, with delivery set for late 2018. Dania Pointe is not the only development currently underway in Dania Beach combining office with retail use. The auspicious conditions of Dania Beach’s growth potential attracted the interest of local development firm Becha, LLC, which is working on the two-stories of new restaurants, retail shops and offices at the 31,776-square-foot Village at Atlantic Shores. Regarding the $10 million, 1.6-acre site.
What is driving new construction moving into 2018? The surge in demand for large transportation infrastructure projects is an important driver of the local economy, particularly the construction sector. For instance, the new Brightline train station in downtown Fort Lauderdale should lead to additional developments in the surrounding area, which has been somewhat overlooked until now. The cruise industry is also a big engine of new projects. Cruise lines are increasing their fleets, both in number and size, and the requirements of these massive and increasingly sophisticated vessels should continue to drive demand for general contractors at Port Everglades. One of the fastest-growing arms of our company has been the construction of solar farms, as demand for solar construction is growing across the country. Although the solar market is largely politically driven, many large corporations are committed to reducing their energy footprints. Some of the biggest owners of renewable energy are Apple, Google and Amazon, which utilize solar farms to meet the massive energy needs of their data centers. We are trying to lead by example and have installed solar panels on the south side of our corporate headquarters in Fort Lauderdale. In 2016, there was more renewable energy brought online than any other form, so we’re excited to build more of these projects here in South Florida. www.capitalanalyticsassociates.com | 55
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“It’s the right concept at the right time in the perfect location. The data shows that the market is there to support a mixed-use development,” Elias Benaim, owner of Becha, told . (For more about this development read our chapter on Dania Beach on page 127 ) Downtown Fort Lauderdale, the epicenter of the county’s development, will be home to several new mixed-use projects. Among them is the ambitious 100 Las Olas, which broke ground in March 2017 and is expected to open in 2020. The construction permit for the Kolter Group’s project was valued at $152 million by Dodge Data & Analytics. The building will have 46 levels and rise 499 feet, making it the tallest in the city once complete. In addition to 238 rooms in the building’s Hyatt Centric Hotel and 8,500 square feet of retail space, 100 Las Olas will house 121 luxury condos, the first built in the downtown area in over a decade. Work is also well underway on the Related Group’s $160-million Icon Las Olas mixed-use development. It will feature 15,000 square feet of ground-floor retail space, two restaurants and 272 rental units, all within the 45-floor, 455-foot building. In an effort to provide every necessary accommodation, seven of those floors will be dedicated to parking. Initial leasing began in June 2017. The Fort Lauderdale City Commission has given Traina Companies approval to develop FATcity just north of Las Olas Boulevard. The name of the project adopts the acronym given to the nearby Flagler Arts and Technology Village, downtown’s emerging arts district. The development’s two 30-story towers will include an overall 1.35 million square feet of mixed-use property and sit on a 2.69-acre plot. Once complete,
The trend toward mixed-use developments is bringing a diversity of product types into the market.
FATcity will have 612 new residential units, 270,000 square feet of office, retail and hospitality space and more than 1,300 parking spaces. To avoid a clustering of affordable housing developments and to ensure that low cost and access to services do not compete, incentives have been put in place for developers to incorporate affordable units into market-rate projects.
Henry Sniezek Director – Broward County Department of Environmental Protection & Growth Management Climate resiliency is our number one challenge to supporting sustainable growth, and we need to start planning for it now as it puts our future at risk. Housing is another major challenge because land scarcity is pushing Broward into a period of redevelopment. The third obstacle is transportation. We no longer have the capability to expand our roadways to accommodate more vehicles, so we have to think creatively about offering viable alternatives. Our priority right now is sea level rise. Our official board-adopted estimate is a 26-inch sea level rise by the year 2060.
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CONSTRUCTION, INFRASTRUCTURE & UTILITIES OVERVIEW
The most recent Broward County Land Use Plan reclassifies apartment units under 500 square feet as half-units, allowing developers to increase the total number of units in a building while still obeying maximum density requirements. Money makers Construction starts for nonresidential projects totaled $3.06 billion during the first half of 2017, a 55 percent increase from the $1.97 million in the first two quarters of 2016. Much of that growth was in commercial and industrial developments. “Projects in the industrial sector present some of the biggest opportunities in Greater Fort Lauderdale, despite the difficulty in sourcing the necessary land on which to carry out new industrial projects,� Robert Kornahrens, president and CEO of Advanced Roofing, told . Approximately 30,000 square feet of new industrial space entered the Greater Fort Lauderdale market during the first quarter of 2017, while 1.3 million square feet were under construction as of July. Because most of the larger plots of developable land are located away from the densely populated eastern portions of the county, a respective 33 percent and
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headquarters. In nearby Pembroke Pines, Broward’s Bergeron Land Development is building the 300-acre Bergeron Park of Commerce and Industry, where work is currently underway on the 170,000-squarefoot Class A Bergeron Distribution Center. Once finished, the industrial and commercial park will be zoned for M-1 light industrial, M-3 general industrial and M-4 limited heavy industrial uses. In Weston, Royal Caribbean Cruises is dedicating $9 million to its warehouse. (For more about this development read our chapter on Pembroke Pines on page 87 )
Investment initiatives at the state, county and municipal levels are driving much-needed upgrades of the area’s infrastructure.
28 percent of the industrial space currently under construction is located in the southwest and central areas of Broward. Apotex Pharmaceuticals is investing $184 million in a new 380,000-square-foot facility in Miramar, which will house the Canadian firm’s U.S.
A question of quality The American Society of Civil Engineers gave Florida a C on its 2017 Infrastructure Report Card, compared to the national score of D+. Low marks for stormwater and coastal areas pulled down the overall grade, while the state earned a B- for the quality of aviation and port infrastructure and a B for its bridge infrastructure. While approximately 15 percent of the state’s 12,046 bridges are older than 50 years, only 1.7 percent were considered structurally deficient. Florida Governor Rick Scott approved a 20172018 budget with $85 million designated for public infrastructure and job training initiatives. “Governor Scott and his administration are investing a lot in making necessary infrastructure upgrades around Broward County. We’re seeing more projects coming online now than at any point in the past 10 years,” J.R. Bergeron, president of Bergeron Land Development, told . Public infrastructure is overseen by the Broward County Department of Public Works, which is made up of departments dedicated to construction management, facilities management, highway construction and engineering, traffic engineering, highway and bridge maintenance, and solid waste, recycling, water and wastewater services.
Thomas Miller CEO – Miller Construction Company
Following the recession in 2008, a lot of people left this area of work, and it is hard to get them back. Now that there is a lot of construction going on, everyone is competing for employees. One of the biggest obstacles to getting people into the trades is that every parent wants their kid to go to college, so fewer young people are looking to construction as a career path.
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The Broward County Capital Program FY17-21 is the budgeting and planning framework for all capital projects under consideration over the next five years. Significant investment has been directed toward capital improvement projects at the Fort Lauderdale-Hollywood International Airport (FLL) and the nearby Port Everglades, which are significant drivers of the county’s economy. These investments stand to greatly benefit the area’s general contractors. Moss & Associates is the second-largest general contractor in southeast Florida based on gross billing in 2016. In 2017, it built a $200-million international concourse at FLL for Southwest Airlines. In 2017, the company began work on a $470-million contract to extend the deepwater turnaround area for cargo ships at Port Everglades. The port received approval from the Broward County Board of Commissioners in May 2017 for a $437.5-million expansion project. In addition to extending the turnaround area, it will add berths for larger postPanamax cargo ships and install crane rail infrastructure to support new, super post-Panamax cranes. Road works Transportation planning along with the allocation of funds and requisite coordination is carried out by the Broward County Metropolitan Planning Organization (MPO). The MPO is tasked with transforming the county’s transportation infrastructure to improve mobility, by increasing the presence of mass transit in the tri-county area. It is also responsible for the county’s Transit Development Plan, Transportation Improvement Program and Long-Range Transportation Plan. The MPO’s board includes members from the South Florida Regional Planning Council and the South Florida Regional Transportation Authority. Broward’s current five-year capital program is allocating funds for eight major road upgrade projects, as well as for the continuation of the countywide Signalization Engineering Improvements (SEI) scheme. Under the SEI, new technology will be implemented to optimize traffic flows in an effort to reduce congestion and improve the reliability of mass transit. In another attempt to address traffic problems, the capital program has allocated $2.5 million for the creation of countywide bicycle lanes. Also integral to the area’s transportation infrastructure is the Brightline project. The planned high-speed rail service will connect Miami, Fort Lauderdale and West Palm Beach and is scheduled to open at the end of 2017. In the first three years of the Brightline’s construction, 10,000 jobs per year were created.
Thomas Hutka Director, Broward County Department of Public Works
How is the Department of Public Works preparing water and sewer infrastructure to support a growing population? With the return to higher levels of economic growth in Broward County, water management and transportation are significant priorities. Staying ahead of growing water demands includes proactively maintaining, repairing and replacing our water and wastewater pipes and treatment facilities, and not waiting until infrastructure failures cause costly and environmental problems. The national recession and temporary slowdown in local construction allowed us to catch up by planning and building additional capacity to address the demands of future growth. For example, through innovative partnerships with neighboring wastewater service jurisdictions, we have been able to significantly increase the amount of treated effluent that goes back into the environment as reclaimed irrigation water. The county’s water and wastewater services staff are proud of their public-private partnership to construct the area’s first fat, oil and grease, waste-to-energy cogeneration plant. This state-of-the-art facility receives waste products from local restaurants and industries for power production that will offset the county’s wastewater treatment power bill by $29 million over 17 years. The plant will also remove almost 9,000 metric tons of greenhouse gas emissions annually. How is the department currently targeting traffic congestion in Broward? With assistance from the Florida Department of Transportation, Broward County recently invested in state-of-the-art traffic signal system hardware and software. It has also been upgrading the communications connections that reach our 1,500 signalized intersections. County staff has worked diligently to synchronize traffic signals along major streets to help alleviate urban rush-hour congestion and increase safety. www.capitalanalyticsassociates.com | 59
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Power build The 2017 Infrastructure Report Card listed Florida’s energy consumption among the five highest in the U.S. The nation’s third-largest energy provider, Florida Power & Light (FPL), serves approximately 10 million consumers across the state, though its primary market is the populous southeast. Around 70 percent of the energy generated by FPL to serve the tri-county area comes from natural gas. Nuclear generation accounts for 17.13 percent, while coal, oil and solar account for a respective 5.34 percent, 0.38 percent and 0.06 percent. The remaining 7.05 percent is purchased power. FPL made headlines in Broward when it announced plans to replace its Lauderdale Plant with a new plant in Dania Beach, which will include a 1.2-gigawatt facility. To expedite the project, the Florida Public Service Commission exempted FPL from the standard proposal process, and a request for certification of the site was filed with the Florida Department of Environmental Protection in August 2017. Home to a rare global network access point, Broward offers residents and businesses world-class internet connectivity. Greater Fort Lauderdale has an extensive fiber-optic network that supports high-bandwidth internet connectivity. AT&T recently rolled out its 1-gigabit internet connection to customers in the Miami-Fort Lauderdale area. Known as Internet 1000, the provider’s fastest internet speeds are now available to approximately 300,000 residences and small businesses through an all-fiber network. Fort Lauderdale-based Hotwire Communications owns and operates Fision, a 10-gigabit ultra-highspeed connection. This is available via the provider’s fiber-to-the-home network.
New installations of smart technology throughout the county’s traffic management signal system should improve efficiency.
Michael Kaufman President & CEO – Kaufman Lynn Construction
We are bullish moving into 2018. There is no doubt that we may be nearing the end of the current construction cycle. However, this cycle was much more logical and conservatively underwritten than the previous one. We expect to see a more natural transition within each sector, rather than an abrupt falloff where all construction stops at once. The construction sector in Broward County is very active. In the South Florida market, we have more activity happening in Broward than in Miami-Dade or Palm Beach counties.
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Despite having spent around $3 billion over 10 years to increase the resilience of the electrical grid against extreme weather events, the impact of Hurricane Irma left almost 4.4 million of FPL’s customers without power. In Broward, some 85 percent of customers lost power. FPL was quick to react, resolving outages within a few days, according to the company. Looking ahead The market for new construction in Greater Fort Lauderdale is active, entering the third quarter of 2017. “There is a lot of growth and new opportunities in Broward County, both for commercial projects as well as in the residential segment,” Angela and Wayne Messam, co-owners of Messam Construction, told .
According a survey published by the Associated General Contractors of America, 79 percent of construction firms in Florida expect to increase hiring in 2017, and 30 percent of contractors in the state foresee an increase in the dollar volume of projects, while only 10 percent anticipate a reduction. “We are expecting population growth, and the main consideration for our department is where to encourage this growth, given the fact that we’ve run out of developable open space,” Henry Sniezek, management director of Broward County Department of Environmental Protection, told . The steady supply of large-scale proposals for new developments across the county, and continued investment in infrastructure should ensure that the construction industry will remain busy. www.capitalanalyticsassociates.com | 61
Transportation & Aviation: New investments in underlying transportation infrastructure are revamping the way people get in, out and through Greater Fort Lauderdale. Large-scale expansions at the airport are supporting more routes to new destinations throughout the U.S. and abroad. The Brightline project is bringing high-speed, intercity rail connectivity to South Florida, while Fort Lauderdale looks to add light rail into the mix. Meanwhile, transit authorities look to smart technology to create attractive alternatives to driving.
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Transportation & Aviation in numbers: Fort Lauderdale – Hollywood International Airport monthly passenger traffic: 2016 2,570,000
JAN
2,440,000
FEB
2,880,000
MAR 2,460,000
APR MAY
2,390,000
JUN
2,350,000 2,490,000
JUL
2,330,000
AUG 1,970,000
SEP
2,030,000
OCT
2,490,000
NOV
2,800,000
DEC 0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2017 2,800,000
JAN
2,610,000
FEB
3,140,000
MAR
2,950,000
APR 2,630,000
MAY
2,680,000
JUN
2,940,000
JUL 0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Source: Broward.org
Fort Lauderdale–Hollywood International Airport, passenger traffic, 2016 (millions):
Fort Lauderdale–Hollywood International Airport top 10 airlines, by passengers per year: 2015
8,000,000
6.1
23.2
Domestic
International
2016
7,000,000 6,000,000 5,000,000 4,000,000
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Source: Broward.org
Silver
Allegiant
Air Canada
United
American
Virgin America
Source: Broward.org
Delta
0
Southwest
1,000,000 Spirit
TOTAL
2,000,000
jetBlue
29.3
3,000,000
Upward mobility: With ample airport connections, new rail systems and a developed road network, the Broward County’s transportation sector is well positioned to offer support and convenience to the area’s residents Transportation is an important driver of the Broward County economy. According to the Greater Fort Lauderdale Alliance, the trade, transportation and utilities sector added 3,800 jobs in Broward County between June 2016 and June 2017, a growth of 2.1 percent year-on-year. In May 2017 alone, employment in the sector created 400 new jobs. The Broward County Capital Budget sets out more than $35 million to fund the county’s program of transit capital projects in the 2018 fiscal year, followed by an additional $89 million in transit project funding between 2019 and 2022. Less is more Although Broward covers a smaller land area than Miami-Dade or Palm Beach counties, an August 2017 report from the Florida Department of Transportation (FDOT) showed that Broward contained 4,294 miles of municipal roads, as well as 303 miles of roads in unincorporated parts of the county. Collectively, at nearly 4,300 miles, there are 40.1 percent more municipal roads in Broward than in Miami-Dade, which has 3,055 miles, and 97.8 percent more municipal
roads than in Palm Beach, at 2,170 miles. Over 43 million road miles are traveled every day in Broward, where commuters spend an average of 38 hours idle in traffic every year. Between 1990 and 2010, the average roadway commute increased by approximately 30 percent, from around 23 minutes to 30 minutes. FDOT has funded a number of completed or ongoing projects in Greater Fort Lauderdale. The Broward Mobility Project, which began in February 2015, is adding sidewalks, multiuse pedestrian paths and bicycle lanes along 20.8 miles of 45 roads throughout Greater Fort Lauderdale. The $15-million project is being carried out by Construct Group and is slated for completion in fall 2018. At a cost of $900,000, seven miles along Interstate-95 (I-95) were retrofitted with new signage as part of the second phase of the Intelligent Transportation System scheme. Work on the retrofit finished in August 2017. Express service The express lanes of I-95 in Miami-Dade now extend into Broward, providing 21 miles of toll lanes with dynamic, congestion-based pricing. These run from ( ) www.capitalanalyticsassociates.com | 65
TRANSPORTATION & AVIATION INTERVIEW
Flight modes How Greater Fort Lauderdale’s primary airport is expanding its reach and fueling the local economy
Mark Gale CEO – Fort Lauderdale-Hollywood International Airport However, our air service portfolio is quite diverse, including low-cost to five-star carriers. We recently worked with the Emirates airline to add a non-stop Dubai service. This adds one-stop connectivity to 150plus cities in 80 different countries.
With the Miami International Airport 45 minutes away, how does Fort Lauderdale-Hollywood International Airport stay competitive? We compete effectively in various ways. Miami International Airport (MIA) and Fort LauderdaleHollywood International Airport (FLL) are two very different airports, both in terms of size and passenger demographics. FLL is a low-cost airport, and several low-cost airlines have chosen to make it a premier piece of their route network. Our largest carrier, jetBlue, is increasing its number of flights here Spirit Airlines also has a significant presence, as does Southwest Airlines. Fort Lauderdale has one of the lowest costper-enplaned-passenger metrics of any large hub, currently operating in the U.S. at $5.06. This makes us extremely attractive to many airlines. 66 | Invest:
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What are your expansion plans for 2017, and what new direct flights can we expect? The airport is currently in the midst of a $2.3-billion expansion program, which has included some $800 million for the construction of a new south runway. We are under construction from end to end right now, as we work to both expand our facilities and improve existing ones. There is currently a $333-million renovation program in Terminal 1, including the new $200-million international concourse A, which opened in July. Approximately another $133 million is dedicated to a new connector building between Concourses B and C. Terminal 2 will soon be undergoing a $117-million renovation program. The last major piece of the terminal modernization program is the new, $450-million international Concourse G in Terminal 4. This project will be finished in the fall of 2018. How does FLL work with partners such as Port Everglades and others in the tourism industry? In Broward, the Greater Fort Lauderdale Convention & Visitors Bureau, Port Everglades and FLL all report to the county administrator. We regularly work as partners on issues. Many passengers fly into FLL and then transfer to board cruises at Port Everglades. People come through FLL to attend conferences and conventions, and there are plans underway to expand the convention center and construct a new convention hotel. The logistics of connecting economic engines is something we are working on.
( ) downtown Miami to just south of downtown Fort Lauderdale. As of September 2017, work is underway on the 29-mile, Phase 3 extensions of the I-95 express lane project. Part of Phase 3A-1, the addition of two express lanes, began in October 2015, carrying a price tag of $149 million. The lanes will run along the 6.7-mile northbound and southbound stretches of I-95 between Broward and Commercial boulevards and are expected to open in spring 2020. The $156-million Phase 3A-2 of the express lane expansion project began in January 2016. Once complete in spring 2020, the I-95 express lanes will continue for 7.3 miles between Commercial Boulevard and SW 10th Street. Construction of the expansion’s Phase 3B-1 is scheduled to begin in 2018, with express lanes extending between SW 10th Street and Glades Road, while new lanes will also extend between Glades Road and Linton Boulevard in Palm Beach as part of the project’s Phase 3B-2. Improvements to I-75 and I-595 are also underway, costing a total of $536 million and with construction lasting four years. In an effort to minimize disruption, the project is being executed in four segments, with expected completion in late 2018. Once finished, 15 miles of managed lanes will have been added, with an aim of improving congestion and mobility to help accommodate future growth. The project will also include the construction of sound barriers, interchanges, overpass bridges and express lanes on I-75. New bridges will connect the express lanes of I-75 with Florida’s Turnpike and I-595, the latter of which opened three reversible tolled express lanes between the Turnpike and I-75 in 2014. Track changes The South Florida Regional Transit Authority (SFRTA) operates Tri-Rail, a commuter train service between the Miami International Airport (MIA) and the Mangonia Park station in West Palm Beach. According to a regional ridership snapshot, 457,960 riders used the Tri-Rail in May 2017, a 2.32-percent increase from the 447,584 riders in May 2016. The SFRTA also operates a convenient feeder bus that brings passengers to the station. This service was utilized by 80,412 passengers in May 2017, a drop-off of 9.26 percent from the 88,617 passengers in May of the previous year. Connecting Miami, Fort Lauderdale and West Palm Beach, the Brightline intercity express train is scheduled to begin service by the end of 2017, marking the end of the project’s first phase. It is estimated to have created an average of 10,000 jobs per year
Robert Fornaro President & CEO, Spirit Airlines
How has the U.S. market been affected by Spirit’s introduction of the ultra-low-cost carrier (ULCC) model in 2007? Not only does the ULCC model work here, other carriers have since adapted their models to be more like Spirit’s; now almost every airline charges separately for bags, seat assignments, food and other onboard items. You always have to adopt a strategy to match market realities, but in terms of operating the ULCC model, the U.S. stands out as a unique domestic market. Most domestic airline markets throughout the world are made up of ULCCs. It is now rare for traditional airlines to be the predominant carriers for domestic air travel. So, the U.S. is very much an outlier, in that larger traditional airlines still have a hold on the domestic market. What has made our ULCC model so successful in the U.S. is that even when the economy is down, we are still able to provide a cost-efficient means for air travel. Why is Spirit using Fort Lauderdale-Hollywood International Airport (FLL) as its flagship base? FLL can serve the region as well as Miami can, and in terms of the leisure segment Fort Lauderdale is probably even better suited. Its convenient location between Miami and Fort Lauderdale enables us to easily serve both markets. Greater Fort Lauderdale has a dynamic economy that is increasingly growing as a gateway to Latin America, along with the rest of South Florida. This airport is becoming an increasingly attractive option for flyers, and it still has a great deal of international potential, but historically is has been the low cost of operating here has made it so competitive for carriers. Spirit is South Florida’s hometown airline and Fort Lauderdale is a perfect place to be. We are always looking for ways to stimulate more travel. From here we have grown to serve 37 domestic destinations and 23 cities abroad, and we are looking to add more. www.capitalanalyticsassociates.com 67 www.capitalanalyticsassociates.com|| 67
TRANSPORTATION & AVIATION OVERVIEW
during its three-year construction and following its completion is projected to add an average of 5,000 jobs per year through 2021. In the same period, Brightline is expected to generate $653 million in local, state and government tax revenue and $6.4 billion in direct economic impact for Florida. In 2020, annual ridership is expected to stabilize around 2.8 million, generating $64 million in revenue and removing nearly 3 million vehicles from South Florida’s congested roads. Once Phase 2 of the $3-billion project is complete, the 900-foot express trains will continue on from the West Palm Beach station, eventually reaching the new $221-million transportation hub at Orlando International Airport.
The line extending to Orlando is scheduled to launch in 2020, and riders utilizing this service are expected to generate $229.4 million in annual revenues, according to a 2015 study. Mass appeal A June 2017 report from Broward County Transit showed that 2,497,460 riders made use of public transportation in Greater Fort Lauderdale that month, marking an 11.8 percent decline from the 2,831,691 riders in June 2016. The number of riders in the fiscal year up to June 2017 had decreased by 9.3 percent from 27.4 million in the same period of the previous year to 24.8 million. Revenues from Broward’s public bus routes in June 2017 totaled $1.67 million, a 12 percent decrease from the $1.89 million generated in June 2016. In May 2017, Florida Governor Rick Scott gave his approval of House Bill 221, which attempts to standardize statewide regulations for transportation network companies. Ridesharing services such as Uber and Lyft now stand to meet an even wider share of Greater Fort Lauderdale’s transportation demand. The Broward County Capital Budget approved $8.2 million for the replacement of 16 buses during the 2018 fiscal year, while an additional $36.4 million was approved for bus upgrades and modernization between 2019 and 2022.
Annual ridership of the Brightlineis expected to stabilize in 2020 at about 2.8 million passengers.
Regional plays Improved connectivity, a result of Brightline, is one aspect of efforts to further regionalize South Florida’s economy. The limited public transit in the region and subsequent dependency on cars have led to a degree of isolation among the economies of South Florida’s three major urban centers. “Brightline will connect each city center in a half-hour and do so in a productive way, whereby passengers can cut travel times and work on the train. Corporations across the region understand the benefits from both a business development standpoint and as an opportunity to improve the quality of life for their employees,” Dave Howard, CEO of Brightline, told .
Jason Annunziata Director – Fort Lauderdale-Hollywood International Airport, jetBlue Fort Lauderdale-Hollywood International Airport has a small footprint, and some might think of this as a disadvantage. However, jetBlue considers its size an advantage, both for the airline and for business. It means that we can get our customers through the airport very quickly and this is very important especially for business travelers. The leveraging of new technologies could mean that we’re able to create one of the best experiences in South Florida right here in the airport.
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TRANSPORTATION & AVIATION OVERVIEW
Rail services provide an important alternative to driving along South Florida’s primary north-south transportation corridor.
Since 2010, 29 express buses have run along six long-distance routes that connect major destinations within Greater Fort Lauderdale and several others in Miami. This popular express service carries nearly 2,000 riders every day and is the result of a partnership between Broward County Transit and FDOT. Water ways Beyond buses, Broward has several other forms of public transit. Fort Lauderdale has been called the Venice of America, with Water Transportation Alternatives water taxis serving the same function as the vaporetti in Venetian canals. Private Transportation Management Associations provides additional forms, such as the Sun Trolley in Fort Lauderdale and the Hollywood Trolley in the nearby city, which connect their respective urban centers to their beaches. The county’s 2018-2022 Capital Budget has allocated $4.5 million over the next five years for the purchase of new community buses to increase connectivity between neighborhoods and the fixed-route network. It also calls for $4.4 million between 2020 and 2022 to purchase new paratransit vehicles and $109,020 for
the acquisition of additional transit support vehicles. In the 2018 to 2022 capital budget, Broward has allocated $4.5 million for the purchase of new community buses to increase connectivity between neighborhoods and the fixed-route network. It also calls for $4.4 million to be spent between 2020 and 2022 on new paratransit vehicles and $109,020 for the acquisition of additional transit support vehicles. These measures are aimed at connecting areas with low levels of service to the county’s primary transit corridors. “The next logical step in the evolution of transportation in Broward County is addressing more seriously the first and last miles. With the current state of GPS tracking and computers’ improved inter-device communication capabilities, the idea of putting together a robust first- and last-mile system is something that is becoming increasingly viable, and I am excited about it, as are a number of our county commissioners,” John Camillo, president and CEO of Yellow Cab Broward, told By early 2021, Fort Lauderdale will have also added light rail to its public transit offerings. The Wave will provide access to downtown and is designed to reduce www.capitalanalyticsassociates.com | 69
Jack Stephens Executive Director, South Florida Regional Transportation Authority
How can the business community and public transit work together to improve transportation opportunities for the workforce? The economic life of an urban area depends on the ability of businesses to connect with a qualified labor force. Transportation, particularly the public transportation system, allows for a much larger labor pool. Staff members are coming all the way from St. Lucie, Martin County and northern Palm Beach County using the rail service. We have worked with a number of companies to offer employee discount programs. For example, American Airlines is our largest participant at the Miami airport. There are pilots, flight attendants and ground crews using the program to go to and from the airport. The Tri-Rail Commuter Connector service has been very successful in providing free transit between different stations and major employment centers. Our most active is the service from the Fort Lauderdale Tri-Rail Station to the Fort Lauderdale airport. How is Tri-Rail working to attract more passengers? We are trying to remarket Tri-Rail to younger professionals who would rather spend their time on cell phones, iPads and laptops during their travel time. People can’t do that when they’re driving. We now have Wifi on our trains, and we are currently installing it at all of our stations. There is a growing population of cyclists in South Florida. We now have a program where we’ve taken one car and converted it so that instead of cyclists stacking their bikes up by the door, there is a dedicated car where they can store their bikes safely. We are constantly working to make our service more safe and reliable. We promote rail safety as a principle concern and are always trying to come up with new ways of keeping people away from the tracks or helping them to cross in a safer fashion. Education is the best way to deal with this, and we’ve had significant success in that regard. 70 | Invest:
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the number of vehicles on the road and direct new growth toward the urban core. The project is a wide-ranging collaboration between Broward County, FDOT, the City of Fort Lauderdale, the Broward Metropolitan Planning Organization (MPO), the Fort Lauderdale Downtown Development Authority, SFRTA and the Federal Transit Authority. It will bring 2.8 miles of light rail streetcar service to 13 stations in and around downtown Fort Lauderdale. The project has been designed as part of a multimodal concept that will increase connectivity throughout Greater Fort Lauderdale. The Wave will have direct links to the Sun Trolley system and the Tri-Rail, as well as reaching Las Olas Boulevard and Fort LauderdaleHollywood International Airport (FLL). It will also connect residents and office workers with hospitals, courthouses and leisure areas. Breaking ground in 2018, the project is valued at $195 million and will support 4,200 jobs, 2,630 of which will be construction-related and the remainder of which will be longer-term positions. The overall economic contribution is expected to be $473 million. Originally conceived in the early 2000s, the project encountered some resistance in mid-2017 when a petition was circulated among Broward residents claiming that the project was too expensive and not required. However, in October 2017, the federal government signaled its support for the project, announcing that it would be releasing $60.7 million to help fund The Wave system. The funding is coming from the Federal Transit Administration as part of the Small Starts program. The project is expected to be ready for use by 2021. Flight mode Florida is ranked first in the nation for the attractiveness of its aerospace manufacturing segment and second for the number of aviation, aerospace and space establishments. The attraction is based in large part on exemptions from sales and use tax for aircraft maintenance and repair, related equipment and fixedwing aircraft sales. The multibillion-dollar aviation industry provides employment for about 46,000 workers across the South Florida region in airlines, maintenance repair and overhaul (MRO) facilities and component manufacturers and suppliers. According to the U.S. Bureau of Labor Statistics, workers in Broward’s aviation industry earned an average annual salary of $76,616 in 2016. That same year, the aviation industry accounted for 10,143 jobs in the county, marking a 6.2 percent increase from the
TRANSPORTATION & AVIATION OVERVIEW
previous year. In 2016, the county’s 1,384 MRO jobs carried an average annual salary of $66,592. Broward College, Nova Southeastern University, Keiser University and Florida Atlantic University all offer degrees and certificate programs in aviation, creating a strong local pipeline of skilled workers. Some key companies with operations in Greater Fort Lauderdale include HEICO, GE Aviation, National Jets, Premier Aircraft Sales, Kellstrom Defense Aerospace, Lufthansa Technik and CTS Engines. Also present is GA Telesis, and its 100,000-square-foot headquarters next to Fort Lauderdale Executive Airport employs 250 of the company’s 500 workers, including skilled mechanics, who earn up to $50 per hour.
the second-largest share of passengers at FLL. The company employs 1,800 people in Broward, making it the fourth-largest employer in the county. It is also the public company with the fourth-highest revenues, having earned $2.14 billion in 2015. The John Fuhrer Downtown Helistop offers 24/7 access to a 7,056-square-foot helicopter landing pad in downtown Fort Lauderdale. Housing 235 aircraft, 10 helicopters and even a Goodyear blimp in a 45,000-square-foot hangar, the Pompano Beach Air Park is a cityowned airport covering a total of 946 acres. Meanwhile, the North Perry Airport in Pembroke Pines primarily deals with light planes owned by companies or individuals. Twice named the General Aviation Airport of the Year by FDOT, North Perry Airport has an estimated annual economic impact of $133 million on the surrounding community.
Fort LauderdaleHollywood International Airport has 12,500 employees and supports almost 140,000 jobs.
To the skies Several facilities support air transit in Broward. As of July 2017, Miramar-based Spirit Airlines had
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TRANSPORTATION & AVIATION OVERVIEW
Fort Lauderdale made headlines in 2016 as the origin of the first commercial flight between the U.S. and Cuba in over 50 years.
It has four runways, houses more than 300 aircraft and completed approximately 139,880 operations in 2016. Located close to downtown, the Fort Lauderdale Executive Airport features five full-service, fixed-base operators and handles more than 165,000 landings and takeoffs every year. It houses more than 800 aircraft, including 24 helicopters and 255 jets. The airport also has more than 1.5 million square feet of manufacturing, warehouse and office space in its 200acre industrial airpark. It also serves as the main hub of Foreign Trade Zone 241, which is operated by the City of Fort Lauderdale and consists of six satellite locations spread across 1,300 acres throughout the county. At the center of Broward’s aviation sector is FLL. A primary economic engine for the county, FLL directly employs 12,500 members of staff and supports an estimated 139,920 jobs overall. It pays $3.5 billion in annual wages and generates approximately $13.2 billion in economic output. Though FLL is owned by Broward County and operated by the board of county commissioners, it does not use county tax revenue, but funds maintenance, 72 | Invest:
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operations and capital improvements through user fees, rentals, bonds and grants. Record breakers Year-on-year growth in passenger traffic through FLL stood at 9 percent at the beginning of 2016, making it the seventh-fastest-growing airport in the U.S. “Arrivals into our facility have grown substantially over the past two years. In 2017, we’ve had strong growth in our executive charter segment,” Samuel Robbin, president and CEO of National Jets, told . A record 26.94 million passengers flew through FLL in 2015, and by May 2016, FLL had registered the country’s second-highest year-on-year growth in passenger traffic. July 2017 data from the Airports Council International put FLL as the fastest-growing large-hub airport in the U.S. between June 2016 and June 2017. FLL also had the 10th-highest level of year-todate international traffic as of June 2017. “Typically, when carriers open a new market, there is an allowed time frame for a gradual increase in demand, but the international flights that we opened June 4 are
TRANSPORTATION & AVIATION OVERVIEW
almost full every day,” Tennina McAnany, FLL station manager for Southwest Airlines, told . Total passenger traffic in July 2017 reached 2,944,287, up 18.2 percent from the previous month. Domestic passenger traffic increased by 14.8 percent in July 2017, compared to the previous month, while international traffic shot up by 31.1 percent in the same period. This marked the 40th consecutive month of growth in overall passenger traffic. It was also the 12th consecutive month in which growth of international passenger traffic reached double digits. Average daily air carrier departures increased by 14.1 percent, from 333 in July 2016 to 380 in July 2017. Meanwhile, flights from FLL served 124 destinations in July, compared to 116 during the same month in 2016. Based on historical performance and a rising number of available flights, FLL estimated in July 2017 that total passenger traffic for the year could exceed 32 million.
second-largest share of FLL traffic, at 20 percent. Emirates began servicing FLL from Dubai in 2016 and recorded a 91 percent inbound load factor during July 2017, though its outbound load factor was just 51 percent. British Airways launched flights between London Gatwick and FLL in July 2017, recording a 92 percent inbound load factor and a 76-percent outbound load factor in the first month of operation. Other notable additions at FLL include Norwegian Airlines’s flights between Fort Lauderdale and Barcelona, which began on August 22, 2017. Norwegian Airlines launched service to Paris in December 2016 and is scheduled to begin flights between FLL and Martinique in October 2017. JetBlue initiated service from FLL to Providenciales, Quito and Havana in fall 2016, as well as to Aruba in January 2017. Southwest announced at the beginning of 2017 that it would add routes between FLL and Cancún, Montego Bay and Belize City, and the airline flew its inaugural route from FLL to Grand Cayman in June 2017. Supporting much of this growth is the $2.3-billion capital investment being made in the airport’s facilities. A new south runway was added and began operations in September 2014, after creating an estimated 11,000 jobs during its construction and contributing $1.4 billion to the local economy. Concourse A located in
July 2017 marked the 40th consecutive month that FLL had seen an increase in overall passenger traffic.
Major carriers Accounting for roughly 25 percent of flights in July 2017, jetBlue Airways’ 723,468 flights marked a growth of 15 percent from July 2016 and made it the largest carrier at FLL. Southwest Airlines saw a 39 percent year-on-year increase in traffic during July 2017, putting it in a tie with Spirit Airlines for the
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TRANSPORTATION & AVIATION OVERVIEW
Discount airlines account for the lion’s share of passenger traffic at the county’s primary airport.
Diana Alarcon Transportation and Mobility Director – City of Fort Lauderdale
Broward County has congestion issues. As part of our 2035 Vision for the City of Fort Lauderdale, we have decided to become multimodal. To achieve this and manage our traffic flow properly, more than one solution is needed. The Wave streetcar was the first initiative, but we need to combine walkability, cycling, cars and other modes to get that balance right. This Fort Lauderdale Department of Transportation and Mobility was started in 2011 to address the lack of initiatives focusing on transportation and has allowed us to combine resources from different departments to help us achieve our goals.
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TRANSPORTATION & AVIATION OVERVIEW
Terminal 1 opened for use in July 2017, adding five gates for domestic and international use. The number of gates in terminal 4 will increase from 10 to 14, some of which will be for international use and include customs offices. As part of a modernization scheme, the four terminals will also be upgraded to feature more shops and restaurants. Travel advisory FLL and the rest of South Florida’s transportation infrastructure was tested when Hurricane Irma made landfall on September 9, 2017. In preparation, FLL stopped all flight service the day before, as did MIA. Both were closed through September 12, and by the time they reopened, along with most of Florida’s other major airports, approximately 4,110 flights had been canceled throughout the state. Mandatory evacuation orders were given for large sections of Miami-Dade, Broward and Palm Beach, forcing around 1.3 million of the metro area’s roughly 6 million residents to leave their homes as Irma approached. The main transit corridors were filled with some 500,000 residents fleeing Broward’s evacuation zone east of U.S. Route 1. Governor Scott’s efforts to aid in evacuation and recovery included suspending all fees along the state’s toll roads, which run for more than 700 miles. In the aftermath of the storm, the primary obstacles involved debris on roadways and power outages that affected millions of residents. Broward County Mayor Barbara Sharief assessed the damage on September 11, noting damage to infrastructure and street flooding, as well as the outages, which had rendered traffic lights inoperative. Sharief called on citizens to stay off the
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TRANSPORTATION & AVIATION OVERVIEW
roads while cleanup crews worked to make the area safe. Mandatory curfews were also issued throughout South Florida for several days following Irma’s passage in an effort to aid response teams in restoring power and transportation infrastructure. Looking ahead Among the current efforts to stimulate economic growth in the U.S., transportation infrastructure remains a key target for investment at local and federal levels. In September 2017, the U.S. Department of Transportation announced that $500 million in discretionary grants would be made available to rebuild infrastructure as part of the Transportation Investment Generating Economic Recovery (TIGER) program, which Broward is already utilizing to fund certain initiatives. A 2013 a TIGER grant provided $18 million for the Wave streetcar project in Fort Lauderdale, and in 2016,
the Broward MPO was awarded a TIGER grant of $11.4 million to help implement the regional Complete Streets initiative. The grant funded nearly 60 percent of the $19.1-million project, which aims to improve bicycle and pedestrian mobility in Fort Lauderdale, Lauderdale Lakes, Oakland Park and Pompano Beach. Initiatives like these improve the state of existing infrastructure while also seeking to reshape it in order to promote sustainable growth throughout the region. The number of connections at FLL is growing. In addition to new services from British Airways and Emirates, new long-haul flights to Oslo, Stockholm, Barcelona, Copenhagen and Paris have been added. These new destinations will not only help the airport, but will also bring travelers both for business and pleasure to Broward, further supporting the area’s vibrant economy.
Both British Airways and Emirates Airlines, among other long-haul carriers, have added new services at FLL.
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Marine & Logistics: With a seaport that leads the U.S. and the world by many measures, Greater Fort Lauderdale is a key node in the regional and global logistics network. Its strategic location and close ties with Latin America make the trade and logistics sector a powerful driver of the county’s economy. Meanwhile, Fort Lauderdale’s reputation as the yachting capital of the world precedes itself, with a local marine industry that forms a key element of the economic and social identity.
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Marine & Logistics in numbers: Port Everglades, total containerized cargo (TEUs, ‘000s): 2007
949
2008
985
2009
796
2010
793
2011
881
2012
924
2013
928
2014
1,013 1,061
2015
1,037
2016 0
200
400
600
800
1,000
1,200
Source: Port Everglades Commerce Report
Top-10 imports by trading partner by total value, 2016 ($ million): Honduras
$2,666
Guatemala
$986
Dominican Republic
$1,551
Brazil
$680
Italy
$422
Colombia
$539
Spain
$402 $376
Bahamas Chile $158 Portugal $133
0
500
1,000
1,500
2,000
2,500
3,000
Source: Port Everglades Commerce Report
Top-10 exports by trading partner by total value, 2016 ($ million): Honduras
$2,726
Guatemala
$1,411
Dominican Republic
$2,013
Bahamas
$560
Netherlands
$729
Virgin Islands
$583
Venezuela
$546 $487
Trinidad & Tobago
$564
Chile
$495
Colombia
0
500
Source: Port Everglades Commerce Report
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1,000
1,500
2,000
2,500
3,000
MARINE & LOGISTICS OVERVIEW
Sea of opportunity: Greater Fort Lauderdale’s advantageous position allows the marine and logistics sector to be well served and an essential part of the local economy. Port Everglades is a crucial economic driver for the county, region and state At the southeastern extremity of the U.S., Broward County is within 1,000 miles of key foreign markets throughout Latin America and the Caribbean. It has world-class logistics infrastructure and a businessfriendly tax environment, prompting the Greater Fort Lauderdale Alliance to advertise with the slogan: “Life. Less taxing.” This combination of factors has made Broward an important hub in regional and global trade and logistics networks. In the zone Encouraging trade are the 2,141 buildings zoned for warehouse distribution spread throughout the county. By mid-2017 there were 81.2 million square feet of warehouse distribution space in Broward, with an additional 1.16 million square feet under construction. Net absorption of warehouse distribution space came to 183,094 square feet during the second quarter of 2017, with a vacancy rate of just 3.8 percent. Greater Fort Lauderdale is home to two foreign trade zones: FTZ No. 25 and FTZ No. 241. The former
is located on 22.7 acres of Port Everglades’ property, and its 388,600 square feet of warehousing space were the first of their kind in the state. FTZ No. 25 hosts companies such as Stanley Black & Decker, Parbel of Florida and Toyota Tsusho America. FTZ No. 241 has six satellite locations spread across 1,300 acres throughout the county, offering increased accessibility to businesses. Its primary hub contains 1.5 million square feet of manufacturing, warehousing and office space and is located at Fort Lauderdale Executive Airport’s 200-acre Industrial Airpark. From A to Broward With truck drivers, cargo crane operators, pilots, railway engineers and more, the area’s logistics sector supports more than 20,000 jobs, a figure projected to grow by 4.9 percent by 2020. The sector’s employees earn an average of $66,206 per year, making it an important provider of high-paying jobs. Some of Broward’s many universities and colleges help to supply the necessary skills. Nova Southeastern www.capitalanalyticsassociates.com | 79
MARINE & LOGISTICS INTERVIEW
Course for success How new investments in Port Everglades’ infrastructure ensure it remains a key economic driver
Steven Cernak Chief Executive & Port Director – Port Everglades How is Port Everglades addressing environmental concerns? We consider ourselves to be environmental stewards. A program was started in 1980 to monitor offshore environments. Since 1997, Broward County’s Environmental Protection and Growth Management Department has monitored 25 locations of coral reefs exclusively on an annual basis. There has been a project for the deepening and widening of the channel on the books for some time. It was authorized in 1996 and finally got congressional authorization in 2016. This shows how long it takes to get a project done, given all of the environmental considerations. We want to do things the right way. We have an obligation on the economic side to provide opportunities but this is a beautiful environment and we have to protect that as well. We are willing to do what it takes to ensure that as we work on various projects, everything fits and works together. How will the Southport Turning Notch expansion make Port Everglades more competitive? By extending the Southport Turning Notch from 900 to 2,400 feet, we will increase our ability to handle cargo ships and throughput capacity, so that we can move cargo more quickly. The additional berthing will enable us to handle larger ships without impacting other customers, which can sometimes be problematic. Our customers are also making investments in the yard that will allow containers to be stacked higher, and for a certain amount of automation to be implemented, so that we can handle the cargo in a more efficient manner. We want to offer more to our existing customers, many of whom have been looking for additional capacity, so that they can grow. We have carriers that have been with Port Everglades for a long time, so we want to help them grow their businesses, too. 80 | Invest:
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How will the new logistics center and warehouse boost the free trade zone’s operations? This is really being driven by our Southport expansion and the demand for efficient warehousing and cold storage spaces. The existing free trade zone is just an older set of buildings in the wrong place right now. The choice was either to put a tremendous amount of investment into refurbishing the structures in place or to relocate the entire facility. Relocating the building makes sense, as it allows for more efficient operations for our container customers. The older buildings are all more tightly spaced, which limits what can be done. But a new structure can have high ceilings and long spans between supports, which gives us a lot of freedom in configuring the space to handle everything that it needs to.
MARINE & LOGISTICS OVERVIEW
University offers a certificate and a master’s degree in supply chain management, while Broward College has a global trade and logistics program. Port Everglades is a principal node of the county’s logistics network, and its property stretches along the coastlines of Fort Lauderdale, Hollywood, Dania Beach and unincorporated parts of Broward. The port’s reach nearly meets that of the Fort Lauderdale-Hollywood International Airport (FLL), another important logistics hub. According to the U.S. Department of Labor’s Bureau of Labor Statistics, the trade, transportation and utilities sector in Broward added 3,800 jobs between June 2016 and June 2017, a 2.1 percent year-on-year increase. Railways Able to transport goods to an impressive 70 percent of the U.S. population within just four days, Broward utilizes a vital stretch of rail. The 351 miles of Class II mainline rail operated by the Florida East Coast Railway (FECR) connect Miami to Jacksonville, at which point the trains transfer to CSX Transportation and Norfolk Southern lines. The annual operating revenue for Class II rail categorization was between $35.8 million and $447.6
million in 2011, and FECR’s stretch plays a crucial role in Broward’s trade and logistics economy. The company provides exclusive rail service to Port Everglades, where it owns a 42.5-acre near-dock intermodal container transfer facility (ICTF) worth $53 million, as well as other principal carload transfer yards. FECR completed the ICTF in a public-private partnership with Port Everglades and Broward County, which provided land worth $19 million for the site. Opened in July 2014, the ICTF enables the direct transfer of containerized cargo from ships to trains. Because this is performed on port property, interference with traffic on nearby roads is eliminated. The transfer is achieved using three gantry cranes and the 21,000 linear feet of FECR rail on site. By the end of its first year in operation, the ICTF had increased the number of loads that FECR transported from Port Everglades by 26 percent. Further use of the facility is projected to remove 180,000 trucks from Broward’s roads by 2029, and the ICTF is estimated to support 2,188 jobs throughout South Florida. In 2017, FECR was named the top-performing rail and intermodal service provider in Logistics Management magazine’s yearly Quest for Quality survey.
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Patrick Collins General Manager, Crowley
What are the advantages of Greater Fort Lauderdale as a regional logistics hub? With three sailings per week to the northern zone of Central America, including Guatemala and Honduras, two sailings to the Caribbean, two to the Dominican Republic and Haiti, and one to the southern zone of Central America, includes Costa Rica and Panama. The advent of e-commerce is quickly changing our customer requirements. Speed and flexibility are the keys to our customers’ success in this new world. In addition, the topography of the coast here and our position at the southeastern extremity of the U.S. are attractive for the logistics sector. The Florida Department of Transportation’s extension of I-595 all the way to the port has greatly improved traffic flow. There is only one street light between the port and the interstate, so there is minimal delay between off-loading the cargo run through the Crowley terminal and getting it out to customers. Increasing the speed at which containers flow from ships through the terminal and out to the local transportation infrastructure network substantially improves the efficiency of operators here. The construction of Florida East Coast Railway’s intermodal container transfer facility here on the port’s property has also been an improvement. Crowley receives and processes the most containers of any operator at Port Everglades from an ocean liner perspective and inland via the rail system. How are the capital investments in the port affecting Crowley’s operations? We have plans to continue growing alongside Port Everglades, and we have seen some significant volume increases for our operations here. At the end of 2015, we acquired another steamship line and logistics company, which has significantly increased our volume. We have been able to add new diversified trade lanes within the Caribbean and Central America and offer various services that are becoming increasingly attractive. 82 | Invest:
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The completion of the Panama Canal expansion is directing record levels of containerized cargo through Port Everglades.
Airways FLL is among the country’s fastest-growing airports in terms of passenger traffic, but it also plays an important role as a cargo hub. In 2016, 92,245 tons of cargo passed through FLL, an 11.7 percent increase from the 82,577 tons processed in 2015. The number of shipments continues to rise. The 52,193 tons of cargo that passed through FLL in the first half of 2017 marked a 6.6 percent increase from the 48,969 tons processed in the previous semester, and a 20.6 percent increase from the 43,276 tons processed in the first half of 2016. FedEx was responsible for the majority of the cargo that passed through FLL in July 2017. The company handled 5,076 tons of cargo, a 67.3 percent share of the 7,543 tons processed at the airport that month. The U.S. Postal Service (UPS) had the second-largest share, with 8.7 percent of the cargo that passed through FLL in July. UPS was followed by Azul, Emirates, Southwest Airlines and Delta Air Lines, which accounted for 6.9 percent, 5.8 percent, 5.6 percent and 2.3 percent of the month’s cargo shipments, respectively. Global logistics giant DHL calls Broward County home, headquartering its operations for the Americas in Plantation.
MARINE & LOGISTICS OVERVIEW
DHL Express Americas’ Plantation headquarters employs around 320 workers. The Broward office supports operations throughout the Americas region, where DHL Express dominates with a 45-60 percent market share of Spanish-speaking South America. Port time With an estimated economic impact of nearly $30 billion in 2016, Port Everglades is a primary engine of
Broward’s economy. County estimates put the number of jobs in Florida supported by Port Everglades at 222,914 in 2016. Port employees who reside locally numbered 12,963. Local and state taxes generated by the port’s activities totaled $1.08 billion in 2016. The port is classified as a self-supporting Enterprise Fund of Broward County and as such does not use local tax revenue to finance operations or capital improvements, drawing instead on its own revenues and local, state and federal grants. Approximately 15 percent of all trade between the U.S. and Latin America passes through Port Everglades, making it the nation’s most prominent gateway to the south, according to the port’s 2016 commerce review. It is also Florida’s busiest seaport in terms of exports, having sent abroad goods worth a total of $11.7 billion in 2016. The same year, Port Everglades processed the most containerized cargo in the state and was number 10 in the nation, with 1.04 million twenty-foot equivalent units (TEUs) passing through. In 2016 it also processed the most refrigerated cargo in Florida and the sixthgreatest amount in the country. Meanwhile, Port Everglades also moved the second-largest quantity of petroleum products in Florida, at 121 million barrels. In 2016, Port Everglades’ top destinations for exports in terms of total TEUs were Honduras, with 46,476, Guatemala, with 46,369, the Dominican Republic, with 44,766, the Bahamas, with 26,517, and the former Netherlands Antilles, with 23,180. The most popular countries of origin for imports were similar. Honduras led, with 65,568 TEUs, followed by Guatemala, with 57,537 TEUs, the Dominican Republic, with 26,725 TEUs, Brazil, with 24,861 TEUs, and Italy, with 21,617 TEUs. The vast majority of containerized commodities imported at Port Everglades in 2016 were edible fruits, nuts and fruit peels, which comprised 73,839
Charlie McCurdy President & CEO – Informa Global Exhibitions
The Marine Industries Association of South Florida (MIASF) and Show Management have worked together for many years to build what is now the largest boat show in the world. Informa is one of the world’s leading show organizers, and we have been working closely with MIASF to make the Fort Lauderdale International Boat Show an even more compelling experience for exhibitors and visitors, from the physical experience of the show to the marketing of the event.
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MARINE & LOGISTICS OVERVIEW
Ongoing upgrades to Broward’s logistics infrastructure are improving the county’s competitiveness.
TEUs. These were followed by non-knit textile apparel articles and accessories, at 33,284 TEUs, wood and articles of wood, including charcoal, at 19,085 TEUs, beverages, spirits and vinegar, at 16,175 TEUs, and edible vegetables, roots and tubers, at 14,596 TEUs. The same year, the most-exported items were nonrailway or tramway vehicles and parts, at 58,097 TEUs. They were followed by miscellaneous edible preparations, at 42,113 TEUs, nuclear reactors, boilers, machinery and parts, at 33,963 TEUs, non-knit textile apparel articles and accessories, at 22,294 TEUs, and electric machinery, audio/visual equipment and parts, at 16,102 TEUs. Meanwhile, Crowley Liner Services extended its lease and operating agreement with the port by 20 years, at a cost of $157.8 million. The company transported 145,940 containers through the port in the 2015 financial year, and with the deal it increased its footprint at Port Everglades from 74 to 99 acres. Two other companies extended their leases by 20 years in 2016: Florida International Terminal and King Ocean Services. The companies moved 156,045 TEUs and 153,984 TEUs through the port, respectively, in the 2015 financial year. 84 | Invest:
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Waterways In addition to facilitating activity at Port Everglades, the county’s 300 miles of navigable waterways and Atlantic coastline support a marine industry that is vital to the local economy. “As we design and manufacture marine and aviation beacons, the importance of being located in Greater Fort Lauderdale is not lost on us. It is one of the marine industry capitals of the world,” Gerry Angeli, the president and general manager of ACR Electronics, told Greater Fort Lauderdale’s marine industry employs an estimated 110,000 workers, with duties ranging from dockage to marine product retail, brokerage, manufacturing and maintenance. The industry generates an annual economic impact of $8.8 billion in the area, while throughout South Florida it employs closer to 136,000 people, with a total economic impact of $11.5 billion. The Fort Lauderdale International Boat Show is the largest in-water event of its kind in the world. Held every November, it will enter its 58th year in 2017. A 2016 study put the show’s statewide economic impact at $857 million and reported that it supported 6,000 jobs and
MARINE & LOGISTICS OVERVIEW
attracted nearly 100,000 attendees that year, 58 percent of whom resided outside of the tri-county area. Broward’s 50,000 registered vessels have helped Fort Lauderdale gain nicknames such as “the Venice of America” and “the yachting capital of the world.” While luxury cruising is only one aspect of the larger industry, approximately 2,000 vessels measuring 80 feet or longer dock in Broward every year, with an estimated average economic impact of $488,000 per visit.
Looking ahead In recognition of the important roles that trade and logistics play in Broward’s economy, the county actively supports investment in the long-term competitiveness of infrastructure. While significant capital improvements are ongoing at FLL, the county has committed to other projects aimed to ensure that Port Everglades remains an economic powerhouse. In December 2016, the U.S. Congress passed the Water Infrastructure for Improvements to the Nation Act. This granted approval for a $389-million project to deepen Port Everglades’ entrance channel and turning basin from 42 feet to 50 feet. “We’re thrilled about the approval for the port’s new expansion. It took work in Tallahassee and in Washington, D.C., and it is still a work in progress,” Margaret Kempel, executive director of Port Everglades Association, told . The completion of the project is expected to take place between 2021 and 2025. In May 2017, when the Broward County Board of Commissioners voted unanimously to approve capital investments totaling $437.5 million. These will help the port handle the increase in cargo traffic and large ships expected following the completion of the Panama Canal expansion project in June 2016. The Southport Turning Notch Extension (STNE) will add three new cargo cranes and lengthen the deepwater turnaround area from 900 feet to 2,400 feet, which will provide additional space for up to five new cargo berths. The STNE is projected create 2,227 construction jobs in the short term, plus an additional 5,529 jobs throughout the region. It is expected to increase economic activity by $10.7 billion per year once maximum capacity is reached by 2027. The STNE is the largest expansion project in the history of Port Everglades, and its enthusiastic support from the county commission highlights the port’s critical role in the local trade and logistics economy.
Jim Hertwig President & CEO – Florida East Coast Railway
Broward County has a great logistics network already in place and is investing in upgrades to key infrastructure. The Broward County Commission has been great to work with in terms of getting support to open our new intermodal container transfer facility at Port Everglades as well as providing investment to secure the necessary land. With our location between the seaport and the airport, we can see nothing but growth.
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Pembroke Pines: Ranked one of the best places to live in the U.S., family friendly Pembroke Pines is branching out into new terrain in 2018. With new municipal and cultural facilities as well as hundreds of residences and a diverse collection of attractive retail and entertainment offerings, the Pembroke Pines City Center is at the very center of a vision for the city’s renewed urban core. Add to that great schools and medical facilities and the city’s growth speaks for itself.
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Progress in the Pines: With an emphasis on community, Pembroke Pines is building on its strengths as a family-friendly environment with excellent education and medical amenities while the new Pembroke Pines City Center is adding new dimensions to the area’s offerings Ranked as one of Money Magazine’s Best Places to Live in 2014, the City of Pembroke Pines, affectionately called “Pines,” is known for its calm environment and livability for young families. It has some of the best elementary and secondary schools in the county, and with five housing communities for adults older than 55, the city also caters to its senior citizens. Adding to its appeal is its convenient location, with a 30-minute drive to both Miami and Fort Lauderdale, making for an easy commute to the primary downtown urban centers of South Florida. The city has a total area of 34.4 square miles sandwiched from east to west between the Florida Turnpike and U.S. 27. These 34.4 square miles include huge areas for conservation, largely due to their proximity to the Everglades National Park. According to 2016 U.S. Census Bureau estimates, Pembroke Pines has a population of 168,587, making it the secondmost populous city in Broward County and the 11thmost populous city in the State of Florida. The city has a median household income of $62,116, and the 88 | Invest:
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more than 61,000 housing units have a median value of $207,500. The median age of the city’s resident is 39.5, and nearly 25 percent of the population is under 18. Post-war booms From 1950 to the mid-1970s, the east part of Pembroke Pines grew as an incorporation of the rest of the county. In 1960, the Village of Pembroke Pines, less than 1 square mile at that time, officially became the City of Pembroke Pines as a result of the post-World War II population growth in the area. The central business district underwent a period of development from the 1970s to the 1990s, which included the Pembroke Lakes Regional Mall. Westward expansion was made possible by annexing the 320 acres north of Pines Boulevard and east of Davie Road Extension. In 1980, the property from Flamingo Road to U.S. 27 was annexed, doubling the size of the city. After Hurricane Andrew in 1992, the western region of Pembroke Pines underwent a rapid expansionary period. Pembroke Pines’ infrastructure remained
relatively unspoiled following the hurricane, which caused around $26 billion worth of damage in Florida. Upon receiving insurance settlements, many flocked to the city to buy property, and Pembroke Pines was named one of the fastest growing cities in the nation in 1999. What followed this expansionary period was, and continues to be, a pattern of structural and economic growth throughout the city. Building blocks Pembroke Pines has various initiatives designed to maintain the growth momentum of the city. The guiding framework for the future development of Pembroke Pines is the city’s 2014-2019 Economic Development Strategic Plan. The plan profiles the city’s population, its assets and opportunities for increasing the city’s economic strength. Economic Diversification remains a primary focus, as the city is currently predominantly retail-centric. One of the most recent and successful efforts to further the city’s diversification agenda is the Bergeron Park of Commerce and Industry. The 300-acre commerce park is zoned for light industrial, general industrial and limited heavy industrial use. Within the commerce park, Bergeron Land Development is developing a 173,373-square-foot Class A distribution and warehouse facility on a 9-acre tract. Pembroke Pines is also rezoning many areas of land to encourage a new pattern of development. The city’s most recent industrial redevelopment project is the redevelopment of the Broward Correctional Institute into the 750,000-square-foot South Florida Distribution Center. The 60-acre site was purchased from the State of Florida for $13.5 million. Developers Core 5 Industrial Partners and Helms Development have broken ground on the first 224,572-square-foot Class A building, which is slated for completion in late 2017. Golden years Pembroke Pines has long been committed to taking care of its senior population. In the 1970s, the city established its first senior center, which sought to provide health and wellness activities for the growing senior population. In the early 1900s, the city built the 53,000-square-foot Carl Shechter Southwest Focal Point Community Center, which serves as a prototype for senior centers at the national level. Century Village is a nationally recognized active adult independent living community. The 7,780unit condominium community offers a wide range of amenities and recreational activities including a public golf course and 24/7 security. Century Village
Frank Ortis Mayor, City of Pembroke Pines
What role will Pembroke Pines City Center play in the city’s future growth? The original vision for Pembroke Pines’ layout was to develop in a spoke and wheel fashion. However, the city’s development pattern and expansion to the west created areas of disconnect. The Pembroke Pines City Center will act as a hub for the area and serve as the downtown of our central district. In order for a city’s downtown district to flourish, there have to be residents living near businesses. Once complete, residents of Pembroke Pines City Center will be able to enjoy the walkability of the area, shop in the retail component, eat at the restaurants and even enjoy entertainment offerings. We have a longstanding commitment to arts and culture, and the many awards and the support that the Frank C. Ortis Art Gallery and Exhibit Hall have received are proof of that. Ultimately, the idea is that once people are able to experience Pembroke Pines City Center, it will help attract new residents and support future business growth. What have been the driving forces behind Pembroke Pines’ ongoing growth? In 2014, Pembroke Pines was named by Money Magazine as one of the best places to live. Pembroke Pines was at one time, the fastest growing city in the U.S. In the wake of Hurricane Andrew, a wave of displaced residents from Miami-Dade began moving north to our city. There was a lot of available land to the west at that time that had already been assessed for the needs of infrastructure, roads and water. Because all of these assets were already in place, the city was able to absorb the rapid development set in motion by the hurricane. We thrive off of our diversity, and we also we attract all different types of businesses. Our economy is also becoming increasingly diverse. We are moving away from predominantly retail spaces toward developing more new industrial and office buildings. www.capitalanalyticsassociates.com
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also maintains a medical alert system and operates daily buses to assist with seniors’ transportation needs. The 160-acre Hollybrook Golf and Tennis Club, another of Pembroke Pines’ acclaimed senior living communities, offers an 18-hole PGA golf course and an 18-hole executive golf course surrounding the 1,992-unit complex. Park Place is made up over 1,000 units on 37 acres, surrounded by the city-owned Pembroke Lakes golf course. On 32 acres in the heart of Pembroke Pines lies Colony Point senior living gated condominium community. Its six buildings each feature 110 units over five stories, and the community offers a host of amenities tailored to senior living. A bus service is offered three days per week. Memorial Hospital West is located within a half mile of the community.
Education focus Education also has a considerable impact on Pembroke Pines. One of the ways in which the city has facilitated the advancement of its educational institutions is by increasing charter school development. Pines has developed its own citywide, city-run charter school system, comprised of four elementary schools, three middle schools and one high school. The Pembroke Pines Charter School System was created in response to the post-Hurricane Andrew building boom in 1992, when many people migrated to Pembroke Pines and the traditional public schools became overcrowded. The system is consistently given an A rating by the Florida Department of Education, and U.S. News and World Report named the city’s high school as one of the nation’s best. The U.S. Department of Education awarded National Blue Ribbons to two of the schools in the system. The Pembroke Pines Charter School systems educates just under 6,000 students, while more than 4,000 students remain on the waiting list. In addition to the city’s charter school system, the independent charter schools Franklin Academy and Somerset Academy both offer K-12 educational programs, while Renaissance Charter School provides K-8 programs. In total, around 8,000 students attend charter schools within Pembroke Pines. Higher education also has a strong presence in Pembroke Pines. The city is home to the 103-acre South Campus of Broward College, which offers both
The Pembroke Pines Charter School System was created in response to the post-Hurricane Andrew building boom in 1992.
Medical matters Memorial Hospital West and Memorial Pembroke are the two main healthcare facilities within the city. Memorial Healthcare System is one of the biggest and influential in South Florida, with nine locations throughout the region. With 384 beds, Memorial Hospital West is nationally rated for its high-performing treatment for patients with heart failure, chronic obstructive pulmonary disease and colon cancer. Memorial Pembroke, housing 157 beds, specializes in nephrology, urology and pulmonology. The Memorial Hospital West Campus is currently undergoing an expansion, which includes the addition of a new graduate medical facility, a 1,500-space parking garage and bed tower expansion. It will add 249,833 square feet of new hospital space.
Mark Doyle CEO – Memorial Pembroke
As we move away from the traditional hospital structure into community health centers, we would like to develop large outpatient centers where we can put more physicians and services. Our goal is that people won’t be required to come to hospitals to get outpatient care. With these centers, we can expand into areas that are underserved or that have the most population growth in order to meet the needs of the community.
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two and four-year academic degrees in a variety of fields. Broward College also maintains the Pines Center campus on the city-owned Academic Village property. Broward College has received a national award designating it as one of the top-three community colleges in the country. Meanwhile, Keiser University’s local campus offers courses in business, criminal justice and nursing, and Barry University’s local campus offers degrees in business administration, health services and information technology. Florida International University has a location in Pembroke Pines where it offers programs in public health, computing and international relations are offered. Moving parts Because of Pines’ access to I-75, U.S. 27 and the Florida Turnpike, getting in and out of the city is made very easy with a car. Started in 2014 and scheduled for completion near the end of 2018, four new express lanes are being added along the existing median of I-75, which spans about 3 miles across the city. At a total estimated cost of $485 million, throughout the four phases of its lifecycle, the 15-mile project will add direct connections to I-595 Express, the Palmetto Expressway and the Florida Turnpike. Crossing above the southern extremity of Pembroke Pines’ length of I-75 is the recently completed Pembroke Road Overpass. After years of discussing the need for a bridge going over I-75 and two years of actual construction, the nearly $8-million Pembroke Road Overpass was completed by the Florida Department of Transportation and opened in August 2016, providing an important connection between the eastern and western portions of Pembroke Pines along the city’s southern boundary with Miramar. Pembroke Pines is also home to North Perry Airport, devoted to private and business light-plane activity. The establishment is operated by Broward County Aviation and has been running since 1950. In 2016, there were 139,880 flights at the airport. It is currently undergoing new development by Diversified Aviation, and aviation hangars are being built on the North Perry property. Adjacent to North Perry Airport is the Broward College Emil Buehler Aviation Institute at Broward College, which offers three associate degree programs and five aviation certificates. On the houses The city’s focus on infrastructure, community and real estate has spurred much of its recent growth, and Pembroke Pines has planned several capital improvements for the next few years. Pines has been
Charles Dodge City Manager, City of Pembroke Pines
What have been the highlights of Pembroke Pines’ development in 2017? In April of 2017, we moved into our city center facility, which serves as both the cultural and governmental hubs of our community. The facility is the focal point of our City Center Regional Activity Center project which will have residential and commercial uses including retail, entertainment, hotel and restaurants. In 2017, we also saw new housing projects get developed in the Raintree Community and Centra Falls, with home sales between $300,000 and $1 million. We have seen infill development east of I-75 and new warehouse and industrial projects on the west side of the city. Post-recession, our community has seen steady growth in property values across each sector. What have been the main catalysts for growth over the past few years? At one point, Pembroke Pines was one of the fastest growing Cities in the U.S. We saw an increase of nearly 60,000 people over just a few years. Our population today is approaching 170,000 people. Pembroke Pines is strategically located with access to major roadways including I-75, U.S. 27 and the Florida’s Turnpike. Our residents enjoy a great quality of life due to access to great educational opportunities and programs for families of all ages. The creation and growth of our award-winning charter school system – one of the largest municipally-run systems in the country – is a major asset of our city. Pembroke Pines has taken a proactive approach in the real estate market. When it comes to commercial development, Pines Boulevard is one of the most desirable streets in South Florida. Over the past year, we have seen numerous commercial assets change hands with significant increases over previous sales. One property sold for double compared to the previous sale just three years prior. The development community sees a stable community with great assets, and they want to be part of our success. www.capitalanalyticsassociates.com
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Leah Carpenter CEO, Memorial Hospital West
How is Memorial Hospital West keeping up with the demands of Pembroke Pines’ growing population? The population of Pembroke Pines is growing, and the demographics of our patients are changing. We plan our expansion projects based on our extensive studies of what is happening in the market and the needs of our community. Memorial Hospital West is expanding our oncology center because we are seeing an older population with increasing rates of cancer. We currently have several ongoing expansion projects, and one of my top priorities is ensuring they are all completed on time. We are in the middle of building an additional 120-bed tower, which we are anticipating will open in February of 2018. That tower is already 75-percent full, meaning that our current patients can fill three-quarters of this new capacity. We are in the midst of growth in response to the needs of the community. When the hospital first opened, it was largely focused on managing the rapid growth of the baby boom. We still have a high demand for birthing services, but now we also have a large aging population. How will your new residency program change Memorial Hospital West’s role within Broward County’s overall healthcare system? One of the most significant developments within our campus is the recent completion of construction on our graduate medical education building. We are expecting our first class of residents in the Summer of 2018, so preparing for that is at the forefront of what we are doing. Our goal is to make Memorial Hospital West’s residency program a top destination among all residency programs. We will be a brand new program competing with residencies throughout the U.S. and even abroad, so we want to get off on the right foot for that. One of our seven pillars of excellence is a commitment to community and ensuring we are meeting the community’s needs, even beyond healthcare considerations. We treat everyone, regardless of their ability to pay. We want to make sure that care is equal and accessible to everyone. 92 | Invest: Greater Fort Lauderdale / | PEMBROKE PINES Broward County 2018
recognized by the Greater Fort Lauderdale Alliance as a Platinum Permitting City. The designation means that the city has adopted a streamlined permitting ordinance or resolution. To help developers, the city has an online tracking system as well as a designated member of staff that works directly with businesses going through the permitting process. Pembroke Pines has more than 10 million square feet of commercial development. Around 8.7 million square feet of its commercial property is made up of retail centers concentrated along the 13.1 mile stretch of the Pines Boulevard Corridor. The city has the premier shopping malls Pembroke Lakes Regional Mall and the Shops at Pembroke Gardens. It is also home to the three Power Center Developments of Westfork Plaza, Pembroke Commons and Pembroke Crossing. Pines has the lowest retail vacancy rate of any city both in Broward and in the entire South Florida area, averaging between 3 and 4 percent. Pines is also home to approximately 600,000 square feet of industrial space, with an additional 1 million square feet slated to be developed by 2018, including the Bergeron Park of Commerce and Industry. The Chapel Trail Planned Unit Development consists of two industrial areas at the 10-acre Sheridan Palms Business Park and the 75-acre Chapel Trail Trade and Commerce Center. The number of office parks in the city is also increasing. In 2016, Duke Realty completed the first building of the Pembroke Pointe office park, a nearly 148,000-square-foot, Class A office building with direct exposure to I-75. The TPA Group recently acquired the development rights for the remaining office acreage for $12.2 million and will begin construction in early 2018 on the Edison, a 335,000-square-foot Class A office building. Overall, the area’s office market is healthy. In the fourth quarter of 2016, the Southwest Broward office submarket had a vacancy rate of 6 percent, in contrast to the countywide vacancy rate of 11.1 percent. Central promise In April 2017, Pembroke Pines completed one of its most significant projects to date – the $58-million Charles F. Dodge City Center. With the inauguration of the City Center facility in April 2017, the city gains a multiuse venue that can host events such as conventions, trade shows, meetings as well as live musical and theatrical performances. The four-story, 175,000-square foot building houses the Pembroke Pines City Hall as well as a 35,000-square foot Grand Hall that can seat more than 3,200 guests. The Charles F. Dodge City Center complex is just
PEMBROKE PINES OVERVIEW
Major developments along its primary roads will help centralize the city’s economic and social activities.
one component of the larger Pembroke Pines City Center project, a master-planned 160-acre, mixed-use Terra Group development made up of retail, hotel, entertainment and residences by developer, Terra Group. The first phase of construction of the Pembroke Pines City Center, comprised of 350,000 square feet of retail and commercial development, is underway and is expected to be completed by the end of 2018. The first phase includes a neighborhood grocer, entertainment and restaurants. Approximately 70 percent of the area is already pre-leased, signaling a good start for the future of the Pembroke Pines City Center, which already houses such Pines symbols as the 9-11 and Veterans Memorials. The second phase of the project will include additional retail and restaurant options, while phase three will include hotel facilities. The project was created with the goal of generating centrality within the city, providing a gathering site for the estimated 400,000 residents who will live within the surrounding 5 miles of the area. Pembroke Pines City Center currently consists of three residential projects. The first of these is Montage Pembroke Pines, which was developed by Mill Creek Residential Trust. The project is made up of 700 rental units across 27 acres and was bought by Harbor Group International for $158.5 million in April 2017. The Town at Pembroke Pines was developed by the Related Group and is a
complex of 365 luxury units on 11 acres. The complex was sold to the Rockpoint Group for $87 million in April 2017. The third project, which will be constructed in the heart of the Pembroke Pines City Center, will be developed by Terra Group, adding another 387 residential units to the locale. Transport demand Despite the city’s proximity to Florida highways, Pembroke Pines currently faces challenges in public transit. Although the city wants to steer away from a commuter environment, residents continue to use cars to reach employment centers in Miami and Fort Lauderdale. The city is trying to encourage its residents to shift away from the use of personal cars by increasing the destinations serviced by Broward County Transit, including the City Center, in particular. Another obstacle that Pembroke Pines faces is the limited availability of land. Moving west is no longer an option for the city because of its proximity to the Everglades. For this reason, redevelopments are anticipated to continue taking place on the older eastern side of the city to improve the land and buildings that are already in use. Artistic leanings Pembroke Pines prides itself on its cultural offerings. www.capitalanalyticsassociates.com | 93
Ron Bergeron Founder & CEO, Bergeron Land Development
What is the importance of the Everglades to the people and economy of Pembroke Pines? Pembroke Pines borders one of the natural wonders of the world, and millions of people in South Florida rely on the Everglades for drinking water. Millions more come here to visit the Everglades and the fishing capital of the world, which in turn fills our hotels and is a big driver of the tourism economy. The natural resources of South Florida and the economic machine that they drive have an impact of about $50 billion every year, yet they also protect our quality of life. As both a businessman and a member of the Florida Fish and Wildlife Conservation Commission, we are trying to create jobs while at the same time undertaking a restoration of the largest wetland in the world. The goal for all of us moving forward is to have a great economy and build the American Dream through affordable homes and job creation, but do so while respecting and preserving our natural environment. What do you see as the potential demand for new industrial developments in Pembroke Pines? The Bergeron Park of Industry and Commerce has plans for around 2.3 million square feet of industrial buildings, which is a product in big demand across South Florida. Our park is diversified and is able to accommodate light and heavy industrial uses as well as manufacturing and outdoor storage. With the growing importance of distribution and logistics in Greater Fort Lauderdale, warehousing is also in high demand. These new industrial developments in Pembroke Pines are not only meeting demand, they are also creating new jobs. Pembroke Pines is a very pro-business city with high operating standards. The requirements in Pembroke Pines for an industrial and commercial campus like ours are much different than those for similar developments that went up in the past. Broward County has a very bright future and Pembroke Pines is a great city to work with. Wise leadership in government is critical to the future of our economic growth. reaterFort FortLauderdale Lauderdale/ / | PEMBROKE 94 Invest: G Greater 94| |Invest: PINES | PEMBROKE PINES BrowardCounty County2018 2018 Broward
Its proximity to the Everglades makes Pembroke Pines a popular area to experience the natural wonder of the area.
The city provides many activities and facilities to accommodate residents in search of leisure pursuits or creative outlets, and various entertainment options are offered throughout Pines. Of particular note is the 442-seat Susan B. Katz Theater. Situated within the River of Grass Arts Park, the theater hosts performances year-round provided by the Pembroke Pines Theater of the Performing Arts (PPTOP) such as Hairspray, Les Miserables and You’re a Good Man, Charlie Brown. As of 2017, PPTOP has been named the “Best Community Theater” for two years in a row by website BroadwayWorld. Pines is dedicated to preserving the arts, as evidenced by its many galleries. The Fletcher Art and Cultural Center hosts free guitar, drama, art and piano classes year-round for all ages. Studio 18 serves as an art gallery and workspace for local artists to exhibit their work and hosts eight art shows a year. The Frank, which opened in 2017 as part of the new Charles F. Dodge City Center and is named after Pines Mayor Frank C. Ortis, is another exhibition gallery that supports a cultural climate within the community. The city has fostered overall community engagement
David Martin President, Terra Group
through various cultural symbols and events celebrating holidays and locales representative of Pines. The annual Pines Day is perhaps the most characteristic embodiment of the city, celebrating the conception of the city April 22. In 2017, the city celebrated its 57th birthday with free entertainment, including rides and the 2017 Miss Pembroke Pines Royal Court Pageant. The Kiss Country Chili Cook-Off also takes place in Pines’ renowned 299-acre county-owned CB Smith Park, bringing approximately 20,000 people to one of Greater Fort Lauderdale’s most popular parks. Looking Ahead Pembroke Pines’ reputation as a safe, friendly city and its emphasis on education and healthcare make it an attractive destination for new families and seniors alike. It offers world-class entertainment and art venues, regionally recognized parks and A-rated schools. Most importantly, the city cares about its residents. With the groundbreaking Pembroke Pines City Center project underway, the goals of increasing the centrality of community activities and diversifying the city’s economy are closer than ever before.
What makes Pembroke Pines such an attractive city for Terra’s new projects? As one of Florida’s best places to live and work, Pembroke Pines is the second-most populous city in Broward and home to a growing base of large corporate tenants, so we’re seeing a surge in demand for new retail and lifestyle offerings in the area. Our mission at Terra has always been to improve communities through developments that fill a void in the marketplace, and we’re doing just that with projects like Pines City Center by meeting growing demand with a development that caters to residents’ everyday needs. There is a scarcity of developable land along Pines Boulevard, which creates a high barrier to entry and protects new projects from being diluted by future developments. This has provided a strong basis for us to pursue projects here, and we are currently developing several different properties in the area. Pembroke Pines is a mature market, and a lot of the housing stock reflects that. We felt that what was needed was a new supply of housing built to current standards of excellence with an emphasis on architectural aesthetic. Pines City Center is generating strong interest among national and regional retailers. Next door, the City of Pembroke Pines recently built a $60 million civic center complete with a 3,500-seat performing arts center and conference hall, an outdoor plaza, a 10,000-square-foot art gallery and a new city hall. How do Terra’s projects in Pembroke Pines reflect the current trends in what the housing market is demanding? People that traditionally either owned a single-family house or rented one now want to be closer to shopping while still being able to live in a larger space. Often times, in targeting the urban core, there is a strong focus on millennials, but a product catering solely to young professionals will miss out on opportunities to attract young couples and families as well. www.capitalanalyticsassociates.com|| 95 www.capitalanalyticsassociates.com
Banking & Finance: The global financial sector watched in anticipation as newly elected president Donald Trump was carried into the Oval Office on a wave of business-friendly campaign promises. Two increases of the federal funds rate provided a boost of optimism to the banking industry, especially in South Florida where commercial and consumer lending activity remained strong in 2017. Meanwhile, area banks look to grow their customer base with new fintech offerings.
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Banking & Finance in numbers: Top midrange South Florida banks by assets, 500 million- 1 billion, first quarter 2017, ($ ‘000s):
Banesco USA
983
U.S. Century Bank
974
Biscayne Bank
781
Helm Bank USA
772
The First National Bank of South Miami
661
Grove Bank and Trust
660
573
Apollo Bank
Banco do Brasil Americas
$541 million 0
Assets Q1 2017 (‘000s)
$250 million
Loans Q1 2017 (‘000s)
$500 million
Net Income Q1 (‘000s)
Deposits Q1 (‘000s)
$1 billiion
Noncurrent Loan Ratio
Banesco USA
$982,668
$736,420
$791
$864,637
0.63%
U.S. Century Bank
$973,876
$727,694
$1,892
$796,232
1.33%
Biscayne Bank
$780,557
$641,245
$2,416
$648,293
0.38%
Helm Bank USA
$771,632
$473,536
$626
$628,784
1.69%
First National Bank of South Miami
$660,882
$432,563
$746
$548,552
0.61%
Grove Bank and Trust
$659,514
$223,763
$2,809
$545,782
0.08%
Apollo Bank
$573,459
$402,032
$823
$489,849
0.55%
Banco do Brasil Americas
$540,804
$380,665
$506
$462,895
0.32%
Source: Bizjournals/Bauer Financial
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Bauer Financial Star Ratings
Top South Florida banks by assets more than 1 billion, first quarter 2017 ($ billions):
BankUnited
27.88
Florida Community Bank
9.38
City National Bank of Florida
8.52
Mercantil Bank
8.38
Sabadell United Bank
5.80
Ocean Bank
3.56
Stonegate Bank*
3.23 2.96
TotalBank BAC Florida Bank
1.99
Gibraltar Private Bank & Trust
1.62 0
$5 billion
$10 billion
$15 billion
$20 billion
$25 billion
Assets Q1 2017 (‘000s)
Loans Q1 2017 (‘000s)
$27,881,033
$19,309,489
$66,193
$20,086,766
0.77%
Florida Community Bank
$9,382,096
$6,878,939
$39,753
$7,680,471
0.24%
City National Bank of Florida
$8,524,659
$5,553,375
$24,258
$6,047,518
0.47%
Mercantil Bank
$8,382,996
$5,798,855
$8,074
$6,598,201
1.06%
Sabadell United Bank
$5,808,706
$4,152,371
$11,708
$4,350,708
0.97%
Ocean Bank
$3,566,673
$2,848,938
$7,438
$3,045,479
0.38%
Stonegate Bank*
$3,238,047
$2,461,213
$7,994
$2,722,255
0.37%
TotalBank
$2,968,478
$2,091,970
$6,093
$2,133,420
0.55%
BAC Florida Bank
$1,996,652
$1,518,578
$4,479
$1,627,089
0.46%
Gibraltar Private Bank & Trust
$1,620,680
$1,425,968
$1,140
$1,053,760
0.56%
BankUnited
Net Income Q1 (‘000s)
Deposits Q1 (‘000s)
Noncurrent Loan Ratio
$30 billion
Bauer Financial Star Ratings
Source: South Florida Business Journal
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BANKING & FINANCE OVERVIEW
Bank balance: A mixture of national institutions and community banks means Broward County is well served when it comes to financial institutions. Potential new legislation could have a positive impact on the institutions in the banking sector, as it experiences continuing consolidation With unemployment below 4 percent as of August 2017 and a favorable business environment, there is plenty of need for banking and financial services on both the consumer and commercial sides. Financial activities added 300 jobs in 2017, a growth of 0.5 percent yearon-year, in Greater Fort Lauderdale suggesting an increased need for wealth management and loan services. The economic issues in South America have also started to drive capital back into the U.S., with all areas of South Florida well-positioned to take advantage. Main factors Real estate is a primary economic driver in Broward County, and the area has seen steady growth. The first quarter of 2017 saw a 2.3-percent rise in the number of closed sales for condos and townhouses, up to 3,932. Of this amount, 2,467 were paid in cash, which represented a decrease of 2.1 percent on the previous year. The median sales price was up 7.5 percent to 100 | Invest:
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$145,000 and the average price up 3.8 percent to $192,373. An increase in the cost of houses and a decrease in cash sales are good news for the mortgage segment. Overall loan growth across South Florida is slowing, with local banks of more than $1 billion in assets recording an increase in consolidated loan portfolios of only $956 million in the first quarter of 2017, less than half the previous quarter’s reported loan growth of $2.01 billion. Both internal and external factors have created threats to a sound financial environment, with increased incidents of hacking, new competition in the form of fintech and extreme weather events. The South Florida financial institutions that serve the Greater Fort Lauderdale area are having to address new issues all the time. Sunny outlook Banks in the U.S. went into 2017 with optimism. (
)
BANKING & FINANCE INTERVIEW
Counting on interest How U.S. industry regulations and economic downturns in Latin America are shaping the banking sector
Tony Coley South Florida Regional President – BB&T In what ways has the local banking sector changed in 2017 from 2016? The economic downturns in several South American countries have initiated the influx of foreign funds to U.S. banks, so that has been one of the driving forces of growth. However, banking regulators are pushing hard to enforce Bank Secrecy Act regulations. Therefore, capital inflows from foreign sources bring with them a lot of due diligence on our part as well. Regulators rely on the banking system to truly understand the sources of significant deposits from foreign entities. The result of the most recent presidential election has also had a huge impact on expectations from a banking standpoint. One party controlling the house of representatives, the Senate and the executive branch has historically lined up well for robust business growth, and a lot of business owners are excited about what this might mean for potentially lowering taxes and lessening regulations. We are seeing business clients who have been holding on to older equipment beginning to invest a little bit more in capital upgrades. They are hiring more employees, borrowing more and taking a bit more risk. At the same time, they are still very cautious because a lot of the anticipated changes haven’t necessarily played out, and there is still uncertainty in Washington D.C.
Interestingly, in South Florida, we are continuing to do a lot of refinancing, because rates are still relatively low. A lot of people in the area who were negatively affected by the housing crisis are becoming creditworthy again.
How have the recent increases in the Fed rate affected your local mortgage lending? All financial institutions are keeping their eye on the increasing Fed interest rate. We are monitoring what the competition is doing and are raising the prime rate associated with the fair funds rate as most banks have. However, as of right now not much has changed, and rates are still historically low. As rates gradually return to past levels we are seeing refinancing begin to slow slightly across the board.
How are you integrating new developments in financial technology into your strategy? Banking industry leaders have worked hard to understand how to avoid being negatively affected by mobile technology and are instead looking at how to take advantage of it. We spend a lot of time collaborating with Silicon Valley and leading technology firms in order to understand how fintech can help augment what we do. We actively look to partner with them on to benefit from their technology. www.capitalanalyticsassociates.com | 101
BANKING & FINANCE OVERVIEW
( ) The incoming Trump administration trumpeted its pro-business stance and promised financial regulatory reform from the Republican Party including the rollback of Dodd-Frank Act regulations, which had been imposed on banks following the Great Recession. The Financial Choice Act, designed to replace DoddFrank, passed in the House in June 2017, however it has not passed the Senate as of September 2017. Some of the criticism of the Dodd-Frank Act relates to how it unfairly discriminates against smaller banks. Qualified mortgage rules create restraints on the loan operations of community banks, which has an impact on economic growth according to a study by Florida Atlantic University. The rules were put in place to rein in the predatory lending practices that underpinned the subprime mortgage crisis that triggered the recession. Should the Financial Choice Act pass, it is likely to ease regulatory burdens for mortgage and small business loans.
$1 billion in assets as of the second quarter of 2017. Total assets during this period were $76.3 billion, a growth of 11 percent on the previous year. Total loans were $54.2 billion, a 13-percent increase on the $48.2 billion of the previous year. By far the largest of the 11 banks is Miami Lakes-based BankUnited, which as of the second quarter of 2017, has assets of $28.9 billion and a loan portfolio worth $20.1 billion. Florida Community Bank, based in Weston, is the second-largest independent bank in Florida and was founded in 2010. The bank showed year-on-year growth of 21 percent in the second quarter of 2017 from $8.1 billion to $9.7 billion. In September 2017, Florida Community Bank provided a $14-million loan to Mediterranea Palm Property Subsidiary for a 500-home project in the Arbor Parc singlefamily home community in Riviera Beach. The same month, the bank also increased the mortgage of developer Tate Capital’s 40-acre Bahia Mar resort in Fort Lauderdale Beach. The $50-million increase, up to $135 million, is for renovations. The bank also lent $7 million to an as-of-yet-unnamed developer for a 468-lot home development near Goulds, Miami-Dade County. Stonegate Bank of Pompano Beach was founded in 2005 and has since then, acquired 10 banks in the Florida area, including Insignia Bank in Sarasota, Florida in March 2017. In the second quarter of 2017,
Some criticism of the DoddFrank Act relates to how it unfairly discriminates against smaller banks.
Pull together The trend for consolidation, in part triggered by the Dodd-Frank regulations, has impacted Florida. According to the Federal Deposit Insurance Corp (FDIC), on June 30, there were 138 commercial banks and savings institutions in the state as a whole, down from 152 the same time the previous year. South Florida was home to 11 banks with more than
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it was the seventh-largest independent bank in South Florida with assets of $3.13 billion, up 30 percent on $2.4 billion. During the same period, the bank had loans of $2.44 billion, down 1 percent on the previous quarter, but up 25.5 percent on the previous year’s loan value of $1.94 billion. In August 2017, Arkansas-based HomeBanc Shares announced they had approval from the Federal Reserve Board and the Arkansas State Bank for the acquisition of Stonegate Bank. The cost of the transaction was $749.8 million, and under the terms of the deal, Stonegate will be merged with HomeBanc subsidiary, Centennial Bank. HomeBanc had already made an entrance into the local market when in 2014, it acquired Broward Financial Holdings. Of the smaller banks in the Broward area, American National Bank of Oakland Park has assets of $301.6 million as of June 2017, up 10.4 percent on the previous year’s $273.3 million, according to Bauer Financial, with loans and leases of $237.6 million, up 6.6 percent on $222.9 million the previous year. In the first quarter of 2017, the bank issued a mortgage of $8.64 million to Broward Meat & Fish to buy a supermarket building in Pembroke Pines. The Home Federal Bank of Hollywood based in Hallandale Beach had $43.9 million in assets in June 2017, down from $44.1 the previous year. Due to capitalization issues, the bank was rated two stars by Bauer Financial as of September 2017. Natbank is based in Hollywood and, as of June 2017, had assets of $176.3 million, up 2 percent on $172.9 million the previous year. The bank has a Bauer Financial rating of five stars. OptimumBank, based in Plantation, has assets of $112.6 million as of June 2017, down from $123.4 million the previous year and has a Bauer Financial rating of two stars. TransCapital Bank is based in the City of Sunrise. As of 2017, the bank has $118.1 million in assets, up on $179.4 in the previous year and has a Bauer Financial rating of three and a half stars. As of June 30 2016, Wells Fargo has the largest share of deposits with 16.42 percent for the Miami-Fort Lauderdale-West Palm Beach Metropolitan Statistical Area (MSA). In second place, is Bank of America with 16.37 percent, followed by Citibank with 8.96 percent, JPMorgan with 7.97 percent, BankUnited with 5.6 percent, SunTrust Bank with 5.32 percent and BB&T in seventh place with 3.16 percent. BB&T has deposits of $7.34 billion in South Florida. In June 2017, the bank issued a $44-million construction loan for Port Everglades Terminal Land, a company affiliated with Ranger Construction Industries, for an expansion project at Port Everglades. PNC Bank had a 1.77-percent share of deposits in
Cressman Bronson Florida Regional President, PNC Bank
What are the biggest drivers of economic growth in Greater Fort Lauderdale? There are 1,000 people per day moving into Florida, and the tri-county area accounts for around 200 of that number. Greater Fort Lauderdale is a vibrant, diverse and culturally driven community. There is a lot of entrepreneurial spirit in Greater Fort Lauderdale, and it attracts a lot of affluent individuals, so wealth management is an important area for banking here. Corporate and retail are also strong lines of business. Our corporate banking, year-on-year, has seen a 300 percent increase in revenue. The wealth management section of the bank continues to add assets under management at a fast pace. There has been a year-onyear increase of around 70 percent for first mortgages in this region. However, we have also seen a slight shift from refinances to second mortgages. Consumer behavior is also changing. Around 82 percent of all of our clients use some form of digital banking, and more than 62 percent of all of our deposits were done electronically in 2016. How does the current regulatory framework for the banking industry affect the ongoing trend of consolidation? The financial industry handles people’s money, so regulations are necessary. The business and banking communities are generally optimistic that there will be smarter regulations in the future. This is not something that we can control or for which we can plan. However, we plan based on the parameters given. In 2008, there were about 8,500 banks in the U.S. In 2017, there are about 6,000. Bank consolidation is just an industry reality. The cost for regulatory requirements is high, as is the cost of cybersecurity. Small community banks are currently being faced with these challenging equity demands. Thus, we may very well see this trend of industry consolidation continue. 103
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earned someplace else in the country and moved down here. There are pools of money here that don’t traditionally exist elsewhere in the U.S.,” Ronald J. Kovack, co-founder and chairman of Kovack Securities, told .
Despite advances in consumer fintech, many key banks maintain extensive branch networks throughout Greater Fort Lauderdale.
the Miami-Fort Lauderdale-West Palm Beach MSA in June 2016. In the fourth quarter of 2017, it issued a $50.47-million loan to construction company FCI Residential, a subsidiary of Florida Crystals, for the development of 353 apartments on a 13-acre site in Palm Beach Gardens. Kovack Securities is a private investment firm based in Fort Lauderdale. In May 2017, it completed the acquisition of the assets of TKG Financial, an independent broker-dealer based in Santa Barbara, California. The deal was worth $200 million in client assets. Founded in 1997, Kovack Securities supports some 400 independent financial advisors across the U.S. through its registered investment adviser platform, Kovack Advisors. “The overall profile of investors in Broward can be characterized to a large degree by money that was
Local produce As of the end of 2016, some 10 percent of adults in the Miami-Fort Lauderdale-Pompano Beach MSA owned a business, giving it the highest rate of small-business owners of metro areas in the U.S., according to the Kauffman Foundation. Yet, only less than half of them, around 45 percent, survive five years or more. Overall, the area ranks 10th in nation for small business activity. In 2015, more than $1.2 billion was lent to small business in South Florida. In 2016, the tri-county area of Miami-Dade, Broward and Palm Beach saw more than $574 million in loans approved, according to data from the U.S. Small Business Administration. Of the total, some $188 million went to Broward, with $143 going to Palm Beach and $243 to Miami-Dade. Well prepped Major insurance agencies saw premium growth in 2016 in South Florida. Broward’s location and demographics make it a specialized market driven by the high number of seniors and the environmental risks. The market is seeing consolidation, specifically a decrease in the number of private brokers. As of 2016, Arthur J. Gallagher & Co is South Florida’s largest insurance broker with a premium volume of $1.93 billion and 57 local agents. USI Insurance Services of Florida is the next largest brokerage with $472.41 million in premiums and 54 local agents, Marsh & McLennan Agency have $455.35 million with 49 local agents, Sapoznik Insurance & Associates have $198.8 million with 14 local agents and the fifth largest is NSI
David Druey Division President – Centennial Bank
Banking regulations nationwide are very strict and tight, and this has an impact on smaller community banks. Landmark Bank, which we bought in February 2017, was a very well-run $400-million bank, but regulations made it difficult for them. Many community banks in Florida are now for sale because of the tight regulations. They can either carry on for a few years with an average performance, or sell to a larger institution.
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Market voices:
BANKING & FINANCE OVERVIEW
Insurance consumer education
Shannon Alfonso
Florida Region President & CEO, Marsh & McLennan Agency
There has been a shift away from the historical question of, ‘what can I get to cover everything at the cheapest rate?’ toward, ‘what do I have to cover to avoid being penalized?’ and this is true for both employers and employees. That has broadened our scope beyond simply delivering employee benefit policies toward being more of a consultative partner with businesses. Because the process is so complex, clients are looking to companies like us to tell them what the trends are. They welcome that kind of partnership.
Decades ago, it was important that an insurance broker be located right down the street from a client. Today, insurance buyers are much more sophisticated than they were in the past, and the name of the game is more expertise than it is geographic location. Data and analytics have become increasingly important today. While the old model was for brokers to shop around for competitive quotes, today that’s not enough.
Zeb Holt
South Florida Area President, Arthur J. Gallagher & Co.
Rachel Sapozni
President & CEO, Sapoznik Insurance
We use data to educate companies and create programs, classes and opportunities for people to utilize resources better. Data allows us to ease the enrollment process and document the employee’s choices. Data helps us explain what insurance plans clients had during the previous years and what would suit them better in the future. We also use data for wellness programs. However, while this information is incredibly informative, data is never the only consideration.
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Insurance Group with $191 million and 15 local agents. Citizens Property Insurance was one of the remaining providers and, as of August 2016, is the state’s largest insurer with some 443,000 policies, around 256,000 of those in South Florida. The company has stated that it expects some 100,000 claims in the wake of Hurricane Irma. Governor Scott requested that insurers in the region follow a 90-day grace period for policyholders whose coverage had been canceled, also requesting a freeze on policy rates over the short term. Other major property insurers include Universal Property & Casualty with around 198,940 policies as of August 2016, Heritage Property & Casualty with 98,992, People’s Trust with 61,731 and Homeowners Choice with 60,956 policies.
Gonthier, CEO of security firm GardaWorld, told . Healthcare was the main security victim, accounting for 31 of 65 security breaches in 2016. Three of the security breaches were for banking, credit or financial firms. This represented 4.6 percent of the total, which is close to the national average. Looking ahead Broward has a strong economy with a robust real estate sector and flourishing small businesses, helping to drive growth in mortgages and small business lending. The South Florida area as a whole is business friendly with low tax rates and an attractive climate. Corporate banking has seen considerable increases in revenue, and a growing population offers plenty of high-street banking opportunities. “There is a great deal of interest among businesses in various industries regarding how any new tax framework will affect them. Until there are any actual proposals, the amount of uncertainty is unsettling, and everybody is discussing with their industry advocates how to best position their businesses to benefit from any changes,” Teri Kaye, partner at Daszkal Bolton, told . Regulations intended to prevent another financial crisis remain strict, so consolidation is common. Smaller banks in the area may struggle, but the overall the sector has a healthy variety of institutions.
A robust real estate sector and a large number of small businesses create a good customer base for banks.
Security issues The September 2017 revelation of a security breach of Atlantabased Equifax makes clear that the threat of hacking is one the financial world needs to take seriously. According to an FBI report, Florida had one of the highest number of victims in the U.S. by state with 21,068 complaints, behind only California and Texas, but one rank above New York in 2016. Overall losses were almost $89 million in Florida. “A lot of investment has been made by financial institutions to protect their data systems, but we have to make the assumption that there will always be risk, and that risk has to be managed proactively,” Stephen
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Healthcare: Though still notable like much of Florida for its sizeable concentration of seniors, Greater Fort Lauderdale’s population is growing and becoming more diverse. Hospitals throughout the area are responding to the surge in population with expansions and upgrades to healthcare facilities. Telemedicine and decentralization of services look to overcome challenges such as state budget cuts and the limited supply of physicians.
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Environmental health: With an aged demographic and environmental challenges, the area’s medical facilities have their work cut out for them. A number of top-class institutions are ensuring that the area’s residents are well served Of the 67 counties in the State of Florida, County Health Rankings & Roadmaps listed Broward County 19th for health outcomes, a measure of average life span and how healthy individuals feel. Broward was ranked 14th for health factors, which include related behaviors, clinical care, social and economic conditions as well as environmental factors. Roughly 1.9 million people live in Broward, 21.5 percent of whom are under the age of 18, compared to 20.3 percent at the state level. The portion of the population between the ages of 18 and 65 in Broward is 62.8 percent, while 15.7 percent is over the age of 65, compared to the respective 60.3 percent and 19.4 percent of the state’s population. Top condition Health policy in Broward is administered through the Florida Department of Health in Broward County (DOH-Broward), which is tasked with protecting, promoting and improving community health. In 2016, DOH-Broward undertook a Mobilizing for Action through Planning and Partnerships initiative, which 108 | Invest:
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consisted of assessing community health status, community themes and strengths, local public health systems and forces of change. The results of DOH-Broward’s 2016 Local Public Health System Assessment (LPHSA) identified a number of priority areas, including maternal and child health and general access to healthcare. The average ratio of patients to primary care physician in Greater Fort Lauderdale is 1,380-to-1, the same as that of the state. Mental health specialists are available in Broward at a ratio of 720-to-1 and dentists at a ratio of 1,400-to-1, both slightly better than respective Florida averages of 750-to-1 and 1,790-to-1. Medicaid plays an important role in providing insurance coverage throughout the state. According to the Florida Policy Institute, nearly two out of every 10 Florida residents benefit from the $25 billion that the state spends on the program. Among Florida families whose annual income falls below the federal poverty level, Medicaid provides coverage to one in three adults and one in five children. Approximately 21 percent of the population ( )
HEALTHCARE INTERVIEW
For your health How an eye toward the future is keeping Cleveland Clinic Florida at the forefront of the local healthcare sector
Dr. Wael Barsoum President – Cleveland Clinic Florida What are current trends in healthcare for the South Florida area? One of the trends growing locally is transplants. southeast Florida is a donor-rich environment because the weather means people ride their motorcycles every day, which sadly increases the number of fatalities. Gratefully, many of them give their organs for donation. In the past, many of those organs left Southeast Florida, but we have started a number of transplant programs here, and they have been very successful. How can research be made a more significant part of the South Florida healthcare sector? There are a few different ways to fund research. The most obvious way is through federal funding from places such as the National Institute of Health. Then there are various foundations such as the American Geriatrics Society, the Orthopedic Research and Education Foundation or the American Heart Association. All of those groups fund research in Florida. South Florida is also a very philanthropic area. However, a lot of the money raised here leaves the area. Cleveland Clinic is unique in that the money we raise here, we spend here to serve the local population. Lastly, we’re a nonprofit organization, so any profits we make, we can direct into meeting our mission, which includes research and education. What are the main issues in the uptake of technologies to improve patient care? Healthcare benefits a lot from technology, but in some ways it also causes issues. Electronic medical records (EMR) are great, but it is important to create the right balance. There are now enormous repositories of data that you can access from countless sites. Having re-
mote access to data is a huge benefit for the medical profession. There are countless terabytes of data, and by the year 2020, healthcare data will be doubling every 72 days. This needs to be managed. There needs to be some methodology to turn this data into usable knowledge. Healthcare providers should be embracing startup technologies much earlier. Cleveland Clinic is forward thinking and on the cutting edge of delivering healthcare, but there are startup companies that are still five years ahead of where we are regarding technology. We need to partner with these companies because being earlier adopters of technologies that benefit our patients makes sense. However, it has to be done in a way in which the brand is protected and there is no unnecessary risk. www.capitalanalyticsassociates.com | 109
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( ) of Greater Fort Lauderdale is uninsured, a figure lower than the rate for Miami, which is 32 percent, and the state as a whole, at 22.9 percent. The uninsured rate in Broward is also lower than the collective average among its Florida peer group of Hillsborough, MiamiDade, Orange and Palm Beach counties, which is 24.4 percent. Nonetheless, the rate in Broward still far exceeds the national uninsurance rate of 13.4 percent. While it falls slightly short of Florida’s 95 percent target for full immunization of kindergarten-aged children, with 94.2 percent, Broward exceeds the 92.2 percent average among its county peers as well as the state average of 93.7 percent and the national average of 94 percent. Among children younger than two years living in Greater Fort Lauderdale, the rate of immunization is just 84 percent, lower than the 85.8 percent collective average of Broward’s county peers. This rate of infant and toddler immunization is also lower than that of the state, at 85.5 percent, and the nation, at 84.2 percent. As part of the LPHSA, 48 organizations operating in Broward completed an online survey, rating strengths and areas for improvement within the Greater Fort Lauderdale healthcare ecosystem. The summary of the results gave the system high marks in the evaluation of health services and the availability of such services. However, the area’s healthcare sector scored low for research and innovation. Ratings for diagnosis, investigation and the enforcement of laws dragged down its average score. There is good access to healthcare data in Broward as a whole. Already commonplace in many other industries, increasing shared access to records between doctors and patients is a growing focus of many of the area’s healthcare providers. “Patient Portal is a huge technological advancement for us that allows patients to access their medical records here at the facility from their own mobile devices,” Trey Abshier, CEO of Florida Medical Center, told . Major medicine Broward’s nearly 2 million residents are served by a strong supply of local healthcare organizations, many of which are expanding to keep up with increased demand generated by the county’s growing population. This growth and South Florida’s mounting economic might are driving more dollars into the coffers of the region’s healthcare providers. According to the state’s Agency for Health Care Administration, hospitals in the tri-county area recorded an 11.7 percent year-onyear increase in net income, from $1.16 billion in the 2014 fiscal year to $1.29 billion in 2015. 110 | Invest:
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Hospitals across the county are responding to a surge in demand with a wave of new facility expansion projects.
Memorial Healthcare System Numbering among the country’s largest public health networks, Memorial Healthcare System is one of two such public health systems serving Greater Fort Lauderdale. It operates six hospitals in Broward, including the flagship Memorial Regional Hospital. Memorial Regional is one of the largest in the state, with 1,037 beds. In 2016, Memorial Regional recorded 35,667 admissions and performed 8,489 inpatient and 11,203 outpatient surgeries, while its emergency department received 193,252 visits. The Memorial network of providers in the area collectively treated 129,162 admissions, received 418,614 visits to its emergency departments and recorded 15,644 inpatient and 25,802 outpatient surgeries in the same year. Memorial operates eight outpatient facilities, which address needs ranging from outpatient behavioral health to fitness, surgery, 24/7 urgent care and other specialized services. To help address the shortage of physicians in South Florida, as in much of the country, Memorial is investing $14.4 million in a new 31,000-square-foot facility, which is intended to support the system’s new graduate medical education program at Memorial Hospital West. In its first year, the new facility will support residency offerings in internal medicine, pediatrics, physical medicine and rehabilitation. With
HEALTHCARE OVERVIEW
an auditorium, large classrooms and work spaces for faculty and residents, the facility is scheduled to open in summer 2018. Broward Health The second of two public health systems serving Greater Fort Lauderdale, Broward Health is also one of the largest public healthcare systems in the U.S. With five hospitals throughout the area and three ambulatory centers, two of which are dedicated to urgent care, Broward Health employs a staff of 8,446 professionals, among them 1,900 physicians. In 2016, primary care physicians working for Broward Health fielded a total of 106,568 visits. The system offers 1,529 beds and admitted 60,699 patients in 2016. The same year, there were 297,403 emergency department visits, 248,152 outpatient medical center visits and 15,188 outpatient clinic visits. Broward Health’s surgeons collectively performed 16,417 outpatient surgeries and 14,163 inpatient surgeries in 2016. Broward Health is renovating two floors at the recently renamed Salah Foundation Children’s Hospital in Fort Lauderdale. Expected to open in 2017, the ongoing renovation will also involve a new pediatric outpatient clinic and 20 new private rooms for patients and their families. When the hospital’s overall $52-million capital improvement program is completed in 2019, the 125-bed hospital will have
added 67 additional private rooms, as well as on-call rooms and physicians’ offices. The Salah Foundation Children’s Hospital has one of the largest pediatric hematology and oncology programs in South Florida. In the previous fiscal year, 25,000 pediatric patients were seen at the hospital, and more than 6,000 patients have been treated since January 2015. Cleveland Clinic Florida The Ohio-based Cleveland Clinic network maintains operations in Florida consisting of a hospital in Weston and seven additional healthcare centers. Cleveland Clinic Florida was the highest-ranked hospital in Broward County, according to the 2017-2018 U.S. News World Report, which also listed it as the secondbest hospital in South Florida. The 166-bed state-of-the-art hospital employs more than 350 nurses and 255 physicians covering 55 specializations. . A $302-million overall expansion is underway at Cleveland Clinic Florida in response to its occupancy rate typically exceeding 90 percent. Groundbreaking for the system’s new 72,000-square-foot Family Health and Ambulatory Surgery Center took place at the beginning of second quarter 2017. The facility is scheduled to open in 2018 and will feature 40 exam rooms, six operating rooms, 24 preparation and recovery bays, two endoscopy suites and additional imaging services.
In response to Cleveland Clinic Florida’s high occupancy rate, a $302-million expansion program is underway.
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million for the expansion of its Northwest Medical Center. The project will add two floors, increasing the number of beds and the capacity of the hospital’s intensive care unit. A new six-story, 322-space parking garage will support the increase in patient traffic.
Great synergies exist between the local healthcare sector and Broward’s research universities.
The capital investment will also go toward a new 180,000-square-foot tower at Cleveland Clinic’s main campus in Weston to accommodate more specialty surgeries and Broward’s largest organ transplant program. The Weston campus will also benefit from a 25-percent increase in emergency room capacity, 75 additional hospital beds, three new operating suites and added critical care areas. Hospital Corporation of America East Florida The U.S. healthcare giant Hospital Corporation of America (HCA) maintains a strong presence in the region. The East Florida Division of HCA is headquartered in Fort Lauderdale and oversees 14 affiliated hospitals as well as four emergency care centers, a supply chain center, an integrated regional laboratory, 12 ambulatory surgery centers and several imaging centers. The East Florida network employs more than 18,000 workers and has more than 6,000 physicians on staff. To address growing demand across its locations, including those in Broward County, HCA East Florida released in July 2016 details of an estimated $650 million in necessary capital improvements. One of the highlights of HCA’s investment program is the $219-million hospital under construction on the Nova Southeastern University campus in Davie, built in conjunction with the university’s medical department. In Plantation, HCA is investing $56 million to add new beds and private rooms at its Westside Regional Medical Center. In Margate, HCA is dedicating $66 112 | Invest:
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Holy Cross Hospital Founded in 1955, Holy Cross Hospital is a 557-bed, nonprofit Catholic facility in Fort Lauderdale and a member of the Trinity Health organization. Also a teaching hospital, Holy Cross is currently raising funds for its new Phil Smith ALS Movement Disorders Clinic at the Phil Smith Neuroscience Institute. Smith, a businessman and philanthropist who suffered from ALS, also known as Lou Gehrig’s disease, donated $7 million to expand the neurological care offered at Holy Cross in a new state-of-the-art facility. Of this donation, $2 million was designated to match funds in the hope of increasing community support. The new facility will also help Holy Cross Hospital to build upon ties with Harvard Medical School. Florida Medical Center The Florida Medical Center has three facilities in Fort Lauderdale, all based in Davie. The Emergency Care Center is a neighborhood facility that offers 24-hour treatment and diagnostic facilities. The group also has an imaging center and a Care Spot Urgent Care, which is a drop-in facility staffed with an on-site nurse and other medical professionals. Miami Children’s Health System Miami Children’s Health System is the sole healthcare system in the region serving exclusively children, and U.S. News & World Report’s 2017-2018 “Best Children’s Hospitals” included eight of the health system’s subspecialties on its list. It operates Florida’s only freestanding pediatric trauma center, and the Pediatric Surgical Practice performs more than 1,500 minor and 2,000 major operative procedures every year. In Greater Fort Lauderdale, Miami Children’s Health System operates the Nicklaus Children’s Dan Marino Outpatient Center in Weston as well as the Nicklaus Children’s Miramar Outpatient Center. PACE Centers Miami Jewish Health Systems operates a Program of All Inclusive Care for the Elderly (PACE) center in Miramar, where an interdisciplinary team of professionals provides integrated, team-managed care to eligible elderly patients. Since opening in October 2016, Miami Jewish Health’s Miramar PACE center has ( )
HEALTHCARE INTERVIEW
Strong prognosis How Memorial Healthcare System’s investments, despite regulatory uncertainty, are improving public health
Aurelio Fernandez, III President & CEO – Memorial Healthcare System there is no reason why anyone should need to leave South Florida to receive world-class healthcare. As consumers become more educated, they are increasingly shopping around for the safest system as well as the provider that does the most. How is the healthcare sector being affected by the uncertainty surrounding U.S. healthcare legislation? There is a huge amount of uncertainty, and it is affecting all of us in the healthcare sector. It is inhibiting the industry from developing fast enough to address all of the challenges facing us. Nonetheless, we have communicated to our board of commissioners that regardless of any legislative decisions in Washington D.C. in terms of healthcare costs, we are not going to compromise patient care. What we may do instead is defer capital investments in expansion projects.
What are some initiatives that Memorial Healthcare System is undertaking to expand its role within South Florida’s healthcare sector? We are embarking upon a graduate medical education program that will begin in July 2018. The three residency programs in pediatrics, internal medicine and physical medical rehabilitation will take in 166 students. We also have a joint venture with the Moffitt Cancer Center. Moffitt will have a presence at Memorial Hospital West, but it is not an affiliation agreement; it is a joint venture whereby our physicians will work for Moffitt. They will have access to our portfolio of research and clinical trials, which in the field of cancer treatment are crucial to the final service delivery system. With everything that Memorial Healthcare System and Joe DiMaggio Children’s Hospital has to offer, 114 | Invest:
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What are some of the most significant challenges facing healthcare providers in South Florida? South Florida is driven a lot by managed care, and there is currently excess capacity. When there is excess capacity, certain economic forces come into play. In the past, providers were more able to charge whatever price they saw fit, but this excess capacity creates economic pressures that can be difficult to address, such as being able to deliver the same quality services at a low enough price to utilize our capacity. The challenges are due to services being so sophisticated and requiring such a high complexity of resources to maintain that few people are ultimately willing to pay. People may look at our prices, expecting us to charge the same amount as a standalone hospital. However, a community hospital that only performs general surgery, end-of-life care and baby deliveries does not incur the overhead needed to provide the full range of medical services that we provide.
Market voices:
HEALTHCARE OVERVIEW
Health insurance
Penny Shaffer
South Florida Market President Florida Blue
With the passage of the Affordable Care Act, there was an assumption that states would accept the money for the expansion of Medicaid, so there was a shift away from certain funding for public hospitals and those that serve lower-income populations. However, some states decided not to expand Medicaid and didn’t take those expansion funds from the federal government. The hospitals ended up carrying the burden, and the costs are then shifted to commercial rates, which then shift to the individual and the employers, who are ultimately providing the care.
The Affordable Care Act has brought a lot of change to the marketplace without addressing stability, particularly within the individual market. Healthcare in this country is expensive, and this means health insurance is also expensive. The holy grail lies in mechanisms that help subsidize some of that cost and get more people covered. As more people are included within the insurance pool, the overall risk drops and pricing can follow.
James Repp
President & Chief Operating Officer AvMed
John Benz
The state’s healthcare budget cuts are making it more difficult for Medicaid recipients as well as the healthcare providers who serve Medicaid recipients. Recognizing that the Medicaid budget is not going to change and our contracts are not going to change, our job is to become more efficient and effective. The investment that we have to make in this period of time is in keeping people healthy and getting them to doctors.
President & CEO Community Care Plan
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and human services functions were allocated $34.3 billion, surpassing the previous year’s allocation by more than 4.1 percent. The majority of the 2016-2017 health-directed funding was assigned to healthcare appropriations, with the $29-billion allocation representing 35.2 percent of the state’s total budget. Medicaid in Florida received 38.9 percent of its funding from the state, while the federal government covered the remaining 61.1 percent. In June 2017, the state passed its budget for the 2017-2018 fiscal year, which called for $521 million in cuts aimed at state hospitals, scheduled to start in the second half of 2017. The cuts will come from Florida’s general revenues as well as from federal Medicaid matching. The state did reach an agreement with the federal government on a $1.5-billion annual commitment to Florida’s Low-Income Pool program. The funding will go toward Florida’s safety-net hospitals, though details of the agreement’s implementation remain unclear.
Greater Fort Lauderdale’s increasingly diverse demand for healthcare services are driving medical innovations.
( )been providing comprehensive preventative care to residents in the surrounding community over the age of 55 that are primarily medicare and medicaid eligible. Its goal is to enable larger portions of Greater Fort Lauderdale’s sizable elderly population to continue living independently in their own homes. Nearly 700 participants were enrolled in Miami Jewish Health’s four South Florida PACE centers, and the PACE program helps keep 97 percent of its participants out of nursing homes and in the community. All covered In Florida’s budget for the 2016-2017 fiscal year, health
Budget issues Nearly one-third of the approved budget cuts, approximately $160 million, will affect hospitals in South Florida, particularly public hospitals that treat large numbers of uninsured patients and Medicaid recipients. Broward County’s MHS is slated to lose $14.2 million for its Memorial Regional Hospital and $6.6 million for its Memorial Hospital West. Broward Health Medical Center and Broward Health North are marked for cuts of $13.6 million and $6.6 million, respectively. Meanwhile, North Shore Medical Center will go without $7.6 million in funding during the 20172018 fiscal year. According to the Florida Office of Insurance Regulation, in 2016, the state’s 25 largest health insurers earned a collective $18.12 billion in premiums,
Joyita Garg Vice President of Florida PACE Centers – Miami Jewish Health
In the State of Florida, there are only four operational PACE Programs that serve over 1,600 members. Our goal is to increase the number of individuals we serve by expanding and increasing the number of our locations. To do this, we must impress upon our legislature the qualitative and quantitative benefits that the PACE program offers to nursing home-eligible constituents who want to remain in their homes and community.
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marking an 18.05 percent year-on-year increase from the $15.35 billion earned by the same group the previous year. Average direct premiums for group and individual markets reached $10.3 billion and $7.87 billion, respectively, in 2016. Blue Cross and Blue Shield of Florida, known as Florida Blue, earned the most in direct premiums out of all insurance providers in the state. The $5.44 billion earned and 1,020,753 individuals covered gave Florida Blue a 29.94 percent share of the state’s health insurance market in 2016. Humana Medical Plan held 10.36 percent of the market, with $1.88 billion in premiums earned from the 422,721 lives covered. Third on the list was UnitedHealthcare, which covered 310,042 individuals and held an 8.45 percent share, with $1.54 billion in premiums earned in 2016. Health Options covered 307,420 people and earned $1.48 billion in premiums, constituting an 8.16 percent share of the market. The fifth-largest provider was the specialized UnitedHealthcare of Florida, which covered 223,566 individuals, earned approximately $1 billion in premiums and held a 5.51 percent share of the market in 2016. South Florida Community Care Network (SFCCN) was launched in 2000 as Florida’s first safety-net hospital-owned Provider Services Network. After transitioning to an independent company in 2014 in response to Florida’s Statewide Medicaid Managed Care reform, SFCCN rebranded itself in 2016 as Community Care Plan (CCP) and targets population health management. CCP is a collaborative effort between Broward Health and Memorial Healthcare System to serve the county’s Medicaid population. CCP is fully owned by Greater Fort Lauderdale’s two safety-net healthcare systems, which are responsible for the North Broward Hospital District and South Broward Hospital District, respectively. CCP plays an important role in providing health plans to the underserved members of Greater Fort Lauderdale. By the end of 2016, CCP’s membership had grown to 44,944 Medicaid patients, 24,902 children’s medical services patients, 23,778 commercial patients and 6,991 uninsured patients. CCP provided $106 million in medical and related benefits to the community in 2016 and has contributed $31 million to its member services and future growth to date. Eyes on Zika The spread of the Zika virus appeared in headlines throughout 2016, and the local government continues to pay close attention. The number of travel-related
Patrick Taylor President & CEO, Holy Cross Hospital
How does the diversity of Broward impact the care that you are providing? Broward requires a range of specialties partly because of the diversity of the area. At Holy Cross, we specialize in orthopedics, cardiovascular and oncology. Because of our demographics, we do have a lot of undocumented immigrants that often don’t have places to turn to for healthcare. They often rely on emergency departments, which is not cost effective. The best way to get treatment is through access to long-term care. Florida is one of the states that didn’t expand Medicaid, so there are gaps that patients fall through. This puts a lot of pressure on emergency departments and prolongs the postponing of care instead of dealing with health issues head-on. What are some of the top challenges facing healthcare providers in South Florida right now? The uncertainty surrounding the Affordable Care Act (ACA) and the general direction we’re going with healthcare is a challenge. The ACA cannot go away completely, so it has to be amended, and that creates an incredible amount of uncertainty, both for patients and for healthcare systems. I don’t know a single healthcare entity – the American Medical Association or any physician association, surgeons association, hospitals association or any other healthcare provider – who have supported either version of the recent healthcare bills. You can’t be in healthcare and say you’re going to have people less insured or give them less access and think that that’s a good thing. Even from a business point of view, it turns into bad debt for us. If somebody comes in and they are not insured, we’re still going to treat them, which is part of our mission. In the long run, all of us with insurance will ultimately have to cover that. I believe in capitalism, but the idea that we can let the free market take care of healthcare is simply wrong. If the free market could have taken care of this, it should have been taken care of before the ACA. www.capitalanalyticsassociates.com | 117
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cases among Floridians reached 90 by August, and 21 of these cases were in Broward County. The Florida Department of Health also announced in August 2017 that the state’s first sexually transmitted Zika case of the year had been confirmed in Pinellas County. In March 2017, the Broward County Commission accepted a grant of $801,900 from the Florida Department of Health to help prevent the virus’ spread, the grant will be used to cover the cost of chemicals and supplies for aerial and ground spraying. Hurricane damage In the aftermath of Hurricane Irma, the Florida Agency for Health Care Administration worked with Governor Rick Scott and senior members of the state governance to asses the damage in Florida as well as any postdisaster medical issues. During the storm, a number of assisted living facilities, nursing homes and hospitals were closed. As of the end of September 2017, some assisted living facilities and nursing homes are working on backup generators while direct power lines are still being restored. The storm led to the tragic deaths of 11 residents from heat exhaustion when a power outage hit rendered an air conditioning unit unusable at The Rehabilitation Center at Hollywood Hills. Governor Scott ordered that by mid-November all such facilities in the state be fitted with generators permanently wired with four days’ worth of fuel. Some facilities have complained that the blanket rule does not take into account the size of facilities, and that it could cost as much as $10,000
per building. On September 26, LeadingAge Florida, a group representing more than 100 nursing homes and assisted-living facilities, posted a challenge to the ruling at the Division of Administrative Hearings. Looking ahead In September 2017, the American Health Care Act failed to pass, but the Republican Party is still attempting to reform healthcare. With 21 percent of Broward County residents uninsured, any threat to safety-net hospitals will have a detrimental effect on public health. Healthcare remains one of South Florida’s major sources of high-paying employment and accounts for more than 70,000 direct jobs in the region. Between June 2016 and June 2017, education and health services added 6,800 jobs in Greater Fort Lauderdale. This 6.5 percent year-on-year increase put Broward in a tie for the fastest-growing metro area in Florida in terms of jobs created in the sector. “With or without the ACA, the healthcare industry in the U.S. faces many of the same issues as healthcare sectors throughout the world, namely increasing access to cost-effective care that improves people’s health and well-being. South Florida faces all of those issues, but we also have the added distinction of serving a growing and aging population,” Eduardo Egea, principalhealthcare lead for Stantec Architecture, told . The increasing number of baby boomers reaching retirement age and the steady arrival of new residents ensure that world-class healthcare will be in demand moving into 2018 and beyond.
The aging generation of baby boomers is creating demand for specialized healthcare in Broward.
Nancy Humbert Executive Vice President of Ambulatory Services and External Affiliations – Nicklaus Children’s Hospital We don’t want children to have to leave their communities to receive specialized care, so we are developing outpatient centers where there is a need. We assess communities to determine which subspecialists are in shorter supply. For example, our decision to have a strong orthopedic presence in Miramar is meeting an existing need. There are children living there who would otherwise have to go further to receive care.
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Education: With one of the largest public school systems in the U.S. and several award-winning colleges and universities, the educational offerings of Greater Fort Lauderdale are a great contributor to the local economy as well as the high quality of life. New programs are being created to produce the qualified graduates needed to fill positions in highgrowth sectors, while research partnerships and new expansion opportunities are catching the attention of interested investors.
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Level best: All levels of education are catered to in Broward County, and the sector is a major employer. International students and locals alike enjoy a high quality of instruction In addition to training the next generation of working professionals, Broward’s education sector employs approximately 7.4 percent of the local workforce. This figure is growing, and by the start of the second half of 2017, Greater Fort Lauderdale’s education and health services sector had added 6,800 jobs in 12 months, marking a 6.5 percent year-on-year increase. Headed by Superintendent Robert Runcie, the Broward County School Board has an operating budget of approximately $3.87 billion for the 2017-2018 school year, a 1.66 percent increase from the 2016-2017 budget of approximately $3.81 billion. It has 31,797 employees across the public school system, earning it the title of the largest public sector employer in the county. Broward College has 1,417 full-time and 3,507 parttime employees, making it the county’s 12th-largest public sector employer. Among private institutions, Davie-based Nova Southeastern University (NSU) is Broward’s largest employer, while Kaplan Higher Education, based in Fort Lauderdale, is the county’s seventh-largest. In 2016, Kaplan amassed $1.02 billion in revenue, making it the ninth-largest earner in Greater Fort Lauderdale. 120 | Invest:
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Higher purpose According to data collected between 2011 and 2015 by the U.S. Census Bureau, approximately 88.2 percent of Greater Fort Lauderdale residents older than 25 graduated from high school and 30.8 percent hold a university degree at the bachelor’s level or higher. These figures are encouraging in comparison to Miami-Dade, where 80.1 percent of residents age 25 and over graduated from high school and 26.9 percent from university. Greater Fort Lauderdale figures are close to national level at 88.7 for high-school and 30.8 percent for university. The county has a variety of private and public institutions of higher education. Over 40 institutions in Greater Fort Lauderdale offer programs at the associate level or higher and 11 offer master’s degrees. Main contender NSU earned its title as Greater Fort Lauderdale’s largest employer with 7,462 people on staff, and it has an annual economic impact of $3.2 billion. A private research university, NSU has eight regional campuses throughout Florida and Puerto Rico, including the ( )
EDUCATION INTERVIEW
Studying the field How research partnerships are keeping Nova Southeastern University at the forefront of higher education
George Hanbury President & CEO – Nova Southeastern University What economic impact does the university have on Broward County? Universities are knowledge-based industries. All of our deans and I meet with most of the economic leaders in South Florida. We talk about the types of employees and specialists that they need. This university is meeting the needs of the community. We just had a donor give funds to support scholarships in our law school to collaborate with researchers on acquiring patents. We are also having the law school work with the business school on how to commercialize patents. Every discipline can be part of attracting business. Instead of simply focusing on tourism and the service industry, South Florida can be a center of knowledge. This would attract businesses that can offer incomes much higher than the minimum wage. We need to attract businesses, and we emphasize life sciences, biotechnology and other high-tech areas. They should be collaborating with the education, business and law departments to fulfill their potential. We have a lot of graduate and professional programs that help facilitate this. How does the university impact the working life of its students? One common complaint these days is that students can’t find gainful employment once they graduate, often with huge amounts of debt. Graduate students make up 80 percent of our student body. As most of our undergraduates go onto a graduate program, and they increase their employment opportunities. Approximately 97 percent of our graduates have some type of gainful employment sufficient enough to pay off their student loans or to keep them from going into default. As such, we have one of the lowest tuition default rates in the nation at just 3 percent.
With healthcare being such an important sector in South Florida, how does the university enhance that? Of our 18 colleges, eight are in the life sciences area. We are now the only university in the Southeast that will offer both Doctor of Osteopathic Medicine and Doctor of Medicine programs. About five years ago, we opened the $50-million Guy Harvey Oceanographic Research Facility. Research ranging from neuroimmune disorders such as Parkinson’s and autism to stem cell therapies and oncological research will be undertaken in the CCR. We have been tagging sharks and doing research into cell therapy and attempting to bridge marine genomic theory with the human genome. There are some possible implications for shark stem cells in cancer research. www.capitalanalyticsassociates.com | 121
Arthur Keiser Chancellor & CEO, Keiser University
What needs to be done to ensure that less welloff sections of society still have access to higher education? We need to continue to support higher education for all students regardless of their financial means, specifically providing access and choice. Choice is critical, because one size does not fit all in higher education. There are a number of different colleges and universities in Broward County, and they each provide different educational models, services and advantages to meet the diverse needs of students. In spite of many economic priorities and challenges, education is one of the most rewarding investments for students and families. There is a role for both public and private institutions, and it is in the best interest of students to have an opportunity to pursue their best fit. Many traditional students thrive in the public setting, while adult learners juggling multiple responsibilities excel in a private setting like Keiser University. What are the current demands in terms of subject range from students? There is heavy demand in the area of healthcare. South Florida is a center for medicine for the whole of Central and South America, and we have a large number of healthcare companies in Broward. Most of our degrees lead to specific career focus areas in many of Florida’s targeted industries, including healthcare. There is a big call for nurses, physician assistants, radiologic technologists, occupational therapists and physical therapists. This demand really influences the degrees that Keiser University offers. Logistics is also a targeted industry because of the connection to Florida’s robust, multimodal transportation economy. IT areas such as cybersecurity are becoming very popular. Leaders in industry and business recognize that to be successful, they have to have good employees, and that’s where the universities come in. It is important that education and industry work together to meet the HR needs of industry. 122 | Invest:
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( ) East Campus in Fort Lauderdale, the North Miami Beach Campus, the Oceanographic Campus in Dania Beach and the 314-acre campus in Davie. The largest not-for-profit private institution of higher learning in Florida, NSU offers more than 150 degree programs at the associate, baccalaureate, master’s, specialist, doctoral and post-professional levels. The university has produced more than 177,000 graduates since opening its doors in 1964 and awards around 7,500 degrees every year. The majority of course offerings are concentrated in graduate-level programs. Of the 23,236 students enrolled during the 2016-2017 academic year, only 4,641 were pursuing undergraduate degrees. The student body is 30 percent male and 70 percent female. At a school known for its diversity, 56 percent of students identify as minorities, while 33 percent identify as white, non-Hispanic and 11 percent as other. It follows that NSU awards more doctoral degrees to minority students than any other university in the U.S. NSU is one of just 50 universities in the country to hold the Carnegie Foundation designations for both community engagement and high research activity. Between 2005 and 2015, research funding from external sources increased by approximately 140 percent, from $34.1 million to $82 million. The university has more than 100 corporate partnerships, and its research initiatives are supported by 93 external agencies, including the U.S. Department of Health and Human Services, the National Oceanic and Atmospheric Association and the U.S. Department of Education. As of the 2016-2017 academic year, NSU had 200 ongoing research projects, targeting issues such as coral reef restoration, stem cell research, cardiovascular disease, autism and new cancer treatments. Partnering with the Imperial College and the Wildlife Conservation Society, NSU is leading pioneering research at its Guy Harvey Research Institute in the field of wildlife DNA forensics. Local hero Having opened in 1960, Broward College is the oldest institution of higher learning in Greater Fort Lauderdale and the largest such school in the county. Nearly 1 million students have attended, with more than 125,000 of them earning degrees. The college has an annual operating budget of $190 million and an economic impact of roughly $1 billion. The student profile at Broward College is a good representation of the international flavor of the area, with some 63,000 students from more than 180 countries attending the institution each year. Courses
EDUCATION OVERVIEW
history of the school and will go to support its supply chain management program.
Colleges and universities in Greater Fort Lauderdale are working together with the business community to fill critical skills gaps.
studied include business, education, health science and public safety, science, technology, engineering and math (STEM) and social-behavioral sciences and human services. The college also has an emphasis on art, design and communications as well as supporting workforce developments with industry, manufacturing, construction and transportation studies. With healthcare a driving force behind South Florida’s economic growth, the college’s nursing program ranks eighth in the nation, while its overall health program ranks 17th. Graduates from Broward College’s nursing program achieved an average 91 percent passing rate on the National Council Licensure Examination for Registered Nurses, beating the state average by 17 percent and the national average by 8 percent. The institution is also embracing new trends in e-learning, and the website OnlineColleges ranked Broward College’s expanding virtual learning platform as the state’s most affordable, and the college was recently named a member of the 13-school Leveraging, Integrating, Networking and Coordinating Supplies consortium. The group received a $24.5-million grant as part of the Trade Adjustment Assistance Community College and Career Training program. The college’s $12.9-million portion stands as the largest grant in the
State champion In conjunction with Broward College, Florida Atlantic University (FAU) runs Link to FAU, which is a program designed to help graduates of the community college’s associate programs easily transition into bachelor’s degree programs at the university. FAU offers more than 170 degree programs through its 10 colleges. It has a strong presence throughout Greater Fort Lauderdale, with campuses downtown, in Davie and Dania Beach. Opened in 1990 and now FAU’s second-largest location, the Davie campus offers degrees in more than 30 disciplines to its nearly 5,500 students. It is home to the Center for Environmental Studies as well as the Teaching and Leadership Center, a collaborative initiative between FAU, Broward College and the Broward County School Board. The Fort Lauderdale campus has an enrollment of only 299 students and houses FAU’s Small Business Development Center and the Florida Public Archaeology Network. It is also home to the university’s Institute for Design and Construction, the site of the construction technology program, which offers construction project coordinator and construction management certifications. At the research center on the Dania Beach campus, 55 students are enrolled at SeaTech, FAU’s Institute for Ocean and Systems Engineering – the first of its kind in the U.S. The research center is partnered with and receives support from organizations such as the National Science Foundation, the Office of Naval Research and the Naval Surface Warfare Center. Focus on jobs Now the State of Florida’s third-largest private notfor-profit university, Keiser was founded in 1977, with the intention of providing career-specific instruction to adults. The university has approximately 20,000 students and 3,800 employees throughout its network of 18 campuses in Florida, including the 100,000-square-foot main campus in Fort Lauderdale. While Keiser has 100 offerings at the associate, baccalaureate, master’s, specialist and doctoral levels, around 62 percent of the university’s graduates come from its STEM and healthcare programs, and the school now boasts more than 66,000 alumni. Every year Keiser creates an economic impact of more than $3 billion and directly or indirectly supports more than 30,000 jobs throughout Florida. www.capitalanalyticsassociates.com | 123
EDUCATION INTERVIEW
Community of leaders How Broward College is driving the local economy by producing skilled graduates
David Armstrong President– Broward College from hackers. IT is a huge industry in Broward County, and we work with IT companies to provide them with training. Healthcare is another big opportunity, especially in South Florida and Broward County. The college has a relatively new healthcare sciences simulation center with all of the latest technology. Part of the success of our healthcare programs is due to the partnerships with hospitals, as they contribute a lot of equipment. For example, Memorial Healthcare Systems purchased a brand new, high-end ambulance for us because it is training some of its staff to become paramedics.
What are the greatest educational needs in Broward County? One of the challenges is keeping pace with the needs of our community, and that starts with the needs of our students. Our students come to us from a wide range of academic backgrounds, and many of them are adults looking to improve their career prospects. We have to offer vocational programs, which often include training in new technologies that have disrupted the workplace. We want our students to get good, well-paid jobs, because that is going to help the quality of life in our community. Broward College constantly adapts its programs to address the changing needs of the workplace. For example, around two years ago we started a course in cybersecurity. There are a growing number of threats, and banks, governments and companies are all at risk 124 | Invest:
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How is technology changing the student experience? When we build a new building or renovate a classroom, we make sure that it has the latest in technology. We also make sure that we invest in professional development and training for faculty members so that they can use the technology. Broward College was recently awarded an openresource grant that allows us to offer more courses and other resources online, with student savings reaching upward of $4.2 million annually. We have increased the number of desktop computer services in our libraries, giving more students access to good IT infrastructure. All of our courses include some kind of an online aspect, providing connections to rich online communication tools and resources. Faculty members are increasingly using computers to interact with students outside of the classroom. Innovation in learning depends on the faculty, and we have created an innovation committee to facilitate this. Our staff need to learn how to use IT to effectively communicate and improve teaching, as well as understand technological applications in collaborative learning.
EDUCATION OVERVIEW
Public service Broward County Public Schools (BCPS) is the sixthlargest public education system in the nation, with more than 265,000 students enrolled at its 238 public schools and education centers and 99 additional charter schools. BCPS serves students hailing from almost every country in the world and speaking 130 language. The system’s award-winning virtual program provides instruction to more than 175,000 adult students and others continuing their education. After BCPS’ $800-million bond issuance was approved in 2014, the county is finally going to see upgrades to education infrastructure, with renovations scheduled to begin at 103 schools moving in 2018. The first schools scheduled for renovations are Eagle Point Elementary in Weston, Coconut Creek Elementary and Cypress Elementary in Pompano Beach. These schools are set to receive new roofs, air conditioning systems, fire safety improvements and other building upgrades. Looking ahead Nearly 30 percent of participants in the nationwide 2016 MyCollegeOptions program expressed an interest in pursuing STEM fields, according to findings of the Alliance for Science & Technology Research in America and the 2016 Florida STEM Report Card. In Florida, the number of participants interested in pursuing higher education in a STEM field was much greater, at 54.6 percent, suggesting that continued state support for programs that emphasize STEM education at the K-12 level could help leverage the strong underlying interest among Broward students. In 2017, BCPS received a $227,000 grant the Robotics Education & Competition (REC) Foundation and NASA. The grant will be administered over the next four years and will provide robotics materials and equipment as well as supporting teacher professional development for all schools in the district. Beginning in the 2017-2018 academic year, the resources will help supplement some of the STEM+Computer Science (STEM+C) opportunities currently offered at more than 50 BCPS schools, with additional schools to be added in subsequent years. Introducing students to STEM+C programs during the transition from middle school to high school is part of the foundation of the BCPS #BrowardCODES initiative to better develop the computer science component of BCPS education. The Broward County School Board also made headlines in July 2017, when it became the first to vote in favor of filing a lawsuit challenging the constitutionality of House Bill 7069 (HB 7069), which
Higher education institutions in Broward cover all levels, from vocational training and associates degrees to doctoral programs.
passed through the Florida legislature in June. The vote was unanimous, and Bay, Lee, St. Lucie and Volusia counties quickly joined Broward in challenging the new law, which opponents assert then gives preferential treatment to Florida’s charter schools. Meanwhile, BCPS could be forced to share an estimated $12 million from its budget for the 2017-2018 academic year with the privately managed charter schools, according to data from the Florida House of Representatives. With the passing of the 2017-2018 budget, lawmakers voted to increase funding for Florida’s 12 public universities by $232 million, while reducing funding for the 28 state colleges by $25 million. Broward College alone stands to lose at least $2.3 million in funding during the 2017-2018 fiscal year. Institutions of higher learning in Greater Fort Lauderdale have a continuously growing local population to serve, making the education sector all the more important in the years to come. Education services remain a valuable attractor for new investments and a key sector both for employing the current local workforce and strengthening the supply of skilled talent to fuel the Broward economy. www.capitalanalyticsassociates.com | 125
Dania Beach: Once a quiet farming town, Dania Beach has grown into an economically vibrant city. Today it remains a hub of the region’s robust marine industry, and its notable sports and entertainment offerings are of great interest to enthusiasts of both. Meanwhile, construction of the massive multiuse development Dania Pointe is progressing, bringing with it a new stream of residential and commercial opportunities.
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Life’s a beach: Once known as the antique capital of the South, Dania Beach now has much more to offer. It is a logistics base, has a growing IT sector and is a family-friendly tourist destination The City of Dania Beach is building upon its existing character and absorbing a hotbed of new development activity. Located in the heart of the tri-county area of Miami-Dade, Broward and Palm Beach, Dania Beach is adjacent to and just south of the Fort LauderdaleHollywood International Airport (FLL) and just west of Port Everglades. The city straddles the heavily traveled Interstate-95 corridor, providing unparalleled access to the major north-south highway and only a mile away from I-595, Broward’s major east-west highway. Dania Beach encompasses miles of ocean, beachfront and intracoastal properties to the east and stretches over 2 miles to the west. It is a significant center for the marine industry and other industrial and commercial properties, in addition to existing residential neighborhoods, many of which are located on water features such as the ocean, the intracoastal waterway and interior canals. Dania Beach is an important entertainment destination in South Florida with the newly renovated Casino @ Dania Beach. It will soon be home to Dania Pointe, a 2.5-million-square-foot mixed-use development to be built along I-95 on a 102-acre parcel 128 | Invest:
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of land. Dania Pointe will include shops, restaurants, entertainment venues, two hotels, corporate offices and more than 1,000 residential units. With abundant waterfront property and beautiful beaches, the city’s tourism industry is one of its primary economic drivers, as evidenced by the increase in hotel development, occupancy and visitor spending. Multifamily developments are springing up throughout the city, with an additional 3,000 units projected to be built within the next few years. Danish background Dania Beach was the first city incorporated in Broward County in 1904. It was originally a town made up of 12 Danish families. In 1898, the town was officially incorporated. The total of 35 residents were of Danish origin, giving rise to the name “Dania.” Dania Beach has grown into a city with a population of approximately 30,000. Major growth is expected over the next decade, with over 3,000 new residential units already approved for development. The name was officially changed to Dania Beach in 1998 to emphasize the beachfront on the eastern boundary of the city.
Downtown attractions Downtown Dania Beach is expanding along Dania Beach Boulevard and Federal Highway (U.S. 1). In 2107, the downtown area is home to 12 hotels, with construction of an additional four expected to be complete by the end of 2017 and the beginning of 2018. Arts and design have a strong commercial presence in Dania Beach, which was once known as the antique capital of the South. Dania Beach houses a unique Antique Row along U.S.-1 featuring art galleries and shops. Lucky breaks Anchoring the activity in the downtown area is the new Casino @ Dania Beach, which has recently been redeveloped and provides a year-round entertainment venue. As the newest casino in Broward, The Casino @ Dania Beach has 900 Las Vegas-style slot machines, a 24-table poker room and live Jai-Alai, an iconic squash-like game known as the fastest ballgame in the world because of the unique device players use to accelerate the ball. Dania Beach is also home to the 800,000-square-foot Design Center of the Americas (DCOTA). The center is transforming into a mixed-use development that includes high-end designers to the home furnishings trade, Class-A corporate offices and a new luxury LeMeridien hotel that is currently under construction. Over the next few years, DCOTA will have more than 1.2 million square feet of commercial uses. New developments The goal of the Oasis Project is to improve the physical quality of life for residents of the city’s existing neighborhoods. The main focuses of the project include beautifying the city, increasing property values and fostering neighborhood pride. The Oasis endeavor has been broken up into 14 separate projects, with each one focusing on a different area or street in the city. With 11 having already been completed, the city’s work will continue on projects 12 and 13 as of November 2017. New street signs, sidewalks and driveways will be incorporated as part of these projects. The deep blue The Ocean Park Beach beautification is another ongoing major ongoing initiative undertaken by the city. Split into three phases, the purpose of this project is to enhance and revitalize the Dania Beach Ocean Park by focusing on beach restoration, preservation, landscaping and beautification. Phase one of the project focused on the beautification of the Dania Beach Ocean Park and was completed in March 2017.
Tamara James Mayor, City of Dania Beach
As a native of Dania Beach, what do you hope to be the biggest accomplishments during your tenure as Mayor? One of my main priorities as mayor of Dania Beach is to rebrand the city. We want to transform it into a city in which anyone can be proud to work, live and thrive in, regardless of gender, sexual orientation, religion, classification or age. Some of the biggest challenges that we face in achieving these goals continue to be traffic and our pension obligation with the Broward Sheriff’s Office. We will continue working with the Broward Metropolitan Planning Organization to make sure that we are evolving along with the needs of the surrounding residential districts and businesses. As our tax base increases, we are making sure that we secure additional police and firefighters to sustain the growth in Dania Beachs. How does Dania Beach distinguish itself from other cities in the area? Dania Beach was the first city to be incorporated within Broward County and to this day remains a true gem. We are one of few cities in Florida that has a marina located directly on the beach. In addition to that, accessing and parking along our beach is convenient. We have a restaurant on the pier. The city is located at a perfect distance from Port Everglades and Fort LauderdaleHollywood International Airport, and that location is an advantage both from a quality of life perspective for residents as well as businesses considering operating here. How is the city ensuring that new economic development helps benefit all residents? Continuing to focus on generating new economic development means that we will be expanding our tax base. I hope that with all the ongoing and upcoming economic development in Dania Beach we will soon be able to lower our effective tax rates. This is a situation in which everyone wins. Additionally, the businesses that we are bringing into Dania Beach will be businesses that our residents will be able to enjoy. www.capitalanalyticsassociates.com | 129
DANIA BEACH OVERVIEW
Phase two will cost $4.9 million and focus on the beautification of Ocean Park, including a pedestrian beach walk, new parking areas and improved access. It is expected to be completed in 2018. Phase three is being planned with restaurants, a playground, a pavilion, a newly-renovated retail complex, a banquet hall and mixed-use education building at a total cost exceeding $20 million. It is estimated that the full program will be completed by 2024. The road ahead Preliminary plans are currently being studied by the Florida Department of Transportation (FDOT) to substantially improve the I-95 interchanges at Griffin and Stirling Roads, which serve as the main entrances to the city from the heavily traveled north-south interstate highway. Various other infrastructure improvements are under construction and planned. A significant improvement is in the process of being completed by the end of 2017. FDOT awarded approximately $5 million to replace the Ravenswood Road Bridge over the Dania cutoff canal. Construction began in November 2015. The project includes installation of new drainage and sewer lines, construction of a new bridge and reconstruction of Ravenswood Road. Other road improvements are planned and under construction throughout Dania Beach, including the award of approximately $1 million for roadway improvements on SW 30th Avenue, completed in summer 2017. The main purpose of the project was to widen the road to allow for greater traffic flow. Marine core The marine industry plays a vital role in the city. The Dania Beach Pier is a focal point for the beachfront and there is a 120-boat marina managed by Westec Marine,
The marine industry plays a huge role in supporting Broward’s small businesses, especially along the waterways of Dania Beach.
– one of the largest marine management companies in Florida. More than 300 marine-related companies are based in Dania Beach, which is also home to the Nova Southeastern University Oceanographic Center and Florida Atlantic University’s SeaTech Program. The $11.5-billion industry is an economic driver for the city because of the direct access to Port Everglades, the Intracoastal Waterway and the Atlantic Ocean. Dania also serves as an important center for marine research and technological innovation. The STAR Center located in the city on 10 acres of land is a not-
Roger Moore CEO – Nautical Ventures Group
We have an optimistic outlook for the local marine economy and the economic outlook for Dania Beach is quite strong. One of our future challenges will be finding qualified workers. The Marine Industries Association of South Florida has identified this as the number one problem facing the industry. Currently, the marine industry’s growth is outpacing the rate of mechanics, tradesmen and craftsmen graduating from technical schools.
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Paul Puma, Southern Regional President – Kimco Realty
for-profit division of the American Maritime Officers Union. More than 3,000 commercial vessel and cruise ship maritime officers are trained annually at this facility, including navigational and engine room officers. The STAR center is equipped with the most modern and advanced technology equipment and simulators in the entire U.S. Tourist spot The warm weather and the beach invariably are the main factors attracting tourism to Dania Beach. The close proximity to the airport and the cruise port are other significant factors attracting visitors to the city, with cruise ship passengers enjoying themselves for days both before and after their cruise travels. Tourism is a major economic force in Dania Beach with 10 percent of Broward’s total hotel capacity, or 2,200 rooms located in the city. This will increase in the immediate future with an additional 1,100 rooms already under construction or with site plan approved. By the end of 2017, there will be the completion of four new hotels. This addition, along with other planned and approved developments, should increase the number of rooms available in Dania to almost 3,500, which is expected to constitute approximately 15 to 18 percent of Broward’s total hotel room inventory. In
How does Dania Pointe fit into Kimco’s overall portfolio? Dania Pointe represents a large investment by the company and satisfies an important step in meeting our goal for portfolio growth in the dynamic South Florida market. In many ways, Dania Pointe marks a new direction for Kimco Realty as we meet the demands of the evolving shopping center by creating a sense of place for the surrounding community, where customers can shop, dine, live, work and be entertained. Florida is the third-fastest growing state in the U.S. It has been identified as a core market for Kimco Realty with the goal of growing our portfolio within key submarkets such as South Florida, including of course, Broward County. Kimco Realty currently owns and operates 32 shopping centers in South Florida. When the opportunity became available to purchase the 102 acres for the Dania Pointe project, we recognized the value of a new South Florida development and its strategic location along I-95. Working with the City of Dania Beach and Broward County on the Dania Pointe development has been a positive experience, and we are certain that it will continue to be as we move forward with the development process. How will the integration of technology help attract visitors to Dania Pointe? One of the benefits of developing 102 acres from the ground up is being able to plan the fiber optic infrastructure. This fiber optic infrastructure will afford the residential and office developers the opportunity to build smart buildings for the benefit of their customers and operations. For the retail component, there will be interactive kiosks and digital screens that will keep visitors and residents informed of upcoming events. Efficient irrigation systems, smart parking decks for shopper convenience, project-wide Wifi connectivity and lighting management will also be made possible due to this investment in fiber optic infrastructure. www.capitalanalyticsassociates.com | 131
DANIA BEACH OVERVIEW
2015, average hotel occupancy reached 79 percent while total 2015 visitor expenditures amounted to $14.2 billion. Logistic base The trade and logistics support sector is a major employer in Dania Beach. The city is becoming an important destination for the tech industry with Magic Leap and Chewy, Inc., two major startup companies founded in Dania Beach. In fact, Chewy, the leading online retailer of pet food and supplies, is currently the largest employer in the city. The company increased its sales from $26 million in 2011 to almost $2 billion in 2017. Magic Leap has been one of the highest capitalized startups in the U.S. with more than $700 million of venture capital, including a major investment from Google. Chiquita Banana is also headquartered in Dania Beach. Chiquita, the world’s largest international banana and pineapple distributor, had annual revenues of $2 billion in 2016. Small wonders In the western area of the city, new logistics businesses and flex space and storage warehouses are flourishing, with additional headquarters buildings planned for smaller corporations attracted to the city. In July 2017, it was announced that the new startup, Plum, has raised $9 million of venture capital in late 2017. Plum, which has come up with an innovation to chill wine by the glass, is headquartered in Dania Beach. In addition to downtown businesses such as Staged Right Events and the Runway 75 Restaurant, there are dozens of small businesses operating on Federal Highway, along Stirling Road and in the western Tigertail Avenue sections of the city. Nautical Ventures, a full-service marine retailer, and Redline Media Group, a fullservice creative marketing agency, are only a few of the actively growing small businesses in the city.
New master planned developments are providing several years of demand for the local construction sector.
Robert Shapiro President – Master Development We envision Dania Pointe as being the beginning of a renaissance for Dania Beach. We are going to be raising the bar for other regional developers. People will be able to live, work, shop and dine at Dania Pointe while having an enjoyable experience. Dania Pointe is also going to be a smart town, mixed-use development, which will have major fiber optic infrastructure that will enable high-speed wireless connectivity and provide complete digital capability.
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DANIA BEACH OVERVIEW
Emerald Construction is a woman or minority-owned business headquartered and employing some 125 people in Dania Beach. The company has been operating for over a decade and specializes in hospitality, retail and mixed-use developments. Recent projects include the Royal University Plaza at Coral Springs, the Miami Arts Charter School in Wynwood, Miami and the Tropical Letter Carriers union mail center in Miramar. Smart mix Dania Beach is moving with the times and implementing smart city technology as part of Dania Pointe a 2.5-million-square-foot mixeduse community. Developed by Kimco Realty, Dania Pointe will be the newest attraction to the city with an approximately $1 billion mixed-use development on a 102 acres of land. Plans are approved and underway to build up to 900,000 square feet of retail space, 1,000 luxury rental and condominium multifamily apartment homes, 350 hotel rooms and 506,000 square feet of Class A office space. With its central location adjacent to I-95, just south of the airport, and west of the cruise port, Dania Pointe is likely to become a catalyst for additional growth in the area. With the 2.5-million-square-foot Dania Pointe, together with the adjacent 1.2-million-square-foot DCOTA, the area from Griffin Road to Stirling Road will effectively act as a sub-metropolitan business district in Greater Fort Lauderdale. With over 28 restaurants and entertainment uses planned, Dania Pointe has the potential to become the restaurant and entertainment capital of Broward County. Dania Pointe will feature smart technology throughout the development. It will be offering high-speed internet connectivity by installing an advanced fiber-optic technology infrastructure throughout all of the uses of the development. This will allow applications by
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DANIA BEACH OVERVIEW
Once centered on tomato farming, Dania Beach now draws large crowds to its many leisure and entertainment offerings.
smartphones and other smart devices to be used as keys to offices, apartments and hotels and allow digital control of lighting and air conditioning. Family friendly The recently completed multifamily complex, The Place at Dania Beach consists of 144 residential units and 8,000 square feet of commercial space for dining and retail. The city has also approved eight other
multifamily developments with more than 2,000 additional apartments, single-family homes and townhomes. At The Place at Dania Beach, rental rates start at approximately $2 per square foot. The project has many amenities for residents including a rooftop recreation facility, pool and fire-pit. It is the first completed multifamily project in the city. Trion is expected to be the next luxury, mixed-use multifamily rental property to be developed by
Dev Motwani President & CEO – Merrimac Ventures
The real estate market is healthy. There is a lot of supply that has been planned or being built right now across multiple product types because Broward has net positive migration. We are attracting new demographics such as foreign buyers and younger people, and interest rates are still low. We’re not immune to issues that might impact the global economy, but the fundamentals are solid.
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DANIA BEACH OVERVIEW
could generate about $400 million in net savings for FPL customers and reduce greenhouse gas emissions. This renewable innovation is planned to be in service by 2022. Help wanted Despite all of its accomplishments, Dania Beach faces a few areas requiring improvement. Affordable housing is a key issue, particularly to accommodate more young professionals joining the workforce in Dania Beach. In addition, workforce preparedness is another concern. With so many projects to take place to facilitate growth in Dania Beach, the city needs skilled construction workers. In addition, the city will need more companies trained in IT and administrative positions once all the new major projects start coming online. The city is attempting to address these issues with sponsored training programs and public-private partnerships at no cost to employees to help prepare for the new economy anticipated in the city. Like many other older cities in the U.S., issues exist to improve the overall utility infrastructure of Dania Beach. Plans are being considered to upgrade the water supply system. Storm drainage within the city also needs to be addressed, especially in light of climate change and the low ground elevations in the city. The city’s proximity to the ocean exacerbates normal wear and tear and requires constant improvement. Merrimac Ventures at the northeast corner of Federal Highway and Dania Beach Boulevard. The $70-million project will consist of 300 apartments, 16,000 square feet of retail and incorporate various luxury amenities including a fitness center, a dog park, co-working spaces, yoga and spinning rooms and an attractive pool deck. Construction plans are currently underway. Work is projected to start in 2018. Several other low-rise and mid-rise eight-story to 14-story multifamily apartments have already been approved and are expected to be built over the next three to five years, adding approximately 2,000 residential units to the city. In addition, a number of single-family home developments are currently in the pipeline for the eastern and western areas of the city, including several distinctive developments planned by Stellar Homes. Power play Florida Power and Light (FPL) has plans to upgrade its power generation facilities in Dania Beach. As a result of a major redevelopment of its existing plant, the FPL Dania Beach Clean Energy Center is scheduled to produce 1,200 megawatts of energy with 24/7 capacity, which
Looking ahead Dania Beach is renewing itself as an urban development hot spot. Multiple developments are underway to urbanize and diversify the city and substantially increase its tax base and other revenues. The invention and reinvention of commercial and entertainment venues and emphasis on mixed-use developments are beginning to attract newer and younger residents. The city’s central location within South Florida and its proximity immediately south of the airport, west of the cruise port, and its location along both sides of I-95 make it a desirable locale for residents and business owners alike. With the additional taxes to be obtained from new developments, the city will continue to grow and improve its existing neighborhoods and infrastructure to achieve its overall objectives. With an increasing emphasis on urbanization and diversification, the implementation of smart city technologies at Dania Pointe and expansion of other mixed-use sites such as DCOTA, the city commission is committed to facilitate the creation of a dynamic and vibrant renaissance to the city while maintaining and improving the city’s existing historic neighborhoods and charm. www.capitalanalyticsassociates.com | 135
Tourism, Culture & Sports: Greater Fort Lauderdale’s “Hello, Sunny” tourism marketing campaign is winning awards and visitors. Fort Lauderdale-International Airport continues to bring in travelers from new locations and is one of the fastest growing in the U.S., while Port Everglades remains one of the busiest cruise ports in the world. Investments in the area’s cultural institutions are pushing the profile of Greater Fort Lauderdale to a new level. The Florida Panthers look to heat things up with another run at the Stanley Cup.
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Everything under the sun: Greater Fort Lauderdale has plenty to offer tourists, with the secondlargest cruise port in the world and high-quality attractions. The area is making the most of trends such as Airbnb and luxury travel as the industry moves with the times Broward County has a sunny climate and pristine beaches, making it a prime international tourist destination, while Fort Lauderdale has an array of cultural attractions, high-end hotels and dining options. The local tourism and hotel markets have been growing, while the hospitality industry is meeting heightened demand for luxury experiences. The nearby Port Everglades is opening the area to an increasing number of domestic and international visitors. In an effort to support and promote all forms of tourism, the Greater Fort Lauderdale Convention & Visitors Bureau (GFLCVB) works hand-in-hand with the government, the private sector and the Visit Florida campaign. Sports also play an important role in Broward’s cultural landscape. The Sunrise-based Florida Panthers have shown progress since 2014, and are now going into their second season with a new head coach, new management and new players. This has revived 138 | Invest:
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excitement among loyal fans and drawn increased interest. Industry strength In 2016, the tourism industry supported 1.4 million jobs in Florida, with every 76 visitors sustaining one job. The same year, visitor spending amounted to $1.9 billion, compared to $1.3 billion the year prior. In 2014, Florida tourist destinations generated an economic impact of approximately $67 billion, and Broward made $11 billion in revenue from visitors. AAA Travel listed Greater Fort Lauderdale among its top-five American destinations in 2017, and the area has seen a 12 percent year-on-year increase in hotel room nights booked. With demand for luxury travel on the rise and millions of dollars being invested in hospitality infrastructure, the outlook for the industry is extremely positive going into 2018. Developments in transportation infrastructure ( )
TOURISM, CULTURE & SPORTS INTERVIEW
New opportunities How Greater Fort Lauderdale is drawing on new markets to attract a growing number of visitors
Stacey Ritter President– Greater Fort Lauderdale Convention & Visitors Bureau What have been the most recent changes in trends for the tourist industry? One of the trends we’re seeing is an increase in luxury travelers, mainly due to new luxury options in our destination, especially luxury hotels, dining and retail. Our featured luxury hotels now include the Ritz-Carlton, the W, a soon-to-open Conrad and a Four Seasons underway along Fort Lauderdale Beach. These top-shelf brands attract higher-net-worth visitors with more discretionary spending. Greater Fort Lauderdale has also been increasing the size of our international visitor market, largely due to more nonstop flights by major carriers that are opening the world to us. The international market enjoys our shopping, dining and laid-back quality. They also feel safe along our sunny shores. It’s exciting to see and hear people from nations who have never previously visited. We’ve had a great response from new, existing and emerging areas. What have been the impacts of the Airbnb tourist tax decision? The Airbnb agreement with Broward County is very positive for the Greater Fort Lauderdale Conventions & Visitors Bureau (GFLCVB). Broward collected nearly $200,000 in tourist development taxes in April 2017, and it is expected to collect a minimum of $1 million in years going forward. We believe that the statistics showing a decline in occupancy may not indicate a reduction in visitors, and may simply mean that people are utilizing other forms of accommodation. The hotel industry realizes that it needs to be flexible about the sharing economy, and that there will be people who prefer traditional accommodation, while others prefer new ways to stay when they travel. It’s a matter of marketing, messaging, sales and customer targeting for hotels to reach the right customer.
How is the GFLCVB helping small businesses make the most of tourism? Every tourism and hospitality entity in Broward is covered under the marketing umbrella of the GFLCVB. When visitors come here, they might stay in a large corporate hotel, but they also eat at pubs, coffee shops and restaurants. They have opportunities to shop at our megamalls and in small boutiques and visit attractions owned by smaller businesses. Moving forward, we want to tap into special-interest audiences for meetings and conventions. We’ve already had success in attracting multicultural events, and we see tremendous potential for more LGBTQ conferences. We have a dedicated department and a director of LGBTQ marketing focused on approaching big players to bring their conferences here. www.capitalanalyticsassociates.com | 139
Lisa Lutoff-Perlo President & CEO, Celebrity Cruises
What impact will Celebrity’s new Edge ship have on Fort Lauderdale’s cruise industry? The Celebrity Edge will be coming to Fort Lauderdale in December 2018, and we are grateful to the team of many constituents working to upgrade Terminal 25 at Port Everglades in preparation. There is a lot to be done before then, but the city and port leadership have been amazing in their support for the upgrade. Being able to launch the Edge in its first season from Port Everglades was a mutual vote of confidence for Celebrity and Broward County, and we are excited to be able to show off Port Everglades to all of our guests. Port Everglades is a wonderful place, being so close to the airport. Fort Lauderdale is a great city and guests love to visit, so we are optimistic. This will be good for Broward County, the hotel industry, the restaurant industry and Port Everglades. The county commission has done a great job of increasing not only our competitiveness compared to Port Miami, but also the competitiveness of the port on an international level. How are the increasing numbers of tourists and incoming residents driving demand for luxury cruises? Many of the properties in South Florida that have been recently developed, and those currently in progress, are in the luxury segment. There are a lot of boutique properties and high-end hotel chains going up, and that is because of how successfully South Florida is attracting affluent businesses and travelers. The weather is great year-round, the restaurants are wonderful and the culture is unique. All of these things play a role in attracting so many people here. When people take a cruise vacation they are usually going to come to South Florida, and they often extend their stay either before or after their cruise. Now we are filling a demand in South Florida that already exists. What is wonderful about being able to run Celebrity cruises year-round to the Caribbean and beyond is that for the first time since 2010 there will be an offering for the modern, affluent luxury traveler in South Florida. 140 | Invest:
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Major investments in the Broward Center for the Performing Arts have helped bring award-winning acts to Fort Lauderdale.
( ) have also boosted tourism. Fort LauderdaleHollywood International Airport (FLL) has added a new passenger facility in Terminal 1, which houses Southwest Airlines. The $200-million Concourse A will support a host of new international flights and is just one element of an ongoing expansion worth $333 million. The addition of the concourse will almost double the number of international gates at FLL, from 6 to 11, and this figure will reach 18 by the completion of the expansion in late 2018. Such developments at the airport are expected to increase tourism significantly, with India targeted as a key market for international arrivals. Emirates airline recently began operations in FLL, and it sells 60 percent of its seats to Indian travelers. While the outlook is positive, Greater Fort Lauderdale’s tourism industry has issues to address. In 2016 and 2017, the Zika virus posed a serious threat, with 206 cases recorded in the county as of September 2017, according to the Miami Herald. However, area authorities have been proactive in their response, which has included county-wide spraying
TOURISM, CULTURE & SPORTS OVERVIEW
opened fire near the baggage claim in Terminal 2. Five people were killed and approximately 40 injured in the incident. The airport was closed for the rest of the day, interrupting the trips of approximately 10,000 travelers, but was able to resume service the following day. In August 2017, the county’s aviation department released a comprehensive report describing conditions at the airport leading up to the incident, as well as the shooting itself. It then detailed a scheme to improve emergency planning and operations, training and exercises, resourcing, incident command and countywide preparedness.
of insecticide that targets mosquitos and efforts to inform residents and tourists about the virus. In June 2017, the GFLCVB held a workshop to prepare local leaders in the hotel and tourism industries about the threats Zika and hurricanes may pose. A particularly difficult period surrounded a shooting at FLL. On January 6, 2017, Esteban Santiago-Ruiz
Strong markets The hotel industry in Greater Fort Lauderdale is displaying overall positive growth. In July 2017, area hotels had an average occupancy rate of 80.4 percent, compared to 79.2 percent the previous year. The average daily rate for hotel rooms rose from $114.72 in 2016 to $115.40 in 2017, while revenue per room increased by 2.1 percent to $92.76. An increasing number of travelers seeking highend vacations are coming to Fort Lauderdale, and innovative luxury hotels are being opened, including the Tryp Maritime by Wyndham, the Starwood Hotel, the Plunge Beach Hotel and the Conrad Fort Lauderdale. The 150-room, $23-million Tryp Maritime opened its doors in March 2017, while the Starwood Hotel is expected to open in spring 2018. With 323 rooms, it will provide the city’s first high-rise rooftop bar, as well as a sky lobby, a pool deck, a secret garden and 12,000 square feet of meeting and ballroom space, among other amenities. The 163-room Plunge Beach Hotel opened in February 2017 and features among its perks a beach bar and direct beach access for each bungalow. The Conrad Fort Lauderdale luxury condo hotel is expected to open in fall 2017. ( )
Edie Rodriguez CEO & President– Crystal Cruises
I am very bullish about the cruise industry. Port Everglades has done a fantastic job of upgrading its facilities in recent years, and I still see more potential for additional berths to accommodate growing interest in the port. We find it ideal to be in the South Florida market seasonally, located in one of the cruise capitals of the world. As we plan our global itineraries, we will continue to plan voyages out of this market moving forward.
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TOURISM, CULTURE & SPORTS INTERVIEW
Heating up on the ice How the Florida Panthers put Broward County on the map in the professional sports world
Matthew Caldwell President & CEO –Florida Panthers Overall, the outlook for professional sports remains very positive. Online viewing platforms are completely disrupting the television broadcasting market, and live sports are becoming one of the few programs still primarily watched on television.
How has the team fared since changing ownership, and what is your outlook for professional sports in South Florida? The team came under its current ownership three and a half years ago, and the franchise is now in a much better place. We have great young talent in place for the long term, and there is growing excitement surrounding the team. Our season tickets have almost tripled under the new ownership, and our corporate sponsors have increased by around 30 percent during the same period. There has been fantastic support from fans, corporate partners and local businesses. All of the other local professional teams have Miami in their name, so the Panthers are very much Broward’s team. Probably 85-90 percent of our fans come from Broward and Palm Beach counties. 142 | Invest:
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What are some ways that you are growing your fan base? One of the challenges for sports teams in South Florida is the number of residents who are not originally from the area. A key component of a sports franchise’s success is forming an emotional attachment between the team and its fan base, and that can be difficult with so many locals having only recently moved here. Our core demographic is very family oriented, so supporting youth hockey is a really important initiative for us. We have a practice facility in Coral Springs where our Junior Panthers play, and we are creating a strategic alliance between all six of the local ice rinks through which we’re providing resources and equipment and arranging for visits with players from the Panthers. What role do the Panthers play in the economic and social fabric of Broward? We are located in Broward and the county itself owns the building, so it’s very important to them that we do well here. In addition to growing the Florida Panthers, we want to generate business growth in the area. The hockey team is still the largest revenue driver, but the many marquee concerts here are also an important component of the arena’s operation. We feature around 15 international touring acts every year, and Bruno Mars and John Mayer will both be playing at the BB&T Center in the fall. We’re also part of Oakview Group, a newly formed alliance of 20 arenas across North America, which will help in bringing even more world-class entertainment offerings to Broward.
TOURISM, CULTURE & SPORTS OVERVIEW
The Florida Panthers are stocked up on young talent and fan enthusiasm.
( ) Other newcomers include the Hyde Resort, the Wyndham Garden Hotel and the Aloft Weston. Scheduled to open late in the year, the Wyndham Garden Hotel has 142 rooms and an overall worth of $21 million. The Hyde Resort opened in January, with 362 suites, while the 136-room Aloft Weston is expected to open in April 2018. Existing hotels are expanding and upgrading to remain competitive and cater to new types of travelers. The W Fort Lauderdale recently underwent a $55-million renovation that added 430 rooms and suites. A new 4,000-square-foot ballroom was also added, as well as a Stephen Starr restaurant with ocean-view dining. The project was completed in early 2017. “Bahia Mar is a high-occupancy hotel even when we have all of our rooms in inventory, but the hotel is currently undergoing a major renovation. As a result, there has been a temporary reduction in our inventory, and we have been full nearly every night in 2017,” Bill Cunningham, general manager of Bahia Mar, told . The historic Escape Hotel and surrounding property are being transformed into the 96-room Gale Boutique Hotel & Residences. Set to open in late 2017, it will offer luxury amenities such as a rooftop sky deck, as well
as sleek decor. The project is estimated to cost $120 million. Le Meridien Dania Beach, located minutes from FLL, is undergoing a $30-million renovation and conversion, adding 245 guest rooms, 20,000 square feet of flexible meeting space and two redesigned restaurants. The project is expected to be completed in fall 2017. The area’s most eye-catching change in accommodation will occur at the Seminole Hard Rock Hotel & Casino, which plans to construct a $1.8-billion guitar-shaped tower. After completion, the tower will add 800 rooms, bringing the hotel’s total to 1,300 rooms. The expansion will also include approximately 50,000 square feet of space for dining and entertainment, and is scheduled for completion in late 2019. Place to stay In 2017, Fort Lauderdale approved regulations to clarify tax levies on Airbnb properties. Of the 16,100 Floridian homes posted on Airbnb in 2016, 49 percent were located in the Miami-Fort Lauderdale metropolitan statistical area. The previous year, Airbnb hosts in South Florida earned an annual average of $8,740. While Airbnb is used by fewer than 1 percent of www.capitalanalyticsassociates.com | 143
Kelley Shanley President & CEO, Broward Center for the Performing Arts
What local partnerships does the Broward Center for the Performing Arts (BCPA) have? The BCPA partners with a wide range of organizations to use the arts to achieve broader community goals. These partners range from cultural groups to business and economic development agencies, local and binational chambers of commerce, corporate sponsors, hotels and restaurants, civic organizations and many other nonprofits. We’ve always had a strong partnership with Broward County Public Schools, which has allowed us to use the arts to advance learning. We have served more than 3 million students through this partnership. Beyond that, we now offer many of those same programs to private schools. We also have a strong community education component. Three years ago, we built the Rose Miniaci Arts Education Center, which offers classes to schools and the general public. The classes are open to children and adults, and we’ve already seen six consecutive semesters of growth. Our arts program has given many local groups the chance to perform here while receiving guidance and technical support from the center’s staff. Most performers and musicians come from the area and are helping build the regional theater community. Many people in South Florida consider us to be the home of touring Broadway. With many renovations underway, how do you see the BCPA growing in the future? Broward County has the ability to expand and move along with whatever influences enter the marketplace. With the center’s renovation, we essentially wanted to increase our capacity to do great things through the arts. We’ve done that with the addition of the Rose Miniaci Arts Education Center and by expanding some of our other facilities. Our focus is on creating and increasing participation. We want to connect artists with audiences and create a memorable experience. We want a child’s first visit to the theater to be a positive one that leaves a lasting impression. 144 | Invest:
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Florida tourists, the company has fallen under recent scrutiny. In April 2017, Fort Lauderdale eased licensing regulations for short-term rental owners, slashing application fees from $750 to $350, in order to facilitate compliance and encourage the provision of accommodation. In April 2017, Airbnb came to an agreement with the county and began collecting tax on its area rentals. With the agreement entering into effect in May, the first month of taxes Airbnb paid to the county came to $191,000. Officials estimate that the deal could be worth some $1 million in revenue per year. The word is out “Hello, Sunny” was named the best branding and integrated marketing campaign by the U.S. Travel Association for the second consecutive year in 2016. The GFLCVB brought the appeal of Broward’s sundrenched beaches and year-round warm weather to the streets of Chicago and Boston during cold winter months, reinforcing the county’s efforts to attract winter-weary domestic visitors from the Northeast and Midwest. In December 2016, the GFLCVB launched Hello Sunny TV, a 24/7 digital network that streams live coverage of marquee events throughout the county and features on-demand videos advertising the area’s entertainment, arts and culture, sports and culinary offerings. With the network, the bureau is hoping to target younger and more tech-savvy demographics by offering it on a custom app, as well as on Apple TV. Greater Fort Lauderdale is making strides in highlighting its openness and multiculturalism, with the aim of drawing from key tourism markets. In one effort, the GFLCVB featured transgender models in a 2017 TV advertisement celebrating the new year. According to the bureau’s LGBTQ Market Managing Director Richard Gray, approximately 1.5 million LGBTQ travelers visit Greater Fort Lauderdale every year, with total spending of around $1.5 billion. The county’s expenditure on advertising aimed at LGBTQ visitors reached $8.5 million in 2017. Ship shape Port Everglades is home to two of the largest cruise ships in the world, Allure of the Seas and Harmony of the Seas, which are 5,400-passenger Oasis Class ships. Port Everglades has the second-largest cruise port in the world and the highest number of cruise ships homeported. Eleven cruise lines, with a collective 40 ships between them, use the port for operations. In 2016 it was named “Best Domestic Port” by Porthole
TOURISM, CULTURE & SPORTS OVERVIEW
Cruise magazine and “Best Turnaround Homeport” by Cruise Insight. Approximately 3.8 million travelers passed through the port in 2016, ranking it third in the world for multiday total passengers. The same year, the cruise industry accounted for 34 percent of the port’s $135 million total operating revenue, the largest share of any sector at the port. Cruise-derived revenue also increased from approximately $52 million in 2015 to $55 million in 2016, a rise of 6 percent. Each year, Port Everglades generates some $29.9 billion in total economic activity and $829 million in state and local taxes. It creates 12,840 jobs in Broward and a collective 226,553 jobs throughout Florida, generating $8.9 billion in total wages. In 2016, Port Everglades signed a contract with Carnival, the world’s largest leisure travel company, to extend their contract through 2030, while Costa Cruises
returned to the port after a four-year break. Cruise offerings were further expanded by a memorandum of understanding with Royal Caribbean that included the complete renovation of Terminal 25. This is expected to cost more than $100 million and be completed by October 2018. Other projects are underway at the port through 2017 and beyond. The Slip 2 extension is an $18-million endeavor slated for completion by the end of the year, while parking is being expanded and roadways improved at the port’s second and fourth terminals. These upgrades will facilitate the $50-million expansion of The Greater Fort Lauderdale / Broward County Convention Center, which is scheduled for completion by 2019.
Each year, Port Everglades generates $29.9 billion in total economic activity and $829 million in taxes.
Cultural center Greater Fort Lauderdale offers a variety of options in the arts and culture arena, and these pursuits increasingly
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contribute to the local economy. In Broward, 11,078 fulltime jobs were supported by the arts and culture industry in 2015. That same year, the industry generated $414 million in economic impact, almost double the $230 million it generated in 2010. A majority of non-resident tourists primarily visit to attend arts and cultural events, and they spend an average of 66 percent more than local tourists during their stays. The area’s offerings are diverse. The Riverwalk Arts and Entertainment District is located along the New River in downtown Fort Lauderdale and is home to the Broward Center for the Performing Arts, the Florida Grand Opera, the Fort Lauderdale History Center and the NSU Art Museum Fort Lauderdale. Also located in the district are two historic homes that have become museums: Bonnet House and Stranahan House, the latter of which is the oldest surviving building in Broward. The district caters to a variety of artistic and cultural tastes, offering dining as well as museums, theatre, opera and ballet. The economic benefits of these pursuits are easy to quantify. The Broward Center for the Performing Arts alone generates more than $90 million for the county each year. Among Broward’s top-10 most frequently attended theatres, the center hosts over 600 events and 700,000 visitors annually. In 2017, it presented speakers such as Hillary Clinton, performances by musicians such as David Gray and hit shows, including “The Sound of Music,” “Julius Caesar” and “Fancy Nancy – the Musical.” The Art and Culture Center of Hollywood is another performance space that supports a diverse program in Broward, featuring contemporary gallery exhibitions, shows at the center’s 500-seat theatre and community education events. Returning to Fort Lauderdale, the Flagler Arts and Technology Village Urban Arts District, better known as the FATVillage Arts District, is a four-block area that houses a number of galleries and small creative businesses. The neighborhood provides programs for up-and-coming artists, as well as various platforms for exposure. FATVillage hosts numerous events every year, bringing thousands of art lovers to the area. Meanwhile, some of Broward’s major educational attractions include the Museum of Discovery and Science, the Coral Springs Museum of Art and the Young at Art Museum. The Museum of Discovery and Science has approximately 450,000 visitors per year, generating $6.7 million in revenue. It also contained $4.2 million in assets as of 2010. The Coral Springs Museum of Art brings in approximately 200,000 people annually, while the Young at Art Museum attracts 300,000. 146 | Invest:
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The visual arts are on the rise in Greater Fort Lauderdale thanks to increasing community engagement and world-class exhibitions.
The main event Festivals and entertainment events abound in Broward County. Those with the highest profiles include the Fort Lauderdale International Boat Show, the Hard Rock Winterfest Boat Parade, the Tortuga Music Festival and the Fort Lauderdale Air Show. Broward’s largest and most well-known event, the Ft. Lauderdale International Boat Show show attracted approximately 100,000 visitors and generated $857 million for the Florida economy in 2016. Non-local visitor spending amounted to $29.6 million, with an average expenditure of $208 per day for these travelers. In December, several days of events lead up to the Winterfest Boat Parade, in which yachts cruise through Fort Lauderdale’s waterways — a program that contributes significantly to local tourism. “Two of the major engines of Broward County’s economy are tourism and the marine industry, and the impact of Winterfest, at more than $51 million, drives both. We are the perfect vehicle to promote anything related to the boating industry, and our partnership with the
Bonnie Clearwater Director & Chief Curator, NSU Art Museum Fort Lauderdale
Marine Industries Association of South Florida and Show Management are vital for Winterfest,” Lisa ScottFounds, president and CEO of Winterfest, told . In 2017, the Tortuga Music Festival broke a record by attracting approximately 100,000 domestic and international travelers. The Fort Lauderdale Air Show generates approximately $5 million for the state and brings in hundreds of thousands of spectators every year. Local attractions The City of Miramar opened a new amphitheater on 4.1 acres in July 2017 with an Independence Day concert. The $7.4-million venue entered planning stages in 2013 and, finally complete, it will host events including the Latin Music Festival and Funkfest. In the continually transforming downtown Hollywood is ArtsPark at Young Circle a 10-acre circle named after the city’s founder. The park’s redevelopment was funded by the City of Hollywood with additional support from the Broward County Board of County Commissioners. The complex
How does your relationship with Nova Southeastern University (NSU) support the museum? NSU plays a very important role in the area, and we became a part of it in 2008. It is an institution that fosters cross-disciplinary studies and research, so the art museum is an obvious place for this kind of pursuit. Now, as the NSU Art Museum Fort Lauderdale, we are in a great position to lead the community as a center of research and scholarship. Through our relationship with the rest of the university, we are able to access faculty who present talks that can augment the subjects being exhibited. We also produce an education program for 5 to 12-year-olds called Mini Muse. It actually became so popular that these children’s younger siblings started coming, so we eventually created the Micro Mini Muse program. In both cases, the children participate in an art class, then go on a tour tailored for each age group. For older children we initiated Museum on the Move, a program to bring sixth-grade students from Broward County Public Schools into the museum. How does the museum contribute to the cultural fabric of Greater Fort Lauderdale? My goal is to make Fort Lauderdale the center of the South Florida art coast. Museums sometimes end up falling into a cycle of perpetuating the stratification of society as a result of exclusivity and the support structures necessary to fund cultural institutions. Our openings here pull from a wide demographic range, which is in line with the mission of this institution. We are determined to keep everybody as together as possible. We launched a program in 2017 called Inside the Artist’s Studio, which is a way for us to help connect the general public with the artistic process and better understand how our local artists live and what they do. The approach we are taking is based on the idea of building an informed, engaged and inclusive community in Greater Fort Lauderdale that intersects with the entire world. www.capitalanalyticsassociates.com 147 www.capitalanalyticsassociates.com|| 147
TOURISM, CULTURE & SPORTS OVERVIEW
Millions of tourists visit Broward each year to enjoy its renowned beaches.
features an amphitheater with a 60-by-40-foot main stage equipped with a full light and sound production system and lawn seating for 2,500 guests. Further north, Pompano Beach celebrated the inauguration of the Pompano Beach Cultural Center in May 2017. The $19.8-million facility plays host to 11 artistic companies and features a 400-person main performance hall, while later in 2017 the 47,000-square-foot facility will also house a branch of the Broward County Library. Good sport Broward’s professional hockey team, the Florida Panthers, is located in Sunrise and now owned by Vincent Viola, who purchased the franchise in September 2013 for $250 million. At the time, the team was troubled, which some commentators attributed to decreasing interest from both fans and players. Annual attendance dropped from 16,992 in the 2012 season to 14,177 in 2013. However, the new leadership is slowly bringing the Panthers back on track. Season tickets have almost tripled since Viola took over, and corporate sponsorship has grown by approximately 30 percent since 2013. 148 | Invest:
reater Fort Lauderdale / TOURISM, CULTURE & SPORTS G | Broward County 2018
The Panthers had a record 2015-2016 season, with a run in the playoffs. Moreover, the team set a franchise record with a 12-game winning streak. However, the 2016-2017 season was not as successful, and the team finished with a 35-36-11 record, compared to the 41-3110 league average. In 2015, the Panthers received approval for an extended lease with the BB&T Center. The county commission granted the team $86 million to finalize the deal, which increased public investment in the team to $342 million. The Panthers directly create job opportunities, employing 200 full-time and 600 parttime employees. Meanwhile, Greater Fort Lauderdale’s Gulfstream Park in Hallandale Beach is home to world-class horse racing, as well as a rich offering of restaurants, retail, casino games and other entertainment. The track features a $30-million bronze statue of the mythical winged horse Pegasus standing atop a defeated dragon. At a height of 110 feet, it is the largest equine statue in the world and a popular local feature. In January 2017, the park hosted the first-ever Pegasus World Cup Invitational, which boasted the highest prize purse of any thoroughbred race, at $12 million. The world’s highest-stakes horse racing event will return for a second year at Gulfstream Park in 2018, with a winning purse of $16 million. Including all of the park’s championship horse racing events, Gulfstream’s 2017 to 2018 championship series set a record, with a $28.6-million collective schedule. Serious racing enthusiasts will find few destinations with more appeal. Looking ahead With its sunny beaches and artistic flair, Greater Fort Lauderdale is an easy sell to domestic and international tourists alike. Tourism in Broward has gained momentum against the county’s southern neighbor, Miami-Dade. Boasting higher visitor numbers and increased spending, the industry in Fort Lauderdale is following a trend of growth that should continue in coming years. With an increasing number of cruises departing from Port Everglades, it will maintain its position as an economic driver of the local tourism industry and the county as a whole. While the Panthers’ draw is less evident than those of the beaches and cultural offerings, the team is a staple of the entertainment and tourism landscape in Broward. Changes in management are expected to improve teamwork and encourage more enthusiasm among fans. Meanwhile, all of these factors will contribute to increasing the county’s fan base for years to come.