Invest: Greater Fort Lauderdale 2020

Greater Fort Lauderdale 2020 An in-depth review of the key issues facing Broward County’s economy, featuring the exclusive insights of prominent industry leaders

$159.00 ISBN 978-0-9988966-1-8

59999>

9 780998 896618

Contents: 35 Interview: Michael Weymouth, President, The Las Olas Company 37 Interview: Patricia Will, CEO & Founder, Belmont Village Senior Living 40 Roundtable: Trending now; Dionna Hall, CEO, Broward, Palm Beaches & St. Lucie Realtors; Jonathan Keith, Broward President, Miami Association of Realtors (MIAMIRE); David Martin, President, Terra; Gregory West, CEO, ZOM Living

42 Interview: Ryan Kratz, President, Southeast Region | US Brokerage, Colliers International

44 Interview: Rocco Ferrera, CIO, Stiles Corporation

7 Economy:

49 Constuction & Infrastructure:

8 Economy in numbers

10 Regional champion: A multicultural bridge between the United States, Latin America and Europe, Broward County is uniquely positioned for growth

12 Interview: Bob Swindell, President & CEO, Greater Fort Lauderdale Alliance

51 Interview: Brad Meltzer, President, Plaza Construction

13 Interview: Sandy-Michael McDonald, Director, Broward County Office of Economic and Small Business Development

53 Interview: Alberto Fernandez, President, ANF Group

14 Market voices: Mayors’ corner 16 Roundtable: Key attraction Bill Ganz, Mayor, City of Deerfield Beach; Josh Levy, Mayor, City of Hollywood; Ken Thurston, Mayor, City of Lauderhill; Dean Trantalis, Mayor, City of Fort Lauderdale

54 Roundtable: Why Broward?; Doron Broman, Managing Partner, Moderno Development Group; Jeff Burns, Founder & CEO, Affiliated Development; Alan Hooper, Co-Founder, Urban Street Development; Ryan Shear, Managing Partner, Property Markets Group

22 Interview: Colin Brown, Chairman, JM Family Enterprises 25 Adapt, evolve: Law firms in the Greater Fort Lauderdale region are adapting to a changing world with new practices and advanced tech

31 Real Estate: 32 Real Estate in numbers 34 Seller’s market: High demand in both the housing and commercial sectors is giving sellers the advantage in Broward’s real estate industry

50 Industrial strength: Builders and developers are confident the momentum of the past years will carry forward on the back of industrial demand

60 Risk factors: Sustainability, climate change are key considerations in infrastructure development

67 Tamarac:

68 Long-term vision: ‘The City for Your Life’ maintains a small-town feel while working to attract more businesses and a younger generation

69 Interview: Michelle Gomez, Mayor, City of Tamarac 73 Interview: Keith Koenig, CEO / Chairman, City Furniture / Broward Workshop

75 Banking & Finance: 76 Top 10 target: Broward County is focusing on the financial services sector as one of its key areas for growth 77 Interview: Jorge Gonzalez, President & CEO, City National Bank of Florida 78 Interview: Brian Kovack, President, Kovack Financial

80 Interview: Tansy Jefferies, Principal, International Tax Services, RSM US LLP

81 Interview: Hector Ponte, Southeast Florida Region Bank President, Wells Fargo

82 Roundtable: Era of change; David Druey, South Florida Regional President, Centennial Bank; Iwan Mohamed, President, BB&T - now Truist; James Ray, City President & Wholesale Banking Executive, Fifth Third Bank; Kevin Rogers, South Florida President, Seaside Bank

87 Marine & Logistics: 88 Anchor industry: The marine sector is anchored in the region, with Port Everglades the key to growth 89 Interview: Glenn Wiltshire, Acting Chief Executive & Port Director, Port Everglades Department of Broward County 90 Interview: Phil Purcell, CEO & President, Marine Industries Association of South Florida 91 Interview: Craig Mygatt, CEO, SeaLand 94 Interview: Daniel Thorogood, President & CEO, Seabulk

97 Transportation & Aviation:

98 On the move: Whether on the ground or in the sky, transportation challenges are a key priority

99 Interview: Mark Gale, CEO & Director of Aviation, Fort Lauderdale-Hollywood International Airport

105 Healthcare: 106 Mixed signals: Outpatient treatments on the rise across Broward County’s healthcare services

www.capitalanalyticsassociates.com

|5

CONTENTS

Contents: 107 Interview: Gino Santorio, President & CEO, Broward Health 108 Interview: Aurelio Fernandez, President & CEO, Memorial Healthcare System 112 Interview: Jared Smith, CEO, Broward Health Coral Springs 113 Interview: Manny Llano, CEO, Fort Lauderdale Behavioral Health Center 114 Roundtable: Wellness approach; Leah Carpenter, CEO, Memorial Hospital West; Caitlin Beck Stella, CEO, Joe DiMaggio Children’s Hospital; Jeffrey Welch, CEO, Florida Medical Center; Douglas Zaren, CEO, Memorial Regional Hospital South

Greater Fort Lauderdale 2020

130 Roundtable: Artistic flare; Bonnie Clearwater, Director & Chief Curator, NSU Art Museum Fort Lauderdale; Joseph Cox, President & CEO, Museum of Discovery and Science; Susan Danis, General Director & CEO, Florida Grand Opera; Kelley Shanley, President & CEO, Broward Center for the Performing Arts

ISBN 978-0-9988966-1-8

133 Interview: Tim Petrillo, CoFounder & CEO, The Restaurant People

Writers: Sean O’Toole; Sara Warden

136 Interview: Lisa Scott-Founds, President & CEO, Winterfest

President: Abby Melone Chief Financial Officer: Albert Lindenberg Regional Director: Jack Miller Senior Editor: Mario Di Simine Art Director: Nuno Caldeira Executive Director: Yulia Yurevich-Paranchuk Content Manager: Max Crampton-Thomas

Contributing Writers: Yolanda Rivas, Felipe Rivas Editor: Tomas Sarmiento Interns: Sabrina Bocaranda; Claudia Martínez Invest: Greater Fort Lauderdale 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 2020, 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.

117 Education: 118 Good grades: An emphasis on trades and workplace preparation are among the hallmarks of an improving system 119 Interview: Gregory Haile, President, Broward College 120 Interview: Harry Moon, EVP & COO, Nova Southeastern University 123 Interview: Mason Jackson, President & CEO, CareerSource Broward

127 Tourism, Arts & Culture: 128 Sunny days: Greater Fort Lauderdale has evolved to make sure its hot tourism offer attracts more than just beachgoers 129 Interview: Heiko Dobrikow, General Manager, Riverside Hotel

Photo Credits: Contents: Pg. 5 – Walter Duke & Partners, Inc. Pg. 6 – Walter Duke & Partners, Inc. Economy: Pg. 7 – Walter Duke & Partners, Inc. Pg. 10 – Fort Lauderdale Downtown Development Authority Pg. 18 – Dania Beach Community Redevelopment Agency Pg. 21 – City of Hollywood Pg. 25 – City of Fort Lauderdale Real Estate: Pg. 31 – Stellar Communities, LLC; Metropica Pg. 34 – Stellar Communities, LLC Pg. 45 – Walter Duke & Partners, Inc. Construction & Infrastructure: Pg. 49 – Walter Duke & Partners, Inc.; JM Family Enterprises Pg. 50 – Miller Construction Pg. 56 – Walter Duke & Partners, Inc. Pg. 60 – HDR, Inc. Pg. 62 – City of Hollywood Pg. 64 – VCM Builders, Inc.

Tamarac: Pg. 67 – City of Tamarac Pg. 68 – City of Tamarac Pg. 70 – City of Tamarac Pg. 72 – City of Tamarac

Pg. 98 – Walter Duke & Partners, Inc.

Banking & Finance: Pg. 75 – Fort Lauderdale Downtown Development Authority; Seaside Bank Pg. 76 – Walter Duke & Partners, Inc. Pg. 78 – Valley Bank

Pg. 106 – Broward Health

Marine & Logistics: Pg. 87 – C ity of Fort Lauderdale; Port Everglades Department of Broward County Pg. 88 – Port Everglades Department of Broward County Pg. 92 – International Yacht Brokers Association Pg. 95 – Marine Industries Association of South Florida Transportation & Aviation: Pg. 97 – South Florida Regional Transportation Authority; Fort Lauderdale-Hollywood International Airport

6 | Invest: Greater Fort Lauderdale 2020 | CONTENTS

Healthcare: Pg. 105 – B roward Health Imperial Point; Florida Medical Center Pg. 110 – Broward Health Imperial Point Pg. 112 – Florida Medical Center Education: Pg. 117 – Nova Southeastern University; Broward College Pg. 118 – Nova Southeastern University Pg. 124 – Nova Southeastern University Tourism, Arts & Culture: Pg. 127 – W interfest; Nova Southeastern University Art Museum Pg. 128 – Altman Companies Pg. 133 – Seminole Hard Rock Hotel & Casino Pg. 135 – Nova Southeastern University Art Museum

Economy: Broward County is an economic powerhouse that shows no sign of slowing down. The county’s job creation, consumer confidence and disposable income are above the national and state averages, and it appears poised to weather any downturn given its three thriving sectors: marine commerce, tourism and global trade.

www.capitalanalyticsassociates.com

|7

Economy in numbers: National Population Rank: The Miami Metro Area is the eighth most populous in the country. Comparable to New York City, the Miami-Fort Lauderdale-West Palm Beach area has added over 500,000 residents since 2010. Its current growth rate is higher than the national average of 3.9%. Metro areas with room for outward expansion (Dallas, Houston, Atlanta) experienced higher growth rates than the “built-out� metros (New York City, Los Angeles, Chicago). Following these trends, the area can expect the growth rate to slow as its capacity to expand becomes more constrained.

Population Estimate July 1, 20161

Population Growth April 1, 2010 July 1, 2016

Growth Rate (%) April 1, 2010-July 1, 20161

Population Weighted Density 2010 (people per square mile)2

New York-Newark-Jersey City, NY-NJ-PA

20,153,634

586,224

3.0

31251.4

Los Angeles-Long Beach-Anaheim, CA

13,310,447

481,610

3.8

12113.9

Chicago-Naperville-Elgin, IL-IN-WI

9,512,999

51,894

0.6

8613.4

Metro Area

Dallas-Fort Worth-Arlington, TX

7,233,323

807,109

12.6

3909.3

Houston-The Woodlands-Sugar Land, TX

6,772,470

852,054

14.4

4109.6

Washington-Arlington-Alexandria, DC-VA-MD-WV

6,131,977

495,745

8.8

6388.1

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

6,070,500

105,157

1.8

7773.2

Miami-Fort Lauderdale-West Palm Beach, FL

6,066,387

501,752

9.0

7395.3

Atlanta-Sandy Springs-Roswell, GA

5,789,700

502,972

9.5

2173.0

Boston-Cambridge-Newton, MA-NH

4,794,447

242,045

All MSAs in U.S.

5.3

7980.1

3.9*

6320.8

* Calculated as an average for the 389 metropolitan statistical areas in 2016. Total overall growth for these MSAs was 5.4% (both figures include MSAs that experienced population decline).

1 Census Bureau - Table: PEPANNRES - 2016 Population Estimates; April 1, 2010 (Census Count) to July 1, 2016 (ACS 1-year estimate for 2016) 2 Census Bureau Core Based Statistical Area Report - Patterns of Metropolitan and Micropolitan Population Change: 2000-2010 Source: Broward County Government

Florida Rankings: Population Estimate July 1, 20161

Projected Population 20452

Growth Rate (%) 2010-2016

Projected Growth Rate (%) 2010-2045

Population Weighted Density 2010 (people per square mile)3

Miami-Fort Lauderdale-West Palm Beach, FL Metro Area; Florida

6,066,387

7,700,152

9.0

38.4

7,395

Tampa-St. PetersburgClearwater, FL Metro Area; Florida

3,032,171

4,004,176

8.9

43.9

3,323

Orlando-KissimmeeSanford, FL Metro Area; Florida

2,441,257

3,755,647

14.4

76.0

2,775

Jacksonville, FL Metro Area; Florida

1,477,587

2,078,869

9.8

54.5

2,159

788,457

1,073,381

12.3

52.8

2,390

Metro Area

North Port-SarasotaBradenton, FL Metro Area; Florida

2016 American Community Survey 1-Year Estimates, Table B01003 BEBR Population Projections by Age, Sex, Race, and Hispanic Origin for Florida and its Counties, 2020-2045, With Estimates for 2017 3 Census Bureau CBSA Report - Patterns of Metropolitan and Micropolitan Population Change: 2000-2010 1

2

The Miami-Fort Lauderdale-West Palm Beach area has twice the population of Tampa, the second-largest metro area in Florida. In contrast, its current and projected growth rate is slower than the other metro areas in Florida, which have more vacant land for expansion.

Source: Broward County Government

8 | Invest: Greater Fort Lauderdale 2020 | ECONOMY

Broward Business Profile:

Unemployment Rate (Oct 2018-Oct 2019) Broward County and US: Unemployment Rate in Broward County, FL Unemployment Rate

Fort Lauderdale

Broward

30,171

237,524

Manufacturer’s Shipments ($M)

$1,068.8

$7,160.8

Merchant Wholesaler Sales ($M)

$3,213.9

$31,411.6

Accomodation/Food Sales ($M)

$1,356.2

$4,209.1

3.2

Retail Sales ($M)

$4,715.7

$30,886.3

2.8

Retail Sales Per Capita

$25,869

$17,680

Total Number of Firms

4.6 4.4 4.2 4.0 Percent

Business Profile

3.8 3.6 3.4

3.0

2.6

Nov. 2018

Dec. 2018

Jan. 2019

Feb. 2019

jun.

2019

Jul. 2019

Aug. 2019

Sep. 2019

Oct. 2019

All-transactions House Price Index for Ft. Lauderdale-Pompano Beach, Sunrise, FL (MSAD)

Estimate of Median Household Income for Broward County, FL

S&P/Case-Shiller U.S. National Home Price Index

Median Household Income in the United States

7 6 5 4 3 2 1

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Q3 2019

Dollars, Current Dollars, 2018 CPI-U-RS Adjusted Dollars

Percent Change from year Ago of (Index 1995: Q1=100), Percent Change from Year Ago of (Index Jan 2000 = 100)

May. 2019

Median Household Income:

8

0

Apr. 2019

Source: U.S. Bureau of Labor Statistics

Source: Broward County Government

House Price Index QoQ % Change:

Mar. 2019

Real Median Household Income in Florida

64,000 62,000 60,000 58,000 56,000 54,000 52,000 50,000 48,000 46,000

2009

2010

2011

2012

2013

Source: S&P Dow Jones Indices LLC, S&P/CaseShiller U.S. National Home Price Index

YoY % change in CPU-I, Miami-Fort-LauderdaleWest Palm Beach (Oct 2016-Oct 2019):

2014

2015

2016

2017

2018

Source: U.S. Census Bureau

Bachelor Degree or Higher (Broward County vs Florida):

All items

Bachelor’s Degree or Higher (5-year estimate) in Broward County, FL

All items less food and energy

Bachelor’s Degree or Higher for Florida

5.0

35 30

4.0

Percent

Percent change

25 3.0

2.0

20 15 10

1.0

5 0.0 Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct ‘16 ‘17 ‘18 ‘19

Source:U.S. Bureau of Labor Statistics

0 2008

2010

2012

2014

2016

2018

Source: U.S. Census Bureau

www.capitalanalyticsassociates.com

|9

Regional champion: A multicultural bridge between the United States, Latin America and Europe, Broward County is uniquely positioned for growth As the United States enjoys its longest period of economic growth in history, regional champions like Broward County are standing out as the exemplary pillars of that growth. In Broward, high job creation, consumer confidence and disposable income are outstripping national and state averages, demonstrating the strength of the Greater Fort Lauderdale economy.

Even the threat of a national recession may have a lesser impact on the area than on the national stage.

History Broward County’s road to economic powerhouse ran through the county’s swampland that greeted the first settlers who arrived in the 1400s. Governor Napoleon Bonaparte Broward (1905-1909) established a drainage system that allowed the land to be used first for agriculture, and later urban settlements. The county soon saw the value of tourism and began to set up hotels in 1919, as well as focusing on dredging wetlands to create islands and beach communities. With a port opened in 1928 and an airport in 1929, Broward County was able to capitalize on its geography. To this day, marine commerce and tourism are the two most lucrative industries in the area.

10 | Invest: Greater Fort Lauderdale 2020 | ECONOMY

The county consists of 31 municipalities across 1,322 square miles, broken down into the urban centre and a large chunk of the Everglades Conservation Area. The I-95, the East Coast’s main highway that runs down from Maine in the Northeast to the southernmost tip of Florida, crosses directly through Fort Lauderdale.

The Fort Lauderdale-Hollywood International Airport averages about 350 departures per day and in 2018 served 35.9 million passengers.

But the jewel in the crown has to be Port Everglades, the third-busiest cruise port in the world with 3.8 million passengers in 2018. It is important not only for cruises but also for commercial activities, and is Florida’s No. 1 seaport in terms of income. With operating revenues of around $168 million in 2018, the port is self-sufficient and requires no tax dollars for its operations.

Demographic shifts As of 2019, 1,934,471 people live in Broward County, with an annual growth rate of 1.12% over 2018’s population, making it the second-most populous county in Florida.

In detail, the county is ethnically divided among white (61.6%), black or African American (28.4%), Asian (3.6%), people identifying with two or more races (3%),

ECONOMY OVERVIEW

Monica Cepero Deputy County Administrator – Broward County

We have established a regional public-private collaborative effort to educate our community, develop an action plan to address the impacts of sea level rise and climate change and also to implement solutions to make Broward a more sustainable and resilient community. In anticipation of all this, we have established a collaborative county-wide effort to take a look at land use permits and building codes. We have updated our comprehensive groundwater map and water supply models, so we can plan for any anticipated sea level rise and its impact on neighborhoods and our community’s drinking water supply. Additionally, the County is working to accelerate planning efforts to better position itself to be eligible to receive state and federal funding for necessary resiliency infrastructure investments.

American Indian or Alaskan native (0.03%), and native Hawaiian and other Pacific Islander (0.1%). The county is 51.32% female and 48.68% male, and has a median age of 40.1 years old among the entire population (male and female). Finally, 11.4% of residents have a graduate degree, 20.1% have a bachelor’s degree, 20.0% have some college education, 9.9% hold an associates degree, 27.2% are high-school graduates, and 11.4% did not complete high school.

As the county has swung from predominantly white in 2000 to a much broader mix today, the result is a significant impact on the area’s political structure. From 1948 to 1988, the county backed Republican gubernatorial candidates every year but one, but as the demographics slowly shifted, Democratic candidates have won the county by increasingly large margins.

Although Broward County is not a sanctuary city, in 2017 the County Commission approved a resolution declaring it an “inclusive county.” This was in direct conflict with the Trump administration’s immigration policy, and Broward came into the president’s crosshairs. In April, the president tweeted that the administration would be giving “strong considerations to placing Illegal Immigrants in Sanctuary Cities” as punishment for Democratic policies that failed to tightly regulate illegal immigration.

In May this year, South Florida officials announced they were making plans for an influx of illegal immigrants after they were alerted by the federal government that Broward County and Palm Beach would be sent 1,000 immigrants a month who had

been apprehended on the Mexico-U.S. border in El Paso, Texas, for illegal entry.

If the plan had gone ahead, the numbers would have placed enormous strain on the county’s budget. The federal government then outlined plans to include a question on citizenship in the 2020 Census. According to Democratic attorneys, this question was likely to lead to significant undercounts in the census, particularly in locations with high populations of non-citizens, meaning federal resources would not be accurately distributed. In June, the Supreme Court upheld that the question could not be included, a ruling with overwhelmingly positive implications for Broward County.

The estimated undercount if the question were to be included would involve an economic loss of $210 million in federal funding for the county. “We are very pleased with the outcome of the Supreme Court decision. Federal funding we receive based on the Census count is vital to our ability to support the wellbeing of everyone who resides in Broward County,” said Commissioner Nan H. Rich, chair of the county’s Complete Count Committee, in a statement issued by the county.

Economic performance Broward County’s internationalism means three industries in particular are able to thrive: marine commerce, tourism and global trade. This means the Broward County economy is not necessarily dependent on the economy of the United States, but it ( ) www.capitalanalyticsassociates.com

| 11

ECONOMY INTERVIEW

The right stuff Reinforcing an attractive investment environment and supporting companies is vital to sustainability

Bob Swindell President & CEO – Greater Fort Lauderdale Alliance How does Greater Fort Lauderdale view sustainability efforts related to the threat of sea level rise?

One of our partner organizations, Broward Workshop, hosted a scientist from Holland. The Dutch have been dealing with this issue for years, and if you look at their coastal cities, many are below sea level. Our limestone foundation is a little different from what they have in Holland and there are definite differences in geographic qualities, but they have been working to solve flooding issues for years. People in Broward County want to talk about solutions now because they understand that this is a real threat when they see high tides and king tides causing flooding. We really need to think about solutions and how we can work block by block to mitigate this threat. The reality is that it’s going to take more thought to identify the science that will build a system that truly works.

What challenges is Greater Fort Lauderdale facing?

One challenge we talk about frequently, and this is where publications like Invest: are a real asset, is encouraging investment in Greater Fort Lauderdale. This is not necessarily a problem right now because we still have investment dollars flowing into the area, but I think reinforcing that this community is a good investment destination is vital to our sustainability. As a region, we must be reinforcing and supporting what companies like Stiles are doing when they make a private investment in Fort Lauderdale to create office space inventory, which we can use to attract new companies to the area. Stiles is building the first new corporate commercial high-rise building in 10 years, The Main. That is a great example of creating additional inventory, and I believe that our job is to try to help fill that building.

12 | Invest: Greater Fort Lauderdale 2020 | ECONOMY

What’s is your near-term outlook for Greater Fort Lauderdale?

We conduct an annual poll of chief executives in the region and it came back very positive. South Florida tends to enter a downturn or recession a little bit after the rest of the country, and we tend to exit these situations quicker. A lot of that is due to international investment, and we do not see that slowing down this year. Based on the construction leasing rates that I’m seeing, the demand is there. With some of the federal tax law changes and what you can deduct for state income tax and state sales tax, there have been some additional opportunities created for the region through people seeking lower tax environments. We have branded our community for many years as providing a “Life. Less taxing.” Florida has been well-managed financially, we don’t have unfunded pension obligations and our state has a surplus every year. South Florida will continue to have another strong year.

( ) can be greatly affected by some policy decisions with a more nationalistic skew, namely immigration and trade policies implemented by the current administration.

Marine commerce in Fort Lauderdale accounts for an economic impact of $10.78 billion, with one annual event alone, the Fort Lauderdale International Boat Show, attracting investment of $650 million. Tourism is also a huge economic driver for the county, bringing in $14.2 billion in 2018 and attracting 15.4 million visitors. This industry creates 180,000 jobs in Broward County meaning that every 85 visitors support one job.

Trade and business development is another pillar of the economy, particularly for companies that want a platform to reach both the United States and Latin American markets, such as Microsoft Latin America and Galaxy Latin America. Other companies headquartered in Fort Lauderdale are AT&T, AutoNation, BankAtlantic, Citicorp, Citrix Systems, Hewlett-Packard, Motorola Latin America, Republic Industries, South African Airways, Spherion Corporation, SportsLine.com, and Voicestream Wireless. The area’s success has been recognized numerous times, including a No. 1 ranking for Miami-Fort Lauderdale on the Kauffman Index of Startup Activity for 2017.

In 2018, Broward County was second in Florida in terms of growth, with GDP climbing by $7.8 million, behind only Miami-Dade with $10.8 million. Total GDP in the Miami-Fort Lauderdale-West Palm Beach area in 2017 reached $345 billion, making it 12th nationally.

Public sector As of September 2019, Broward County has a taxable value of $177 billion, meaning these are the funds it is able to collect to provide services such as public safety, affordable housing and sanitation services. As well as attracting private sector funding, the County Commission outlined public sector priorities in a meeting to mark the beginning of the 2019 session in December. These priorities included substance abuse and mental health funding, affordable housing, criminal justice reform and a state beach management program.

Broward County has been one of the areas gripped by the opioid epidemic. Last year saw 1,642 opioid overdoses treated in ERs across Broward County.

In 2019, the federal government allocated almost $1 billion to fight the opioid crisis nationwide. Florida received $49.3 million, of which an estimated $7 million-$10 million was allocated to Broward County.

The Florida Department of Education also launched its budget proposal for the next fiscal year last month, with $100 million assigned to mental health spending up $25 million on current funding. ( )

Sandy-Michael McDonald Director Broward County Office of Economic and Small Business Development

What are the needs of small businesses in Broward County?

There is a need for more small businesses in Broward to get certified and participate in Broward County Procurement and the Small Business Program. One of the challenges to scaling up for a small business, like most businesses, is access to capital. To support labor issue and skills gaps, we are supporting initiatives that encourage trades and apprenticeship training. We are also working with the school district, community organizations and business partners to address ways to shrink the skills gap and give residents more career opportunities.

How can small businesses grow sustainably?

Businesses must pay attention to their operations and their opportunities. You cannot be a successful growing business in five years if you say, “I’m in the same place I was five years ago and I’m okay with it.” If that was by design, then this is a good business model for you, but if it was not, then as a business owner you need to do some assessing to figure out what’s stifling your growth. You need to begin to work on your business plan and forecast where you want to be in the next three to five years. That is why we have our entrepreneurship program and half-day workshops.

Both are designed to find out if a person has the commitment to become an entrepreneur and to make sure they are aware of all the areas to be considered when running a business.

What is on the horizon for your office?

We are getting ready to spread the word regarding the new Penny for Transportation Surtax and the small-business goal of 30% on all eligible subcontracting opportunities. New initiatives include an apprenticeship program throughout the county and expanding resources for Entrepreneurs in our Kauffman FastTrac Program. www.capitalanalyticsassociates.com

| 13

Market voices: Mayors’ corner

Daniel Stermer Mayor City of Weston

My outlook for the city is quite positive, but we are also a young city and going through changes. We recently changed our city manager, with the last one being in office for the last 23 years. I am also term limited out in November 2020 and multiple other city leaders have changed as well. That said, every indicator in the city is sound and strong. There is going to be change and with change inevitably comes different personalities, different desires and different ways of things getting done. We have not sat quietly for 23 years and that is part of the beauty of the dynamics of the people who lead our government. While I would always be happy if Weston was a step above everybody else, I also know that the overall goal is to benefit the community of Broward County.

We have had a bit of a paradigm shift with the leadership of our commission.

In the past, we have not fully embraced the idea that we need to welcome innovation and adapt to the future as it applies to development and what our main corridors could become. Since I became mayor, I have been clear with the public and the commission that our city has an opportunity to have a clear directional shift and become a city that is moving forward. We want to become a city that is adapting and innovating for the future. Our commercial corridors are ripe for redevelopment, as they are aging corridors, and rather than lose out on the opportunity for growth, we want to seize it. We need to do so in a targeted way because Wilton Manors is a quaint bedroom-style community with wonderful single-family home neighborhoods.

Lynn Stoner

Mayor City of Plantation

Justin Flippen Mayor City of Wilton Manors

Coming from the private sector, I always want things done a little faster.

Still, when I look back over the last year, we’ve come a long way. Traffic and transportation are the main challenges, as well as sustainability. We are also striving to streamline business processes with a goal of transitioning to online plan review and permitting over the next several years as part of our “Paperless Plantation” initiative. This particular initiative is part of an overall effort through strategic planning that will focus on providing greater customer service across all 16 of the city’s departments. The city of Plantation believes in continuous improvement and every day we look for ways to better serve our stakeholders.

We are focused on finding the right balance for our residents, visitors and businesses.

14 | Invest: Greater Fort Lauderdale 2020 | ECONOMY

ECONOMY OVERVIEW

Dan Lindblade President & CEO – Greater Fort Lauderdale Chamber of Commerce

The technology hub that we have here in South Florida is real and there is a lot of talent because of it, but not enough. It is expensive to live here in Fort Lauderdale, and people who are in the early stages of their careers are earning starting salaries that can be a challenge. We have been pushing employers to pay a living wage if they want talented people to stay here. It is an interesting situation right now with such a low unemployment rate. Companies are constantly looking for new talent, and right now it is an employees’ market. If someone is not happy where they are working, they can easily go and find another job.

( ) The county is also promoting its Community Redevelopment Agencies (CRAs). The 2002 Florida Statute 163 allowed county and city commissioners to create these agencies that combat “slum and blighted areas which constitute a serious and growing menace, injurious to the public health, safety, morals, and welfare of the residents of the state.” The agencies are authorized to provide economic incentives to encourage development in certain areas of their municipalities that are in need of development using tax contributions from the affected areas. “The CRA has traditionally focused on commercial investments and incentives, but for the first time we’ve incorporated residential revitalization into our cache of programs and initiatives,” said Rickelle Williams, executive director of the Dania Beach CRA. “We started the At Home Dania Beach Program to make people feel at home in their community. This is a comprehensive approach to residential revitalization that encompasses several strategies. Those strategies include down-payment assistance, where we offer up to $20,000 to first-time homebuyers who meet our eligibility criteria.

We are also developing single-family homes through our affordable housing development program. We have several homes that are in the development process, and we anticipate adding more homes in the coming months. We also provide a residential beautification grant where eligible homeowners can receive some financial help for landscaping or painting. When people recognize that there is an investment in the community, they take more pride in their homes and improve the quality of life and tax base.”

Another crisis facing the Broward County government is affordable housing. According to Florida International University, Broward now has a deficit of 74,173 units for

Broward County Commission aims to make $30 million available for affordable housing by 2033 low-income renter households, and 46,170 units for middle-upper-income buyers. In November 2018, the Broward County Commission approved the creation of a trust fund dedicated to affordable housing. As of July, $11 million has been spent and the commission aims to make $30 million available by 2033.

“There are different resources in place to build affordable housing. Some communities use impact fees that come from local government and development to build affordable housing. For some of our projects, we are able to fund them completely, while at other times there are gaps in funding, which slow down the process.

So it is a balancing act. The economy is booming which raises construction prices. As a result, the Housing Authority has used state resources to build the affordable housing that we do,” said Tam English, CEO of the Housing Authority of the City of Fort Lauderdale.

Fort Lauderdale’s homeless population is one of the highest across the United States, with 20,000 individuals estimated to be living on the streets. But by working with the private sector, which invested over $1( ) www.capitalanalyticsassociates.com

| 15

ÂŽ

oundtable:

Key attraction Political leaders in Broward County discuss the unique opportunities and distinct advantages of their particular city for individuals and businesses looking to relocate.

Bill Ganz

Mayor City of Deerfield Beach

What are some unique opportunities for businesses looking at Deerfield Beach as an option?

We have a high concentration of advanced industries as well as a strong emphasis on innovation that is prevalent in our business parks. Within the city, we already have large companies like JM Family, DNA Labs, UM Sylvester Cancer Research Institute and SHL Pharma. We are very fortunate to have those types of relationships and businesses in Deerfield because when you have quality companies located here they tend to attract others. We have also put in place Opportunity Zones throughout the city, including the area between Southwest 10th Street and Southwest 15th Street. We have had a lot of growth in the city in the last 12 months, including over 11,000 building permits that total nearly a billion dollars in new construction. The city has reinvested in itself as well with several major capital improvement projects.

How is the city working to retain the young professional workforce?

We want to make sure that we provide them with a wide variety of opportunities, not just entertainment, but business opportunities as well. We also are trying to make sure that we are appealing to all generations of the workforce. One of the ways we hope to accomplish that is with some of the new residential construction that is being built. We have worked with these developers to make sure they are keeping the new buildings attractive to all segments of the workforce in the city. We are also fortunate to have the most beautiful beaches in all of Broward County, and these people can really take advantage of this being a nautical destination.

16 | Invest: Greater Fort Lauderdale 2020 | ECONOMY

Josh Levy

Mayor City of Hollywood

What makes Hollywood an attractive location for businesses and indviduals?

In the past year, there has been a combination of both public and private investment in the City of Hollywood ushering in period of growth and development in the city. On the public side, the city is investing more than $600 million in planned public infrastructure improvements, in addition to a $165 million dollar General Obligation Bond (GOB), to improve the city’s aging infrastructure and public amenities. Funds from the voter approved GOB will be used to construct new public seawalls to combat sea level rise, fund new park equipment for additional recreational opportunities, and pay for the design and construction of a new police headquarters.

Private investment equals approximately $1.5 billion dollars in planned, under construction or recently completed projects. These numbers are only scratching the surface of what Hollywood has to offer.

What changes have you seen from an influx of a younger demographic into the city?

Part of the rationale behind using bond dollars to invest in parks and open space and to modernize our facilities is to entice and welcome a new generation of young residents who want to live in an active, attractive Downtown. In Hollywood, our historic Downtown is close to the beach and is within walking or biking distance. New restaurants, bars and meeting spaces have opened their doors and feature themed experiences that appeal to a young demographic. Hollywood is a vibrant place to live and do business.

ECONOMY ROUNDTABLE

Ken Thurston Mayor City of Lauderhill

Why is Lauderhill a great place for businesses to relocate?

No matter what a person is looking for, they can generally find it in Lauderhill. We celebrate the diversity that can be found in all of our businesses. Consumers can almost always find someone here that speaks their language, and there is a ready supply of workers for businesses.

Unemployment across Florida is very low at the moment, which means that it has become a little bit more difficult to find workers, but businesses can find those workers in Lauderhill. We have an economic development team that is readily seeking businesses to come into the city.

We have also partnered with Broward College to use city buildings to train and certify different categories of workers. If there is a business that has particular needs, we can work with Broward College, come up with a curriculum and get a group of people certified to fulfill the needs of that business. In addition, we are happy to work closely with businesses to take care of their human resource requirements so that they can be successful.

What is the expected impact of the multitude of Opportunity Zones throughout the city?

The concept and the theory of the Opportunity Zone is great. I believe that the verdict is still out in regards to their implementation. The city economic development staff is working hard to increase the awareness of these Opportunity Zones for Lauderhill and are actively seeking investors to come to the city and spend their capital.

Hopefully, we will be successful in getting investors to put their dollars into the city and these zones will be a part of that.

Dean Trantalis

Mayor City of Fort Lauderdale

Why should businesses and individuals look at Fort Lauderdale when thinking about relocating?

The good thing about Fort Lauderdale is that we still have real estate available for growth, and we have some core industries that continue to thrive. In addition to tourism, we have the marine industry, which has been a mainstay in our city for years. The real estate business is still thriving and that will continue to grow.

We are always looking at ways to diversify Fort Lauderdale’s economy. The importance of diversification is part of keeping the economy in the city sustainable. When I ran for office a couple of years ago, one of my themes was to find more ways to embrace tech companies. There are dozens of techoriented businesses that have located in the city, and some are established names like Hotwire and Citrix.

Even if a company does not locate in Fort Lauderdale and instead chooses one of our sister cities, we all benefit from that.

How is the Opportunity Zone legislation already benefiting the city?

We have an opportunity Zone just west of Andrews Avenue, and a number of developers have already inquired about building in this zone. Opportunity Zone legislation has helped foster some of the redevelopment in the Sistrunk area, and I do not think we have even seen the beginning of what is about to come. There is going to be a significant amount of new development in that area. The legislation is still quite new, so it is going to take a little time for people to embrace it and figure out how it will work in their development plans. www.capitalanalyticsassociates.com

| 17

ECONOMY OVERVIEW

Broward County is the second-most populous county in the state of Florida.

( ) million, the city was able to eradicate a tenement camp in the heart of its Downtown. It placed nearly all of its homeless residents in temporary housing, offering rehabilitation programs, mental health and addiction services, and workforce training programs.

Recession risk Despite the strength of Florida’s economy, Jerry Parrish, chief economist for the Florida Chamber Foundation, believes the risk of recession has increased considerably in the last six months. “The job numbers are going up — 227,200 jobs created over the past year — and the unemployment rate (of 3.3 percent) is also improving,” he told the Tampa Bay Times. But he said that employment numbers are not the only indicator of an economy’s strength.

Part of the issue is long-term interest rates on Treasury bonds, which typically are higher than shortterms rates. But since May, this has been inverted, with higher short-term interest rates, which means greater risk before maturity. “There are several things going on, most especially affecting this is the yield curve inversion that has happened. These inversions are getting deeper, and have often signaled recessions in the past,” Parrish said in a video explaining his data. “It doesn’t mean we’re destined to have a recession, but the reduction in business investment that’s happening, along with the global slowdown, do increase the odds of it happening.”

But some say that fears of a recession are primarily 18 | Invest: Greater Fort Lauderdale 2020 | ECONOMY

based on the fact that it has been so long since a recession hit the United States. In fact, the current economic expansion is the longest in history.

Recessions can be weathered by how much money the state can contribute to a rainy day fund that would mitigate a loss in income. According to Erick Elder, professor of economics at the University of Arkansas at Little Rock, Florida can weather a mild to average recession. Florida Gov. Ron DeSantis told Florida Cities 93rd Annual Conference in August that the state has more than $5 billion in reserves in the event of recession. “I think that we’re much better positioned to weather an economic downturn than we were in 2008 and 2009. And I think we’ve been able to expand the base and build better economic resiliency here,” he said.

Beverly Raphael, president and CEO of RCC Associates agrees that the chances of an imminent recession are not as great as some believe. Nonetheless, investors should always be prepared for any eventuality, Raphael told Invest:. “In this business you can never take your eye off the ball assuming this wave of good fortune is going to last forever. I have two Directors of Business Development who go to every industry-related event for professionals relevant to our field. The big question is always whether we see a recession approaching, and we all know that eventually it’s inevitable, but we just do not foresee it in the immediate future. I think it’s easy for people to get too comfortable, but it’s also important not to operate out of fear. You must find that sweet spot in between and stay cognizant of what is happening in the industry. You can’t just sit on your laurels and assume that business will always remain as good as it is now.”

Employment Job creation in the greater Fort Lauderdale area went from strength to strength in the past year. In August 2019, the area that includes Fort Lauderdale, Pompano Beach and Deerfield Beach added 11,400 jobs, a 1.3% gain on the year before, with a 3.3% unemployment rate, 0.2% better than the state rate. The largest growth was seen in professional and business services, with 5,500 jobs added, followed by education and health services, with 4,200 jobs added, trends that continued from the month before.

Strength in employment rates in Broward County is underpinned by high consumer confidence and strong consumer spending. For 2018, the last year for which data is available, Broward County’s median household income was $57,200, well above the Florida state average of $54,644, although it remained below the national median income of $63,179.

The fastest-growing employment sectors are in

ECONOMY OVERVIEW

Peggy Nordeen Owner & CEO – Starmark International

We should be proud of the fiscal responsibility of the state of Florida, and more specifically of Broward County. Broward County is doing a lot of things right, and the last 10 years have been amazing in terms of economic growth. I believe we have many forward thinking people here in the county who continue to encourage and amplify the region. The growth of industry has been a significant part of this. As an example, the aviation industry has really blossomed in this region, so much so that Delta Air Lines recently decided to put their central Delta Private Jet maintenance support here.

education and health services, growing by 4.7% on This could be used for facade improvements, which the year, and professional and business services, include new signage and pedestrian amenities. This is which grew by 3.6%. This is an encouraging sign for done in the hope that these improvements will keep Broward County, given that these areas are outside its the center from looking outdated and will attract new traditional money-making trade and tourism sectors. business.”

A diversified economy is one way the county can sustain growth over the long term.

Employment challenges In August, data shows consumer confidence was With a larger working population, Broward County down to 93.3 from 100 in July on the back of the U.S.- has also had to deal with the challenges that come China trade war. But this was reflected in the national alongside such expansion. Affordable housing is one average of 89.9 for the month of August, showing that of them. The official population density of Broward there is still a healthy level of County is 1,577.6 people per consumer confidence in the square mile, up from 1,346.5 in greater Fort Lauderdale area to 2000 and significantly greater bolster the economy. than the Florida average of 392.7.

The healthy economy is But this figure can be misleading, expected to have a cyclical effect considering that Broward County as it attracts more and more incorporates around 796.9 square companies to the state, which miles of conservation area. will then invest and create more Broward County has a jobs. One recent example is the population of 1,951,260, according announcement from Techtronic to a 2017 census and, when Industries that Broward County taking into account the 427.8 Beverly Raphael will be the location of its new square miles of urbanized land RCC Associates U.S. headquarters. Sandra Welch, in the area, population density mayor of the City of Coconut Creek, actually shoots up to 4,561 told Invest: what her community is doing to attract people per square mile. While far off the 27,012 people investment: “We have several economic development per square mile that the New York City government programs, including an economic development has to contend with, Broward County also has to factor incentive program to which we add $250,000 per year. in its geographical location as part of the High Velocity This program is especially helpful to those businesses Hurricane Zone (HVHZ). that want to establish themselves in Coconut Creek, All buildings that fall within the HVHZ must adhere and businesses that want to expand here. We also have to strict building codes that limit height and shape of our Community Rehabilitation Grant, which provides buildings as a way to mitigate wind speeds. Houses up to $120,000 per application for shopping centers. built in these zones also have to abide by stricter

It’s easy for people to get too comfortable, but it’s also important not to operate out of fear.

www.capitalanalyticsassociates.com

| 19

ECONOMY OVERVIEW

requirements for building materials, such as using high-impact windows and high-performance shutters, which will automatically increase the cost of building.

Because of high demand and strict building requirements, there is a shortage of affordable accommodation in Broward County. According to a new report conducted by Florida International University’s Metropolitan Center, median home price is one of the highest in the country at around $350,000, meaning that around 13% of all households in Broward County can actually afford to buy. Of renters, around 147,000 are either cost-burdened or extremely costburdened, which is to say they spend more than 30% or more than 50% of their income on housing.

At the same time, the state Department of Economic Opportunity estimated that approximately 90,000 new jobs would be created in the next eight or nine years, many of which would be in the service sector. This means a huge increase in demand for more affordable housing. The Board of County Commissioners has allocated a grant of $5 million a year for the last two years, which has been used to build over 600 new units.

Still, according to Director of Housing Finance and Community Redevelopment Ralph Stone, new demand outpaces the supply the county is able to provide.

And low unemployment rates bring with them a lack of skilled labor, as companies must fight to recruit and retain employees. Over eight in 10 employers are worried about retaining top talent, according to a new survey from Robert Half, a global staffing firm. Employees are aware that the power is in their hands: the same survey showed that about 43% of professionals planned to seek new job opportunities over the following year.

The 2018 Conference Board CEO study found that

“failure to attract and retain top talent” is now the top issue for CEOs, even more important than competition or the disruptive nature of technology. While there are more jobs than people, there are not enough skilled workers to meet the needs of more demanding positions.

Companies requiring skilled labor have been forced to re-evaluate recruitment practices and offering extras such as gym membership, bonus schemes, a company car and travel and vacation perks comes almost as standard in today’s job market. Ryan Romanchuk, business unit leader, DPR Construction, told Invest: that creating a welcoming work environment starts with respect for the individual. “DPR is and always has been a self-performing general contractor. It really centers around the belief that we are builders at heart and our central belief as a company to respect the individual. This is why we don’t believe in ‘piece work’ and believe in a fair and honest hourly wage and benefits such as health, 401K and paid care leave for all of our craft employees. We have had high levels of retention and are investing in training our employees to make sure they continue to grow their skillset and have upward mobility within DPR. Being a selfperforming contractor requires additional resources, time and capital but we control our own destiny, carry forward respect for the individual and can be part of our industry working to solve the labor gap.”

Global factors It is true that Broward County has a dependence on international trade in an age of protectionism as the trade war between the United States and China heats up.

According to Enterprise Florida, two-way merchandise trade between Florida and China accounted for $12.25

ECONOMY OVERVIEW

billion in 2016, second only to Brazil with $20.4 billion.

But China is in fact a net importer to the state, with imports accounting for the lion’s share, or $10.76 billion during this period. That means that, of the $73.5 billion in merchandise exported by Florida in 2016, only $1.49 billion was sold to China.

On the contrary, Florida’s largest partners for exports are Brazil, with $14.7 billion, Colombia with $4.4 billion, Chile with $3.9 billion and the Dominican Republic with $3.2 billion. Florida’s position at the southernmost tip of the country means the Latin American market is by far its most accessible. Top exports were civilian aircraft and parts, telecommunications equipment and cars.

The recent renegotiation of NAFTA to create the USMCA agreement included the new addition of a specific chapter on labor laws, which strengthen the powers of trade unions, implying a higher cost of labor for Mexican car manufacturers. Of the $3 billion in cars Brazil imports, Mexico accounts for $666 million while the United States accounts for only $57.6 million.

Higher labor costs in Mexico may mean the United States can access a larger piece of the pie as production and export costs become competitive.

Going further, Florida is making strides to attract foreign investment to the state. Florida ranks seventh among U.S. states in terms of employment by majority foreign-owned firms, according to the fDi global greenfield investment trends 2018 report. The top source of FDI in the state was the UK, with other important investors coming from France, Germany, Brazil, Canada, Spain and Italy.

It seems that wider economic dynamics will strengthen Broward County’s ability to attract foreign investment as the state’s largest investor – the UK – disengages from the EU economic bloc and looks to diversify with new partners. UK Prime Minister Boris Johnson has already met with President Trump, who spoke about “putting the UK at the front of the line” in terms of negotiating trade deals.

The state’s business-friendly tax scheme is another clear incentive for global – and domestic – investors.

“Florida’s tax climate is a huge driver for bringing in new businesses to the area. Unlike some states that offer big incentives to companies, we do not have to do that because we have such a great tax climate. This is one of the main reasons we do well at attracting businesses to Coral Springs,” said Kristi Bartlett, director of economic development for the City of Coral Springs.

One factor that could undermine Broward County’s economic progress is exactly the same factor that makes it so attractive for investment: proximity to the water. Although Broward County’s geography means

Broward County has 24 miles of coastline along the Atlantic Ocean.

it is attractive for global trade and tourism, scientists warn that rising sea levels mean that Florida is the most at-risk state for flooding by 2100. A report from Climate Central Florida shows that in Miami-Dade and Broward counties alone, there are 792,226 at-risk homes worth more than $336 billion. Homes worth $3.38 billion are at risk of flooding in Florida much sooner – by 2050.

International business Broward County is host to a number of consulates and international chambers, including the consulates of Latvia and Sweden, the British-American Chamber of Commerce of Broward-Palm Beach County and the Puerto Rican Hispanic Chamber of Commerce of Broward County. Having organizations such as these established in the county makes it easier to attract firms from these countries to invest in Broward County.

The Greater Fort Lauderdale Chamber of Commerce has nine councils and 22 committees that are inclusive of a range of demographics across the state. For instance, there are councils focused on economic elements, such as the Council of Economic Advisors and the Greater West Broward Business Council, alongside councils that represent a single vision, such as the Beach Council, the Cultural Council or the Downtown Council. But the Chamber of Commerce also includes councils that bring points of view across the spectrum of the population, including the Women’s Council and the GLBX All Inclusive Council. ( ) www.capitalanalyticsassociates.com

| 21

ECONOMY INTERVIEW

Human touch Investments in technology supplement the sales and purchasing experience, but a human touch is still needed in the automotive sector

Colin Brown Chairman – JM Family Enterprises before they make a purchase. The reality is that there is always going to be a human element to car buying that technology can’t replace. The vast majority of people will still want to go into a dealership, test drive a vehicle and be educated by people who really know the product, and our technology investments help to supplement that process.

As a diversified automotive company, how is your business benefiting from the use of new technologies?

We have invested heavily in technology. One of our largest investments is the system our subsidiary Southeast Toyota Distributors put in place to allow each of their partner dealers to see, at any given time, what they have in their inventory, what is selling in their market and what kind of vehicle accessories are impacting sales. This gives them great insight and allows them to order products based on data of their market.

We are the only company that has this technology for our dealers. In the past, inventory managers would look around their lot to see what they had in their inventory and make an assumption on what they needed to order.

We also invest heavily in our web presence to provide customers with as much information as possible 22 | Invest: Greater Fort Lauderdale 2020 | ECONOMY

How is JM Family Enterprises a model for sustainability and environmental resilience within Broward County?

We are in the midst of building a new campus on the site of our current one, and with this new facility we will more than double our solar capacity with each of the office buildings featuring solar panels. In total, there will be approximately 3,700 solar panels generating nearly 2 million kilowatts of clean energy per year, which will help account for about 20% of our energy capacity. Each of these new buildings will also be LEED certified. We are borrowing an idea from Toyota‘s new campus in Texas, by installing 13 tanks to catch rainwater off the garage roof, which will then be used for irrigation. This is anticipated to satisfy at least 60% of our irrigation needs. In conjunction with all of this, we have a sustainability committee that is attracting a lot of attention because of the county’s increasing emphasis on the environment. We want to work in collaboration with the county to help mitigate this issue and its effects on our region.

What trends are emerging in the automobile industry that have raised concern?

The only concern we have is related to the overall health of the economy, particularly with respect to automobile trade tariff threats. Despite some of the looming issues, consumers are still buying and leasing new cars. We feel quite bullish about how things will look in the automobile industry within South Florida for the next year.

ECONOMY OVERVIEW

Jenni Morejon President & CEO – Fort Lauderdale Downtown Development Authority Nearly ten years ago, South Florida became a national and global leader in addressing climate change by developing the Southeast Florida Regional Climate Compact made up of Monroe, Miami-Dade, Broward and Palm Beach Counties. Following this sophisticated public sector collaboration, the Compact engaged the business community to explain why economic resiliency should be on their agenda. Now, groups like the Greater Fort Lauderdale Chamber of Commerce, the Alliance and the Broward Workshop—and their private sector members—better understand the importance of climate change and why investments in resiliency today will have an ROI and long-term tangible benefit.

( ) These initiatives help bring diversity to business long-term agreement with Royal Caribbean Cruises, activities and helped Broward County nab a series of which includes an investment of $114 million in the awards in recognition of its diversity. These included modernization of Cruise Terminal 25. It is due to be the two of its cities – Weston and Lauderhill – being ranked homestead of Royal Caribbean’s second Quantum Ultra in the Top 15 nationwide of small cities to start a Class vessel Odyssey of the Seas in November 2020. The business in 2018. Also in 2018, South Florida ranked in port’s cargo business is also being overhauled, with a the Top 10 nationally for locations for women to start a $437.5 million investment – the largest expansion in its business. In 2017, it was ranked first on the Kaufmann history. With these developments, tourism continues Index of Startup Activity. to grow and the county continues to encourage small Part of the dynamism in the Broward County business development in the area through incentives economy can be attributed to the and workshops. welcoming of these diverse groups, But an economy based on connecincluding those from different tivity faces unique challenges, not countries. According to employers least mitigating the rising sea levels in Fort Lauderdale, there are not and finding enough international enough US-born workers to meet skilled labor to fulfil its requirethe extensive demand in industries ments. The County Commission such as health, hospitality, seems keen to address these issues, construction and technology. The with a variety of training incentives Bureau of Labor Statistics says and industry partnerships that aim there are 7.3 million job openings to bridge these gaps. nationwide but just 6 million With a continued focus from Kristi Bartlett, people are unemployed, creating a local and state authorities on City of Coral Springs gap that is set to continue growing.

Broward on issues such as housing, health and education, the county looks set to continue Looking ahead its growth as one of the leading job generators in the In economic terms, Broward County’s geography country. “To those doing business in states that have and demographics means it is uniquely positioned a bad business and political climate, my message is as a multicultural bridge between the United States, this: come to Florida,” said Gov. Ron DeSantis in his Latin America and Europe. The Fort Lauderdale State of the State address. “We will maintain a healthy International Airport expanded at the end of 2017 to economic environment, we welcome your success and incorporate more transatlantic flights. we won’t chase jobs away through economic ignorance At the same time, Port Everglades negotiated a and demagoguery.”

We do not have to (offer big incentives) because we have such a great tax climate.

www.capitalanalyticsassociates.com

| 23

Adapt, evolve: Law firms in the Greater Fort Lauderdale region are adapting to a changing world with new practices and advanced tech As society evolves, the law evolves with it. The move toward legal marijuana is evidence of that premise.

Legal precedents can shape lives and move society in one direction or another. On a micro level, the legal industry is a jobs provider and economic contributor.

The law is there when settling a mortgage, or suing for damages. In fact, there are few facets of life where the law does not come into play.

In Broward County, the legal industry is part of the professional business services sector. In April 2019, companies in this sector added more jobs on the year than any other sector in the county, growing 3.6%, or 5,400 jobs. As it stands, more than 130,000 employees work in this sector in Greater Fort Lauderdale.

The region is also home to 151 regionally and nationally-ranked law firms across a variety of disciplines, according to the US News Best Law Firms Rankings. Miami-based Greenberg Traurig, for example, is now an international law firm with offices all over the globe. Its Fort Lauderdale practice is ranked as a Tier 1 firm in commercial litigation, corporate law, environmental law, real estate law, tax law and trust and estate law. Florida’s Akerman LLP is now almost 100 years old and has a significant presence across

the state. It has 16 national Tier 1 rankings and its Fort Lauderdale practice has 11.

According to the Am Law 200 ranking for 2018, released earlier in 2019, Florida firms saw gross revenues rise 6.2%, almost double the national rate of 3.1%. Profits per equity partner increased 6.3%, more than twice the national average. The Am Law 200 ranks the next 200 leading U.S. law firms after the national Top 100. Three Florida firms saw their rankings improve: Carlton Fields, Shutts & Bowen and Greenspoon Marder.

History The state of Florida joined the union in 1845 but its legal arm reaches much farther back. The state modeled its legal principles after those of England. In fact, when Florida joined the union it adopted common law “as it existed in England on July 4, 1776,” according to the Florida Supreme Court webpage, reflecting the patriotic tendencies of the state’s early residents.

Spain, also a former colonial master of the Territory of Florida that ceded the territory to the United States in the early 1800s, also influenced the direction of the young state’s legal doctrine. Spanish law was based www.capitalanalyticsassociates.com

| 25

LEGAL ANALYSIS

George LeMieux Managing Partner & Chairman – Gunster Florida is an international marketplace. We have businesses and law firms from around the world reaching out to us for business, whether it is corporate work, real estate work or litigation. We recently litigated a case that involved a company from Hong Kong. Gunster is part of an organization called Global Law, which is composed of about 100 law firms from around the world, and we refer cases to each other and work with each other collaboratively on legal matters. South Florida is now one of the most diverse places in the country. We have people from everywhere and that makes our community very rich and diverse, but it also requires us to be able to do work and have resources around the world. That is one of the factors that has changed. not on common law but on civil law. The treaty with Spain that ceded the future state required the United States and Florida to honor the earlier legal rights that adhered to Spanish law.

As it was at the start, the Supreme Court of Florida is the final authority on the meaning and interpretation of the law in the state. Seven justices sit on the court, which holds two terms a year, starting on the first day of January and the first day of July.

Breaking legal ground The legal sector in Broward County is no stranger to precedent. Fort Lauderdale was one of the first cities in the United States to allow women’s suffrage, even before the 19th Amendment was ratified in 1920. The efforts to pioneer in legal matters extends to this day, with firms adding several fast-growing practices to their portfolios.

Akerman is opening up the area of cannabis law and Greenberg Traurig was voted 2019 Law Firm of the Year in IT Law. Akerman – and more notably the firm’s Partner Jonathan Robbins – has played a leading role in the relatively new practice of cannabis law. The firm has been unravelling the intricacies of credit for hemp businesses while simultaneously raising the profile of cannabis law, an industry that is by some estimations expected to grow to $50 billion in the next 10 years. The firm’s efforts seem to be bearing fruit. Under the SB 1020 law that took effect in July 2018, the cultivation and sale of hemp and hemp products is legal as long as it contains less than 0.3% THC. This has effectively legalized marijuana, given that weed and hemp are virtually indistinguishable.

The US Attorney’s Office for the Northern District of Florida has doubled down, saying they will not prosecute 26 | Invest: Greater Fort Lauderdale 2020 | ECONOMY

low-level cannabis cases that involve quantities of less than 3g. “I think that’s good news for everybody in Broward County and in the state of Florida,” former Broward County prosecutor Ken Padowitz told CBS Miami. “I think that most people — most reasonable people — want law enforcement devoted and focused on real crime and real criminals. I think most people in this day and age are at the point where that’s where we want our resources spent. We don’t want people arrested on very small amounts of marijuana.”

Even before the legislation was passed, cannabis practices had been set up within several law firms to navigate the newly-legal CBD industry. Law firm Duane Morris set up its cannabis practice formally in January 2017 and has seen increasingly positive revenue results, partner Seth Goldberg told Law 360.

Stinson formalized its cannabis practice last year.

But it is not just multinational firms that are breaking new ground in Broward County’s legal system. Small Fort Lauderdale-based Wintter Law is nationally ranked as a Tier 1 firm in trust and estate litigation and familyowned firm Vianale & Vianale LLP is a Tier 1 firm in mass tort litigation and class actions. At small firm Thomas & LoCicero, six of the seven partners are included in the Best Lawyers ranking and its Fort Lauderdale firm is ranked Tier 1 in First Amendment Litigation. And in March 2019, Fort Lauderdale-based law firm Van Horn Law Group successfully set a precedent in bankruptcy legislation by arguing that NFL players could not be forced to relinquish funds awarded by the NFL Concussion Settlements Fund during bankruptcy proceedings.

Trending areas including acclimatizing international businesses and investors coming to the Greater Fort Lauderdale area who need to understand the local

LEGAL ANALYSIS

nuances of the law. “Typically, the greatest barriers to entry for businesses looking to establish themselves in the South Florida area would be understanding tax incentives and access to local and state resources that can benefit those particular businesses,” says Alfred Delgado, managing partner of the Law Offices of Alfred Delgado. “I work with these businesses and with the Broward County’s Office of Economic Development to put those businesses in contact with those institutions and organizations that are going to offer them a wide variety of options. These options may be good for them in terms of jump-starting their business, making tax incentives available to them that they were unaware of or other services that may benefit that business.”

Delgado also says that there remains a steady stream of businesses that either want to come to the United States and establish themselves or businesses that want to hire foreigners, despite the greater scrutiny on these types of applications. “We are still seeing a constant stream of demand for these applications. This is a great sign to me. I also see a lot of demand for our investment visas, ranging from either long-term investment visas, the popular EB-5 or the shorter term E-2 Investor visa. There also is demand for intra-company transfers. This is for foreign entities that want to establish a subsidiary or branch in the United States, or already have a branch and want to build it up. They want to transfer their executives from abroad to the United States to help establish this branch.

The other demand driver for our firm is the H-1B visa.

This is for companies that want to hire individuals with a bachelor’s degree for a specialty occupation position.”

The law is also formed by the events that shape a community. Mass shootings have become more common across the United States, and Florida and

Gross revenues at Florida law firms rose 6.2% in 2018, almost double the national rate, says AM Law 200 Broward County legal experts must keep up with the unfolding developments. After the 2018 shooting at Marjory Stoneman Douglas high school, where 17 people were killed, lawmakers sought to plug the breaches in legislation that were brought to light. Florida subsequently passed its “red flag” gun law, which allows police to remove firearms from a potentially dangerous individual subject to the approval of a court. According to NPR, the Florida law could set a precedent for study by other states.

Another shooting, at a California Synagogue, prompted Florida lawmakers to pass an anti-Semitism bill that applies to schools and universities. The bill, HB 741, contains a detailed description of anti-Semitic behaviors, including dehumanization or stereotyping of Jewish people.

Tax Reform When Qualified Opportunity Zones (QOZs) were created by the federal government in the 2017 Tax Cuts

Drew Melville Real Estate & Land Use Attorney – Melville Law, P.A.

Fort Lauderdale is still growing, and there are a ton of projects in the approval process. The city is also growing while preserving its history and keeping its historic buildings intact, which is great for the community and our identity. There are also a lot of towns around Broward that have Opportunity Zones and they are trying to capitalize on them now. I’d like to see more development along the Dixie corridor in Pompano and Deerfield. It would also be great to see more food operators in areas that are considered “food deserts,” which is defined as more than a mile stretch without an option for healthy food.

www.capitalanalyticsassociates.com

| 27

LEGAL ANALYSIS

and Jobs Act, they were focused on 8,764 communities across the 50 states covering almost 35 million Americans. The program was designed to direct investment to regions with an average poverty rate over 32%, compared with the national average of 17%.

“We anticipate that $100 billion in private capital will be dedicated toward creating jobs and economic development in Opportunity Zones,” said US Treasury Secretary Steve Mnuchin in a press release. “This incentive will foster economic revitalization and promote sustainable economic growth, which was a major goal of the Tax Cuts and Jobs Act.” The program works on the basis of deferral of taxes until either the property is sold or Dec. 31, 2026, whichever comes first.

Investors can claim a 15% tax reduction if they invest over the entire 10-year period.

But the program is still new, and many investors are struggling to work out the best way to obtain returns.

This is where South Florida’s law firms come in. Miamibased law firm Berkowitz Pollack Brant has been helping investors navigate the new landscape. “The questions are all over the map,” the firm’s Director of Tax Services Arthur Lieberman said during a panel discussion in Fort Lauderdale. “In a way, it’s all the same question: What about my property?”

Even before the OZs, Florida was always an extremely attractive state in which to establish a business. It has a 6% sales tax on items bought, but there is no personal income tax on earnings, although federal income taxes still apply. However, this means that a Floridian earning $30,000 per year would not owe any of this to the state in personal income tax, while a New Yorker earning $30,000 per year would take home around $28,837 after paying state income taxes.

Florida’s corporate income tax rate also comes in at the lower end of the scale, especially in comparison to other major cities. At just 5.5%, it is lower than New York at 6.5%, California at 8.84% and Illinois at 9.5%.

“Hedge funds and finance firms in places like New York, Chicago and California are feeling the burden of operating in high-tax states,” said Nitin Motwani, managing director of Encore Housing Opportunity Fund, to the New York Post.

But despite low tax rates, small businesses must still negotiate complex tax legislation including those relating to S corporations, C corporations, LLCs, partnerships, sole proprietorships and multistate businesses. For those investing in real estate in Florida, the tax process surrounding the process can be cumbersome and unclear, leading law firm Akerman to publish a blog detailing the intricacies of documentary stamp tax, sales and use tax and corporate income tax.

28 | Invest: Greater Fort Lauderdale 2020 | ECONOMY

Technology Law firms are increasingly changing their approach to their business, including how they interact with their clients and cases. At the forefront of this change is technology, which is disrupting every aspect of the legal business. Artificial intelligence, connectivity, digitalization what were once the realm of the infotech world are more commonly staples of today’s modern law firm.

These firms need to differentiate themselves, and technology is helping them to do just that. “We have set up an extranet website that is client-facing where they can pull up and see the same information we have about the status of each file,” says Sam Felker, office managing shareholder at Baker Donelson. “Every case is tracked, they have access to the case budget, they can see in real time what the legal spend is on every single matter and they can see all of the case notes for status updates. This means that clients no longer have to dig through hundreds of emails to keep up with a matter assigned to our firm. They have all this information easily accessible in one place via the internet.”

But not everybody is on board, yet. The 2018 American Bar Association’s Legal Technology Survey Report showed that 57% of all respondents were budgeting for technology. Breaking the number down, however, highlighted some disparities. It showed that 66% of solo firms said they did not budget for technology, up from 58% in 2017, while 38% of firms with up to nine lawyers also did not budget for tech. More alarming is the number of firms that reported not having any technology training available. In this category, 71% of solo firms said no training was available, up from 49% the year before.

Among firms with two to nine lawyers, 42% said there was no training available, an increase from 35% in 2017.

One area that is commanding attention is cybersecurity, a practice that Felker said is rapidly growing among law firms. “Every business, big or small, must be focused on cyber-security and mitigating the risk of an incident or breach. The law is developing extremely quickly in the area of cybersecurity. For example, California recently passed a law that is cutting-edge in terms of protecting consumers and how their information is used. Everyone is worried about the transfer and sale of their data, so California just passed the CCPA (California Consumer Privacy Act), which goes into effect Jan. 1. This legislation is a cybersecurity-based law that basically requires any company that reaches customers in California, which is almost every large U.S. company, to comply with the CCPA. If a person wants to know what information is being kept about them and if they want to see it, then they have the right to not only see it but also edit it,

LEGAL ANALYSIS

Philip Rosen Shareholder & Chair, Real Estate Practice Group – Becker

The transactions just keep coming. You look out of my office and there are cranes everywhere. Clients are bullish on the market, and these are long-term buyers, not “buy and flip” buyers. They understand that property might be expensive now but buyers have one thing in common: they believe in the long-term viability of the real estate market, especially in South Florida. We are the beneficiaries due to our weather, federal tax policy and population growth.

Developers in Miami-Dade and Broward are focusing on infill – how do we take this property and make it better? – and that is the sign of a maturing real estate market.

delete it and to make sure their information is not sold to other companies. This is where the cyber-security laws in the United States are headed. California was just the first to do it. It is important for our clients to stay abreast of such developments and be prepared to meet these challenges.”

Legal aid Broward County’s law firms are not just catering to the wealthier classes. A new Broward County Courthouse was completed in 2017 with an investment of over $200 million. One of the services provided at the 741,000-square-foot, 21-story building is free legal aid services. The services include divorce cases, paternity and other family law matters. Women in Distress of Broward provides support to victims of domestic abuse. And these offices are only one of five centers now on offer to Broward County residents.

Congress also approved another $190 million in funding, this time for a new federal courthouse in Fort Lauderdale. The new building will be 232,000 square feet and will house 12 courtrooms, 17 chambers and 50 parking spaces. “As one of the largest and busiest judicial districts, Broward County requires a courthouse that is safe and secure so disputes can be handled peacefully,” said Florida Congresswoman Lois Frankel to South Florida Business Journal. The court is expected to be completed by 2024.

Diversity The Florida Bar understands the need to create diversity within its legal system, to represent the rich cultural tapestry of its citizens. In its 2016-2019 Strategic Plan, the bar association laid out several initiatives to attract

a broader variety of participants. “The Bar objectives include: Creating a diverse judiciary, as well as diverse judicial nominating commissions, that reflects the population of Florida [and] continuing to enhance The Florida Bar’s diversity grant program,” it said in its manifesto.

According to the U.S. Bureau of Statistics, 2016, representation by women and minorities nationwide in the legal sector is below comparable industries.

The data showed 35.7% of lawyers are women, 4.4% are black, 5.6% are Hispanic and 4.7% are Asian. By comparison, 61.3% of accountants and auditors are women, 8.5% is black, 9.0 percent is Hispanic and 10.9% is Asian. In addition, white students comprised 67.45 of admitted applicants to the fall 2016 school year, according to the Law School Admission Council, Inc. Among the 980 judges in Florida, 17.5% are minorities.

Looking ahead Broward County’s legal services providers are continuing to pioneer in several areas, negotiating the complex realities of today’s world. Amendment 4 was passed in January this year in Florida, a groundbreaking piece of legislation that allowed felons to vote. But the legislation signed by Gov. Ron DeSantis conditions the right to vote on payment of fines and fees. A diverse group of Floridian and Broward County-based groups are fighting the clause.

Technology with continue to be a key factor for leading firms to ensure growth as they adapt to the emerging needs of clients who are themselves often tech savvy, while international investment arriving into the Greater Fort Lauderdale area should keep firms busy explaining the nuances of the changing and complex tax code. www.capitalanalyticsassociates.com

| 29

Real Estate: A healthy real estate market provides confidence to investors and attracts population growth, both of which are staples of Broward County as the housing and commercial sectors enjoy robust activity. In housing, it’s a seller’s market while low vacancy rates are underpinning the commercial segment.

www.capitalanalyticsassociates.com

| 31

Real Estate in numbers: Closed Sales

The number of sales transactions that closed during the month Economists’ note: Closed Sales are one of the simplest – yet most important—indicators for the residential real estate market. When comparing Closed Sales across markets of different sizes, we recommend comparing the percent changes in sales rather than the number of sales. Closed Sales (and many other market metrics) are affected by seasonal cycles, so actual trends are more accurately represented by year-overyear changes (i.e. comparing a month’s sales to the amount of sales in the same month in the previous year), rather than changes from one month to the next.

Year

Median Sale Price

Percent Change Year-over-Year

Year-to Date

14,658

1.2%

November 2019

1,174

2.2%

October 2019

1,344

1.7%

September 2019

1,229

7.6%

August 2019

1,436

-6.2%

July 2019

1,634

11.9%

June 2019

1,464

-11.2%

May 2019

1,661

9.4%

April 2019

1,541

11.8%

March 2019

1,355

1.3%

February 2019

938

-8.6%

January 2019

882

-9.9%

December 2018

1,148

-11.1%

November 2018

1,149

3.0%

Closed Sales: 2,000

2015

2016

2017

2018

2019

1,500

1,000

500

0 J F M A M J J A S O N D

J F M A M J J A S O N D

J F M A M J J A S O N D

J F M A M J J A S O N D

J F M A M J J A S O

Source: Broward, Palm Beaches & St. Lucie Realtors®

32 | Invest: Greater Fort Lauderdale 2020 | REAL ESTATE

Broward, Palm Beaches & St. Lucie Realtors®

Median Sale Price

The median sale price reported for the month

Year

Median Sale Price

Percent Change Year-over-Year

Year-to Date

$365,000

2.8%

November 2019

$375,000

4.2%

October 2019

$362,000

2.0%

September 2019

$367,500

5.0%

August 2019

$369,750

2.7%

July 2019

$380,000

5.6%

June 2019

$369,900

0.7%

May 2019

$370,000

4.2%

April 2019

$360,000

1.3%

March 2019

$365,000

4.1%

February 2019

$350,000

4.5%

January 2019

$355,000

2.9%

December 2018

$350,000

2.9%

November 2018

$360,000

2.9%

(i.e. 50% of sales were above and 50% of sales were below) Economists’ note: Median Sale Price is our preferred summary statistic for price activity because, unlike Average Sale Price, Median Sale Price is not sensitive to high sale prices for small numbers of homes that may not be characteristic of the market area. Keep in mind that median price trends over time are not always solely caused by changes in the general value of local real estate.

Median sale price only reflects the values of the homes that sold each month, and the mix of the types of homes that sell can change over time.

Median Sale Price: $400K

2015

2016

2017

2018

2019

$300K

$200K

$100K

$0K J F M A M J J A S O N D

J F M A M J J A S O N D

J F M A M J J A S O N D

J F M A M J J A S O N D

J F M A M J J A S O

Source: Broward, Palm Beaches & St. Lucie Realtors®

www.capitalanalyticsassociates.com

| 33

Seller’s market: High demand in both the housing and commercial sectors is giving sellers the advantage in Broward’s real estate industry The real estate market in Broward County has been characterized by slow but steady growth for the past couple of years. Both single-family homes and condos have increased in price as a seller’s market forces buyers to compete, and while cities in Broward County are not the most expensive in the country to rent, they do come close to the top of the list.

Like residential properties, commercial real estate is in high demand amid tight supply: vacancy rates are ultra-low for industrial and retail property, and quite low for office space, as well. Despite massive deliveries of new commercial property every year, the steady demand stoked by the region’s rapid job creation keeps supply low. Consequently, there is always a need for new construction, particularly of commercial real estate, so there is no shortage of investment opportunities, including the Opportunity Zone potential in Broward County and the rest of the South Florida region.

Residential fundamentals Broward County and nearby Miami-Dade have continued their strong year-over-year real estate growth, with total sales as of July 2019 far surpassing 34 | Invest: Greater Fort Lauderdale 2020 | REAL ESTATE

the national average. Broward in particular saw a significant leap in high-value sales, with movement of $1 million-plus homes increasing by 39.3% compared to the same time last year, and the number of condos selling in this price range spiking by 15.8%. A deeper dive into Broward, which is said to be a seller’s market, reveals that total sales grew by 9.7%, from 2,900 units in July 2018 to 3,181 in 2019. Single-family home sales are growing a little faster than condo sales, with growth rates coming in at 11.9% and 7.4%, respectively. The median price of both types of property have enjoyed similarly modest increases over the past year, from $360,000 in July 2019 to $380,000 in 2019 for singlefamily homes, and $165,000 to $172,000 for condos.

Overall, 62.3% of Broward County residents own their homes, while 37.7% rent.

Looking at Broward’s Q2 2019 performance overall, there is still a growth trend for single-family homes when compared to Q2 2018. Single-family home sales rose 2.7%, from 4,544 in 2018 to 4,666 in 2019.

However, condo sales actually contracted somewhat by 5.9% to 4,805 total sales. A noted lack of supply in certain price ranges and neighborhoods, as well as the unavailability of FHA loans for condos in Florida, may

CONSTRUCTION REAL ESTATE OVERVIEW

Michael Weymouth President The Las Olas Company

be having a chilling effect on sales in the region. The median price of both types of property increased in Q2 2019 over Q2 2018: 1.6% for single-family homes and 3.2% for condos. Although the price of a single-family home in Broward County is currently higher than the state and national average, the median sale price for a single family home in Broward actually grew at a slower rate over the past year than the statewide and national average growth rates of 3.3% and 4.3%, respectively.

The profile of home buyers is also changing as a new generation comes into the market, with different tastes and different needs, said Larry Baum, managing partner at Stellar Communities, LLC. “The first-time home buyer is, for the most part, no longer in their 20s or even early 30s. The trend we have seen is that the first-time home buyer is now in their mid-30s and 40s. The fact is that most millennials want to be more mobile, are financially strapped, and being tied down to a mortgage is not appealing to them. A good portion of these millennials saw what happened to their parents during the recession, which has made the idea of purchasing a home even less appealing. This has led to these individuals leaning more toward renting places, and that is why we started our rental division.�

Rental market Almost 1,000 people move to Florida every day, and 180,000 jobs are expected to be created by the end of 2019. The highest concentration of this job growth will be in South Florida, including Miami-Dade and Broward counties. Alongside this job creation, there is an oversupply of condos in Broward County that is keeping rents low compared to places like San Diego,

What is your short-term outlook for the Downtown real estate market?

That is a bit of a tricky question because Downtown is still very much in flux. Some people feel that there is an abundance of overdevelopment happening, but I am not one to believe that. Plans and zonings are in place to help direct growth. We need to stay focused on the intent to build Downtown Fort Lauderdale into an economic hub. There are growing pains due to the development of Downtown, but once it is complete, the area will be an extremely desirable place to live because everything will be more accessible and the walkability factor will be a turning point for the city.

What strategies are most successful in retaining long-time retailers on Las Olas Boulevard?

Our strategy is to be patient, not to panic and to find the right mix of tenants. If we wanted to be a food-centric boulevard, we could probably have all of our space occupied by now, but that is not our desire. For instance, we still have one restaurant space available, but we are waiting and being very selective because we do not want to cannibalize our existing restaurant tenants.

How have you been able to mitigate challenges facing the Riverside Hotel?

A significant challenge that we are constantly having to battle is that hospitality is labor intensive and the lack of affordable housing for this workforce is something that hurts all the east-side hospitality businesses. Most of the affordable housing is in the western portion of the county, and it is extremely difficult for the people in the hospitality business to drive or commute from the areas with affordable housing to Las Olas or the beach.

The commute for these people who are coming to work from the west side could take up to two hours, which is simply not sustainable. They are also most likely driving past the newly renovated Hard Rock Hotel and Casino, which is paying the same as us but is a much shorter drive or commute. www.capitalanalyticsassociates.com

| 35

REAL ESTATE OVERVIEW

Ann Deibert CEO – Broward County Housing Authority

Affordable housing is a hot topic in South Florida and particularly in Broward County. There are different groups within the county that focus on affordable housing. A good majority of the conversation is overlapping, which is good because while not everybody has to be in the same group, we are all talking about resolving the same issues. Educating the community about the necessity and benefits of affordable housing is an ongoing process. I must commend the Broward County Commission for the actions they took in creating the housing trust, which has been a big step in a positive direction. Their first commitment of $5 million generated some great new affordable housing. They have now increased this amount to $10 million.

New York, and nearby Miami, though construction has slowed and it is possible that this oversupply will be absorbed before too long. Not everyone believes, however, that oversupply is an issue, or that the market has even come to that. “Time will tell when it comes to the question of whether there is a risk of oversupply in the market. If we look at the historical precedent of the absorption rate for this current cycle, everything so far has been well-absorbed. There are a couple of big projects coming online simultaneously, so it will be a test to see if this precedent can be maintained. I believe demand will remain strong, and as we see more people buying property, not just domestically but also from other submarkets across the country, I would say I will remain cautiously optimistic,” Jaime Sturgis, founder and CEO of Native Realty, told Invest:.

Rent prices have already started to climb in Fort Lauderdale, with an 8.80% increase year-on-year for a one-bedroom apartment and a 5% increase for a two-bedroom, for average rents of $1,600 and $2,100, respectively. This puts Fort Lauderdale at No. 13 out of the 19 most expensive rental markets, leaving a lot of markets that are more expensive, but many more that are cheaper.

Affordable housing South Florida is considered the least affordable metropolitan area in the entire country thanks to rents that are rising at a pace that far exceeds that of wages.

Overall, Broward is suffering from a 74,173-unit shortage of affordable rentals for low-income households, and it is also 46,170 properties short for potential low- and moderate-income buyers. Fortunately, the county and 36 | Invest: Greater Fort Lauderdale 2020 | REAL ESTATE

its residents are taking proactive steps to address the local housing affordability crisis. For example, 73% of Broward voters approved the establishment of a dedicated affordable housing trust fund in November 2018, which cannot have its funds diverted to nonaffordable housing-related uses. Although the total appropriations are still being negotiated, officials are hoping to have up to $30 million in the fund by 2033.

Prior to the passage of the trust fund, in 2017, the county had embarked on a three-year, $15 million per year affordable housing investment plan, with $11 million being invested to date. The individual municipalities within Broward are also throwing their financial weight at the issue, including a 2018 joint agreement between Hollywood and the county to spend up to $25 million on neighborhood revitalization and affordable housing; the city of Tamarac’s update to its homestead exemption for seniors that provides an extra $25,000 on top of the county’s own $25,000 exemption; Broward County Public Schools’ program to waive impact fees for developers of affordable housing; and South Florida Community Land Trust’s initiative to buy property across the county and rent it at below-market rates.

Unfortunately, one of the most effective ways to combat housing affordability, increasing wages, doesn’t seem to be forthcoming anytime soon in Broward. Many Broward residents earn below the county’s median wage of $17 per hour, and precious few occupations in the county pay above it. Median rent in Broward has increased by 16% since 2011, while wages increased by only 10%.

Growing neighborhoods One of the things that attracts new residents to (

)

REAL ESTATE INTERVIEW

Senior access Access to senior living facilities is not only important for the elderly population living in the region, it is important for attracting people of all age demographics

Patricia Will CEO & Founder – Belmont Village Senior Living Why did you choose to build the first Florida facility for Belmont in Broward County?

We are extremely bullish on entering the South Florida market. Entering Broward County was definitely premeditated and not a whim. When we were deciding to enter this market there were a couple things that stuck out as major opportunities. The first was the high density of the senior population. In Broward County, there are over 100,000 seniors over the age of 75, and the growth rate of that population is also very good, at over 3 percent. The stable growth rate for this sector of the population combined with a resilient underlying economy is what we look for. It is not good enough to just have a lot of older people, there also needs to be a vibrant underlying economy with adult children of these seniors and grandchildren who are coming into the market and not leaving. This is why we’re not, for example, in the Rust Belt, where there is a large concentration of elder seniors, but younger people often end up migrating to places like South Florida.

Fort Lauderdale and Broward County both have an underlying movement of younger people to this region and an established, large population of seniors already living here.

Another factor that strikes us about Broward County is that there is very low penetration of senior living communities like ours compared with the national average. If you were to look across the country and look at all the primary markets you would find that senior living and senior housing and care represents about 11 percent of eligible seniors. It is under 7 percent in this region. This tells us that Broward County is a major market opportunity.

How is the availability of access to facilities like Belmont Village important to the overall growth of Broward County?

There are two reasons. The first is that this county wants to retain its existing population. If somebody has to go to some other part of Florida to get highquality seniors housing and care, then they are losing that population and that older population effectively has a large portion of the wealth.

The other reason is that if they want to continue to attract younger people into the community, who are still in the workforce, then the county needs to have a place for these people’s parents. If people are leaving the Northeast, for example, and mom and dad are still there, then they are not going to want to leave them behind. So having facilities like ours is extremely important to the future of the local economy. www.capitalanalyticsassociates.com

| 37

REAL ESTATE OVERVIEW

Gerald Stryker President & CEO – John Knox Village

When you take on a vision as grandiose as John Knox Village, you must be able to execute on it. This execution comes down to having great collaborations and partnerships. We know what we are good at and yet we learn more every day. That said, our ties with community partners and universities are a major key in our success. We have been working very closely with Nova Southeastern University, because I foresee a day where we will use their campus in a way that creates a smaller neighborhood setting where our residents can enjoy sports, music and classes.

( ) Greater Fort Lauderdale is the host of promising up-and-coming neighborhoods where it is truly possible to “live, work, and play.” While there are many such areas in Broward County, there are a few that stand out in particular. One such neighborhood is Victoria Park, which retains the classic beauty of its more traditional Florida homes while beginning to spice things up with a splash of new development. Some of the features that make this neighborhood so enticing are the proximity to Fort Lauderdale Beach, Las Olas Boulevard, and the Broward Center for the Performing Arts. Another hot neighborhood is the Tarpon River District, a familyfriendly neighborhood with easy access to the hustle and bustle of Downtown Fort Lauderdale. Many young families at a variety of income levels have moved into the area recently and enjoy access to its fantastic parks and the regional favorite Tarpon River Brewing Company.

Perhaps the quintessential revitalized neighborhood in Broward County is the Flagler Arts and Technology District, or FATVillage, for short. Twenty years ago, FATVillage was an economically depressed warehouse district with some low-income housing, but today it is a bohemian wonderland of street art, galleries, restaurants, and luxury apartments thanks to an inspiring collaboration between local artists and developers. FATVillage is further buoyed by a Virgin Trains USA station that brings foot traffic into the neighborhood. Another neighborhood of note is Colee Hammock, which is among the oldest, most diverse, and most eco-conscious neighborhoods in Fort Lauderdale.

Colee Hammock sits along the Intercoastal Highway and the New River, with homes in a variety of styles and price ranges, as well as theaters, restaurants, shopping, and other entertainment venues in walking distance.

38 | Invest: Greater Fort Lauderdale 2020 | REAL ESTATE

Fort Lauderdale is also an example of how changes in demand have reshaped the original vision of particular communities. “Downtown Fort Lauderdale was originally planned as an office market; however, the bulk of the recent development has been residential,” said Steve Hudson, president and CEO of Hudson Capital Group. “This is not a bad thing, but at this point we need to figure out how to adapt to what we have, which is a very large Downtown population of 24/7 residents. This is not the Fort Lauderdale of the past, where snowbirds came down in the winter, lived in a condo on the beach and went back home for the summers. There is a balance needed between downtown residents, office, retail and nightlife.

Decades of planning and investment have propelled Fort Lauderdale to become a world-class city.”

Commercial industrial market As the labor market continues to grow throughout Broward County to more than 1 million workers, and employers continue to add jobs, the unemployment rate has fallen to 3.3% as of August 2019, below the national rate of 3.7%. The county’s manufacturing, construction, transportation and utilities industries have all added jobs and, consequently, have needed ever more industrial space, thereby contributing to the improvement of industrial market fundamentals. The overall vacancy rate for industrial real estate stood at 3.4% as of the close of Q2 2019, outperforming the fiveyear average of 5.5%. Southwest Broward saw the biggest gains, thanks to its status as the county’s second-largest industrial submarket, and held steady at 4.5% vacancy despite many new properties being delivered during the quarter. Approximately 2 million square feet ( )

REAL ESTATE OVERVIEW

www.capitalanalyticsassociates.com

| 39

®

oundtable:

Trending now Industry leaders look at the trends that are driving the real estate market, from technology and continuing education to shifting demand and sea level rise.

Dionna Hall

CEO Broward, Palm Beaches & St. Lucie Realtors

What are some ways that technological innovation is changing the real estate market?

On the national front, there are many different business models for brokers. We have traditional brokers with brickand-mortar offices, but we’re also seeing business models such as that of eXp Realty, which uses virtual offices.

Another brokerage model has one broker for the whole state and local agents in each market. These different models are emerging mainly because of technology – realtors have a lot more options, whether it’s coming into the office every day, working from home or even from another country. Obviously everything centers around having an smart phone, and so what we do here in regards to technology is make sure everything’s integrated so realtors have what they need at their fingertips. We make sure that our MLS has an app that’s easily integrated on their phones, and that they have different applications that allow them to access a variety of property information.

How important is continued education to realtors and brokers?

To stay current and be successful, our members need to have continuing education. Some prefer to obtain that knowledge in a classroom setting, while others like taking online classes. We find that a lot of our members prefer to come into our facilities, which is why we have so many offices. Many of our offices have about a 100-person classroom to meet the learning needs of our members. I think that is a testament to the fact that our members, and realtors in general, are always interested in continuing to educate themselves. They want to make sure that they stay current on the newest trends and information.

40 | Invest: Greater Fort Lauderdale 2020 | REAL ESTATE

Jonathan Keith

Broward President Miami Association of Realtors (MIAMIRE)

How has commercial real estate performed this year and how do you believe it will perform in 2020?

This year has seen some of our biggest sales within my company and within my team for commercial, so the activity is there. We always have people looking to put their money in different areas depending on what they are buying and what they are selling. The future for commercial real estate is still hot. We were getting this nod toward potential recession but as of now we are still not seeing that. We’re seeing some time frames, like the summer, that have been slower for commercial real estate than others.

Now, we are at that point where we are seeing a lot more activity. As we move into 2020, I see the commercial arena being more focused on class B and C office space. These are office spaces that are near suburban neighborhoods as opposed to being in a metropolis. These businesses do not want to pay top dollar for office space, but they still want to bring people together so they can manage them and the business can flourish.

What are the biggest challenges buyers are facing?

Affordable housing is always going to be an issue in this region. I believe that with the interest rates coming down, we are going to see some more positive activity in this space but there will always be a need for more. Infrastructure is always going to be a challenge for housing as well. The city has got to be able to keep up with the growth. I would also love to see our governmental bodies, like the FHA, become a little less stringent, specifically on condos. It seems like they are just putting a lot of roadblocks in the way of a buyer that wants to be in a building by means of FHA financing.

REAL ESTATE ROUNDTABLE

David Martin President Terra

What emerging trends are you keeping an eye on at the regional level?

Traditionally, the population demanded more of a single-family product. Today, there is more demand for an urban product. People are now starting to realize what urbanization is and the benefits it provides, like walkability, a reduced commute and ultimately more time in their day. People are always trying to find a way to create more time. Putting employment and housing closer together is a mission that is going to solve many of the challenges that we have in South Florida. The shift to residents choosing to move into more of an urban environment versus always looking for the single-family house is going to be a continuing trend.

The second trend we are watching within real estate development relates to public-private partnerships.

Cities are looking at their portfolios from an asset management perspective and realizing that they can acquire incremental tax revenues from certain types of development. There is a lot more planning and strategic thinking at the municipal level regarding public-private partnerships, more than I have seen in the last 20 years in Broward County.

How are you positioning your company to be able to weather the next economic slowdown?

We want to position ourselves to be economically resilient by improving our neighborhoods, which is ultimately going to make our assets more valuable. We are investing in ourselves to ensure we are less affected by real estate cycles and to try to minimize the peaks and valleys of the cycles.

Gregory West CEO ZOM Living

What is your view of the South Florida landscape for residential real estate?

We are seeing a lot of housing being built and finished in the urban core, both in Miami and in Fort Lauderdale.

I believe we are entering a period of oversupply in Fort Lauderdale and Miami. That being said, I fully expect rent, rent growth and absorption to slow into 2020.

The number of tower cranes around Downtown Fort Lauderdale is an indication of a great market, but this pace of development is not sustainable long term.

There will certainly be submarkets in Broward that are successful outside of Downtown Fort Lauderdale. I just believe we are entering a time where there is more housing supply than the market demands. I also believe this will correct itself rather quickly, but we are in a soft patch now.

How much of a focus should developers have in regards to resilience against sea level rise?

The topic of environmental resilience is incredibly important not just for individual developments, but for our community as a whole. Sea level rise is the biggest existential threat to the South Florida community. It’s important to understand that it does not necessarily threaten the very existence of our community, but it does threaten our growth and economic prosperity. As a community, we have to be conscientious that the world around us is changing and we have to adjust our physical place to accommodate that. The good news is that this threat is not like a hurricane where we only have a week to prepare. Sea level rise happens over the course of many years, and we know what areas are vulnerable. www.capitalanalyticsassociates.com

| 41

REAL ESTATE INTERVIEW

Still strong An abundance of buyers and escalating prices are signs the market remains resilient despite talk of a downturn

Ryan Kratz President, Southeast Region|US Brokerage – Colliers International Where do you see the hotspots in the next few years in South Florida?

There is going to be more activity in urban infill, which there has been for a while. There will be redevelopment of underperforming and under-utilized properties.

We are seeing this in Downtown Fort Lauderdale significantly, but the suburbs are also alive now too. There was an assumption that the millennial generation would only prefer to be in the core of a city or the first ring suburb. The reality is is that for a host of reasons, one is price performance of housing and another is the formation of families, we are seeing millennials do exactly what almost every other generation has done: moving to the suburbs. They are either renting or buying houses at more affordable pricing, which gives way to more office, retail and new housing development out in the suburbs.

Have you observed any signs of a downturn for the real estate market in South Florida?

We have not seen any signs that would lead us to believe that a downturn is near. In our industry, typically the leading indicator of a downward trend is vacant land sales. When vacant land sales start to slow down or pricing is starting to change dramatically, we will then see a follow-on decline of activity in office, industrial and retail. This is less so in apartments and medical offices, some of the more resilient areas of commercial real estate, but as of now we have continued to see land prices escalate. There are still plenty of buyers and pricing is aggressive for vacant land, but the deals are still getting done, which tells us that we are in a healthy market.

42 | Invest: Greater Fort Lauderdale 2020 | REAL ESTATE

What is your take on the sentiment that we may be overbuilding in South Florida?

In the commercial space I do not believe we are overbuilding. South Florida has had its histories of overbuilding, particularly in the condo space, over the years. There are a lot of residential units going up in Fort Lauderdale, but it also could be argued that the market is underserved on account of the growth they’re experiencing. It used to be a follow-the-crowd business, where we would see a superstar project go up and then other developers would try to either emulate or just build off of the success of that one.

Today’s market has become a much more data-driven business, so the likelihood that we overbuild a market today is much lower than it was 15 years ago. Data gives us the ability to know that if we add a certain project, the likelihood that we cannot get it leased up for two or three years may be high or low. We never used to have such good data to tell us that information.

Rocco Ferrera CIO Stiles Corporation

Why should people invest in Broward County?

Southeast Florida is an institutionally-qualified market, and Broward County is just starting to hit its economic stride. We have a population of nearly 2 million, a high rate of development growth and there is continuous migration into the region. These are among the key elements that institutional investors look for when deciding where to invest: people, growth and jobs. On top of this, there is the absence of new land, so the existing land will become more valuable over time.

How are you navigating the lack of skilled labor?

Attracting young talent and retaining them has become a challenge. Our construction company is in a constant battle for labor, management and experienced superintendents and project executives.

During the recession in ‘07, ‘08 and ‘09, a lot of young people were scared away from choosing a career in this business. To address this issue we are involved with all the schools locally, from FAU to Broward College, and we are offering them internships. What we hope to do is to expose these younger students to all the benefits a career in the construction industry can bring them.

How are you helping to address the lack of office space in Broward County?

We are at a point where vacancies are historically low and rents have never been higher. Office space has gone through a bit of an evolution in terms of demand as companies assess how much space they actually need to successfully run their businesses. A lot of the pre-leasing we have done recently is to existing companies that are taking slightly less space, but it is much more efficient space. We felt it was time to build another office building on Las Olas Boulevard. It had to be on this street because that is where the primary demand is. When that building is completed, it will conclude an almost 20-year gap since the last office building was constructed on Las Olas.

44 | Invest: Greater Fort Lauderdale 2020 | REAL ESTATE

( ) of additional warehouse or distribution space is under construction in the county, most of which is already available for lease. Asking rents for industrial space in Broward County have gone up by 8.8% to $9.62 per square foot under a triple net lease.

Commercial retail market Like its industrial real estate market, Broward County’s market for retail space has been characterized by a steady decline in vacancy and an increase in asking rents over the past few years. With a current supply of approximately 50 million square feet of retail space, the contracting availability of space in Broward has caused asking rents to increase by more than 15% over the past five years. During this same five-year period, 1.4 million square feet of additional retail construction was completed. Thanks to a retail market that does more than $23 billion per year (thanks to the spending power of locals and millions of tourists) and which is expected to grow by 5.8% by the end of 2019, this new construction was absorbed quickly. This white hot demand helps to keep construction of new retail space active despite rising construction costs, and construction activity is expected to accelerate even more in the near future.

One particular retail space received some major renovations this year. The Sawgrass Mills Mall, one of the biggest tourist draws in South Florida, is receiving some long overdue updates to its interior spaces this year, some of which date back to the mall’s late 1980s, early 1990s origins. The Simon Property Group-led multimillion-dollar overhaul, expected to be completed in time for the mall’s 30th anniversary in 2020, will consist of replacing broken furniture, tearing up old flooring and carpeting, and integrating natural light sources into the interior. In addition to these renovations to its existing interior space, the country’s largest outlet mall, also is adding more stores and a 174room AC Marriott hotel.

Commercial office market As expected, the final category of commercial real estate, office space, also performed well in Broward County in Q2 2019. The professional, education and health services sectors in Broward County grew faster than those of all other metro areas statewide, while the financial sector also saw modest gains. As these industries are typical renters of office space, their workforce growth means greater demand for this kind of property. This demand is reflected in spiking asking rents, which grew by 7.3% to $32.91 per square foot during Q2 2019. Breaking that down into types of office space, Class C space grew the most by 13.1%, followed by Class B

REAL ESTATE OVERVIEW

space at 4.3%, and Class A space finishing at 3.8%. Despite the seemingly modest growth, Class A space finished at a historic high of nearly $40 per square foot. Asking rents exploded in the Cypress Creek/Commercial submarket, one of the area’s largest, rising by 5.2% over the past year.

As expected from such strong growth in rent prices, vacancy rates are also down countywide, resting at 11.5% at the close of Q2 2019, a modest decrease from 11.7% in Q2 2018. This negligible shift can be explained by a few large move-outs from the central business district that offset otherwise good drops in vacancy. There was more than 622,000 square feet of new office space under construction at the close of Q2 2019, 18% of which has already been pre-leased, with more leases expected to be signed as the projects move closer to completion.

Overall, Broward County has done well attracting midsize companies, but tenants with larger square footage requirements have continued to look to Miami’s office submarkets instead, causing Broward’s growth in this particular submarket, though strong, to lag behind Miami’s.

Investment opportunities When the Tax Cuts and Jobs Act became law in 2017, it presented an exciting opportunity for real estate investment in the form of Opportunity Zones, which are designed to direct private real estate investment into areas that have long been economically disadvantaged by affording capital gains tax deferrals to investors. It just so happens that South Florida is one of the hottest areas in the country for Opportunity Zone investment, with all of the region’s largest cities placing on a list of the Top 25 metros in which to invest in Opportunity Zones, including Miami, Fort

Access to affordable housing is an issue that Broward County is working hard to try and solve.

Lauderdale, and West Palm Beach, based on their favorable tax regulatory environment, rapid job and population growth, and positive outlooks among their commercial real estate markets. In all, there are 123 Opportunity Zones in South Florida, with Miami-Dade coming out on top with 67, Broward following with 30, and Palm Beach right behind with 26, while 16% of the region’s commercial real estate assets are located within an Opportunity Zone.

The hope is that these zones provide another incentive to invest in South Florida real estate, while directing some of this economic activity into the areas that need it most. “In my practice, we have seen a lot of dollars lining up to invest in Opportunity Zones. A lot of these Opportunity Zones in Broward County are in downtown areas that are highly developable. In Fort Lauderdale,

REAL ESTATE OVERVIEW

Brent Baker Division President – Pulte Homes

We have had quite a few successes in the Broward County region in 2019. One has been the overwhelming success of our Hollywood project called Parkview at Hillcrest, which was a former golf course that we converted to a mixed-use project in 2017. This past year has been our most successful for this property because we are on track to sell over 175 houses. We have seen demand from buyers for this area from Broward to Miami. The other big success has been our property in Oakland Park. We worked for three years on the Oak Tree Golf Course, which was a golf course on 160 acres of land in the middle of Broward County that had been closed for 12 years. Several other developers had tried to convert that to industrial, commercial and residential but they had all failed. We worked with the neighborhood community for three years and we were ultimately able to get our project approved for 405 new homes. We closed that in September and we are out there now completing land development.

the whole area north of Broward Boulevard and west of South Andrews Avenue has tremendous investment and speculation occurring between the regional activity center zoning and the underlying Opportunity Zone.

We are also seeing developer clients rushing to get plans drawn up for Opportunity Zone sites so they can market those plans to investors. As appraisers, we are trying to figure out what is the premium in value for an Opportunity Zone site verses an non-Opportunity Zone site? We have not had enough data yet to start studying and make any conclusions, but that is what we are interested in finding out,” said Walter Duke, president and CEO of Walter Duke & Partners, Inc. Looking ahead As Broward continues to grow in terms of its diverse population and economic strength, there will be a steady need for investment in both residential and commercial real estate. For the time being, residential real estate prices continue to go up as the market remains steadily in sellers’ favor, and the cost to rent an apartment is following suit. Commercial real estate continues to be a promising investment, with extremely low vacancy rates among industrial and retail property and modestly low vacancy for office space.

New construction is always breaking ground to keep up with the influx of workers, and several trendy neighborhoods are enjoying steady growth as a result.

46 | Invest: Greater Fort Lauderdale 2020 | REAL ESTATE

In addition to providing places for professionals to live and work in ultra-hip communities, South Florida’s many Opportunity Zones entice capital into the region’s historically disadvantaged neighborhoods, ensuring that residents at every income level benefit from the area’s success.

“I speak to brokers and developers all the time and right now we have record low vacancy, but if interest rates go up and GDP goes down, the game changes. If we continue to have trade issues, that could seep into the health of the industrial development sector. Overall, however, I’d say the outlook for this area is pretty awesome. I am always cautiously optimistic, but if I was to survey 10 developers, five would be super-optimistic, one would be not optimistic at all and the other four would be cautiously optimistic,” Jules R. Morgan, executive director of NAIOP South Florida Chapter, told Invest:.

Similarly, Lamar Fisher, President and CEO of Fisher Auction Company, believes the game could change sooner rather than later. “Some of the experts that we deal with have expressed concern about the first quarter of 2020, and how the market might step into correction mode. The real estate market is cyclical and ultimately it has to have a correction.

Whether it is going to be a big dip or a small dip, I don’t know, but I believe it will happen. I don’t think the market can sustain the future development that is on the books right now.”

Construction & Infrastructure: The construction sector is facing challenges from high costs to land scarcity, but the overall outlook remains stable for the near term. On the infrastructure side, the emphasis is on sustainability and climate change while still creating a profit, with solar energy the leading contender in the alternative energy segment.

www.capitalanalyticsassociates.com

| 49

Industrial strength: Builders and developers are confident the momentum of the past years will carry forward on the back of industrial demand As the housing market in Miami gets more and more expensive, those looking for the Miami lifestyle without the price tag are beginning to look to neighboring areas that offer similar quality of life. Broward County is a hot favorite. Alongside an appetite for industrial real estate, the region’s construction industry remains on firm ground.

A number of major projects are underway, including the expansion of the Broward County Convention Center that will add a new hotel to the skyline, while the rising e-commerce tide is helping to lift the commercial sector. New inventory has already hit the market this year but 1.3 million square feet of industrial and flex space remains under construction, according to the Broward Industrial Report for Q2 2019 from Colliers International. Despite the stable market, construction costs are rising and industry jobs have taken a small hit, with total employment in the segment dipping 0.4% in September year on year compared with a 4% gain in the rest of Florida, suggesting that while the market remains in growth mode, there are challenges ahead.

Performance Among the key determinants of a sector’s health is

cost, and recent figures suggest construction is getting more expensive nationwide. The national Laspeyres Price Index rose in August 2019, coming in at 135.7 compared with 134.8 in July and 130 in August 2018.

This is the ninth consecutive year-on-year rise in the basket of goods used in construction activity. Labor costs for private industry workers were also up 2.6% from June 2018 to June 2019. Wages and salaries increased 3% for the period and benefits were up 1.8%. Constructors and developers in Broward County are also feeling the pinch, said Andrew Verzura, principal at VCM Builders, Inc. “Construction costs are very expensive, and they have not gone down.

Compared to when we started building spec houses in 2013 to where we are now, construction costs are up 30%. Construction costs are deal breakers for a lot of projects that we are looking at because they just do not make financial sense. The banks are not going to finance projects when the numbers do not make sense and will not work. We have seen many of the large rental communities being funded by pension funds.

Most of these projects that are primarily funded by pension and real estate funds have been looking for a 6% return.”( )

50 | Invest: Greater Fort Lauderdale 2020 | CONSTRUCTION & INFRASTRUCTURE

CONSTRUCTION INTERVIEW

Labor challenge Remaining proactive by constantly interviewing candidates and running internships can help alleviate workforce crunch

Brad Meltzer President – Plaza Construction How are you handling the lack of construction labor in South Florida?

Eight years ago, the lack of labor was much worse than it is now. I believe a lot of people thought that after the Lehman crash we were going to see a five- to sevenyear suppression of work, but it really turned out to be about a year and a half. The issue is that a lot of the construction labor force had already moved away so many subcontractors, which are the companies that we rely on to perform the work, downsized. When the market came back strong, they were caught off guard.

While it is still a current challenge to find workers for all the construction projects, we are trying to remain as proactive as possible. We are constantly interviewing and looking for new talent. Our internship program is also robust, so we are looking for not only industry veterans, but for young people to come join our company and grow with us.

How are you attracting young professionals to your company?

What we are finding is that by reaching out to young people and giving them an opportunity as an intern with our company, opens them up to the possibility of a future in this industry. We also started a program about a year ago called Plaza Futures. This program is for somebody who joins Plaza Construction and has between zero and two years of professional experience.

We put them in this program, in which they rotate around our company and learn the different facets of our business, including field superintendent, project management, estimating, accounting and safety. The purpose is to give them a different view of what these jobs actually entail.

What have you observed in regards to demand for more office space?

The migration of people from Northern states like New York is fueling a larger demand in the office market.

Office buildings by their nature are usually built based on some large tenant having already been secured. In South Florida, office development has always been strong, and very rarely do we see buildings get built and not fill up quickly in the office market. I believe there is still room for more supply. The project that we are working on now for Royal Caribbean is somewhat of a game changer in regards to the office market. The leaders at Royal Caribbean are really forward-thinking people, and we are building a campus environment that I do not believe anybody else in South Florida can rival. What we will see start to happen because of bestin-class facilities like this is more of the best-in-class talent pool moving to South Florida. www.capitalanalyticsassociates.com

| 51

CONSTRUCTION OVERVIEW

Asi Cymbal President & Owner – Cymbal Development

We have a significant interest in Downtown Fort Lauderdale, and we own a six-acre site along the water where we are building The Marina Lofts. We brought in Bjarke Ingels, an amazing architect, to design the project. Marina Lofts will be a multi-use project with residential, marine and retail, and a possible hotel and condo component as well. We have waited for the market to come to us, and we believe this is happening now with all the activity that is happening south of the river. It is primarily a rental market on the river and we think there is an opportunity to create something spectacular and cost-efficient along the waterfront.

( ) Tariffs on steel are not helping developers. Since Point Riverbend for just over $88 million, or $172 per President Trump imposed tariffs on steel imports square foot. under Section 232 in March 2018, domestic rebar prices In addition to rising cost, developers are also facing have increased. Turkey, a traditional seller of rebar a dearth of land availability. As more and more into the United States, saw buying appetite reduce as developers see the value in industrial real estate shipments were subject to 25% tariffs and, later, 50% to bolster a buoyant e-commerce sector, there is a tariffs on steel rebar entering the United States. Turkey new trend toward buying smaller parcels of land for sent an average of 150,000 tons per year of rebar to industrial development, some of which total just 4 or the United States, but in 2018, this reduced to 126,288 5 acres. tons and in the first half of 2019, Land is so scarce in fact that only 48,748 tons were sold. As developers are now looking to recompetitiveness decreased, U.S. zone so that they have enough developers were forced to buy space to build on. Lennar Corp in domestic rebar, which is typically July announced it wanted to remuch more expensive. zone a Coconut Creek property In this landscape, it is becoming that was approved for a shopping more and more expensive for center in 2008 that was never developers to build properties, built. The vacant lot is now zoned but that hasn’t stopped growth for commercial use, but Lennar is in Broward County, especially looking to put it to good use. “The among industrial developments. demand for brick and mortar In terms of industrial properties, commercial development has Dev Motwani, Merrimac Ventures a key driver in the region, diminished due in large part to 531,552 square feet of industrial online shopping,” Lennar stated properties were added to the county in the second in the application. “The city and county are both quarter of 2019, but vacancy rates increased only experiencing strong demand for residential units at all marginally to 4.1% from 4%, indicating new property income levels.” is being snapped up soon after it is put on the market.

Lennar Corp is the top homebuilder in South One example is Extra Storage Space’s purchase of Florida, according to a ranking by the South Florida 15 self-storage facilities across Broward County in a Business Journal. It broke ground on 2,977 properties $104.4 million deal, making it South Florida’s biggest in the 12 months ended June 2019, with a price range industrial sale in the second quarter. Broward was also of $240,000-$1.32 million. The second-largest is home to the region’s second-largest sale in the quarter: D.R. Horton, which began work on 848 properties ASB Capital, an institutional investor, bought Bridge during the period, with a value of $202,000-$881,000.

So much capital is looking to go into Opportunity Zones that we are seeing land prices rapidly increase.

52 | Invest: Greater Fort Lauderdale 2020 | CONSTRUCTION & INFRASTRUCTURE

CONSTRUCTION & INFRASTRUCTURE OVERCONSTRUCTION OVERVIEW VIEW

Rounding out the Top 5 are GL Homes, Ryan Homes and DiVosta Homes, with 761, 427 and 357 properties in the works, respectively.

Between costs and land availability, there is also the future of the economy to consider, and while most pundits point to the county’s resiliency as a positive factor, the fact is that some sectors will perform better than others. “In regards to trends, any slowing down of the economy may have a negative effect on the hospitality sector. On the other hand, healthcare will continue to remain strong for our industry because there is so much competition within healthcare systems that they are constantly looking to improve their facilities, making them more like hotels. Rising water levels and sea levels are also going to present an opportunity for companies like ours because in the near future contractors are going to need to help with mitigating the negative effects these higher tides can cause. There are many areas in Broward County where the infrastructure is aging and needs to be improved to support the local growth and climate change. This is also an area that we are focused on as we look toward the future,” said Debbie Danto, owner of Danto Builders.

Opportunity Zones A key development for the construction sector in late 2017 was the creation of Opportunity Zones.

This program offers tax incentives to boost the development of less privileged regions. In South Florida, Broward County has 30 Opportunity Zones and Miami Dade County has 68. “The Opportunity Zone and tax benefits do not make a bad project good, but they can make a good project great,” said Dev Motwani, president and CEO of Merrimac Ventures in an interview with Invest:. “If it is a good fundamental project, then that means we are going to have a better after-tax return by virtue of the benefits. So much capital is looking to go into Opportunity Zones that we are seeing land prices rapidly increase. We focus on the deal first, and if it happens to be in an Opportunity Zone, then that is just an added benefit, but we are not chasing deals or capital solely based on the Opportunity Zone aspect.” Merrimac Ventures has two existing projects in Opportunity Zones, a dual-branded Hilton Hotel in Flagler Village adjacent to the Virgin Trains USA station and a self-storage and retail facility on Broward Boulevard.

To qualify for a 15% tax break, investors must harvest capital gains in 2019 and reinvest them within 180 days, otherwise they will be “grandfathered out” of the scheme. However, benefits can still be drawn ( )

Alberto Fernandez President ANF Group

What factors make ANF Group appealing to potential clients?

The local community appreciates dealing with a company that has longevity in the South Florida area, and one that emphasizes hands-on management.

I am personally involved in much of the strategic management of a project at the beginning, helping with pricing and in the execution of the project as it gets built.

Many of the larger firms are national, so customers do not have access to the real decision-makers, and the owners of those companies. This is something we have perfected and built relationships around. What clients appreciate about us the most is our pre-construction services. When a developer or any organization is getting ready to start on a big project, the first thing they want to know is what the costs are going to be.

A lot of the time owners and developers will come to us without a full set of drawings. Instead, they bring layouts of how the building is being proposed. They use us because of the historical data we have collected from buildings that we have done in the past and our local knowledge of the area. In turn, we give them what we call a ROM (rough order of magnitude), which is an estimation of a project’s level of effort and cost to complete. We try to stay within a certain percentage, 3-5%, of the original ROM throughout a project.

What impact are you seeing from the U.S. tariff action?

I have not seen any recognizable increases in pricing due to tariffs. This is in comparison to about a year ago when we had an uneasy time with this subject because wood, steel and other overseas material were going up in price due to the tariffs. We had a rough time because since the industry could not anticipate this, we were not implementing those clauses into our contracts. We were fortunate because many of our clients were more flexible in their thinking and accepting of the increased cost.

Lately, in the last six to eight months, this price hike has been subdued, but we can’t say what is going to happen in the near future because it is still a volatile situation. www.capitalanalyticsassociates.com

| 53

®

oundtable:

Why Broward?

Leading developers provide their insight into the Broward County real estate market and discuss the factors impacting their business.

Doron Broman

Jeff Burns

Managing Partner Moderno Development Group

Why did you choose to focus on the Broward County market as opposed to other areas in South Florida?

What we first found attractive was the demographics, growth and transportation projects in this region.

The other piece that caught our attention was the development that was already happening in and around Downtown Fort Lauderdale. We also found the city’s master plan to be very modern, organized and clear, allowing us to see the city’s plans for the next 20 years. We found Fort Lauderdale essentially much more organized then for example Miami. Moderno Development Group represents mainly foreign investors from Israel and Germany who are looking for a large exposure into modern U.S. cities and the U.S. economy in general, Fort Lauderdale matches this criteria perfectly.

How has the abundance of newly constructed residential facilities affected your business?

While there is a lot of supply coming from the construction of new apartment buildings, we haven’t seen a drastic effect yet on the market. Even though the supply has increased threefold in the past five years, prices have also increased 5% per year. I do believe we have reached a point where growth rates are going to be more moderate and this is reflected in our models. Moderno’s valuecreation strategy differs from most other developers in that we build to hold for at least 10 years post-stabilization.

This strategy is less affected by small shifts in rent prices and rather focuses on long-term fundamental growth aspects of our investments. We are tapping into the near Downtown areas because more people are seeking to live in more walkable areas.

Founder & CEO Affiliated Development

How have you leveraged the Opportunity Zones in the state and what is their potential in Broward?

In April (prior to the IRS posting its regulations) we closed our The Six13 project with Qualified Opportunity Zone (QOZ) funding. We are one of the first companies to implement QOZ financing for a project of this kind in the state of Florida. These zones are definitely getting a lot of thrust, but there are more people talking about it than implementing it. The QOZs are definitely going to have an impact, but it is becoming more challenging to find sites that make sense due to unrealistic landowners/sellers.

There might be a reality check setting in with landowners who found themselves in a QOZ and have priced their land ridiculously high. It could have the adverse effect of preventing projects from happening in some areas because of false expectations. Our philosophy is to remain disciplined. If we strip away the QOZ benefit, is this still a deal we’d do? If the answer is yes, we’ll take an aggressive position. Some people are doing deals that would not otherwise pencil-out (without the QOZ rules).

The program was intended to incentivize investment into these areas not make a bad deal good.

Which areas of the region have the most demand for multifamily developments?

Fortunately for us, all of South Florida is booming. More and more people are moving here from the northeast and other high-tax states because our business climate is favourable and our quality of life is second to none.

Certain markets have experienced a tremendous amount of urban growth during this latest cycle, such as Flagler Village.

54 | Invest: Greater Fort Lauderdale 2020 | CONSTRUCTION & INFRASTRUCTURE

CONSTRUCTION ROUNDTABLE

Alan Hooper

Co-Founder Urban Street Development

How will Opportunity Zones continue to affect development?

Opportunity zones are going to accelerate development and help bring real estate and business investment to areas where in the past, might have been a struggle.

By giving capital gains tax deferrals and abatements to investors, now private capital can be added to other efforts like CRAs to help infuse redevelopment. However, since it is private capital and not government subsidies, the investments require due diligence. Projects are going to have to pencil out financially, so the location and business plan will matter. But as the better areas of the zones are improved, the wave of investment should move deeper into vital areas. And if the financials need a boost, that’s where CRAs and other programs can help bridge the margins.

How has the low unemployment rate in Broward County affected your business?

We are tight right now as it relates to construction labor, and having a 3% unemployment rate plays a large factor. This is a challenge, but from a glass is half full perspective, it is a reflection of how well the economy is doing. The alternative is that business is slow and people need jobs. That being said, I am not so worried about the challenges of labor as I am the challenges of managing how people can continue to enjoy the area, while dealing with the effects of growth and change. With an ever-growing population and changes in the environment, it’s a balancing act that requires investments in things like transportation and infrastructure.

Ryan Shear

Managing Partner Property Markets Group

What is attractive about Fort Lauderdale and other areas of Broward County?

Fort Lauderdale is an underrated market for a lot of people. Back in the 1990s, it was seen as a bit of a sleepy town, and it still is in some ways, but in reality is major metropolitan. Some of the area’s metrics, such as job growth, household income, wages and salaries, and even transportation, are much better compared to Miami. We see Fort Lauderdale as an up and coming, growing market, as opposed to tier 1 cities such as Miami, Chicago, Boston, New York City and D.C. Many of the less mature markets, such as Orlando, Phoenix, Austin, and Charlotte, are more appealing to us.

How are you hedging your strategy to prepare for an eventual downturn in the market?

Personally, I believe in core-city multifamily development growth. It is just less cyclical, population growth is not going to slow down in most major cities, and multifamily is a low-risk asset class. It is not that you can’t lose, you can lose if you take on expensive debt, or stack your capital with a lot of risk, but philosophically, you shouldn’t lose with an apartment building with the right location and patient capital.

What is your company looking to accomplish in 2020?

I believe it will be our best year. We have spent years consolidating our departments, capital and acquisitions, because real estate does not really work nationally, real estate works locally. The firm has never been as streamlined as we are now. We have a veteran, experienced team in construction and asset management. www.capitalanalyticsassociates.com

| 55

CONSTRUCTION OVERVIEW

( ) from the program after this point, just at a lower rate. The scheme has already drawn in several investors, including BH3, which is building a $100 million mixed-use development on West Atlantic Avenue.

The Qualified Opportunity Zone program is still a learning curve for many participants but it can develop into more than just a tax incentive scheme. “We are starting to see more projects target those areas within Opportunity Zones. There are definitely several projects that we have looked at over the past several months because they are located in an Opportunity Zone that we might not have had on our radar two years ago. From an investor standpoint, it is determining what the true tax implications are and if the pro forma works. As more guidance comes out from the IRS, the uncertainty diminishes, and ultimately these zones are going to create new opportunities for projects,� said Brian Sudduth, president of Miller Construction.

Commercial Broward County has a younger population than the state average, with 56% of the population below the age of 44. As Broward County becomes younger, one of the main drivers of commercial real estate demand is millennials. One of the major demands of these younger generations is convenience, meaning they want to live, work and socialize in the same radius.

Developers now have to think more and more about the added value they can offer in commercial real estate, especially given the competition brought about by the rise of e-commerce. There is still demand for

Sales in October 2019 of luxury and median-priced homes in Broward County fell 5.9% from the year-before period.

CONSTRUCTION OVERVIEW

commercial developments, but they have to offer added value for the consumer over and above shops or office spaces.

For instance, last month, Balfour Beatty signed a $780 million contract with the county to expand the existing convention center and build a hotel expansion to boot. The expansion will add 525,000 square feet of meeting space, a new 65,000 square foot waterfront ballroom and a waterfront plaza. The hotel will have 29-storeys, 800 rooms, a ballroom, a rooftop bar, a spa and fitness center and pool decks, not to mention breath-taking views of the Atlantic Ocean.

In 2018, e-commerce was worth $501 billion and this figure is expected to balloon to $740 billion by 2023. As e-commerce booms, so too does the need for industrial storage sites that are close to large urban populations.

“Most online products are stored in warehouses, and the facilities need to be near major metro areas to accommodate consumer expectations of instant gratification,” said Al Brooks, Head of Commercial Real Estate and Commercial Banking at JP Morgan Chase in a blog post. “E-commerce companies like Amazon now offer customers two-hour delivery service options, and goPuff has an on-demand mobile app that allows you to order necessities from a warehouse.” Broward County offers proximity to both Fort Lauderdale and Miami, at a fraction of the price of land in Miami would cost, and developers are taking advantage of its potential.

In doing so, Miguel Pilgram, owner and CEO of Pilgram Group, said there needs to be a balance between what developers want and the history of the neighborhoods they are going into. “The biggest question for us developers should be how do we

Andrew Burnett Senior Principal – Stantec

Historically, we would see the demand for smaller residential units in the Downtown urban core because of the density of the population. As we moved away from the urban areas, the units were constructed bigger to attract more people, but now we are starting to see smaller units becoming attractive away from the urban centers.

This indicates that people are looking for alternative solutions that are more affordable. It may also be partially due to having more flexibility and adaptability in the way that we live and the way that we engage the community as Broward becomes more connected and dense.

We foresee more of these deals for smaller units outside of the main urban areas making sense for investors.

www.capitalanalyticsassociates.com

| 57

CONSTRUCTION OVERVIEW

Andrew Ansin Developer & Owner – Miramar Park of Commerce

Due to the growth of the internet and e-commerce, a lot of retail sales are now generated from spaces traditionally used for warehouses. There are fewer attractive retail spaces than there were previously, whereas the warehouse space is going from strength to strength. The rise in e-commerce has certainly been to the park’s benefit because it has kept warehouse occupancy rates high with a lot of demand. We have also noticed that our tenants increasingly need less distribution space and more office space with heavy parking requirements. They also like to have retail and residential space close to the park, which in turn allows the park to grow because it drives an increase in traffic.

preserve the history of an area, while still investing and promoting the growth. The thing we need to do is talk to the local residents. Most developers never talk to local residents because our objective is to come in, buy the properties at a low price and develop it for profit.

It does not matter to them how this development will affect the local community in that area. The other issue is that developers rarely bring in the culture that honors the history of an area. Instead, we will put up a design that says nothing about the local community.”

Residential One area that could potentially put a cloud on the sector is residential. As long as buyers continue to line up,

properties will be developed. But data from the Miami Association of Realtors suggests buyers are starting to have second thoughts. Sales in October 2019 of luxury and median-priced homes in Broward County fell 5.9% from the year-before period. By comparison, sales rose 2.3% in Miami-Dade. Condo sales also faltered, dropping nearly 13%. On the bright side, single-family home sales climbed 1.7%.

Still, luxury developments continue springing up across South Florida. In June, Rescore Property secured a $121.3 million financing tranche to develop mixed-use project Plantation Walk, which includes 700 luxury residential units, 160,000 square feet of office space and 190,000 square feet of retail space.

58 | Invest: Greater Fort Lauderdale 2020 | CONSTRUCTION & INFRASTRUCTURE

CONSTRUCTION OVERVIEW

Fort Lauderdale’s North Birch Road is home to 321 at Water’s Edge, with 23 residences with a starting price point of $2 million. The development has a sky terrace, private wine club and private marina, among other features, and was ranked one of Mansion Global’s Hottest New South Florida Developments of 2019.

Another segment that holds a great deal of promise is the emerging micro-unit trend, according to Joseph Kavana, chairman and CEO of Metropica. “One trend that is prevalent in Miami and emerging in Broward County is the concept of micro units. These are condo towers with smaller units, and very good amenities.

Younger people and professionals do not need to live in large units and pay a lot of money that they do not want to spend. People are also becoming more accustomed to the idea of spending time at their home to do things that are absolutely necessary like sleeping, bathing and light cooking. Most of their social activities are being conducted outside the home or in common areas that most of these buildings now offer, so the need for a lot of space is not as prevalent.”

Increasing residential developments in the city has knock-on effects, and developers are now eyeing Las Olas Boulevard, which connects the beach to downtown. There will be over 1,000 restaurant seats developed in the next several months as features such as the Virgin Trains USA bring new tourists and new connectivity to the Fort Lauderdale area.

“Historically, Fort Lauderdale had always been a secondary market to Miami. Then, when prices kept rising in Miami, developers started looking for cheaper dirt and came here,” said Jenny Morejon, Executive Director of Fort Lauderdale Downtown Authority in an interview with Forbes.

On the other end of the scale, affordable housing remains a sore point for the county but a potential boon for residential constructors. As of July, Broward County was short 74,173 units for low income renters.

In response, the county has created a dedicated fund for affordable housing, with the goal of saving $30 million by 2033 for housing projects. So far, $11 million has been spent. Other initiatives include a commitment by Hollywood and Broward County governments to invest $25 million on low to moderate income housing. In the non-profit sector, South Florida Community Land Trust is buying property and selling it at below-market rates.

Looking ahead The jewel in Broward County’s crown in the coming years will be the industrial real estate segment, which has already attracted the attention of major

developers. At the end of 2018, Bridge Development Partners secured a $13.5 million construction loan to develop the 174,129 square foot Bridge Point FLL Logistics Center. This is in addition to the near 2 million square feet of industrial space the company is developing in South Florida.

Labor will continue to be a hurdle as skilled workers become as scarce as land. “The challenge of finding labor in construction is not limited to just identifying people for management roles; it is also finding quality craftsmen to work on these jobs. There are more opportunities than available workers in the marketplace. People leaving Florida and leaving the industry all together during the recession was one factor, but we also have a skills gap because for the last decade, high-school students were encouraged to go to college rather than consider vocational training for things like electrical, plumbing and welding.

Those programs are finally seeing a resurgence, but that gap has had an effect on available labor,” said Miller Construction’s Sudduth.

Overall developers and builders remain mostly confident in the near-term outlook for the sector and for Broward County. “My outlook for Broward is still very strong,” Verzura said. “There is competition but that is a good thing. I believe we will still see people buy properties here. We have a friendly environment for developing and a government that is pro development. As long as we have builders and developers continuing to focus on sensible building, then we should be in good shape for the next year.

We have to be very careful and look at deals that make sense because there are a lot of inflated deals out there right now. People all think their property is worth so much money but in reality it is only worth as much as people are willing to pay for it. The market is leveling off, which is not a bad thing, and it will be interesting to see how the market accepts all the new rental buildings in downtown.”

The ability to diversify will be a key to success in the case of a downturn, added Peggy Hogan Marker, president of Marker Construction Group, in an interview with Invest:. “The key is diversity into sectors that are also recession-resilient. For instance, we are starting to more actively pursue sectors like public and hospital work. While these sectors may not be as sexy or have the larger profit margins, they are great, steady work. It is all about not being focused on just one thing. Staying diversified in your work and continually focusing on growing different parts of your business are incredibly important in the case of another economic slowdown, or worse, a recession.” www.capitalanalyticsassociates.com

| 59

Risk factors: Sustainability, climate change are key considerations in infrastructure development Globally, infrastructure spending is lacking, but according to Oxford Economics, the United States will have the largest infrastructure spending gap by 2030, sitting at $3.8 trillion. The United Nations advises that countries spend around 3.7% of their GDP on infrastructure development but for the last decade, the United States has spent around 2.5%.

Spending on new infrastructure is deficient, but research shows the United States is spending more and more on the maintenance of existing assets.

According to a report by Brookings, “Since 2007, real spending on operation and maintenance jumped from $243.3 billion to $266.5 billion. Meanwhile, real spending on capital projects plummeted 16 percent, from $207.1 billion to $174.0 billion.”

Broward County ecosystem Infrastructure of cities and states in hurricane zones like Broward County is even more vulnerable.

In a study carried out after Hurricane Irma in 2017, vulnerabilities were identified in critical infrastructure such as roads, airports, storm water control, wastewater, telecommunications, drinking water, electricity, and ports in the event of

a hurricane. In response, the county expanded its modeling investment with the USGS to provide upto-date hydrological information that will help it to outline a capital investment plan that will protect the county.

But hurricanes are not the only risk Broward County’s infrastructure faces as a result of its geographical positioning. The county’s coast is “uniquely vulnerable” to flooding due to rising sea levels, says NGO Global Change. According to a report from Zillow, 792,226 houses in Miami-Dade and Broward counties are at risk of flooding by 2100 – at a cost of around $336 billion. As development continues across the counties, Daniel Suarez, South Florida managing principal at HDR, Inc., says fast action on infrastructure is vital. “South Florida is ground zero for dealing with sea level rise. As a community, we need to act as quickly as possible. It starts with having a productive dialogue with elected officials and making sure their constituents truly understand the impact sea level rise could have on this community. Most people hear about it and read about it but many do not truly understand how their lives might be affected. There also needs to be some

60 | Invest: Greater Fort Lauderdale 2020 | CONSTRUCTION & INFRASTRUCTURE

INFRASTRUCTURE ANALYSIS

for the county. “Throughout the three-year process, our Convention Center team focused on becoming the most energy-efficient, least polluting and healthiest work space among convention centers, which makes us more attractive to meeting planners and groups who are looking for a truly green meeting facility,” said Mark Gatley, regional general manager for SMG and the Greater Fort Lauderdale/Broward County Convention Center in a press release.

Broward County Convention Center is currently certified under the US Green Buildings Council’s LEED Communities program.

urgency about upgrading our infrastructure to be more resilient to rising sea levels.”

To better address the issue of sustainability, Broward County has set up an Environmental Planning and Community Resilience Division, charged with developing sustainable plans in the face of climate change. Some of the initiatives include strengthening the seawall height policy to a minimum height of 5 feet, pursuing penetration of solar systems across the county and promoting LEED building practices. Vince Yarina, principal and vice president of Langan Engineering & Environmental Services, Inc., points to water supply as the key environmental factors to consider. “Environmentally speaking, water supply is No. 1, followed by waste water treatment and how to handle that, particularly as we are seeing redevelopment in urban areas. In Hollywood, Fort Lauderdale, Pompano Beach, and Dania Beach, the infrastructure is outliving its time. As the population grows, we need to constantly improve and update our infrastructure.

The issues in the eastern part of the county, where we see the next wave of growth, are different, for example, from those in Pembroke Pines, Weston and Miramar, which have new infrastructure and are not yet being redeveloped. In the eastern part of the county, we have to make sure there is water, make sure it is treated, and we also seed flood control and infrastructure to manage both sea level rise and storm water.”

In 2012, the existing Fort Lauderdale convention center was awarded the gold LEED certification, underlining the importance of sustainable building

Water Revenues from Broward County’s water and wastewater system came in at $109.7 million in 2018, and is projected to reach $128 million in 2019.

In Broward County, the totality of these funds is to be reinvested in several areas of the water system, including regional treatment, regional transmission and retail water and wastewater.

But despite this investment, there remain worrying deficiencies that have yet to be addressed, with the Fiveash water treatment plant in Fort Lauderdale an example. An accidental rupture of a pipe at the plant earlier this year caused by a third-party contractor also caused havoc for the Fort Lauderdale community. The Fiveash plant processes 40 million gallons of water per day and the outage affected approximately 220,000 customers, including hospitals, hotels and shopping malls. Water service was restored with a temporary fix that patched the pipe a few hours later, but a warning to continue to boil water before consumption stayed in place over the following 72 hours. In its year-end 2018 budget, Broward County pledged a total of $252.9 million for new construction of wastewater and water treatment plants.

Climate change is set to add to Broward County’s water woes. As the sea levels rise, there is a danger that algal bloom will become more frequent and widespread, possibly spreading contaminating bacteria to the county’s water supply. And because Florida has a high number of septic tanks, it may be more at risk of a contaminated water supply. A UN report found that these systems are particularly vulnerable in the face of rising sea levels.

In neighboring Miami-Dade, a report found that 64% of septic tanks could fail and require repairs every year. Authorities have been building strategies to address the problem for 30 years, but still estimates say it will take around $3.3 billion to www.capitalanalyticsassociates.com

| 61

INFRASTRUCTURE ANALYSIS

With the looming threat of sea level rise, the need for updated infrastructure is at an all-time high.

connect residences and commercial buildings to a traditional sewage system. With Broward County struggling with an outdated water treatment strategy, there is a risk that it is already 30 years behind MiamiDade.

Companies are aware of the urgent attention that sea level rise requires, but more is needed, said Nguyen Tran, CRA director for Pompano Beach CRA. ”We need to push it down to a code level to prepare for sea level rises. This has come up a couple of times during planning for our Innovation District, especially on our waterway system to handle the drainage. It has to accommodate sea level rise. We know sea level rise is going to happen and we need to be on top of that. Sea level rise will not be on everyone’s priority list until you can no longer be able to obtain a 30-year mortgage.

This needs to be a priority.”

Electricity A controversial new piece of legislation was tabled this year in the state of Florida. The energy choice amendment would deregulate the electricity market, allowing new players to generate electricity outside the typical investor-owned utilities. The group Citizens for Energy Choice is championing the bill, suggesting it would increase competitiveness and allow consumers to find lower-cost energy deals. But critics are doubtful this would be the case. “While phrased both in its title and in its summary as a purportedly pro-consumer choice measure, the proposed amendment does the opposite,” Florida’s Attorney General Ashley Moody wrote in a filing with the state Supreme Court. “The undisclosed chief purpose of the proposed amendment is to eliminate the main providers of electricity service to Floridians, the investor-owned utilities.”

62 | Invest: Greater Fort Lauderdale 2020 | CONSTRUCTION & INFRASTRUCTURE

INFRASTRUCTURE ANALYSIS

And it is not only politicians and utilities that have raised concerns over the plans – environmental advocates have weighed in too. “There is no guarantee that the Legislature is going to implement this in a way that is actually good for consumers, and good for some of the things that we’re really interested in, like renewable energy and energy efficiency. So that’s a complete black hole,” says Stephen Smith, the Southern Alliance for Clean Energy’s executive director to the Florida Phoenix.

The concern stems from the 30-by-30 commitment

by Florida Power & Light (FPL) to install over 30 million solar panels across the state by 2030. Fellow utilities Tampa Electric Company and Duke Energy Florida have similarly ambitious solar investments on the cards in the coming years, and environmental groups are concerned that these plans may fall by the wayside if new players are allowed to enter the market and disrupt the status quo.

Meanwhile, Florida’s Public Service Commission is driving home the need for energy efficiency, despite concerns this may not be a priority for utilities after all.

In August, a new hearing began for Florida’s utilities to explain why there has been a decline in energy efficiency initiatives and set new goals for the future.

And while Citizens for Energy Choice wants more players in the market, utilities like FPL are consolidating further. FPL recently closed the $185 million acquisition of Vero Beach utility, welcoming a further 35,000 customers to an existing base of over 10 million. And at the beginning of this year, FPL parent company NextEra Energy completed the $6.5 billion acquisition of Gulf Power from Southern Company.

INFRASTRUCTURE ANALYSIS

FPL parent NextEra Energy completed the $6.5 billion acquisition of Gulf Power in early 2019 Alternative energies In terms of renewable energies, solar is the best option for Broward County. Land is becoming more expensive, meaning there are few options for wind power developers to install turbines in a cost-effective way. Broward has access to the sea, but offshore wind turbines would be vulnerable to hurricane activity off the Gulf coast, which could ultimately be more costly for the county. Hydro energy has been generated by Florida for decades in the city of Tallahassee, but now

To better address the issue of sustainability, Broward County has set up an Environmental Planning and Community Resilience Division.

64 | Invest: Greater Fort Lauderdale 2020 | CONSTRUCTION & INFRASTRUCTURE

INFRASTRUCTURE ANALYSIS

solar power undercuts it economically and the city proposed the closure of one of its two plants in 2017 due to lack of efficiency.

The initial outlay for solar energy in Broward County is still relatively expensive for residents, coming in at between $11,688 and $15,812, equating to around $2.75/W. But Broward County’s privileged position, with 247 sunny days per year on average compared with the national average of 205, meaning its residents can reap greater rewards for solar power. The cost per watt is at the low end of the national average, which ranges from $2.58/W to $3.38/W. There are also various incentive schemes both on a state and federal level to encourage solar installation.

First, there is the 30% Federal Investment Tax Credit (ITC), a 30% deduction on federal tax returns. Another benefit the state of Florida provides is a property tax and sales tax exemption when homeowners install solar systems. Florida has also put in place a net metering system, allowing private residents who generate excess solar electricity to monetize it by selling it back into the grid.

For higher-income households, this could be a solid investment, but for those whose resources are already stretched in the county, it is difficult to see where the initial investment will come from. But residents are already solving that problem by starting a solar energy

co-op, where a group of homeowners purchase solar panels in bulk, costing less money than purchasing panels individually. The first Broward co-op was set up in 2017.

Looking ahead The biggest looming question that faces Broward County’s infrastructure industry is how to incorporate sustainability and factor climate change into developments in a profitable way. And the county is making efforts to overcome its infrastructure issues, but more still needs to be done. The Fort Lauderdale Chamber of Commerce launched the 1000 Mermaids project this June, an art installation to bring attention to water and reef conservation.

“We know there will be more investment in addressing aging infrastructure like utilities and improving transportation networks, both of which are critical to supporting South Florida’s projected population and economic growth,” said Suarez. “We will also continue to focus on finding solutions that improve the resilience of our infrastructure to help mitigate issues related to sea level rise. Beyond next year, there will also be expanded use of technology.

For example, we’ll continue to see advances in intelligent transportation systems and autonomous and connected vehicle technology.” www.capitalanalyticsassociates.com

| 65

Tamarac: The city of Tamarac has traditionally been a retirement community but as it grows, it is attracting a younger demographic. To ensure it continues on a clearly defined development path, the city has put in place a long-term strategy that plays to its emerging strengths while fostering fresh opportunities.

www.capitalanalyticsassociates.com

| 67

Long-term vision: ‘The City for Your Life’ maintains a small-town feel while working to attract more businesses and a younger generation The city of Tamarac has a privileged geographical location in South Florida, with Palm Beach to the north, Fort Lauderdale to the east and Miami Beach to the south, while the Everglades National Park expands to its west. It straddles five major highways: U.S. Highway 411 and state highways 817, 870, the Florida Turnpike and the Sawgrass Expressway, which connects the I-95 and the I-75.

But despite being so well-connected and vibrant, Tamarac maintains the sense of a small town as city officials and businesses work to attract young people and families. With the tagline “The City for Your Life,” more and more young people and families are moving to Tamarac because of the quality of life it offers. The city’s Sports Complex amenities include a hockey rink, tennis courts, basketball courts, covered playground, picnic tables, and soccer fields. After its expansion in the first half of 2019, the facility also now offers one Little League-sized and two full-sized baseball fields, a picnic shelter, and a fishing pier.

The active Community Center offers a gym, meeting rooms, ballroom, arts and crafts room and an awardwinning program for seniors, while a fitness court was opened in December 2019 at Tephford Park. Regular 68 | Invest: Greater Fort Lauderdale 2020 | TAMARAC

community events, such as the annual Turkey Trot over the Thanksgiving holiday, are other attractions bringing people into the city. The Tamarac government was also named Florida’s first Green Local Government by the Florida Green Building Coalition. Tamarac was voted the 11th-safest city in Florida, according to SafeHome. org.

As the city grows, it is keeping an eye on the future. In 2014/15, it adopted a strategic plan that it updates yearly based on input from residents and businesses, financial projections and demographics. The strategy focuses on five goals: Inclusive community, healthy financial environment, dynamic organizational culture, clear communication, and a vibrant community.

City officials have also developed a longer view strategy: the Tamarac 2040 – Vision for the Future plan.

This plan is a sweeping economic development program that focuses on fostering the city as an expanding pharmaceutical hub, promoting clean manufacturing and offering redevelopment opportunities.

History The city of Tamarac was founded by developer Kenneth E. Behring and incorporated on July 19, ( )

TAMARAC INTERVIEW

Pharma focus The city of Tamarac hopes to build on its strengths and position itself as a pharmaceutical hub

Michelle Gomez Mayor – City of Tamarac What steps has Tamarac taken in terms of development to attract more people into the city?

Tamarac has taken a multi-pronged approach to development. We’ve overhauled our comprehensive land-use plan, developed public-private partnerships and continue our extensive outreach to builders and developers. The results are evident. Tamarac Village, the city’s first mixed-use development, is proceeding ahead of schedule. It will include 400 residential units, approximately 35,000 square feet of retail and restaurants, and feature a public park and outdoor amphitheater for special events. We’re also in the midst of redeveloping Colony West, home to the city’s two 18-hole golf courses. Marriott is building a 120-room Fairfield Inn on the property and Tamarac is building a new clubhouse next door, complete with dining and event facilities. Both are scheduled to open in 2020.

What are some of the unique business opportunities that Tamarac offers?

Tamarac is ideally located – within minutes to five major highways. We’re primed for redevelopment, with underutilized shopping plazas that need new life. Our demographics are changing, with more younger families calling Tamarac home. That presents a tremendous opportunity for restaurants, stores and entertainment options. We are also focused on industry growth. To this end, we are developing the Tamarac Medical Mile District where we hope to attract more medical and pharma businesses. We already have a core of headquarters in this space, such as Unipharma, IQ Formulations, and the University Hospital and Medical Center campus. Our goal is to build on these strengths and position Tamarac as a pharma hub in Broward County and South Florida.

How do you ensure the city of Tamarac’s sustained growth?

We have to continue focusing on our vision for the future, that’s why we’re developing Tamarac 2040.

It’s a long-range plan that includes redevelopment opportunities, an emerging pharma hub, expanded fiber optics for greater connectivity and smart infrastructure, all while maintaining the outstanding quality of life that we’re known for. We are attracting a younger demographic because they see a clean, safe, modernizing and affordable city. Our city government has been very smart with our finances. The renowned rating agency Fitch has acknowledged Tamarac for our “strong financial resilience and superior inherent budget flexibility”. We must continue to account for significant population growth and how the needs of the community can change with this growth. www.capitalanalyticsassociates.com

| 69

TAMARAC OVERVIEW

( ) 1963. Behring decided to tap into Florida’s appeal as a retirement location to offer the convenience of a condominium with the privacy of a single-family home for active retirees. He began building just 5 miles from the East Coast but then began working his way inland toward the Everglades National Park as land purchases would permit.

The borders of the city of Tamarac are remarkable, with a large western bloc adjoined to a smaller bloc to the southeast. But as the city runs further east, its border changes into a series of fine lines and small lots of land. The reason for this was that Behring built his developments on pockets of commercial land that were gradually annexed from Fort Lauderdale. A long stretch from North State Road 7 to Prospect Road annexed in the 1970s is only as much as a block wide or less in parts.

Behring’s model worked on the basis of one-bedroom or two-bedroom condominiums surrounding a common area that provided activities funded through a monthly fee paid by the residents. According to the U.S. Census Bureau, the median population age in Tamarac is 47.8, which is above state levels at 41.6 and national levels at 37.7. But in the previous census in 1990, the median age was 10.5 years higher, at 58.3, showing that more and more young people and families are moving to the city.

General economy Tamarac is a city of 66,499, with a labor force of 34,119.

Median household income in 2017 was $45,474, a 2.42% increase from the year prior. This can be explained by the fact that the majority of the population is of pension age and may not have a substantial income but rather live on savings. The increase from the year before is in line with an increasing young population coming to the city.

But in Tamarac, certain populations are more represented than others. For example, almost 40% of the population is white, 27.5% Hispanic or Latino and 27.5% black or African American. In 2017, 88.3% of the residents in Tamarac were U.S. citizens, an increase on 87.4% in 2016 but still below the national average of 93.1%. This is a testament to south Florida’s role as a haven for Latin American immigrants. In Florida, the most common country of origin for noncitizens is Cuba, followed by Haiti and Mexico.

The city also has an 11.1% poverty rate and, like in most U.S. cities, income inequality is present among certain groups. But unlike in some cities, poverty in Tamarac corresponds with the size of the demographic groups, with 47.3% of those living in poverty identifying as white, 21.6% black and 20.7% Hispanic.

70 | Invest: Greater Fort Lauderdale 2020 | TAMARAC

Median household income for Tamarac in 2017 was $45,474, a 2.42% increase from the year prior.

Average male income is 1.34 times that of their female counterparts and, according to the Gini Coefficient, income inequality is at 0.47, although this is lower than the national average of 0.49. In 2017, office and administrative support occupations provided the greatest number of jobs in the city, with 5,087, followed by sales with 3,913 and management occupations at 2,515. Farming employed the fewest number of people with only 35 jobs attributed to the sector, followed by life, physical and social sciences at 43 jobs and architecture and engineering accounted for 273 jobs.

But the highest job-creating sector overlapped with the highest-paid profession, as public administration posts paid an average of $52,101. Utilities followed, paying employees $50,703 per year, and finance and insurance paid $40,215. With an average salary of $45,474 and an average property value of $140,100, property is largely affordable in the city, and home ownership rates are over 70%, above the national average of 64.8%.

There are several large employers based in the city, including restoration company PuroClean, car wash equipment manufacturer Sonny’s: The CarWash Factory, pharmaceutical manufacturer UNIPHARMA and the Broward Teachers Union. One major employer, City Furniture, recently opened a new 120,000-square-

TAMARAC OVERVIEW

foot showroom in Tamarac with a price tag exceeding $20 million and plans to open another South Florida location next year. It was shortlisted for the Large Retailer of the Year Award by the Home Furnishings Association in October 2019.

Capital improvement projects As more young families move to Tamarac, the city needs to provide more community space and dynamic activities.

As well as the community center and sports complex, Tamarac recently completed Tamarac Village, the city’s first mixed-use development with 400 residential units and around 35,000 square feet of retail and restaurant space. With a public park and amphitheater, the development retains Behring’s original vision and incorporates a two-story clubhouse for residents.

Although it may be sticking to its retirement community roots, there is also room for innovation in the city’s blueprint. In fact, the way Tamarac is expanding its city is catching the eye of Smart City Developers and was shortlisted on the Digital Cities 2019, taking third place in cities with a population up to 75,000. The survey recognises cities that are employing technology to tackle social issues, develop services and strengthen cybersecurity and more.

Appealing to both the retirement community and

400-unit Tamarac Village is city’s first mixed-used development the young professionals living in Tamarac is the redevelopment of the 262-acre Colony West country club and golf course being carried out by the city at a cost of $11.1 million. The city acquired the property in 2011 when the previous owners moved to rezone the land for residential development.

The city is now ploughing investment dollars into the project to bring it up to scratch, with plans that include a new clubhouse with dining and event facilities. Marriott hotels also hopped on board to build a 120-room Fairfield Inn that will overlook the two 18-hole golf courses. The ambitious project is due to be completed in 2020. www.capitalanalyticsassociates.com

| 71

TAMARAC OVERVIEW

Tamarac Medical Mile District In its 2014 Development Plan, Tamarac city authorities announced plans to promote the expansion of its hospital campus as an anchor for economic development. This goal was reinforced in 2018. “To address current market conditions, this area requires a phased, multi pronged, mixed use redevelopment approach. However, it is recommended that redevelopment planning for the Medical Mile area should be evaluated in the context of a large scale, long term University Drive Corridor Master Plan and through aggressive collaboration with regional business incubation programs and networks,” said the report.

Strong competition locally, including the recently upgraded Coconut Creek medical facility and the Broward Health Medical Center is driving Tamarac to offer more, sticking to its long-time vision of mixeduse and community spaces. The Medical Mile program involved including the medical campus in a mixeduse style project alongside retail space, multifamily developments and office spaces.

Tamarac University Tamarac is a city that places value in experience.

At Tamarac University, students can participate in an eight-week interactive program, held annually in the spring. The participants in the course are allowed to visit city facilities, learning on the job from government officials and city staff about the role of the public sector and local government. The program covers a wide spectrum of the public sector including the Broward Sheriff’s Office, Tamarac fire and utility departments, and even city finances.

Challenges While all may seem rosy in Tamarac, the reality is that there are still several problems that need to be addressed.

One of those problems is connectivity and commute times. Despite being lauded as being ahead of the curve in Smart City technology, the city’s average commute time comes in at around 28.3 minutes, compared with the national average of 25.1 minutes. More than 2% of Tamarac’s workers also have “super commutes,” which are journeys that exceed 90 minutes.

This can be largely explained by the fact that, since its inception, the city has grown in a haphazard fashion with no real city planning to speak of. Designed initially to be a sleepy retirement community, the city was unprepared for the current issues brought about by young workers and two-car households. Commuters are forced to drive because, while attracting workers to the city, Tamarac failed to also keep up in terms of 72 | Invest: Greater Fort Lauderdale 2020 | TAMARAC

City Furniture is one of the largest employers in Tamarac.

public transportation, and now commuters have no other option but to drive or car-pool to the office. When surveyed, 82.6% of those in Tamarac drove alone, 7.81% carpooled and 3.96% worked from home. Only 3.57% used public transport, 0.57% cycled and 0.44% walked. The city is addressing this challenge as part of its Tamarac 2040 plan. To address the commuter issue, the city promises “enhanced multimodal transportation, transportation hubs and rapid bus system” as part of the plan.

Another issue being addressed is connectivity, building on its strong showing as a Smart City. The Vision 2040 plan pledges an expanded fiber optic network for greater connectivity, as well as adding smart infrastructure.

And the city is learning from its previous development mistakes when approving new building permits. Now, the city requires developers to consider installation of sensing and IP-based controls in all new city construction.

Tamarac now uses 65,000 IP-based controllers in several areas, including HVAC system control and humidity, temperature and flood data monitoring.

CONSTRUCTION TAMARAC OVERVIEW

Keith Koenig CEO / Chairman City Furniture / Broward Workshop

Looking ahead The history of Tamarac’s development has created two opposing characteristics. Firstly, it is a city where residents feel safe, and this factor is attracting more and more people each year. As a retirement community, Tamarac previously existed in small nuclei around a community center, where everything was available in the same neighbourhood and nobody had to travel far.

But those exact characteristics are also the city’s greatest challenge. As more people arrive, the city is playing catchup regarding the new demands for connectivity infrastructure. Because of its privileged location close to five main highways, there has been little need to promote public transport but as the city’s population grows, it is stumbling into the tipping point whereby even the roads will be neither sufficient nor sustainable to support long-term development. The city’s Vision 2040 plan displays the willingness of the authorities to step up to the plate and address some of the issues that are hindering Tamarac’s further growth.

What progress has been made on the goals set by the Broward Workshop last year?

When we look back over the last year, we have really moved all our goals forward. At the top of the list was addressing homelessness. A little over a year ago, we had a major encampment of close to 100 homeless in Downtown Fort Lauderdale and they were in an area right next to the library. Earlier this year, we worked to help these homeless people be placed into more permanent housing. Our second goal relates to education, particularly K-12 education in Broward County. When Superintendent Bob Runcie arrived in 2011, the Broward County school system was in disarray. Members of the school board had been accused of improprieties, morale was low and we were facing over $20 million in fines for not meeting state-mandated class size. Runcie has worked diligently to address those issues and to move our Broward County school system forward. The good news is that our school system has improved greatly. Broward County Public School System nearly achieved an overall A rating in 2018 and they are working to continue to improve.

How has City Furniture maintained its longevity in the market?

The key to City Furniture’s longevity in the Broward County marketplace has been reinvesting back into our business.

We operate financially conservative, meaning that we are careful and never try to bite off more than we can chew. That being said, growth has been a cornerstone of our business. If you do not have growth as a cornerstone strategy for your business, you can’t attract the talent you need or want. For instance, millennials all want to see opportunity to advance, grow and succeed, so they are attracted to companies that embody that vision. In our case, we just opened up big stores in Orlando, and we are planning to open in Tampa over the next few years. The other key to this business has been private ownership. We are able to invest for the long term benefit of our facilities, our customers and our community. www.capitalanalyticsassociates.com

| 73

Banking & Finance: The financial services industry is among the Top 10 targets that Broward County has drawn up for its attraction, relocation and expansion efforts. The sector is already seeing activity in Broward with new entrants into the market. Technology, meanwhile, remains the industry’s main disruptor and will be the main driver of change in the years to come.

www.capitalanalyticsassociates.com

| 75

Top 10 target: Broward County is focusing on the financial services sector as one of its key areas for growth Broward County has all the hallmarks of a booming financial center. With a sound real estate market, young population and tax incentives, it’s not hard to see why it has attracted a host of international banks and institutional investors. The Broward County Board of County Commissioners has also identified the global services industry, which includes banks and insurers, as one of its 10 targets for attraction, relocation and expansion.

The efforts may be paying off. In 2019, Miami-based community bank opened Pacific National Bank (PNB), while another went to the Federal Deposit Insurance Corporation (FDIC) for approval to launch in Broward County. Another community bank also made the list of the Top 200 healthiest financial institutions in the country.

Among the challenges the industry faces is continued consolidation and the disruptive impact of new technologies. Fintech increasingly is making inroads into the sector, forcing banks both large and small to adapt or be left behind.

Landscape South Florida had a total of 4,983 bank branches 76 | Invest: Greater Fort Lauderdale 2020 | BANKING & FINANCE

with deposits totaling $586.4 million in 2018. Most of the deposits (around 18.96%) were carried by Bank of America, followed by Wells Fargo with 13.54%.

SunTrust and JP Morgan Chase took 8.63% and 6.19% shares, respectively. The number of community banks in South Florida has been dwindling over the years, as M&A activity led to greater consolidation.

The 2008 financial crisis only added further weight to the problem. In South Florida, in the third quarter of 2018, there were 40 banks headquartered in the region, down from 79 in 2008.

Although new bank charters are still far off the pre2008 pace, in 2018 a new bank charter was approved by FDIC for the Coastal Community Bank in Hollywood.

This would have been the first new community bank in South Florida in almost 10 years. The bank ran into trouble when it failed to raise its initial capital target of $23 million. FDIC approval requires the bank to raise at least $22 million. Undeterred, Coastal Community Bank again applied to FDIC for approval in July 2019.

In July, Broward County also saw the arrival of Miamibased PNB, which opened its doors in Fort Lauderdale.

The bank is looking to serve small and medium-sized companies. As of March 2019, PNB’s assets totaled ( )

BANKING & FINANCE INTERVIEW

Good connection Bank clients want multiple connectivity channels. Financial institutions need to balance the best technology with a personal touch

Jorge Gonzalez President & CEO – City National Bank of Florida How do you combine banking technology with the need to maintain a connection to people?

At the end of the day, we recognize that clients want multiple channels of connectivity, and some want multiple channels at different times. We have to provide that. At some point, they want to speak to a human being. At another, they want to engage with us through their smartphones. Our business model is peoplecentric; we are not a mass retail bank but a private and commercial bank. Our clientele values the relationship provided by people, but we have to provide the best technology to support our people in delivering the best possible experience. We have invested heavily in all the right applications and platforms to support our people and clients.

The market has reacted well to our business model.

We would not have otherwise grown as we have in the last five to 10 years. You have to make sure you hire the right people. You need to have people who have the right values and understanding of what is important to clients.

One of our core values is putting the client at the center of everything we do. We will invest $50 million to $60 million in the next three to four years to make sure our platform is cutting-edge and even more client centric. If you don’t stay ahead of the curve, you can quickly become a dinosaur.

What challenges is the industry facing regarding data security and cyber threats?

The whole industry is facing cybersecurity issues, but the good news is that one of our main investment priorities is cybersecurity and privacy of information.

This is not going away. Having the right size is important because you have to have the capital, the resources and the talent to properly invest in this area. There is not much margin for error.

What risk-mitigation strategies is the bank implementing to address a potential downturn?

We are probably nine years into a very prosperous economic cycle. Trying to project when and how much of a slowdown is always a challenge and nobody has a crystal ball. I think a slowdown is actually healthy because it could really allow the markets to catch up with what is happening. If you have too many years of consecutive growth without a fundamental rationalization of the marketplace, it could create bubbles. In working to address that, we have tried to stay true to a disciplined approach to business, whether at the peaks or valleys of the economic cycles. We don’t get overly excited when things are too good, nor overly conservative when things are bad. At the end of the day, it’s about picking the right clients and the right transactions. www.capitalanalyticsassociates.com

| 77

Brian Kovack President Kovack Financial

How does the unique business environment of South Florida benefit your company?

South Florida is predominantly a service-based and tourism-based landscape. What this means for companies like Kovack Financial that are service-based, is that there is a large pool of professionals who are able to provide labor and back-office support functions.

There is a large pool of young, successful up-andcoming talent who can be easily integrated into an organization like ours and help grow and develop the infrastructure. We take advantage of this labor pool in a number of ways, including our internship program, which at any given time during the off-school period, has approximately 10 students from the local universities.

How important is the implementation of new technology to your business?

Technology is critical for any service industry, specifically the continuation of different leased as well as homegrown technologies that provide automation and standardization in processing of account activity for a business. These technologies can be both a positive and a negative. It is positive because it allows an organization to automate procedures, protocol and day-to-day functions. On the other hand, entry level or baseline individuals who do not have that technology background have a difficult challenge in adapting to the change.

What changes have you seen in your industry in the last few years?

There is clearly a shift in the financial services industry from traditional investment management to fiduciary, holistic family-oriented management. This new style of management has a heightened emphasis on putting the client’s interests first, and not just simply charging a commission for a stock, bond or option trade. It is providing comprehensive fiduciary client account management. A lot of this is focused on the senior demographic.

78 | Invest: Greater Fort Lauderdale 2020 | BANKING & FINANCE

South Florida is a banking powerhouse and had a total of 4,983 bank branches with deposits totaling $586.4 million in 2018.

(

) $498 million with deposits reaching $337 million.

Providing further evidence that community banking is making a comeback in Broward County, the American National Bank was voted among the top 200 healthiest financial institutions in the United States by Lending Tree in a study that evaluated 10,000 banks and credit unions. American National is the county’s oldest bank.

Broward County’s commercial banks are no slouches either. In July, Florida-headquartered Ocean Bank released its year-end results and revealed it had increased its total assets by 11.2% to $4.3 billion since December 2018. Equity capital increased 6.5% over year-end 2018 to $475.4 million. Solid lending was one of the reasons given for the strong performance.

Among the challenges for the financial services is the talent pool. The low unemployment rate in Broward County means there are fewer people looking for new opportunities. “This has resulted in companies working harder to keep employees around. We are not in the same economy we were in back in 2008-2009 when there was lower demand but a higher supply of talent. This has reversed and there is a high demand for talent but a low supply out actively applying or

BANKING & FINANCE OVERVIEW

job searching. This has created an opportunity for our company since it is far more challenging for companies to find talent on their own,” said Meghan Stephens, managing branch director of Creative Financial Staffing.

To successfully recruit and retain top talent, financial businesses need to understand what the new generation wants. “Typically for accounting and finance positions, they are not asking for 40hour workweeks because that is not common to be successful in these jobs. Companies that offer an emphasis on a work-life balance are seeing a lot more millennial candidates interested in their companies.

Companies that are operating in a more old school fashion may still attract these type of candidates, but they have a better chance when they offer more of an employee-friendly, collaborative work culture,” Stephens added.

Borrowing The highest consumer debt in the United States comes from two sectors: student loans and mortgages. There are 45 million borrowers who collectively owe more

than $1.5 trillion in student loans across the country, meaning 2019 student loan debt is at its highest rate ever. Florida is the fourth-highest state with the most student loan debt, standing at $72.8 billion across 2.2 million borrowers. That’s an average of about $33,000 per person.

A study that analysed data from the Federal Reserve Bank of New York, the U.S. Census Bureau, and the Bureau of Labor Statistics showed that Florida has an auto-loan delinquency of 5.3%, credit card delinquency of 9.7%, mortgage delinquency of 1.6% and a student loan delinquency of 13.7%. This makes it the fourthworst state in the country for loan delinquency.

Floridians are hungry for credit cards. A study conducted by WalletHub showed that Florida’s average household credit card debt was $9,278 in the second quarter of 2019, up $311 on average. Overall credit card debt in the state reached $66.4 billion, up by $2.3 billion. The state also is among those with the highest ratio of nonperforming loans. New Jersey, New York and Florida accounted for 46% of the NPLs sold between August 2014 and June 2018, according to the Federal Housing Finance Agency (FHFA). But overall sales of NPLs is decreasing. In the first half of 2018, 7,140 NPLs were sold, compared to 18,419 in 2017. Fannie Mae is selling off over $1 billion in NPLs in South Florida.

As per the terms of the sale, the buyer must pursue recovery methods that limit losses for the borrowers.

An area of particular concern for responsible lending advocates is a new directive passed by the Florida legislature that expands the type of high-interest loans payday lenders can offer. “This move by the legislature increases the risk that Floridians will be bounced out of the banking system due to being trapped in harmful payday loans,” said Diane Standaert, director of state policy for the Center for Responsible Lending, a national advocacy group in an interview with McClatchy. “Payday lenders have been pushing hard to loosen rules that make it easier to trap more people into debt-trap loans.”

This year, the Fed lowered interest rates twice, meaning borrowing is cheaper for US citizens. Several companies including Disney, CSX and Caterpillar have already taken advantage of this, raising $28 billion in cheap debt over the course of just one day.

Technology Although community banks have the advantage of being closer to the client, a failure to provide hightech services could lose them the competitive edge.

A 2016 survey carried out by JD Power showed that millennials prefer to use big banks because they prefer www.capitalanalyticsassociates.com

| 79

Tansy Jefferies Principal, International Tax Services RSM US LLP

How is RSM tackling gender challenges in the accounting industry?

We are proud to report that RSM in south Florida is leading the charge and breaking the proverbial glass ceiling with 30 percent female ownership in an industry where the average is approximately 16 percent. RSM places a high emphasis on coaching and mentoring our high-performing women to retain and accelerate them into leadership positions. We also want to increase diversity and inclusion more broadly throughout our organization. Culture, diversity and inclusion are strategic business drivers and have shown to be great catalysts for business growth.

In what areas is RSM seeing the greatest demand for its services?

As a specialist in transfer pricing, I have seen an uptick in services that affect multinational, middle-market organizations. From tax reform to changes across the broader global tax landscape, there have been significant impacts for international companies. We have also seen a rise in enquiries from investors on the tax programs related to Opportunity Zones.

What is enticing investors into the Broward market?

South Florida is an enticing climate for a multitude of reasons, including the federal tax changes and incentives that have fostered an interest from our clients determined to keep jobs and intellectual property in the United States. One of the usual challenges for inbound foreign investors is understanding the complexity of U.S. tax law, because of the different layers of taxation at the federal, state and local levels.

Luckily, for businesses seeking relocation into Broward County, those layers are not quite as complex as in certain other parts of the country, which makes Broward a favorable option.

80 | Invest: Greater Fort Lauderdale 2020 | BANKING & FINANCE

the digital banking options that are provided. While 66% of Americans primarily manage their money through a bank’s online platform or app, only 18% primarily manage their accounts in-branch. Direct – or branchless – banks are outperforming traditional banks in every segment, according to JD Power. The transformation in banking involves more than just apps and online platforms. There is a wholesale conversion taking place that is also impacting the fundamental role of banks. “One of the trends we are watching carefully is the tellerless branch. This is just starting to happen in South Florida and different markets across the county.

This machine is more or less a highly sophisticated ATM. But it can do a lot more than just take a deposit and dispense cash. They can do all the same things a human teller would do and unlike a human, they can be available 24 hours a day. The branch is being transformed into a financial consultation center not a transaction center,” said Richard Helber, president and CEO of Tropical Financial Credit Union.

The penetration of technology is visible across the financial spectrum, from daily banking to wealth management, and it continues to change the game, according to James Bonilla, managing partner at Coastal Wealth. “Less than a decade ago, a person would need to go through an intermediary like us to buy or sell a security. Now that same person can be on their way to work and trade at the click of a button,” he told Invest:. “Technology is imperative to our business, although we do believe that balance and perspective are very important. One way in which we have benefited from new technology is through our use of algorithms.

Algorithms and technology have allowed us to bring our products and services to market much more efficiently than we ever could in the past. I believe that using technology as a driving force is something the whole financial services segment has been and will continue to lean heavily on moving forward.”

And many banks see a more personalized service as a key to overcoming the new direction of technological banking. “These systems allow users to access their accounts remotely, and they may very rarely come into our branches,” said Jeffery Klink, First Senior Vice President, Southern Florida Regional President of Valley Bank. “How we mitigate this so the banking experience doesn’t become impersonal is to ensure that each client has a core group of bankers who they know and who know their needs. When customers call our bank, they are actually talking to somebody who knows the client not just from a business standpoint, but also on a personal level. This personal service combined with our technology platform has really ( )

BANKING & FINANCE INTERVIEW

Data security Consumers are becoming more tech-savvy and banks are adopting new measures to protect them from cybersecurity threats

Hector Ponte Southeast Florida Region Bank President Wells Fargo Have you identified any variations in customer behavior and needs?

We want to be able to provide our customers access to our services where, when and how they want. While members of Generation Y are more inclined to rely on technology to use our services, they still walk into our branches for certain aspects of our business, although in fewer numbers year after year. The same customer may use an ATM for certain needs, walk into a branch for another specific need and call our phone bank or use online banking for other services. Our ability to provide options and flexibility allows us to take good care of all customers. Customers are more informed, have more options at hand and have done their research for the specific products they need. We are also facing a new movement where several new players want to get into banking. Google announced they will start handling checking accounts and Apple is offering credit cards. These large companies are expanding from their core business and want to get a larger share of their customer’s business. If we do not keep up, we will lose that business.

How is Wells Fargo bolstering its cybersecurity muscle to strengthen its financial services?

Data security is the top threat for financial services.

We read about breaches to major companies, putting critical information at the mercy of what other people do with it. Behind the scenes, we have established several layers of control, teams of experts that keep cyber thieves in check. We have also developed tools to help our customers identify potential threats. In 2018, we introduced a service called Control Tower. It can be accessed through online banking and allows you to see all the merchants you have allowed access to your account or anyone you set up as a recurring payment.

You can also turn your credit and debit cards on or off

through tor mobile app. We are also focusing our efforts on artificial intelligence and predictive banking. Based on the customer’s patterns, it can personalize their banking experience and help identify when something is off-pattern and maybe even suspicious.

What emerging trends have you identified?

On the small business front, Wells Fargo partners with Gallup to conduct a quarterly survey. Responses about upcoming small business trends came back quite positive. Small-business customers are telling us that they are confident about the economy, their ability to obtain credit when needed and access to capital in general. This is a positive sign at a moment where there is a prevalent uncertainty surrounding trade and the upcoming presidential elections. www.capitalanalyticsassociates.com

| 81

ÂŽ

oundtable:

Era of change The financial services sector is dealing with disruptive change from technology, cyber threats and nontraditional lenders. Invest: asked financial leaders what they are doing to deal with the challenges of a new era.

David Druey

South Florida Regional President Centennial Bank

How do you approach the trend of people looking at more nontraditional lenders?

In South Florida, we are always competing against two things, cash and nontraditional financing. South Florida has quite a few nontraditional financing options, but these options typically charge for the nontraditional financing through fees and a higher interest rate. This idea is comparable to the convenience store versus a chain grocery-store mentality. A convenience store may be easier to access but you will pay $6 for a gallon of milk, while a chain grocery store may be a bit more effort to access but will result in a savings of $2 for the same product.

The same idea applies for lending from a traditional source like a bank versus a nontraditional lender.

Have you observed any changes in demand for your services with the influx of millennials?

Millennials have a tendency to do everything on their phone, which is fine and we appreciate that technology, but they are missing out on the human component of a banking relationship. Having a relationship with one’s bank is vitally important to their financial well-being. When that relationship solely exists on technology, there is no connection with the financial institution. Millennials are missing out on the connectivity and relationships with banking professionals that could ultimately help them with whatever they may need. The positive trend we are observing is that as millennials age, they are realizing that to start a business or buy a home they need to have a relationship with their bank. They are migrating more toward having relationships with financial advisers and banks because they need them as a service provider.

82 | Invest: Greater Fort Lauderdale 2020 | BANKING & FINANCE

Iwan Mohamed Market President BB&T, now Truist

What are some trends in the local market that you are keeping an eye on?

Demographics are shifting in the market. The entrepreneur who has had an established business in Broward County for decades is now ready to cash in.

This person is typically in their late 50s or early 60s, and they are ready for the next stage in their lives. We are seeing businesses transition to the next generation, like a son or daughter, or to an outside party. here is a lot of activity with respect to businesses being purchased, consolidated, merged or acquired. Sources like wealthy investors, private equity groups or family offices have ready access to capital and are making these purchases with the intent of consolidating the businesses into larger ones, or, running them separately and using like-type businesses to support each other. Interest rates remain low and many investors feel that the stock market is somewhat over-inflated. They are seeking decent yields based on sustainable business models in the market.

How will the merger of SunTrust & BB&T benefit your clientele?

This is an exciting time for all of us. The post-merger name of the combined banks is Truist. Truist will offer better technologies, more convenience and an expansion of combined specialties across a broad range of clients.

Our approach to the market will be based on values such as trust, caring and a personal touch. Our Community Banking Model will ensure that client representation is local in our respective markets. Resources will be allocated for training and development to make sure our bankers are consultative, competent and responsive in their approach.

BANKING & FINANCE ROUNDTABLE

James Ray

City President & Wholesale Banking Executive Fifth Third Bank

What is a continuing trend that you see changing the banking industry?

When we think about a trend that gives us a glimpse of where the banking industry is headed, it is really in digitalization. Most consumers have their bank’s app on their phone, which allows them to do most of their usual banking functions and avoid having to go inside a banking center. Our goal now is to do this on a commercial platform. We already have things like the currency processing solution, which is being widely adopted. We also see the continued automation of our online commercial banking system.

How are you protecting your clients and the bank in the case of another economic recession?

This has been one of the longest economic recoveries in modern history. Not all recessions are created equal, so I don’t believe that when a recession hits again, it’s going to be like 2008-2009. It may hit a certain industry or geographic area in the country harder, but we do not see it affecting everyone across the board. We are preparing for it on a macro level by opening up new markets and new geographies. The bank has recently expanded into California and we also now have offices in Houston, Dallas and Colorado. On a micro level, as we conduct our underwriting analysis, we are looking at our customers’ projections for the next three to five years and making sure that we synthesize what happens if they have a 3%, 5% or even 10% loss in revenue or discontinuation of a certain subset of their client base. We are making sure we feel comfortable that they have a balance sheet that can withstand a dip in the economy or a dip in their business.

Kevin Rogers

South Florida President Seaside Bank

What is the biggest challenge in the market for a small to midsize bank like Seaside?

I think the biggest challenge is always going to be the competition. Banks of our size do not have the brand recognition that a Bank of America does, so the question is how do we sell Seaside Bank? We have to go out and talk to our clients about who we are and what we specialize in. We drive home the fact that we are able to provide the same products and services that the big banks do but in a community bank type of setting. We’ve taken a lot of clients away from these big banks. If you look at what’s going on in the big banks right now, it’s all about sales process management and managing their people to numbers that, a lot of the time, mean selling products and services that the clients really don’t need. We don’t subscribe to this notion and instead focus more on listening to our clients and making sure that they get what they want and need.

How are you protecting your clients in regards to cybersecurity?

Cybersecurity is a huge topic, not only in our bank, but also across the financial services industry. We tell our people all the time that we’re a small bank, and if we took a $2 million to $3 million hit it would substantially hurt us. Our people are on guard every minute. We have an incredible on-boarding process, and we not only know who we’re banking with, but we also know who are clients are dealing with as well. If you ask what keeps me up at night more so than hitting balance sheet goals, it’s cybersecurity and being hit with a loss. The amount of money that the bank spends on cybersecurity is incredible, but you have to stay ahead of the game. www.capitalanalyticsassociates.com

| 83

BANKING & FINANCE OVERVIEW

Michael Balter Regional Managing Partner – Marcum LLP

Broward County is the chosen destination for many who want to be in the region. We appreciate the county line delineations but have an even greater appreciation for the fact that South Florida is one interconnected region from a newcomer’s perspective. Whether Miami, Broward, or Palm Beach, there is continuous interest from active business people. This isn’t just a retirement region. Whether private equity looking for new high growth investment opportunities or entrepreneurs looking for a tax friendly environment, eyes have turned toward this region and people and money are following. At Marcum, our culture is also entrepreneurial, which means we’re well-aligned with our clients and the region.

( ) allowed us to compete from a service perspective with the community banks.”

Regulations Another issue that is proving complex for all banks is the changing regulatory landscape. With new technology comes new rules and it can be difficult, especially for smaller institutions, to keep up. The Payment Card Industry Data Security Standard applies to all banks that handle major credit cards and is aimed at reducing fraud. It outlines practices financial institutions must follow when storing, processing and transmitting cardholder data.

The General Data Protection Regulations (GDPR) recently came into effect and, although technically an EU regulation, U.S. banks must comply with them when handling the personal data of those who live in the EU. The Fair and Accurate Credit Transaction Act (FACTA) has been in effect since 2003 to protect against identity theft.

Yet another EU regulation, the Payment Services Directive (PSD2), has caused a headache for many financial institutions. The mechanism is designed to allow for real-time payments but with a lack of clarity on how to implement the technology, many U.S. banks reportedly missed the Sept. 14 deadline.

But many banks breathed a sigh of relief in 2018 when the Obama-era Dodd-Frank act was rolled back.

Initially designed to stop banks engaging in the kind of risky practices that led to the 2008 financial crisis, the regulation was widely thought to be too onerous for smaller banks. After the resolution passed in 84 | Invest: Greater Fort Lauderdale 2020 | BANKING & FINANCE

Congress, fewer than 10 banks are now subject to the legislation while banks with assets under $250 billion will not be forced to comply.

Mortgages Broward County is remarkably mortgage-shy. In fact, allcash buyers in the county total almost twice the national average at 31.9% as of August 2019, albeit down on the 34.1% last year. The SALT tax, added to the lack of Federal Housing Administration-approved condos, is essentially pricing lower to medium-income earners out of Broward County’s housing market. FHA loans require lower down payments and credit scores than traditional mortgages but of the 9,307 condominiums in Broward County and Miami-Dade, only 12 are FHA-approved.

Broward’s condo prices also are increasing, reaching $176,540 in August 2019, a 6.7% increase on the year. This means (generally wealthier) all-cash buyers are cornering the condo market in Broward County. In August, 47.2% of condo sales were closed in all-cash purchases.

Private equity funds in South Florida are also snapping up distressed real estate. In June 2019, Safe Harbor Equity announced it was doubling its initial funding goal of $100 million for investment in foreclosures. In August, Florida came in fifth in terms of the number of foreclosures, at one in every 1,633 units. Of 53 metro areas analyzed with populations over 1 million, Jacksonville came in second with one in every 1,043 housing units foreclosed in August. But in a sign that the real estate market remains healthy, overall distressed sales in Broward dropped 29.2% year-over-year in August, from 137 to 97.

BANKING & FINANCE OVERVIEW

Insurance As Broward County attracts more high-net-worth individuals, the property insurance market is reaching new heights. The location of Greater Fort Lauderdale in a hurricane zone combined with people with higher-value assets to protect is an insurance broker’s dream. Insurers in Florida are coming up with novel new business models that apply specifically to those with a high net worth.

For instance, AIG Private Client Group hires an America’s Cup sailor to find safe cover for luxury yachts in the lead-up to a large storm, based on the premise that the cost is dwarfed by what they would have to pay out in the event the yacht was wrecked. “As a business model, protecting everything from pianos and antiques to wine collections before a disaster arrives is cheaper for insurers than the billions they would have to spend rebuilding and replacing properties,” Los Angeles Magazine’s Bob Morris wrote.

Another business model is offering much broader ranges of coverage. “For luxury vehicles, they offer ‘agreed value’ coverage that pays out based on a specific value rather than a lower depreciated amount,” Jon Kelly, CEO of high net worth insurance broker Kelly Klee told Business Insider. “Thus, if one’s $298,000 Ferrari is totaled due to flood, the owner knows she doesn’t have to wonder how much she’ll receive to replace the car, as it is written into the contract.”

Premiums have also increased. Florida has one of the highest premium rates in the country, at an average of $1,918 per year for a standard policy that includes property, personal liability and medical

coverage. Nearly $10 million in property claims were filed for Hurricane Dorian, which hit Florida’s coast in September but thousands of claims are still open from Hurricane Michael last year.

Florida’s insurers are also welcoming new legislation that would make it more difficult to fraudulently claim against property insurance. The Assignment of Benefits (AOB) reform deals with a rule allowing claimants to seek repairs by third-party contractors as a way to speed up the repair process. The contractors in many cases would then allegedly inflate their costs when claiming from the insurance company. If the insurance company challenged the claimant, the company would have to pay all legal fees in the event of a loss, while the claimant was never obligated to do so. This encouraged insurance companies to settle, and therefore increased premiums.

According to S&P Global Market Intelligence, “Citizens Property Insurance Corp. estimated that the changes would reduce statewide average rate need to 10.1% from 25.2%. The drop in rate need would be even more pronounced in South Florida, which Citizens described as the ‘epicenter’ of the legal abuse. Rate need is the amount premiums need to rise for them to be actuarially sound.”

Underserved segment One area that needs to be addressed, which also represents an area of potential growth, is the percentage of the population that is unbanked. A 2017 study conducted by the Federal Deposit Insurance Population discovered that only 59.5% of the MiamiFort Lauderdale-West Palm Beach population are

Fred Zutel Head of Corporate Risk & Broking - Florida – Willis Towers Watson

It is no secret that the insurance industry is dealing with a talent and age gap. It’s one of the most significant challenges that we face, yet the benefits of working in this industry remain largely unknown to young professionals or recent college graduates. The industry has not done a great job of marketing itself, especially when compared to financial services, banking, or other sectors.

Despite these challenges, South Florida is a growing, dynamic and expanding marketplace and the quantity and quality of available candidates continues to expand. We have worked very hard to attract the best talent in our market and consider recruiting the next generation of leaders and professionals one of our primary responsibilities.

www.capitalanalyticsassociates.com

| 85

BANKING & FINANCE OVERVIEW

Sheri Fiske Schultz Managing Partner – Fiske & Company

There are a lot of issues with cybersecurity as so much sensitive information is now stored in the cloud. This is something we are keeping a close eye on. We have the advantage of being part of the BDO USA network, which provides us the increased resources to help us and our clients mitigate this risk. Artificial intelligence is also affecting an important change in the industry. For example, software can be used to scan basic tax information into a tax return automatically on behalf of the individual. We have not yet fully adopted this technology because of concerns regarding security, although we are continually educating ourselves in order to confidently make this leap. We have resisted utilizing third parties services to handle clients’ tax information despite the clear trend amongst our competitors.

The need for tax services alone are decreasing, which is why we are expanding our consulting services.

fully banked. Around 8% are completely unbanked, meaning they have no access to bank facilities. The unbanked rate is higher than both the Florida average and the national average – both 6%.

But coming in at 17.6%, the rate of the underbanked population was lower than the national average of 18.7%. “The good news is that our nation’s banking system is serving more American households than ever before. The bad news is that even as the overall number of people who are unbanked has declined, 8.4 million households continue to lack a banking relationship,” said FDIC Chairman Jelena McWilliams in a statement. This is a big area of opportunity for Broward County area banks.

Looking ahead As Broward County’s banking sector evolves, so too does the need for security. As financial institutions become increasingly digital, they also must ensure this data is well-protected. According to SQN Banking Systems, the Top 5 biggest threats to a bank’s security are unencrypted data, malware, unsecure third-party services, manipulated data and spoofing.

As new technology emerges, new challenges are also likely to arise that must be addressed through legislation and best practices. Increased regulation could cause headaches for smaller banks, especially as the industry continues to consolidate and competition from larger institutions heats up.

86 | Invest: Greater Fort Lauderdale 2020 | BANKING & FINANCE

Top 5 bank threats: unencrypted data, malware, unsecure 3rd-party services, manipulated data and spoofing Being aware of the challenges and how to approach them is vital, says Jarett Levan, president of BBX Capital Corporation. “We spend a lot of time educating ourselves on how the business climate is changing: this includes the competition, demographic changes, political changes, and economic changes, just to name a few. How do we face these challenges? To counter the unknown, we need to be aware of our surroundings and how quickly technology and consumer behavior are evolving. The ways we sold our products and services to customers a year ago are changing because customers have more tools at their fingertips. We are now using technology to improve the customer experience and to reduce the cost of delivery. This is something that we are very focused on.”

Marine & Logistics: The marine industry in Broward County contributes almost $9 billion and over 100,000 jobs to the local economy annually. The industry’s pearls are Port Everglades, which has positioned Fort Lauderdale as a major logistics hub, and the International Boat Show, which draws visitors from around the world. As in many other industries, finding the needed talent to fuel the sector remains a challenge.

www.capitalanalyticsassociates.com

| 87

Anchor industry: The marine sector is anchored in the region, with Port Everglades the key to growth Greater Fort Lauderdale’s privileged position as a port city on the Atlantic coast has allowed it to carve out a thriving marine industry. Known as the “International Marine Hub” and the “Yachting Capital of the World,” the Greater Fort Lauderdale area provides an array of marine services from shipyards to logistics. The industry is estimated to add around $8.8 billion to the county’s coffers each year and provides around 110,000 jobs across Broward County.

Each year, over 50,000 registered vessels cruise Fort Lauderdale’s waterways and coast. When tallying employment, earnings and output for the recreational marine industry alone, Broward County’s total economic impact in 2018 was a $8.9 billion, dwarfing Palm Beach County with $2.2 billion and Miami-Dade with $914 million, and making the sector one of the largest in the area.

The sector in Fort Lauderdale covers shipyards, manufacturing, wholesale and retail marine products, brokers, dockage, and repair services, much of it centered in the area known as Marina Mile. “There has been a great upsurge in the marine business in Broward County over the last two years,” said Robert Roscioli, president and CEO of Roscioli Yachting Center, Inc. 88 | Invest: Greater Fort Lauderdale 2020 | MARINE & LOGISTICS

“The shipyards are spending billions of dollars to recreate and reimagine their facilities to handle the size of the ships that are coming here. Over 12 years ago, I recognized that there was a shift happening in the industry, so I started building our facility. There are more boats being built around the world than ever in the history of boat building. American-built boats have slowed down considerably because of the number of European boats that are being produced. The key in our business is to adjust for this, and so we have.

Broward County, more specifically Marina Mile, is not only the boating capital of the world, it has become the boating repair capital of the world.”

Port Everglades The pearl of the industry is Port Everglades, which is easily accessible by road, air and rail. The I-95 runs right through Port Everglades up the East Coast and the I-75 connects the port to the country’s central belt through Georgia, Tennessee, Kentucky and Ohio, all the way to the US-Canadian border in Michigan. Fort Lauderdale International Airport (FLL) is also located just a stone’s throw away, giving the Port exemplary connectivity.

The terminal is also sandwiched between ( )

MARINE & LOGISTICS INTERVIEW

Making waves Expansion and upgrades continue to improve Port Everglades, including construction that will result in five new cargo berths

Glenn Wiltshire Acting Chief Executive & Port Director Port Everglades Department of Broward County What are the biggest highlights for Port Everglades over the last year?

On the cruise side, we opened Cruise Terminal 25, which was a complete renovation of an old terminal.

That was something that we spent a lot of time on and the actual construction cost for the terminal itself was a little over $90 million. It was successfully completed on time for the cruise ship Celebrity Edge to arrive last November. Work on the biggest project the port has ever started, our Southport Turning Notch Extension, is also underway. It is a $471 million project that started construction over a year ago. This project will result in five new cargo berths in our Southport area, and new crane rail along two berth areas that will allow us to accommodate super post-Panamax container cranes. These cranes will provide the capability to accommodate higher stacks on the ships.

How is the port focused on environmental sustainability and resilience?

The super post-Panamax cranes that we will soon have at the port are all electric, compared to some ports that are still buying cranes with diesel engines. We were the first port in the United States to voluntarily undergo a baseline air emissions and air quality test. We did that so we could have a baseline that could be used as a point of reference moving forward, and to look at the initiatives we could take to reduce the carbon footprint of our port. In regards to sea level rise, we had the National Oceanic and Atmospheric Administration install a water-level monitor right here at the port.

Previously, the nearest water-level monitors were in Virginia Key and Lake Worth. We are fortunate because the elevation of the port is already quite high. We have not had to look at initiatives to raise sea walls because the port was already designed to handle sea level rise in the case of storm surges due to hurricanes.

What does the next year look like for Port Everglades?

We are projecting continued growth from the cruise side because of the development at the port. The Independence of the Seas cruise ship that was going to be deployed to Europe will now stay at Port Everglades until next summer, which will be good for us because that will mean passengers that we were not planning on having. On the cargo side, we are expecting longterm growth once the Southport Turning Notch is completed. Due to the disruptions associated with the construction, the cargo carriers and shipping lines have adjusted their schedules to work around the ongoing construction because they understand the development is necessary for their business to grow as well as our own. As a landlord port, we provide an environment for our tenants to succeed. Our success is based on their success so while it will be a slower year, it will still be a successful one. www.capitalanalyticsassociates.com

| 89

Phil Purcell CEO & President Marine Industries Association of South Florida

How important is the Fort Lauderdale International Boat Show to the community?

We are the refit and repair capital of the world, the yachting capital of the world. When you think of Fort Lauderdale International Boat Show’s impact on the state of Florida, it generates an $857 million economic impact, with 110,000 visitors from 52 countries around the globe. Keep in mind that $100 million a day changes hands in sales during the five days of the show. The marine industry has an economic value to Broward County of $8.9 billion.

How is the marine industry attracting younger workers?

Our Salty Jobs video initiative that highlights job opportunities in the marine industry is a cutting-edge effort. The Salty Jobs team creates a four minute video that highlights the career paths in our industry for white collar workers, blue collar workers or entrepreneurs. We are raising awareness about this great career path that does not require thousands of dollars worth of college debt, that people could start right after high school and enter into an apprenticeship program. We want to push that even harder in Palm Beach and Miami-Dade County. We are willing to roll it out nationally. We also capitalized on Junior Achievement. Every kid in fifth and eight grade in Broward County schools goes through Junior Achievement for a day and they learn the ropes of traditional employment from sponsored storefronts.

How do you see technology changing the marine business?

The good news is that it is hard to disrupt the labor side of this industry. It is harder to automate. You have to get into spaces that are sometimes one-off designs.

Some companies are using technology to take more of an Airbnb approach to boats. People can get on an app, such as Boatsetter, and easily rent a boat in Fort Lauderdale, complete with a captain, for a daily fee.

90 | Invest: Greater Fort Lauderdale 2020 | MARINE & LOGISTICS

( ) Miami International Airport 30 miles to the south and Palm Beach International 50 miles to the north.

The new Virgin Trains USA train also stops nearby, the Tri-Rail commuter line has a stop right next to FLL and two Amtrak stations are in the vicinity.

The port is a leader in containerized cargo, petroleum and real estate, with these three sectors bringing in a combined $88 million over the course of the year, equating to 52.5% of total revenues. At just under $60 million in the 2018 financial year, the cruise segment generated around 35% of the revenues.

Port Revenue Center Contributions FY2018: Lay-In (includes Navy)

Finance

1% <1%

Foreign-Trade Zone

Bulk

<1%

2% Break Bulk

3%

Rail Revenues (Ethanol - FEC/Motiva)

<1%

Northport Garage

Public Safety Services

2%

<1%

Midport Garage

3%

Cruise

Real Estate

36%

10%

Petroleum

22%

Containerized Cargo

21%

Source: Port Everglades

Operating Revenue FY2018

Revenue

% of Total Revenue

Cruise

$59,596,111

35.5%

Contained Cargo

$35,182,449

20.9%

Petroleum

$36,079,665

21.5%

Real Estate

$16,946,173

10.1%

MidportGarage

$5,030,649

3.0%

Northport Garage

$3,572,040

2.1%

Break Bulk

$4,572,385

2.8%

Bulk

$3,617,433

2.2%

Lay-in (Includes Navy)

$1,768,126

1.1%

Finance

$367,299

0.2%

Foreign-Trade Zone

$554,934

0.3%

Rail Revenues (R+Ethanol â&#x20AC;&#x201C; FEC/Motiva)

$372,297

0.2%

Public Safety Services Total

$236,556

0.1%

$167,996,117

100%

Source: Port Everglades

MARINE CONSTRUCTION & LOGISTICS OVERVIEW

The port, located at the country’s southernmost tip, also provides easy access to a market of around 642 million people in Latin America. In fact, Port Everglades’ Top 10 trading partners for containerized cargo were all Latin American and Caribbean countries, accounting for shipments with a total value of around $19 billion.

Despite trade tariffs, Port Everglades has been surprisingly resilient, steadily increasing its total waterborne commerce year on year to reach 25.7 million tons in 2018 from 25.3 million tons in 2017.

The only area to show an impact has been break bulk, specifically steel, which saw tonnages drop to 177,384 tons in 2018 from 262,464 tons in 2017 after President Trump’s tariffs were imposed. Nevertheless, operating revenues soared to $167.9 million in 2018, up from $161.7 million in 2017.

Total TEUs: Trade Partner

TEUs

1. Guatemala

101,825

2. Honduras

Short Tons

$ Value

793,984

$2,537,513,684 $5,154,091,406

101,779

781,515

3. Dominican Republic

70,923

548,970

$3,653,987,371

4. Brazil

45,740

554,953

$1,526,381,800

5. Colombia

42,959

412,721

$1,202,171,404

6. Bahamas

38,456

397,642

$940,360,333

7. Panama

37,376

356,642

$1,063,336,371

8. Costa Rica

37,370

283,387

$930,107,305

9. Netherlands Antilles

27,042

299,253

$883,825,861

26,900

218,216

$1,074,811,047

10. Virgin Islands

Source: PIERS, Loade d TEUs

In terms of economic impact on the local and state economy, a recent economic impact study by Martin Associates showed that economic activity at Port Everglades injects nearly $34 billion into the economy, generating $1.1 billion in state and local taxes. The port employs more than 13,000 people directly, who earn more than $500 million in salaries.

For a sixth-straight year, the port’s container throughput topped 1 million 20-foot-equivalent units (TEUs) in the 2019 financial year to Sept. 1.

Demonstrating the value they see in the port, several companies have made long-term commitments with the signing of long-term leases. Automotive logistics firm Horizon Terminal Services signed a long-term lease for 8.67 acres in Midport and plans to invest an extra $630,000 in a processing facility. Produce importer Sol Shipping Services is in the second year of a five-year lease for 7 acres, which is expected to generate nearly $1.7 million in state and local tax revenue.

Craig Mygatt CEO SeaLand

Why did the company choose Broward County for its new headquarters?

SeaLand, A Maersk Company, was recently reestablished to focus on the customer base moving and receiving products internationally within the North-South tradelanes from and to North America and Latin America.

When we were considering a location for our new corporate headquarters, we had many options. Broward County stood out as a clear winner for three reasons: Broward County offers an excellent quality of life to our colleagues. Top notch schools, multicultural experiences and year-round outdoor activities. This is a main reason we are able to attract and maintain the talent needed to compete in a challenging international marketplace.

Second, Broward county provides easy access to international airports with direct flights to many cities where we operate. Third, Broward County is recognized as a leading centralized business hub. Fifty percent of trade with Latin American moves through Florida. The county has established itself as an integral player in the international marketplace.

How are global factors impacting your business?

In the containerized freight business, we pay close attention to the global news throughout the day, because what happens each news cycle affects our business.

International markets are influenced daily by fluctuating inflation rates, country economies and geopolitical types of activities. All these factors have an impact within the markets of our customers, so we must be on top of current events and remain agile to support our base.

What is your outlook for 2020?

As we see 2020, international trade volumes are expected to remain strong but steady year on year. This is in part a result of global factors like the trade tariffs, economic protectionism and maturity of a few markets. This, of course, can be disrupted by quick changes in policies and political stability throughout the region. www.capitalanalyticsassociates.com

| 91

MARINE & LOGISTICS OVERVIEW

New flexible leases were agreed with the portâ&#x20AC;&#x2122;s three operators, Florida International Terminal (FIT), Crowley Liner Services and King Ocean, designed to make it easier for them to extend their foothold at the port. And investment was made in equipping the U.S. Customs and Border Control at the port with pioneering electronic validation technology that allows shippers to submit documents electronically, speeding up the approval process.

Master/Vision Plan 2019 This fiscal year, the Board of County Commissioners is set to review and vote to approve Port Evergladesâ&#x20AC;&#x2122; 20-Year Master/Vision Plan update. Over the next 10 years, Port Everglades will spend more than $1.5 billion on infrastructure improvements.

The critical Southport Turning Notch Extension (STNE), an ambitious project to extend the Southport Turning Notch by approximately 1,420 feet to the west, is progressing on schedule. In February this year, the Moss/Kiewit joint venture was awarded the $471 million contract for the expansion of the Turning Notch, crane rail improvement and mangrove reclamation. The State of Florida Department of

Fort Lauderdale is often referred to as the Yachting Capital of the World.

MARINE & LOGISTICS OVERVIEW

Transportation has awarded Port Everglades more than $38.4 million in grants toward the cost of the project.

In terms of scope, the contractors will install up to five new cargo berths by lengthening the existing Turning Notch for cargo ships from 900 feet to 2,400 feet. It is also installing crane rail infrastructure for new Super Post-Panamax gantry cranes. In late 2018, the port commissioned three of the new gantry cranes from Shanghai Zhenhua Heavy Industries, which will be delivered in early 2020 at a cost of $13.8 million each. The Turning Notch is slated to be completed by December 2022, while the crane construction will be ready by March of the same year. With the help of the U.S. Army Corps of Engineers, the port is also aiming to deepen its navigation channels from 42 feet to 48-50 feet and widen narrower sections of the channel. The project is currently in the preconstruction engineering and design phase.

Over the construction period, the county estimates that the project will create over 3,000 construction jobs, generating over $122 million in personal income and $11.4 million in state and local taxes. When at full capacity, the expansion will provide 5,529 direct, induced and indirect jobs and $393 million in personal income.

Yachting Broward County boasts 24 miles of Atlantic coastline and over 50,000 registered yachts. The economic impact of the yachting industry in South Florida is $11.5 billion, of which $8.8 billion is generated in Broward County. Despite the economic spillover, yacht-related infrastructure requires attention.“Essentially we talk about South Florida as the epicenter of superyachts in the U.S., and new development is relatively long overdue,” Kitty McGowan, president of the U.S. Superyacht Association, told The Triton. She says the influx of superyachts to the county means billions are now being spent on lifts, infrastructure, and dockage for larger vessels, which makes South Florida even more attractive for service, repair and cruising.

Paul Flannery, Executive Director of the International Yacht Brokers Association (IYBA), told Invest: that it is essential that Fort Lauderdale continues to be a welcoming harbor. “A boat is an economic engine for the community. When a boat comes to a community, 10% of the value of that boat is injected into the local economy on a yearly basis. When there is a transaction involving a boat, an additional 13% of the value of that boat is injected into the local economy, in the first year after the sale. For example, Steven Spielberg owns a private yacht valued at millions of dollars, and when www.capitalanalyticsassociates.com

| 93

Daniel Thorogood President & CEO Seabulk

How does SEACOR and its companies insert themselves into the economic development of the area?

We are a well-capitalized company and a disciplined allocator of capital, with a very high standard regarding investing and operations. Because we are a highly disciplined company willing to invest in capital assets that might otherwise be taken out of service, we are able to do capital deals with companies like International Shipholding, reinvigorate the assets and move the management to Fort Lauderdale. We also continue to invest in new equipment and technology.

What opportunities are arising from the expansion of Port Everglades?

Seabulk Towing provides docking and undocking services by way of large tugs to pull ships on and off their berths. We have invested in some innovative technology called RotorTugs in the last several years, which are really a part of our innovation story. We have invested in the right equipment to be ready for the bigger ships. We anticipate that this port will continue to grow as a container port and as a fuel hub to South Florida.

What sustainability initiatives is the company conducting?

Corporate social responsibility and looking at how to create sustainable businesses is key to anyone who is going to deliver returns for shareholders and the wider community. It is a well-trodden path now, and we have been at it for a while. We built very large ships in 2013 and 2014 to move gasoline from the Gulf Coast refineries into Florida. These ships burn 30% less fuel than the existing technology and are also upgradable to burn LNG, making them another 25% cleaner. From a business point of view, these are usually innovations that create efficiencies, which in turn is good for business.

94 | Invest: Greater Fort Lauderdale 2020 | MARINE & LOGISTICS

Broward County boasts over 50,000 registered yachts he pulls into Fort Lauderdale and ties his boat up here then he will begin stimulating the local economy. This includes buying fuel, hiring people to work on his engines, hiring people to do cosmetic maintenance work, paying dockage, staying at local hotels, eating at local restaurants and more. When a person wants to sell their boat, then we need to make sure they know that there is no better place to do business than South Florida, the yachting capital of the world. The impact of that boat sale happening in South Florida benefits the local economy through yacht broker, marina owner and as well as all the people engaged in that transaction.”

Flannery also says he has noticed the profile of yacht buyers change over the course of the last 10 years as a younger generation gravitated toward boats. “Over the last decade the trend has changed dramatically.

When I was early in my yacht brokerage career, my average buyer was about 65 years old. They would be people who were looking at retirement and ways to enjoy their leisure time. Today’s buyer is in their 30s or 40s. The interesting thing is, millennials are dramatically different consumers than their parents were. Millennials are experiential, and they tend to be temporary consumers, not permanent consumers, meaning they like to rent and charter boats. They want to fly into town, charter a yacht, cruise around for a week and experience a great time with their friends and family. When it is over, they want to give the keys back and go about their business. This is challenging in the yacht sales industry because we no longer have the investment in permanence that we used to have.”

FORT LAUDERDALE BOAT SHOW Fort Lauderdale is also home to the must-attend event of the year for many marine enthusiasts: The Fort Lauderdale International Boat Show (FLIBS). The show started in 1959 as a place for dealers and manufacturers

MARINE & LOGISTICS OVERVIEW

1,200 exhibitors from more than 52 countries, and merchandise valued at more than $4 billion. The 2019 show – marking the event’s 60th anniversary – attracted some of the world’s most luxurious yachts, including the world debut of Lürssen’s 311-foot Madsummer, Abeking & Rasmussen’s 262-foot Excellence superyacht and Heesen Yacht’s 180-foot Vida. It attracts 110,000 visitors.

This year’s show also featured the inaugural ceremony for the new Superyacht Village for superyachts and yachting enthusiasts. The village is located at Pier Sixty-Six Hotel & Marina’s Pier South.

The participation pool also expanded as FLIBS featured yachts from Dubai and Turkey for the first time.

Broward County’s total economic impact in 2018 from the recreational marine industry was $8.9 billion.

to conduct their trade. Today, the economic impact of the show is almost $900 million, contributing more than 110,000 jobs in Broward County and 136,000 jobs regionally.

As the world’s largest in-water boat show, FLIBS stretches across seven locations, displaying approximately 1,500 boats over more than 3 million square feet of exhibit space. The show draws around

Dwindling talent pool As a legacy industry, the marine sector is generally built on shipyards, marinas and businesses that are passed down through generations. But as baby boomers retire faster than they can be replaced by younger workers, a shortage of skilled tradesmen has been created. To address the shortfall, local educational institutions are standing up. Broward College, for example, provides a range of programs related to the marine industry, including Marine Industry Management and Logistics and Transportation as well as certifications in Marine Technology and Systems. The Marine Engineering Management degree covers marine technology, marine electricity, marine electronics, marine diesel, inboard/outboard saildrive and transmission, marine auxiliary equipment, marine corrosion and prevention and advanced marine composites.

But a degree or diploma is not the only way into the industry. Companies are also taking it upon themselves to recruit and train people in the trade. “The biggest

MARINE & LOGISTICS OVERVIEW

Bob Denison Founder & President – Denison Yacht Sales

There has certainly been a surge in demand for the shared consumption part of the business, with many yacht owners making their boats available for charter to offset operating costs. There are also new shared consumption models being introduced, like boat clubs, which are growing in popularity, and Airbnb-type platforms for the boating community like Boatsetter. This is a challenge for us, but we believe that the industry as a whole will benefit in the long term as more and more young people catch the boating bug. We are constantly monitoring the industry’s evolution and exploring possible new business models to make sure we can adapt to and take advantage of the new trends.

challenge we have in this industry is the lack of skilled $25 million. “That challenge has been really acute with workers who can do repairs on a multimillion-dollar all the people selling their properties and marinas to boat. How do we teach a person straight out of high condo developers. They sell their properties to build 10school or trade school to work on a boat like that? It or 12-story condo buildings, and it hurts us, because we takes years to become a good enough carpenter, painter, need fuel docks, bay shops and boat docks. That’s been welder or fabricator to be able to work on these boats,” a real problem. You can’t blame landowners because said Roscioli. “There is no magic recipe to be able to selling to a developer is a lot easier than managing 30 produce these types of workers straight out of school. employees at these facilities, but at the same time it This is why the marine business differs so greatly from is compromising the industry,” said Joseph Farrell Jr, the construction industry, where they can hire unskilled CEO and founder of Resolve Marine. “Quite frankly, I labor to do remedial tasks. We have don’t think we would have Fort been fortunate to not be strained Lauderdale if it wasn’t for the for labor because I have kept the marine industry.” same employees for the past 10, 15 The industry is also dependent and even 20 years. They all came on the health of the global in as laborers. As long as they had economy and on that front there a passion to learn, we taught them is room for optimism, says IYBA’s how to do the different jobs in Flannery. “The world economy this industry. From this, some of drives our industry because them picked up mechanics, some as much as our industry is picked up painting and others dependent on dollars and cents picked up other useful skills. We it is also dependent on emotions.

Robert Roscioli also take the time to cross-train.”

When people feel good about the Roscioli Yachting Center, Inc economy and where it is headed Looking ahead then they buy boats, but if they Despite economic benefits, all is not rosy in Fort are not confident about the state of the economy then Lauderdale’s marine industry. With land increasing they do not buy boats. From a pragmatic perspective, exponentially in value and becoming scarcer, real I believe we are going to enjoy fairly stable and robust estate developers are targeting prime waterfront acres times for the near term. We are 11 years into an eightfor potentially more lucrative projects than shipyards year recovery, so the economic engine is bound to run and docks. In response, yacht enthusiasts and owners out of gas at some point, but I have not heard anybody of the Fort Lauderdale Yacht Harbor acquired Bradford predict another precipitous fall like we experienced Marine’s Davie yacht facility and marina in January for in 2008.”

There is no magic recipe to be able to produce these types of workers straight out of school.

96 | Invest: Greater Fort Lauderdale 2020 | MARINE & LOGISTICS

Transportation & Aviation: Broward County is taking steps to bolster its transportation network that include both public and private initiatives, and in some cases, partnerships between the two. Capital investments at the areaâ&#x20AC;&#x2122;s international airport and the continued rise of ride-sharing apps and other technologies are making for a bright transportation and aviation future in the county.

www.capitalanalyticsassociates.com

| 97

On the move: Whether on the ground or in the sky, transportation challenges are a key priority The future of transportation in Greater Fort Lauderdale is now. With a plethora of challenges on its plate, similar to neighboring regions like West Palm Beach and Miami, Greater Fort Lauderdale is taking a head-on approach to achieve improvements, thinking outside the box in some cases to ensure its transportation options meet the demands of a growing region.

To get started, municipalities throughout Broward County have identified the need for various infrastructure and transportation-related projects within their jurisdiction, and the county government has responded with a one-cent sales tax that will cover a variety of projects designed to ease traffic congestion, improve roads, and make the countyâ&#x20AC;&#x2122;s streets and sidewalks safer for cyclists and pedestrians. The county is also one of the partners working with the Broward County Metropolitan Planning Organization (MPO) on numerous public-private partnerships with a focus on improving transportation in Greater Fort Lauderdale. Other partners of the MPO include the Florida Department of Transportation (FDOT), local businesses, and individual members of the community.

In the vital railway and airport segments, Virgin 98 | Invest: Greater Fort Lauderdale 2020 | TRANSPORTATION & AVIATION

Trains USA and Tri-Rail are working to revolutionize transportation in and around Greater Fort Lauderdale through expansion and the addition of more stops, while Fort Lauderdale-Hollywood International Airport is improving its facilities and runways through a multimillion-dollar renovation and modernization program to stimulate international growth as it attracts more flights from more airlines.

Underpinning most of these improvements are advances in technology, such as driverless cars, new car-sharing apps, and fully electric shuttle services, which promise to cut down on both the congestion and the pollution generated by vehicles in the region.

Initiatives and investments Broward County has been in the process of implementing a variety of programs aimed at addressing the countyâ&#x20AC;&#x2122;s transportation needs. One such program is Penny for Transportation, a local one-cent sales tax that will help fund projects to increase mobility throughout the region by reducing traffic congestion, improving roads, enhancing traffic light timing, developing safer sidewalks and bike paths, and much more.

The initiative is the brainchild of Go Broward, Inc., ( )

TRANSPORTATION & AVIATION INTERVIEW

Clear skies Despite 2019 constraints related to FLL’s modernization work, the airport continues to enjoy ‘phenomenal growth’

Mark Gale CEO & Director of Aviation – Fort LauderdaleHollywood International Airport What have been the major highlights for the airport over the last year?

The overall highlight has continued to be the phenomenal growth rate of FLL, particularly in light of some of the constraints we faced in 2019. The airport has ranked as the fastest-growing large hub airport in the United States, both for 2017 and 2018. Our three primary carriers JetBlue, Spirit, and Southwest, account for roughly two-thirds of our market share and have continued to not only express their interest in growing here at the airport but especially in the international arena.

We are nearing completion of our master plan update, and we have been working diligently on completing the existing terminal modernization program. In 2019 we added several new shops and restaurants, upgraded wayfinding signage in our parking garages, and installed a new pedestrian crosswalk signalization system on the lower-level roadway as part of ongoing improvements. Additionally, the airport’s public WiFi access underwent significant upgrades to meet increased demand. There will be more terminal upgrades such as new and expanded passenger waiting areas, modernized restrooms, and upgraded air conditioning systems as we work to build a better FLL for the enjoyment of airport passengers.

What challenges have resulted from the renovation of the North Runway, and how have you mitigated these?

The North Runway Rehabilitation Project is critically important to the future of this airport. This runway has been in existence in some form or fashion dating back to 1943. It last underwent a major rehabilitation in 2004. The runway supported FLL on its own for two years while the South Runway, which opened in September 2014, was being constructed. We recognized that once the South Runway was operational, we

would need to do some serious renovations to the North Runway. With our airline partners, we decided the best option was to essentially do a full-depth excavation, going all the way down to the subgrade in the center section of the runway, and recompacting the 18-inch subgrade to make it extremely firm and stable. We then laid a six-inch concrete base on top of that and then another 17-inch top layer of concrete pavement surface. While we initially allotted five months for this program, through multiple different efforts from our engineering staff and some industry peers, we were able to identify ways to condense the runway closure period to four months. The critical improvements are expected to extend the life of the runway from 15 to 30 years before any significant rehabilitation would be needed. www.capitalanalyticsassociates.com

| 99

TRANSPORTATION & AVIATION OVERVIEW

Gregory Stuart Executive Director – Broward Metropolitan Planning Organization (MPO) The biggest challenge that we face is just trying to get everybody on the same page, whether it is a local government, the county government, the state government, the federal government or homeowners and business associations. It can be a very difficult task, but it can be done. We are working to strengthen the relationship between the three counties: Miami Dade, Broward, and Palm Beach.

They all need to be talking to one another if we are going to make real positive change when it comes to transportation needs across South Florida.

( ) a 501(c)4 nonprofit that wants to help source funding for solutions to the most critical transportation-related challenges in the county. There are 709 such projects submitted by municipalities in Broward County, and they have been consolidated under the Projects in Your City plan passed by voters. Some specific examples of the kinds of projects being undertaken as part of Penny for Transportation include upgrading existing traffic communications from cellular to high-speed fiber-optic networks; a series of transportation-related studies (one beginning in 2019 and the other beginning in 2020); and school safety zone improvements, including better bicycle and vehicle pattern studies, crosswalk enhancements, pedestrian barriers, and road re-striping.

Another interesting transportation initiative in Broward County is the implementation of the Quiet Zone in May 2019. The Quiet Zone was developed in accordance with the Federal Railroad Administration’s new guidance that trains do not have to regularly sound their horns at every rail crossing, and that engineers can instead choose to sound the horn only when they perceive a threat on or near the tracks, such as a person or vehicle in close proximity. The new approach ensures that engineers can still use the horn to ensure the safety of pedestrians and vehicles in the train’s path, as well as that of passengers on the train itself, while simultaneously mitigating the frequency with which residents along Broward’s eastern rail corridor will be subjected to the sound of train horns. Broward’s Quiet Zone is currently the longest such zone in the country.

F ort Lauderdale-Hollywood Intl Airport There are also big things happening when it comes 100 | Invest: Greater Fort Lauderdale 2020 | TRANSPORTATION & AVIATION

to travel in the sky. Fort Lauderdale-Hollywood International Airport (FLL) is one of the fastestgrowing airports in the country, ranked 18th in the nation in terms of passenger traffic in 2019. In 2018, FLL saw a 10.6% increase in its passenger traffic over 2017, going from 32,511,053 to 35,963,370 passengers served. Thanks to that growth, the airport closed down its North Runway for five months in 2019 to undertake crucial renovations to the aging runway, forcing all air traffic to operate off of the South Runway. The North Runway closure, which began in June and ended October 1, 2019, will likely result in the airport seeing as many as 1 million fewer passengers for the year, but once the upgrades are complete the airport will be able to service more passengers than ever before. The closure also impacted airlines operating out of the airport. “With the ongoing construction at the airport this year, we were not able to keep our growth on the same trajectory as we have the past several years. A lot of this has to do with the Northbound Runway redevelopment. We were not able to add more flights or push growth when there was a 50% reduction of the runway capacity. For us, it was more about how do we efficiently get through the summer runway closure without impacting customer experience. The good news is we had prior experience with this when the airport was rebuilding the southbound runway, but we were much smaller at the time. That being said, it is a good time for the airport to invest in this type of construction because the north runway infrastructure dated back to the 1940s . Doing so is going to allow all of us to really ramp up, and have reliable air traffic handling capabilities,” Jason Annunziata, director of Airport Experience for JetBlue Airways, told Invest:.

The renovations will consist of a $74 million effort

TRANSPORTATION & AVIATION OVERVIEW

to replace the 75-foot center portion of the North Runway, where the greatest impact of landing planes is concentrated, with fresh concrete. The runway’s signage and electrical systems will also be upgraded.

This is the first major overhaul to FLL’s runway since 2004, with some portions of the north runway originally dating back to 1943, when the airport was a naval air station during WWII. The Federal Aviation Administration awarded $44.7 million in funding to FLL to facilitate the extension of runway 10R/28L and the rehabilitation of runway 10L/28R. The upgrades were necessitated by FLL’s rapid growth over the past few years, with analysis firm OAG naming it the fastest-growing airport in North America in 2018. This growth is due in large part to FLL’s partnership with a host of low-cost carriers such as Southwest Airlines, Spirit Airlines, and JetBlue Airways, which together account for two-thirds of FLL’s passenger traffic. In addition to structural upgrades like the new South Runway, opened in 2014, and the current repairs to the North Runway, FLL is carrying out massive renovations to its terminals, with all of them impacted to some extent by 2020. However, it is worth noting that, despite its fast growth, FLL still has challenges. It came in at the bottom end of a list of the country’s 50 best and worst airports by travel website The Points Guy, falling to No. 48. Commute times and amenities were major factors for low scores on the list. FLL’s renovations should enhance amenities, providing potential to climb the rankings.

The airport also has the potential draw of having some of the cheapest airfares in the country, with an average cost of only $245.35.

General aviation Beyond FLL, there is a thriving aviation industry (and supporting industries) in Greater Fort Lauderdale.

For starters, there are 10 airports in all throughout the region, 3 private and 7 international. In total, South Florida’s aviation industry employs more than 46,000 people with airlines, airframe and engine manufacturers, component part suppliers, maintenance repair and overhaul facilities. Thanks to a diverse talent pool fueled by 35 colleges and universities and the lack of state income tax (and other aviation-specific tax exemptions for aircraft repair and leases), Florida is considered the number one state in the country in terms of aerospace manufacturing attractiveness and second in the nation for the number of aviation, aerospace, and space establishments.

Some of the notable Aviation companies based in Greater Fort Lauderdale include 1st Choice Aerospace,

Banyan Air, CTS Jet Engines, Embraer, GA Telesis, GE Aviation, HEICO Corporation, JetBlue, JetScape, JetSmarter, Kellstrom Defense Aerospace, Lufthansa Technik, National Jets, Private Jet Charter, Propulsion Technologies International, Sheltair, Spirit Airlines, and Turbine Controls, Inc., and even more are considering investing in the area, such as GA Telesis, GE Aviation, Heico and Turbine Controls.

Tri-Rail Back on the ground, Tri-Rail trains, operated by the South Florida Regional Transportation Authority (SFRTA), carry people between Fort Lauderdale, Miami, and West Palm Beach. SFRTA is hard at work implementing a series of policies both practical and whimsical to improve the rides and lives of their passengers. First, there are plans to extend Tri-Rail service into Downtown Miami by the end of 2019 by installing 9 miles of new rail infrastructure and purchasing 26 additional trains at a cost of $70 million.

The Tri-Rail tracks will run through MiamiCentral, the station built and already used for the Virgin Trains USA, with which the SFRTA has a collaborative relationship that Steven Abrams, executive director of SRFTA/Tri-Rail, says benefits both sides. “Virgin Trains USA is geared more toward the tourism population, whereas Tri-Rail transports 15,000 riders a day to work and school. Our riders mainly consist of clerical workers, blue-collar workers, construction workers and students. It is a different market than Virgin Trains, but we work very closely together and hope to be able to feed each other’s passengers into our system. We are far along on plans to enter Virgin Trains’ Downtown Miami station. The platform has been constructed, and now we are just waiting on the approval for its Positive Train Control system. Positive Train Control is a safety system that was mandated by the federal government for all railroads in the country. Once Virgin Trains’ system has been certified, we can apply to be a tenant on its system and continue our existing service and extend up to about half of our trains into Downtown Miami. We are hopeful that this will occur in the near future.”

Simulations and expectations for the Tri-Rail Downtown Miami Link are highly positive, with 2,000 passengers to Downtown Miami expected from Fort Lauderdale and West Palm Beach on the first day, half of which are estimated to be first-time riders. In general, the new route will cater to workers commuting into Miami.

Tri-Rail also hosts an annual “Ride and Play Day” during which riders can take advantage of a flat $5 allday fare and get discounts and other special offers at businesses and attractions in Broward, Miami-Dade, www.capitalanalyticsassociates.com

| 101

TRANSPORTATION & AVIATION OVERVIEW

Ben Rogers Director – City of Ft. Lauderdale Department of Transportation and Mobility As the county seat, Fort Lauderdale’s streets serve not only residents, but also large volumes of employees, vacationers, and visitors daily. We are seeing an increase in development throughout the city that will bring additional traffic as new residents, businesses, and attractions call Fort Lauderdale ‘home.’ We are prepared to meet this increased demand and make Fort Lauderdale the city you never want to leave. Through our planning services agreement with the Broward Metropolitan Planning Organization (MPO), the city’s Transportation and Mobility Department will be better able to create a system for people to move around the region safely and reliably. In addition to this agreement, we are strengthening our relationships with all of our partners, including the Florida Department of Transportation and Broward County, and integrating technology into our transportation system to increase efficiency.

and Palm Beach counties. The event was inaugurated in 2013 to celebrate Tri-Rail’s expanded weekend service and to help incentivize locals and visitors to use the trains to reach popular destinations. In addition to the discounts available off the train, riders are also treated to on-train entertainment, such as costumed performers, artists, and live radio shows with giveaways. All passengers need to do to take advantage of the special deals is show their validated ticket or Easy Card at attractions within Broward, Miami-Dade, and Palm Beach.

Ride and Play Day isn’t the only way that Tri-Rail is improving access to entertainment in South Florida.

The mammoth redevelopment at the Isle Casino will coincide with the potential construction of a new TriRail station nearby. The redevelopment will span 223 acres and contain 4,100 residential units, 950 hotel rooms, an 18-screen cinema, 1.4 million square feet of office space, a 300-seat jai alai fronton, and the casino itself would swell to over 140,000 square feet. Officials in Pompano Beach, the city in which the casino is located, consider it only natural that SFRTA would want to construct a station close to such a promising multi-use development, as the additional potential ridership is huge. The redevelopment is set to get underway soon, but will not be completed until 2029.

Of course, all this takes funding and that remains Tri-Rail’s biggest challenge, according to Abrams.

“Our biggest challenge is increasing revenues. We are dependent on funding from the state and the three 102 | Invest: Greater Fort Lauderdale 2020 | TRANSPORTATION & AVIATION

counties that we serve, so we are trying to cut costs and increase funding. Beyond that, our second-biggest priority is an overhaul of our trains and rails to ensure a state of good repair along the corridor. We had the highest on-time performance during this last fiscal year than we have had since 2001, so doing this overhaul will continue to increase our on-time performance. We want to maintain our track so that we can continue to deliver that level of performance for our passengers.”

Virgin Trains USA Virgin Trains USA, formerly known as Brightline before it was purchased by billionaire Richard Branson’s company in 2018, has also rapidly extended public rail transportation throughout South Florida.

The company engaged in a $4 billion, 170-mile expansion during the first quarter of 2019, which linked West Palm Beach, Miami, Orlando, and Fort Lauderdale by it high-speed rail lines. However, this growth is not without growing pains: the company reported operating losses of $23.7 million during the same quarter, though this deficit was an expected facet of the Phase 2 expansion set to unfold over the next three years and funded by $2.7 billion in private bonds, which will also be used to pay off $600 million in bond debt from Phase 1. The operating losses also coincide with an increase in ridership, which started slow but is now beginning to grow ahead of projections, according to some analysts. The Phase 2 expansion will cover four zones: Zone 1 consists of 70 acres of expansion

TRANSPORTATION & AVIATION OVERVIEW

near Orlando International Airport (OIA); Zone 2 is 3.5 miles of expansion in OIA, as well as a station; Zone 3 includes 35 miles of rail alignment following Highway 528 between OIA and Cocoa; and Zone 4 will upgrade 129 miles of existing track to allow trains to reach speeds of up to 110 miles per hour. Phase two is scheduled for completion in 2022.

Virgin Trains believes its business model fills a major gap in the region’s transportation infrastructure between long and short trips. “We are reinventing train travel in America, so there are always going to be challenges, but none that we have not been able to overcome so far. The advent of this project has awakened a desire and a curiosity within the municipalities to recognize the full potential for mass transit in South Florida. We are solving the challenge in Florida of medium-haul travel. Airlines take care of long trips, while rideshare, motorized scooters and buses take care of short ones. There has always been this gap with the 200- to 300-mile distances that are too short to fly and too long to drive. By introducing an option like this, it encourages people to leave their cars at home and start using a more environmentally sustainable means of transit,” Patrick Goddard, president of Virgin Trains USA, told Invest:.

P3 opportunities Perhaps the most important organization for facilitating Public Private Partnerships (P3) in Broward County is the Broward Metropolitan Planning Organization (MPO). The MPO is a transportation policy-making board tasked with planning transportation improvements and allocating funds that the county receives for transportation projects.

In doing so, the MPO brings together members of the public, partner organizations, government agencies, elected representatives, and more to help make transportation plans a reality. One example is the advancement of plans for the Southwest 10th Street Connector. In the summer of 2018, the Florida Department of Transportation (FDOT) advanced funding to begin construction on the Connector by 2022, which follows the MPO board’s vote in 2016 to advance the project to the Project Development and Environment phase. The decision of the MPO board was influenced considerably by the recommendations of the Community Oversight Advisory Team (COAT), a group of residents from the areas that will be most directly impacted by the project. Together, FDOT, the MPO, and COAT are working to improve transportation access in Broward County, with the completion of the Southwest 10th Street Connector expected to reduce congestion

along the Corridor and I-95 in a way that mitigates negative impacts on the surrounding community.

Ride-sharing Ride-sharing has by now taken the world by storm, and although there has been no shortage of controversy and adversity during its ascendance, these challengers to traditional taxis and public transportation, particularly Uber and Lyft, continue to operate in many areas, including Broward County.

However, Uber and Lyft are far from the only game in town, and there are a few newcomers to the Broward County ride-sharing scene. The first is, technically, not ride-sharing at all, but car-sharing. Unlike ridesharing apps like Uber and Lyft that allow drivers to make money off of their cars by offering rides to strangers, car-sharing eliminates the need to do the driving and lets car owners simply allow others to drive their cars temporarily for a fee, similar to how Airbnb lets people offer their homes for short-term rental. One such car-sharing app, Getaround, is actively working to break into the Broward County market in competition with a leader in the industry, Turo. Car-sharing apps claim to help reduce traffic congestion and parking shortages, as well as reduce carbon emissions, by eliminating the number of cars on the road. They also make life easier for people who don’t or can’t own cars. Turo has hundreds of cars available across the Broward/Miami-Dade/West Palm Beach tri-county area, and Getaround is gradually catching up with about 150 cars.

Another interesting newcomer is Circuit, a free, app-enabled electric shuttle service that initiated operations in Hollywood during the spring 2019 and is already available in Fort Lauderdale, Palm Beach, and Miami. The free shuttles are another way these cities are attempting to alleviate traffic and pollution, alongside the ride-sharing and car-sharing apps are other innovations like electric scooter rentals.

2018 saw the launch of 500 electric scooters in Fort Lauderdale, but the service has met with similar issues as dockless scooters in other cities, with users leaving the vehicles strewn about in random, often inappropriate or even dangerous areas. Circuit’s scooters, however, do not carry this risk and have the benefit of being completely free thanks to a combination of sponsorships and municipal funding – Hollywood is authorized to pay Circuit up to $884,351per year to operate in the city.

Technology Of course, Uber is not sitting idly by as car-sharing www.capitalanalyticsassociates.com

| 103

TRANSPORTATION & AVIATION OVERVIEW

apps move in on its turf. The popular ride-sharing app is looking for new ways to better serve users while cutting costs and, not surprisingly for one of the quintessential apps, hoping to do so with the help of new technology. Of particular interest to Uber – and to drivers in the state of Florida generally – is the state legislature’s passage of a law legalizing self-driving cars statewide in 2019. The law explicitly mentioned that it would furthermore be legal for Florida residents to hire self-driving cars through ride-sharing apps like Uber, which would benefit Uber by obviating the need to employ, and pay, human drivers, and instead only require the one-time purchase price of a self-driving car.

Of course, this benefit to Uber is a burden to its drivers, who now face the potential elimination of their jobs and are speaking out against the initiative. There are also concerns related to the safety of nascent selfdriving technology, with Uber pulling the plug on past forays into autonomous vehicle services in Pittsburgh and multiple locations in Arizona when one of their self-driving vehicles killed a pedestrian in 2018. As the technology continues to develop, so will the story of ride-sharing apps’ adoption of autonomous vehicles for the provision of their services. Time will tell how this

impacts workers’ livelihood and the safety of everyone on the road.

Looking ahead Greater Fort Lauderdale is looking toward the future of transportation with a variety of initiatives and improvements being carried out by the government, the private sector and, in some cases, a combination of the two. For instance, voters in Broward County recently approved a one-cent sales tax that will help fund a variety of projects that will make the roads safer and less congested throughout the county.

The MPO is also working with a variety of stakeholders to improve transportation access and safety through initiatives like the Southwest 10th Street Connector project. Virgin Trains USA and Tri-Rail are also trying to get more people out of their cars and into public transportation by rail, which would ease traffic and pollution, and FLL is making it easier for them to get into the sky. Greater Fort Lauderdale is continuing to grow, and the technology that can help its transportation sector grow alongside gracefully is continuing to develop, meaning a bright future for the travelers and commuters in Broward County and the surrounding area.

Healthcare: The Greater Fort Lauderdale area has two key positives when it comes to healthcare: a relatively young population and ample medical facilities to support its residents, but a decrease in admissions is hurting revenues. Public health officials within the county are focusing on prevention, while private sector investment is helping to expand health infrastructure.

www.capitalanalyticsassociates.com

| 105

Mixed signals: Outpatient treatments on the rise across Broward County’s healthcare services Hospitals in Broward County provide a range of procedures, and three are nationally ranked. The county also has more dentists, physicians, internists, OB/GYNs and paediatricians per 1,000 people than the state average. With the exception of aged care, it also outstrips the state average in the number of hospital beds. Healthcare is also a major employer in South Florida, providing over 70,000 direct jobs.

In the Greater Fort Lauderdale area, community healthcare needs are served by two systems, Broward Health and Memorial Healthcare System (MHS).

Broward Health is among the Top 10 biggest U.S. health systems and includes Broward Health Medical Center, which is a teaching hospital. Memorial’s hospitals scored A grades for patient safety from The Leapfrog Group, a national healthcare nonprofit that rates 2,500 U.S. hospitals on safety.

In terms of population demographics, a key factor in healthcare, Broward County has a younger population than the state average, with 56% of its residents below the age of 44. It has lower levels of poverty and only 11.4% of the population over 25 years has no high school diploma, compared with 12.4% in the state. But county public health department expenditure in 2018 106 | Invest: Greater Fort Lauderdale 2020 | HEALTHCARE

totaled $50.9 million, equating to $26.75 per 100,000 people, less than the state average of $35.24.

But hospital admissions in the county are down 7.6% as more surgeries are conducted on an outpatient basis, a challenge for public systems like Broward Health, which suffered a decline in revenues in the past year.

Technology can help on all fronts, and hospitals like Broward Health North, are investing to make sure they remain competitive. “In South Florida, healthcare is a competitive marketplace and what I like to emphasize is that at Broward Health North we are high tech and high touch. Two years ago we completed a $78 million renovation and expansion project to bring the next level of healthcare to our community. One of our key investments was a new, state-of-the-art 36,000 sq. ft.

Emergency Department featuring 53 private suites and three fully-equipped trauma bays. We expanded our surgical services with six new operating suites encompassing 15,000 sq. ft. dedicated to trauma, orthopedic, and general surgery. We updated our exterior façade, renovated the outpatient center with a private entrance and modernized the hospital’s main lobby which now includes a full-service retail pharmacy,” said Alice Taylor, CEO of Broward Health North. ( )

HEALTHCARE INTERVIEW

Prevention Preventive care is vital to managing the populationâ&#x20AC;&#x2122;s health, identifying issues before they worsen

Gino Santorio President & CEO â&#x20AC;&#x201C; Broward Health Which of your services see the most demand and how is Broward Health meeting this demand?

Within Broward County, primary care is always in high demand, and we have been able to meet that need.

Specialty care is also greatly desired, but there is a smaller supply of healthcare professionals in this area, so we have tried to manage things from a population health standpoint by promoting preventative care.

This ensures we identify medical issues before they get to a level that would require more specialized care. In the case where preventative measures are not enough, we are fortunate in Broward County to have an abundance of highly qualified specialists to choose from, while the rest of the country is facing a significant shortage.

With the influx of people into Broward County, how do you plan on meeting this increased demand?

There are about a thousand new residents moving into Florida per day, and Broward County gets its fair share of those individuals. This influx makes us one of the fastestgrowing counties in the state. To handle the increased demand, Broward Health developed a four-tier strategic plan that incorporates the community, the board, physicians and all of our leadership. Using our business intelligence models, this plan takes a comprehensive look at new data for healthcare trends in the county, which has helped us plan to meet demand for the next 10 years. I strongly believe that if we can plan appropriately, then we will be in a better position to respond.

How is Broward Health promoting an emphasis on community health?

We have taken a strong stance on individualized medicine because every culture and every person is different. For example, we recently launched a Vaccinate Broward campaign where we went into the

community and offered vaccinations to hundreds of families. The key to successful community health is bringing the care and preventative medicine to the community, especially if they will not or cannot access healthcare centers.

What are the greatest challenges facing healthcare at the state and federal levels?

On a national level, declining reimbursement rates have been the most significant challenge to the healthcare system. Healthcare is a highly regulated field and there are mandates for enhanced quality and services.

Unfortunately that demand is often unfunded, so we are constantly trying to find efficiencies to compensate for reimbursement cuts without sacrificing our goal of providing the highest quality care. www.capitalanalyticsassociates.com

| 107

HEALTHCARE INTERVIEW

Patient focus The third-largest employer in Broward County is determined to create a culture where the patient comes first

Aurelio Fernandez President & CEO â&#x20AC;&#x201C; Memorial Healthcare System expand this service and cut operation losses by half.

How are you using technology to improve access?

We have made a variety of capital improvements to meet the demands of the community. Aside from our different locations, telehealth medicine is an up-andcoming service aimed at meeting the medical needs of the community. Patients can access a physician electronically from their devices. Also, all of our IV pumps have a â&#x20AC;&#x153;brainâ&#x20AC;? that connects to the pharmacy and our systems to provide better healthcare.

Technology is a huge component for our initiatives, one of which is to become the most technologically advanced healthcare system in South Florida.

How is Memorial Health ensuring the community has access to care?

We have a large community service department.

We are servicing residents in underserved areas, helping expectant mothers, at-risk youth and more, providing preventive services. Our project IHOPE, in collaboration with the state Congress, was established to help the homeless population. The project will help address their different health and social needs. These community services have been very positive. We can measure the results and know that we are making improvements. We are a safety-net healthcare system, which means we take care of all patients regardless of their ability to pay. Unlike others, we are not dependent on taxes. Our primary-care clinics are available to everyone, and their business model has allowed us to 108 | Invest: Greater Fort Lauderdale 2020 | HEALTHCARE

How is the hospital ensuring it has the human talent it needs?

We are the third-largest employer in Broward County.

We rotate over 4,000 nursing students and 300 medical students through our facilities every year. These students become familiar with the system and often decide this is where they want to work. You have to be able to recruit and retain. We have a great culture, which is indicative of why people want to work here. Our staff knows that patients come first. Our physicians work well together and that is a huge part of our culture. Our turnover rate is much less than the Florida average.

What challenges does the hospital and industry face?

There are challenges in the way that we are reimbursed for our services. Medicare and Medicaid do not pay for costs and costs keep rising. In Florida, 40 percent of the $92 billion state budget is for healthcare. There is a lot of pressure. This year, there was the deregulation of certificate of need, which means anybody can open up a hospital. That is changing the dynamics of the market. We are waiting to see the impact of this.

HEALTHCARE OVERVIEW

( ) Performance In its latest annual report for the fiscal year to June 2019, Broward Health, a public nonprofit, unveiled net income of $13.5 million, sharply below its $120-million performance a year earlier. It also saw a drop in admissions while outpatient volume was flat on the year. The leadership at Broward Health changed at the end of December, with Gino Santorio officially taking over as CEO. MHS, on the other hand, saw its earnings soar 156% to $165.5 million in the year to April 2019.

It posted revenue totaling $2.15 billion. Like Broward Health, patient admissions were flat compared to the year-earlier period.

The past year also saw movement on the expansion front. MHS is constructing a medical office building adjacent to Memorial Hospital Miramar. The building will have 126,000 square feet and will include an ambulatory surgery center.

With a $33 million investment, Cleveland Clinic opened the doors of the Coral Springs Family Health Center in 2018. The facility is an ambulatory surgical center with 17 medical specialties, imaging and diagnostic services. According to US News & World Report’s 2017-2018 ranking of Best Hospitals, Cleveland Clinic Florida ranked first in Broward and eighth in Florida.

HCA, one of the nation’s largest providers of healthcare services, also has moved to bolster its Broward presence. Plantation General Hospital, an HCA facility, moved to the town of Davie, adjacent to the Nova Southeastern University Campus. With an investment of $340 million, the new facility will house a four-story hospital and a four-story medical office.

Given the urgent need to train new medical

professionals, HCA is not only investing in a new facility, but also in a pipeline of future doctors and nurses to help fuel the hospital in the long term.

Nova Southeastern University’s Health Professions Division is a multidisciplinary academic health center with six colleges and a variety of academic programs, including osteopathic medicine, pharmacy, dentistry, optometry, allied health and nursing, and medical sciences. Other HCA investments include the $70 million Westside Regional Medical Center and the $75 million Northwest Medical Center.

Technology Cleveland Clinic is now trying to relieve the burden on hospital infrastructure through a new initiative with VNA Health Group to provide home care services, including skilled nursing services, rehabilitation therapy, social work services, joint replacement followup care, wound care, ostomy care and medication management.

There is a shortage of doctors in the country. The University of Central Florida estimates that there are only 2.56 doctors for every 1,000 patients in the United States, and the problem is expected to worsen with population growth. According to legislators, it would take 1,577 primary care, 1,242 dental care, and 404 mental health practitioners to fill Florida’s medical services gap.

To that end, Republican Representative Clay Yarborough introduced a bill to increase the presence of telecommunications in health at the House Ways & Means Committee in March. Telehealth has been slated as the solution to the shortage of medical professionals and the burden on healthcare systems globally. The bill proposes the creation of a tax credit

HEALTHCARE OVERVIEW

With the influx of new residents into Broward County, the region is ideal for large healthcare systems to expand their operations.

of up to $30 million for health insurers and health maintenance organizations that provide the services.

The idea is gaining traction in the private sector.

This year, Miami-based startup Hubspring, which offers a cloud platform that can share files, scheduling and sync calendars, create group to-do lists and send Health Insurance Portability and Accountability (HIPPA) compliant instant messages, won a $40,000 investment for its technology. Baptist Health also launched a new patient access platform using technology from Kyruus, an online scheduling system to optimize processes for patients.

In the past year, MHS also enhanced its online scheduling capabilities and installed on-site kiosks to its hospitals.

Opioid crisis Preventive healthcare is lagging in Broward County, and the three most common causes of death are heart disease, cancer and stroke, making up 57.49% of total deaths in 2018. This is a common problem for developed countries that no longer have to deal with the risk of infectious diseases, but rather the effects of a lifestyle model based on convenience, excess and sedentary behaviors.

110 | Invest: Greater Fort Lauderdale 2020 | HEALTHCARE

One of the most prominent examples of this excess is the nationwide opioid epidemic, which has cast a shadow over Broward County as well. In 2017, 637 people died in Broward County as a result of accidental overdose. In 2018, 1,642 opioid overdoses were treated in Broward County emergency rooms, 85 percent of which were overdoses on heroin. But more than 80% of those addicted to opioids start with prescription drugs, according to Former Vice Mayor of Coral Springs Lou Cimaglia.

There has been a concerted crackdown on opioids in Broward County in recent years as the scale of the problem began to grow apparent. Cimaglia set up the Coral Springs Opioid Task Force made up of healthcare providers, judiciary, Coral Springs Police Department, Coral Springs-Parkland Fire Department and community activists. This task force provides education and information regarding the epidemic and how to dispose of medication.

Another initiative to tackle the epidemic is the Medical Assisted Treatment or MAT program launched

by Memorial Regional Hospital in 2017. The program provides those enrolled with medication to help with withdrawal symptoms, mental health counseling, peer guidance and social support. MHS received

HEALTHCARE OVERVIEW

Gross revenues at Florida law firms rose 6.2% in 2018, almost double the national rate, says AM Law 200

$500,000 at the end of the 2018 Legislature session to continue with a multipronged approach to tackling the epidemic. The MAT program has become a model for others to emulate across the state.

Prevention is another approach that state legislators are focused on. One reason Florida was among the states most affected by the epidemic were the socalled “pill mills,” the trade in prescriptions for opioids like oxycodone that proliferated since about 2003 and attracted thousands of visitors to the state. The previous state governor, Rick Scott, launched a state narcotics tracking system, and Attorney General Pam Bondi made shutting down the pill mills a top priority.

Between 2010 and 2011, the state Legislature passed three drug laws to regulate pain management clinics and monitored prescriptions. The so-called “pill mill law,” passed in 2011, set out extensive procedures for the prescription of pain medication. Law enforcement received $3 million to target pill mills that violated the new laws. As a result of the legislation, the number of pain treatment clinics in the state more than halved in the following year to 441 from 921.

Public policy The county seems to be learning from the opioid

epidemic, with a focus on detecting problems before they arise. According to the CDC, avoidable chronic diseases account for 75 percent of the nation’s healthcare spending and weigh on economic output in the United States to the tune of $260 billion a year.

A study carried out by the Cleveland Clinic Florida in 2012 addressed several areas of focus for Broward County, including chronic diseases prevention, sexually transmitted diseases and health disparities.

Since then, the county has worked to address those issues.

Vaccination initiatives have had great success in targeting immunization in Broward County. In 2019, the county registered kindergarten vaccination rates of 94.2%, up significantly on the 78.8% registered 10 years earlier in 2009. In August, free vaccinations were offered by the county for children returning to school.

Female health screenings, such as mammograms and pap tests, were higher than the state average, as was HIV testing. HIV/AIDS age-adjusted death rates have also dropped, to 3.93 per 100,000 inhabitants from 6.87 in 2014.

But as cases of HIV/AIDS seem to drop, incidences of infectious disease Hepatitis A led Florida to declare a national health emergency. Last month, Florida counties reported high levels of new cases of the disease. Broward reported 13, a fraction of the highest-reporting county, Pasco, which reported 374.

In response, the Florida Department of Health in Broward County Hepatitis Prevention Program now offers free hepatitis A and hepatitis B vaccines, as well as hepatitis B and C testing, for adults at increased risk for hepatitis infection.

Although it remains illegal under federal law, a 2016 constitutional amendment largely legalized medical marijuana in Florida. But it has been a rough road as legislators, mindful of the recent opioid epidemic, try to navigate unchartered territory and prevent it from www.capitalanalyticsassociates.com

| 111

Jared Smith CEO Broward Health Coral Springs

What are some recent highlights for Broward Health Coral Springs?

Over the last 12 months we have made major transformations to our medical center and our overall capability in medical care. We expanded our services tremendously with a $65-million, four-story patient tower. The tower had several key components and enabled us to expand our women and children’s hospital and surgical suites. We also renovated our Women’s Center, which provides our community with advanced capabilities in mammography, bone density, ultrasound and other oncological services. We were recently voted Best Hospital by readers of Our City magazine.

How is the hospital encouraging community wellness?

Our hospital and Broward Health are heavily invested in the wellness of the region. As part of our community health initiatives, we have a successful community wellness and outreach program. It encompasses several staff members, including instructors and nurses, who provide over 40 classes on a monthly basis. Those classes include fitness, yoga, tai chi and educational programs so patients can learn about various health conditions. We also offer health and blood screenings and first aid classes. We have specialized classes geared toward seniors and mothers and newborns, and we also offer first aid training so people can be better prepared for emergencies.

How is technology disrupting the work you do?

To foster innovation, we invested over $4 million in our robotics program. Having surgery through robotic techniques can benefit patients undergoing not only general surgery but urological, gynecological, oncological and bariatric procedures. Through robotic surgery, incisions are often smaller, resulting in the possible reduction of infection risks, enhanced outcomes and often shorter stays in the hospital.

112 | Invest: Greater Fort Lauderdale 2020 | HEALTHCARE

In 2018, almost 1.8 million people enrolled in Obamacare plans for 2019 coverage.

falling into the wrong hands. The state launched an appeal against the amendment but seems to be backing down, satisfied with implementing tight regulation that includes limiting the number of dispensaries and licenses the state can approve.

Since its legalization, five clinics have popped up in the Broward County area, including Cansortium, which recently announced a major expansion for 2019 and 2020 to more than a dozen locations around Florida. Having completed an IPO for the Canadian Securities Exchange in March, Cansortium is now raising more than $56 million in capital to enable continued expansion.

Some believe the best way to alleviate pressure on hospitals is to optimize existing processes. That’s why deregulation surrounding Certificate of Needs (CON) laws was welcomed earlier this year. When CONs were created, they were intended to reduce healthcare costs by limiting capital expenditures, but often worked the opposite way by inflating costs and reducing access to care. In April, a bill was passed by Florida’s state government to exempt hospitals from the system. CON laws “pose serious anticompetitive risks that usually outweigh their purported economic benefits. Market incumbents can too easily use CON procedures to forestall competitors from entering an incumbent’s market,” said the Federal Trade Commission.

CONSTRUCTION HEALTHCARE OVERVIEW

Manny Llano CEO Fort Lauderdale Behavioral Health Center

On a county-wide level, one of the most important priorities for the Broward County Commission is mental health funding. Hospitalizations for mental disorders outstrip the state average in Broward County across all age brackets. The three-year average between 2016 and 2018 was 1,172.1 compared with 958.4 for the state of Florida.

Since February 2018, after the school shooting at Marjory Stoneman Douglas High School in Broward County, both the state and the county have promoted extensive investment in mental health services and counselling. In July, the Department of Education voted to mandate that at least five hours of mental health be included in the curriculum for all middle and high-school students in Florida’s public school system. The Broward County Commission also approved a budget increase that means this fiscal year, mental health spending will total $100 million, up $25 million from last year.

Another health policy that has been brought to the forefront of the county’s awareness is addressing the HIV epidemic. All in all, adjusted three-year averages over 2016-2018 show that Broward County residents have death rates that are below average. The aggregate death rate across the period in Broward County were 637.4 compared with 684.6 state-wide. But the figures ( )

Why did the company choose Broward County for its Behavioral Health Center?

The Fort Lauderdale Behavioral Health Center was built by our parent company, Universal Health Services, and was completed in May 2018. It is the largest for-profit behavioral hospital in Florida with a maximum capacity of 182 beds. We outgrew our previous location and wanted to build a hospital with a warm feeling that felt more like a hotel. We are not just an inpatient facility. Our inpatient services include substance abuse and mental health for both children and adults, as well as older adults who are medically compromised. We also have a Partial Hospitalization Program (PHP) and an Intensive Outpatient Program (IOP), a new Electro Convulsive Therapy (ECT) suite, and an Outpatient Clinic offering evaluations, medication management, individual/family therapy, and Transcranial Magnetic Stimulation (TMS) that now sees around 600 patients per month. These services are not widely available in Broward County so it made perfect sense to build the hospital in this community.

How are you providing affordable healthcare?

We treat all patients. For those who don’t have the means to pay, we try to offer more lower-level care solutions that cost less. At the time of admission, a discharge plan is set up according to the profile of each patient. While there is a strong focus on inpatient care, Broward County still lacks outpatient and after-care programs when it comes to mental health treatment.

What is your outlook for the hospital?

We will continue to grow our outpatient programs, including a medication-assisted program that will launch next year and provide substance abuse treatment. Finally, we will be launching a dedicated First Responder Program in Q1 of 2020 to treat individuals associated with military, police, EMS/rescue, fire rescue, dispatch, and corrections for their substance abuse and/or mental health concerns. www.capitalanalyticsassociates.com

| 113

®

oundtable:

Wellness approach From technology implementation to seminars and community outreach, Broward County’s health institutions are expanding and adapting to meet the changing needs of the growing population.

Leah Carpenter

CEO Memorial Hospital West

How does Memorial Hospital West support proactive healthcare and community wellness?

We focus on meeting the needs of our community.

This encompasses management of acute and chronic illnesses but also in making sure that people are staying healthy and helping them to prevent those same illnesses. We provide preventive care services in several different settings in a multi-disciplinary manner. We have a home health agency, urgent care centers, primary care locations and a wide array of outpatient services throughout the healthcare spectrum, to ensure that our patients have what they need and are doing what they need to do to stay healthy. Our range of services to the community in that sense is quite broad. It ranges from immunizations through the end of life, including hospice and palliative care.

What emerging technologies are incorporated into Memorial Hospital West’s services?

Memorial Hospital West has been granted awards for the types of technology we provide. We are proponents of telehealth, and technology is predominant in all of our key service lines. We also have a very advanced robotics program and make our best effort to stay in the forefront of all technological advances. The midpoint between the personal touch needed and wanted by the healthcare consumer on one side and technology on the other is critical. Technology will continue to evolve and be necessary and it will be crucial for our leadership to make sure we effectively balance high touch with high technology by encouraging personal interactions and face-to-face contact with our patients.

114 | Invest: Greater Fort Lauderdale 2020 | HEALTHCARE

Caitlin Beck Stella

CEO Joe DiMaggio Children’s Hospital

How are you improving your facilities and services to best meet the growing needs of South Florida?

We are now permanent residents of Palm Beach County with the completion and opening of Joe DiMaggio Children’s Health Specialty Center. We are not only investing in that community and hiring local staff, we are also hiring physicians who live there and are part of the community. One of our big initiatives in Broward County is the addition of four stories to Joe DiMaggio Children’s Hospital. It is a complex construction project, because building a new hospital from the ground up is easier compared to adding four stories to an existing operational hospital. We are expanding our facility to address increasing needs in the community, while also incorporating technology that together with a highly skilled team of medical professional can provide children a high level of care to address all their complex needs.

How does the pediatric healthcare system in Broward County compare to that of Palm Beach County?

Families in Broward County have access to great pediatric specialists for their children. As families in Palm Beach County seek similar, highly specialized, pediatric care, we have seen an increase in the number of children seeking care at Joe DiMaggio Children’s Hospital. They are coming from Palm Beach and all over South Florida. As we were planning our Wellington facility, we were already seeing over 2,000 patients per year at our Broward campus. We knew once we opened Wellington that the number would increase. When we started seeing that increase, this told us that we are in the right place, and close to families that need our services.

HEALTHCARE ROUNDTABLE

Jeffrey Welch

CEO Florida Medical Center

How has the Florida Medical Center (FMC) expanded its offerings to best serve the community?

Quite a few exciting things are happening at Florida Medical Center which will greatly benefit our community.

We have become thrombectomy-certified by the Joint Commission, which is a great addition and accolade for our cardiac program. We are beginning new procedures, called Watchman and TAVR procedures, which are the latest and greatest in terms of cardiac advancements.

We have also become a certified chest pain center, and we continue to focus and invest in our centers of excellence for robotics and bariatric surgery. One of the keys to our success is that we make decisions on what equipment we purchase, and what programs to focus on, based on what our community needs and what is best for our patients.

How is FMC encouraging community wellness as a proactive measure to stay out of the hospital?

Our ultimate goal as a healthcare organization is to help people stay active and live healthier and happier lives. To help achieve this, we work in partnership with the local chambers, our city governments and other local organizations to go out into the community to promote wellness and healthy lifestyles. Our doctors are extremely supportive of this initiative, and they assist by volunteering to speak about their area of expertise at events in the community. We host a multitude of seminars and health fairs, such as our annual stroke event, where we talk about the importance of recognizing signs of stroke. These events are critical for the community, and the more we can get the word out there the better.

Douglas Zaren

CEO Memorial Regional Hospital South

What differentiates Memorial Regional Hospital South from the other hospitals in the region?

As the home of the Memorial Rehabilitation Institute, Memorial Regional Hospital South is made unique by our focus on post-acute care. One of our rehabilitative programs is Determination Drive, where we have created a community with an ATM, grocery store, library, park and a MINI Cooper. We use these environments to help patients re-learn different skills in realistic scenarios.

By practicing everyday tasks under the supervision and guidance of our therapists, our patients will be ready to leave our hospital with confidence. We also take pride in our Adaptive Sports program, which helps our disabled patients reach their maximum potential. Different activities such as wheelchair basketball, adaptive bowling and adaptive cycling help our patients have confidence as they adapt to life with a disability. Our patients are the center of all that we do, and we strive to help them recover both physically and emotionally.

How are you implementing new technology to better serve your patients and physicians.

Technology is advancing rapidly in all aspects of life, including in patient care. We have a strong commitment to leverage this expanding technology to provide our patients with the most modern and innovative care in the market. An example of this is our recent acquisition of a C-mill treadmill, which utilizes virtual reality technology to simulate realistic environments for patients. This allows patients to get acclimated to walking in environments they would see outside of the hospital, while still being in a safe, monitored situation. www.capitalanalyticsassociates.com

| 115

HEALTHCARE OVERVIEW

( ) show two areas where Broward County falls short: stroke and HIV/AIDS. The death rate for all ages from HIV/AIDS was 4.8 during this period, compared with 3.3 for Florida.

Stroke rates were far higher than Florida’s average at 60.7 compared with an average of 39.7 for the state.

But HIV screening is higher in Broward County, with 57.9% of the population saying they have been tested compared with 46.9% state-wide.

Insurance The healthcare industry in Florida generates just under 1 million jobs. Its revenues totaled $128.4 billion in 2017 and total GDP impact was $73.3 billion. Around 32.5% of the population has access to private health insurance, while a further 40.5% have Medicare or Medicaid. Only 12.6% of the state’s population is uninsured. In Broward County, 85.4% of residents have health coverage. That figure breaks down as follows: 40.5% on employee plans; 14.8% on Medicaid; 12.1% on Medicare; 16.8% on nongroup plans; and 1.32% on military or VA plans.

The Affordable Health Act (ACA) – more commonly referred to as Obamacare – has been a resounding success in the state of Florida, despite efforts by the Trump administration to first, repeal and replace the legislation, and then changing tack to change the legislation where it could. The temperature around the Obamacare debate has cooled in recent months but Republicans remain firmly against the Act and a lawsuit to strike down the law, supported by the Trump administration, is pending in federal court.

For now, Obamacare remains and in 2018, almost 1.8 million people enrolled in plans for 2019 coverage.

Individual market coverage – policies purchased privately and not supplied by an employer – is higher in Florida than the national average of 6.4%. In Florida, the rate is 12.7% and in South Florida individual coverage reached almost 20%.

The average rate increase across Florida’s individual market was 5.2%, but a new provider, Oscar, brought the total number of providers to seven. The premise of the ACA is to foment competition among providers, meaning the more participants, the more competitive premiums will become.

For Broward County, over 44% of those uninsured fall below the 138% federal poverty level. This means, for a one-person family, household income is below $16,753 and for an eight-person family, income is below $58,484. These are important indicators of the demographics that rely on Medicaid services. Oneperson families earning below $30,350 and eight116 | Invest: Greater Fort Lauderdale 2020 | HEALTHCARE

person households earning less than $105,950 are eligible to claim Medicaid.

Many of these lower-income households are immigrants. The Migration Policy Institute estimates that more than 4 million legal U.S. residents who are not yet citizens receive Medicaid and a further 9.6 million live in families in which a member is enrolled in Medicaid.

A new “public charge” policy introduced by the federal administration would allow the government to classify those who claim Medicaid as public charges, dependent on the state. This would jeopardize an immigrant’s chances of obtaining a green card, meaning it is likely even legal immigrants will pull out of the Medicaid program. Estimates put coverage losses for legal immigrants at between 2.1 million and 4.9 million.

Furthermore, the policy could have a negative economic impact on community health centers, which would be burdened with lower revenues of around $346 million-$624 million, or 538,000 fewer patients per year, says think-tank The Commonwealth Fund.

In the long-term, this is likely to place an increased burden on Broward County’s healthcare system as these individuals miss out on crucial preventive healthcare that can avert costly chronic diseases.

Looking ahead Florida’s and Broward County’s healthcare system is nuanced. While the county has a relatively young population and ample medical facilities to support its residents, failure to focus policies effectively on preventive health creates public health emergencies, such as the Hepatitis A and HIV/AIDS epidemics. But public health officials within the county are making strides in addressing these issues. Investment is being made by the private sector to expand health infrastructure and increase services, offering new markets such as telehealth and medical marijuana.

Elderly care is also an area that is likely to attract greater attention, according to Winnifred McPherson, Director and CEO of Virtue Medical Staffing Services, LLC. “Right now, the majority of our demand is in elderly care. We have corporate hospice clients, so a large portion of our business and workforce is in hospice care. We are striving to attract both corporate and private clients. Private clients will normally require full-time care because they may be living alone or with a family member who cannot be home all the time to take care of them. We also target senior living communities, and we will speak with these homeowners associations to let them know that we are an asset they can depend on.”

Education: The past year was marked by both highs and lows for education in Broward County, with improvements in quality recognized through a number of indicators, including a milestone not seen in a decade.

With a shortage of skilled workers a pressing issue for many local companies, there is also renewed emphasis on workforce preparation and trades.

www.capitalanalyticsassociates.com

| 117

Good grades: An emphasis on trades and workplace preparation are among the hallmarks of an improving system Education in Broward County has seen several highs and lows in 2018 and 2019. One high point is the fact that no schools operated by the Broward County Public Schools district received an F grade in 2019, a milestone not reached by the district in nearly a decade. The district has also performed well in filling teacher vacancies, with fewer than 50 jobs open as of the summer of 2019. Two institutions of higher education in Broward County, Broward College and Nova Southeastern University, both received national honors in 2019, with Broward College once again being named a Top 10 finalist for the Aspen Prize for Community College Excellence and Nova Southeastern earning the 2019 American Dental Education Association Gies Award for Innovation for its dual D.O./D.M.D. degree program.

But there were also lows. Recent changes to the minimum required SAT scores for the Bright Futures Scholarship Program may mean that many students, particularly students of color, will no longer qualify for the empowering program. Broward County is also suffering an exodus of students from district-run k-12s due to concerns over school quality and safety, both issues that the district is actively working to address.

118 | Invest: Greater Fort Lauderdale 2020 | EDUCATION

Various institutions in the county are also working to address Broward’s ongoing shortage of skilled tradespeople by bolstering apprenticeship programs at various levels.

Higher education Greater Fort Lauderdale is home to numerous institutions of higher education, including Broward College, Nova Southeastern University, the Broward Campus of Florida Atlantic University, and Keiser University. However, recent changes may limit access for some students to these institutions. Students set to graduate high school in 2021 and beyond will now need to achieve higher minimum standardized test scores to qualify for the Bright Futures Scholarship, which provides an “Academic” tier award equal to 100% of tuition and fees to the highest-achieving students attending public universities in Florida. To qualify, students will now need to score a combined 1330 on the math and reading sections of the SAT, compared to the previous minimum score of 1290. There is also a second tier to the scholarship, “Medallion,” which covers 75% of student expenses and will now require a score of 1200 instead of 1170. Ostensibly, the change is ( )

EDUCATION INTERVIEW

Quality mission New resources, partnerships help deliver on the mission to ensure a better quality of life through education

Gregory Haile President – Broward College What have been a few highlights from your first year as president?

We have been able to identify a lot of resources and partners to help us drive our focus and mission to ensure that anyone who wants to have a better quality of life via post-secondary education is engaged in that opportunity.

The other side of that is making sure that those who are driving workforce and employment opportunities have the resources that they need to be successful. There have been quite a few prominent highlights to this last year, among them is the work that we have done with a program called Broward UP (Unlimited Potential). The program recognizes the fact that despite the very low unemployment rate countywide, which is now at about 3.3%, there are still several pockets in our community with a 10% or more unemployment rate. We looked at that from a municipal perspective and started identifying ways that we could ensure that notwithstanding what corner of the community a person lives in, that they would have exposure to a post-secondary education and be able to take advantage of it.

What is one way you measure the college’s success?

Measuring success is very important to us. One of the data points we look at is the inertia that we have seen in terms of post-secondary attainment among low-income communities. Nearly 50 years ago, about 6% of students from families in the bottom income quartile earned a bachelor’s degree, and about 40% of students from families in the top income quartile earned a bachelor’s degree. The most recent data shows that those in the top income quartile have gone from 40% to 77% of their students earning a bachelor’s, while those in the bottom income quartile have gone from 6% to only 9% of students earning a bachelor’s. If we do not address this, we will have an even more significant problem in the future. At Broward College, we are focusing on creating that post-

secondary engagement, increasing that attainment rate, and then leveraging that to the long-term vision of social and economic mobility for these individuals.

How much of a role does the college play in retaining talent within Broward County?

One reason we exist is to make sure that we are meeting our local workforce needs. We design our associate of science programs, certificate programs and our Bachelor of Science program with our local business community in mind. We constantly ask ourselves, “what is going to be the track for our students to keep moving into jobs that are right here in this community?” The key component of that is our ability to ensure that folks are coming to Broward County, staying here, investing here, working here and paying taxes here. www.capitalanalyticsassociates.com

| 119

EDUCATION INTERVIEW

Dynamic change Rise in undergraduate students part of the response to the needs of an evolving community

Harry Moon EVP & COO – Nova Southeastern University these decisions is going to have the greatest value at this point in time. We understand that a student is looking for a return on their investment if they do choose to enroll, and what that means to them over time.

How is the profile of the university’s student population changing and what is driving that change?

We have primarily been a graduate institution, but the percentage of undergraduate students has recently grown to 30% of our population. We feel this reflects the university’s dynamism. We are not static in the opportunities that we offer. Instead, we respond to the needs of the community and students. While many private not-for-profit universities have seen undergraduate enrollment diminish, we are seeing ours enlarge. We have worked to become more responsive in understanding that today’s generation is really focused on the net present value of their decision. What this means is that students are more focused on whether they should go to college, what it will mean for them, should they pursue other ventures instead and which of 120 | Invest: Greater Fort Lauderdale 2020 | EDUCATION

How do you envision the future of your medical research programs?

The immediate future is focused on creating more opportunities in healthcare research for our students and the community. In addition to two medical schools and a dental school, we have a new community hospital coming online with HCA Healthcare. The university is also creating a new paradigm of healthcare delivery in the clinical arena with our new NSU Health system.

NSU Health will emerge from the redevelopment of the 85,000-square-foot building that is currently being used by the Miami Dolphins as a practice facility.

This will become our new clinical center, which will work with a variety of medical surgical specialties in tandem with our research activities to advance from the experimental laboratory bench to working in collaboration with industry.

How is the university supporting the startup community in Broward County?

There are more startups in Broward County than in any other county in the country. We have entered into a partnership with Broward County to mutually fund and develop an innovation center that will be housed in the Alvin Sherman Library. The NSU Broward Innovation Center will be an amalgamation of an accelerator, incubator and think tank, and will work with entrepreneurs, businesspeople and educators to bring together the best and brightest of innovative ideas. There is no central hub to help develop these startups from small businesses into something more sizeable, so we are going to try and fill that gap.

EDUCATION OVERVIEW

( ) meant to maintain the integrity of the Bright Futures Scholarship, which was intended to be a meritbased incentive for the state’s brightest students but has been obtained by students who performed lower than the state intended thanks to a SAT that became more lenient in 2016. Opponents of the change decry the fact that the new minimum score appears likely to exclude a disproportionate number of black and Latino students who qualified under the old requirements.

This could potentially reinforce the kind of systemic impediments to receiving a college education that have long plagued minority students. Fortunately, if the new SAT requirement is too strict, students can still apply for a Bright Futures Scholarship using their ACT test scores, which is not receiving a change to its minimum scores.

As for notable news among the institutions themselves, Broward College had a big year in 2019, as evidenced by its being selected as a Top 10 finalist for the 2019 Aspen Prize. The Aspen Prize is among the most prestigious recognitions of community college performance and achievement in the country and comes with a $1 million cash prize. Broward College has received it in the past when the college was an Aspen

Broward College was selected a Top 10 finalist for 2019 Aspen Prize Prize winner in 2013, a finalist in 2016, and a finalist with distinction, which carries a $100,000 prize, in 2017. Although the 2019 Prize ultimately went to two other Florida community colleges – Indian River State College and Miami Dade College – Broward’s inclusion among the list of finalists is a notable distinction and evidence of the school’s continued high performance as a career-oriented institution.

Other 2019 developments at Broward College include five new web development-focused courses in the college’s Information Technology Web Development

www.capitalanalyticsassociates.com

| 121

EDUCATION OVERVIEW

Dr. Johannes Vieweg Founding Dean & Chief Academic Officer – Nova Southeastern University (NSU) - Dr. Kiran C. Patel College of Allopathic Medicine It’s impossible for a school to change its curriculum in a year.

We use an active learning approach in small class sizes of seven or eight, which means we don’t give lectures; instead, the student’s drive the inquiries using medical cases. Rather than learning about anatomy or physiology as isolated courses, they learn how these basic sciences relate to a patient. This forces students to hustle and use critical thinking skills as opposed to just sitting in a lecture.

Students have the ability to ask questions and we guide them along in their journey as best we can but they have to drive the case. This type of learning has shown that students retain the information better than when they cram.

specialization beginning in the fall of 2019, as part a partnership with Miami-based coding academy Wyncode; a partnership with Virgin Trains USA that will provide discounted tickets for Broward College students, internship programs with Virgin Trains USA, and training and educational programs at Broward College for Virgin Trains USA employees; and helping to augment Broward County Public Schools’ supply of qualified STEM teachers through the Teacher Preparation through Real-World Experience and Practice program, established with the aid of a $2.5 million Teacher Quality Partnership grant from the U.S. Department of Education, which will aim to train 25 STEM teachers per year for four years, providing a total of 100 new world-class teachers.

Nova Southeastern University (NSU) also received recognition in 2019 for its D.O./D.M.D. dual degree program. The elite program has only been completed by seven graduates since its launch in 2007, with an eighth set to receive it in 2021, and it is the only program of its kind in the United States. The innovative and unique program earned NSU’s Colleges of Dental Medicine and Osteopathic Medicine the 2019 American Dental Education Association Gies Award for Innovation (Academic Dental Institution), which honors institutions and individuals that embody the highest standards in oral and dental health education, research, and leadership.

Workforce preparation Schools at all levels in the Greater Fort Lauderdale area are dedicated to providing students with the skills 122 | Invest: Greater Fort Lauderdale 2020 | EDUCATION

they need to succeed both during their education and as members of the workforce. For example, Broward County was among just 29 communities in the country to receive Pacesetter Honors from the Campaign for Grade-Level Reading in June 2017 for the countywide progress in early school success in increasing the number and percentage of low-income children who are able to read at the appropriate grade level, and increasing grade-level reading across the board in the county is part of its strategic plan through 2030.

At the higher education level, Atlantic Technical College’s apprenticeship program is the largest such training program in Florida that is focused on construction and the trades, and is the official Apprenticeship Local Educational Agency for Broward County Public Schools. For its part, Nova Southeastern University enrolls students as young as pre-K and all the way through completion of a doctoral program, including the university’s two doctor of medicine programs and its dual degree program, and has partnered with hospital provider HCA to build a teaching and research hospital on campus to ensure that its doctors and nurses have the necessary skills to treat patients and save lives. Another institution, Keiser University, stands as a talent development leader for its career-focused students by providing over 100 associate through doctoral programs that address workforce shortages in the hottest industries, including IT, logistics, and defense and homeland security, and 63% of Keiser’s students earn degrees in STEM, life sciences, or healthcare.

Thanks to these programs, students benefit from

CONSTRUCTION EDUCATION OVERVIEW

being part of a talent pool that continues to attract more high-wage jobs to the area and makes them highly employable. The numbers back this up: year-over-year job growth in the Fort Lauderdale-Pompano BeachDeerfield Beach Metro Division continues to expand as target industries add jobs, such as professional and business services (+5,400 jobs), education and health services (+5,200 jobs), construction (+1,200 jobs), trade, transportation, and utilities (+800 jobs), and manufacturing (+600 jobs). Overall, Broward County enjoyed a decrease in its unemployment to 2.8% in April 2019, down from 3.3% at the same time in 2018.

Emphasis on trades Despite the fact that plumbers, electricians, brick masons, and carpenters are in high demand and regularly net salaries of $55,000-$75,000 plus benefits and a pension thanks to a great need for them in the post-recession construction economy, local employers are struggling to fill open jobs and are forced to decline offers to bid on work. To help close this gap, various institutions throughout Broward County are providing alternate paths to gainful employment for people interested in mastering a trade. One route is through Broward County Public Schools, which offers students training in HVAC, plumbing, carpentry, and electrical through one of its vocational schools: McFatter Technical College, Sheridan Technical College, and Atlantic Technical College.

Another option is Associated Builders and Contractors (ABC), which has several locations in South Florida, and where anyone with a high school diploma can fill out an application and take an aptitude test on a walk-in basis.

From there, candidates are matched with a full-time job with a local company, and sent to an ABC institute for classes and training after they are done working for the day. Students can pursue one of a variety of trades, such as electrical, fire safety, plumbing, HVAC, roofing, and carpentry. While learning, students work full-time starting at a minimum of $15 an hour for electricians, with yearly raises leading to a wage of about $25 an hour upon graduation.

There are also paths to the trades through institutions of higher education, such as apprenticeship training at Broward College in trades like HVAC installation and maintenance, plumbing, welding, and pipe fitting. Similar to the ABC institute, apprentices in these concentrations work while they learn through a combination of on-the-job and classroom instruction.

The apprenticeship program at Broward College is funded by a $5 million grant from the state of Florida. Students can also seek managerial-level training at Broward

Mason Jackson President & CEO CareerSource Broward

How does CareerSource Broward impact the region?

We are No. 2 in placement of vets among the large metropolitan areas, and third in the placement of welfare recipients and the general job seeker. We have provided almost 11,000 customized services, including resume workshops, interview prep and job referrals, to veterans. In the first half of the year to June 30, we provided more than 142,000 services to over 20,000 distinct customers. This includes workshops and counseling sessions and access to tools and technology.

How are you addressing the need for more skilled and trade labor in Broward County?

We are addressing the need through our hundreds of occupational skills training programs and our efforts in apprenticeships and other employer and work based training opportunities. In some cases we will actually reimburse the employer for training a new hire or upgrading the skills of existing employees. There is another issue we have identified. Thirty-seven percent of college graduates are working in occupations that do not require a college degree, and after five years this is still true for 50% of them. Meanwhile, there has been this huge growth in whatâ&#x20AC;&#x2122;s known as middle-skilled jobs, which are the jobs that require more than a high school education but less than a college degree. These include skilled trades, coding and information technology. In this country, there is $1.6 trillion in student debt thatâ&#x20AC;&#x2122;s hobbling the ability of young people to become selfsufficient adults. We have to change this perception that college is the only pathway to a successful future.

We are joining forces with the Greater Fort Lauderdale Chamber of Commerce and several other businesses to get this message out to parents. From surveys that were conducted in the Broward County school system, we know that the greatest influence on career selection for young people is their parents. www.capitalanalyticsassociates.com

| 123

EDUCATION OVERVIEW

College’s main campus through the Associate of Science degree program, which is meant to provide students with the skills they’ll need to become crew supervisors, cost estimators, and assistant building inspectors through a 60-hour program costing a total of $7,600.

Individuals who already have a bachelor’s degree can obtain a master’s in construction management from FIU. Students in this program can take classes on campus or online, where they obtain an education that can help them break into managerial positions in the construction industry with salaries as high as $70,000 per year for roles like site supervisor.

Number of students at schools run by Broward County Public Schools dipped almost 1% in 2019 K-12 Broward County has fewer than 100 vacant teaching positions, but while teacher vacancies are under control, the county is facing a decrease of students in its traditional schools. The number of students attending schools run by the Broward County Public Schools dipped from 226,424 in 2018 to 224,634 in 2019. Over the same period, charter school enrollment rose by 826 students to a total of 45,919. This drop in enrollment is a serious threat to the school district, as it can translate to a loss in funding that can spiral into a vicious cycle.

Two of the main reasons cited by parents pulling their kids out of Broward County schools are school quality and safety. Roughly 45% of the county’s schools are rated at C or below, although the district has made real strides toward improvement. The district received a B rating overall in 2019, and no district-run school received an F grade, a landmark not achieved by the district in nearly 10 years. Over all, 105 schools in Broward received an A, up from 86 in 2018; there were 68 Bs, a slight drop from 71; 101 Cs from last year’s 114; and only 13 Ds, down from 19. Notably, the only school to receive an F was a charter school – Championship Academy of Distinction high school. District-run 124 | Invest: Greater Fort Lauderdale 2020 | EDUCATION

Nova Southeastern earned the 2019 American Dental Education Association Gies Award for Innovation.

Northside Elementary jumped from an F in 2018 to a C this year.

School safety is an even more sensitive issue, with memories of the massacre at Marjory Stoneman Douglas High School in Parkland still fresh in the minds of many parents and students. One of the ways schools in Broward are addressing safety concerns is by increasing the number of employees tasked with protecting students. On top of the districts existing staff of 745 security personnel, the district promised an additional mix of 500 armed guards and unarmed security monitors for the fall of 2019. The armed guards will be largely concentrated in high schools and large middle schools, whereas elementary schools will primarily have unarmed guards. The new security personnel will be paid out of a $19 million slice of the referendum passed by taxpayers in 2018 to provide a total of $93 million per year for four years in funding for items like teacher raises and additional security staff, guidance counselors, social workers, and nurses.

In addition to nearly doubling its pool of security personnel, the school district is also taking a high-tech approach to preventing future shooting tragedies and curbing smaller incidents in schools. First, it plans to purchase 145 analytic cameras at a cost of $621,000, the majority of which will be paid for by a federal grant, in order to augment the existing 10,000 lower-

EDUCATION OVERVIEW

tech security cameras in operation throughout the district. These cameras can recognize the movements and characteristics of vehicles and people and report irregularities to officials, and will be installed on the perimeter of high schools with the most security incidents.

Looking ahead Despite a loss of students from county public schools, an overall shortage of skilled tradespeople, and the erosion of the Bright Futures Scholarship Program, education in Broward County has had a fairly good couple of years. On the K-12 front, the county school district earned a B grade overall and boasted zero F-graded schools for the first time in almost 10 years. When it comes to institutions of higher education, the county is home to multiple national award-winning institutions. Alternative education paths in the trades are also thriving, with a wide variety of institutions offering valuable apprenticeship programs aimed at augmenting the supply of skilled labor. The county has even done a fairly good job of attracting teachers and filling vacant positions when compared with other counties in South Florida. If these trends continue, Broward County is poised to be a leader in education.

Tourism, Arts & Culture: Tourism will always be a mainstay in the Broward County economy, but the reasons the county is considered a tourism hotspot are evolving. Itâ&#x20AC;&#x2122;s no longer just about sunny weather and great beaches as the county and its communities take advantage of the local arts and culture and an inclusive spirit to expand the tourism offer and attract a broader visitor profile to the area.

www.capitalanalyticsassociates.com

| 127

Sunny days: Greater Fort Lauderdale has evolved to make sure its hot tourism offer attracts more than just beachgoers As with most of South Florida, the weather and scenery help to make Greater Fort Lauderdale a tourism destination, but the area’s attractiveness for tourists is much more than simply sun and fun. Arts and culture are another major pull for visitors, with several communities and neighborhoods in the county that are full of galleries, studios, and artistic events.

Getting here is also easy, with a variety of options for travelers. Port Everglades is continually expanding to accommodate increasing cruise traffic, Fort Lauderdale-Hollywood International Airport is similarly expanding its facilities and its flights to serve more travelers, and the Virgin Trains USA connects the region to Miami and West Palm Beach by a 30-minute train ride.

Then there are all the places to stay: 34,000 hotel rooms with another 4,500 on the way between now and 2024, many of them luxury rooms fit for royalty.

Together, these characteristics make Greater Fort Lauderdale a premier tourist destination.

Tourism facilitators The tourism industry in the Greater Fort Lauderdale (GFL) area continues to grow, and this growth is one 128 | Invest: Greater Fort Lauderdale 2020 | TOURISM, ARTS & CULTURE

of the key themes highlighted by the Greater Fort Lauderdale Convention & Visitors Bureau during the 36th annual National Travel and Tourism Week, started May 5, 2019. At the SUNsational Service Courtesy Awards luncheon, one of the Tourism Week festivities, the bureau’s president and CEO, Stacy Ritter, told more than 500 tourism industry partners that GFL’s “tourism has never been better, and we are seeing growth across our multi-sector hospitality industry and in every part of the county, fueling jobs and a positive economic impact.”

The data supports Ritter’s statement with steady growth of luxury, upscale, and midscale hotel space designed to accommodate the increasing number and sophistication of incoming tourists. Some 4,500 new hotel rooms are projected to open throughout Broward County between now and 2024, and this is on top of 34,000 existing rooms. Some noteworthy new hotel construction and renovation projects taking place include the opening of the Conrad Fort Lauderdale Beach, the multimillion-dollar renovations to both the W Fort Lauderdale and the Diplomat Beach Resort, and a new Four Seasons Hotel & Private Residences set to open in 2020. There is also the massive, $1.5 billion ( )

TOURISM, ARTS & CULTURE INTERVIEW

Upping the ante How a historic hotel has maintained its longevity amid a changing, and increasingly competitive, hospitality landscape

Heiko Dobrikow General Manager – Riverside Hotel What is behind the Riverside Hotel’s longevity?

Being on Las Olas Boulevard, in the middle of the entertainment and dining district, plays an important part. Also, when your owners are not only the proprietors of the hotel but also the majority landowners on the boulevard, there is a vested interest in keeping both the boulevard and the hotel vibrant.

Most hotels are very similar in what they have to offer, but at Riverside you literally have your playground right outside your door, your dining and entertainment district in front and in the backyard, a water taxi that can take you anywhere you want to go to explore the city, venues, beaches and museums. This is a really unique location.

How has Broward County hospitality evolved in recent years?

Going back to the 1980s, we were the spring break capital of the world. The leadership then, the mayor and the business community, got together to make the city a little bit more upscale. Suddenly, the momand-pop hotels that we had on the beach became the Ritz Carlton, the Marriott, the Atlantic, and now we have a Four Seasons coming. Those are monumental changes. It speaks much to the change in the business environment that has transpired in Fort Lauderdale.

When you look at the Fort Lauderdale International Boat Show, that is our annual Super Bowl; it’s a multibillion-dollar event. When these yachts appear on the scene, you want to make sure you match that with an upscale hospitality offering. As a result, we really had to transform to match that. It has improved the quality of life in Fort Lauderdale. It has also helped our real estate market, which is now focused more on lifestyle experience. It is not just about the beach and the weather, but also about community, art, culture and museums.

What are additional advantages of being located on Las Olas Boulevard?

Everything about us has to do with location, but it is also about service. If you look at how many of our employees have worked with us for 15 and up to 30-plus years, you see that our service DNA is family, it is part of our culture. Our customers feel they have a home away from home. Our biggest segment is the business customer.

These customers arrive usually on Sunday night and conduct business in town for three or four days. Due to our location, which is close to I-95, with easy access to the airport, they see the convenience of getting to their business quickly. Our leisure customers come because they want to find a unique experience. They don’t want to rent a car. They just walk or take an Uber. We have the location and the facilities that customers enjoy. www.capitalanalyticsassociates.com

| 129

®

oundtable:

Artistic flare Arts and culture are becoming increasingly important in Broward County’s tourism appeal. Sector leaders discuss the impact of their efforts and the support they receive from the county.

Bonnie Clearwater Director & Chief Curator NSU Art Museum Fort Lauderdale

Why are arts and culture institutions like NSU Art Museum vital to the growth of the community?

My philosophy has always been that from the museum we build community. By that I mean the immediate community, the greater South Florida community and ultimately the world. The museum organizes patron travel to cities around the world. This allows people to see the world in a way that as a tourist you would not normally get to see it. At the same time, we invite artists and art historians and visionaries from all over the world to come to the museum and interact with guests and students. For instance, last year, we brought in the young African artist Samson Kambalu, who is now an associate professor at Oxford and this year Pharrell Williams spoke to 200 Broward students about spreading kindness through art.

How is the relationship between the museum and the county mutually beneficial?

One of the things that happened this year was that the city of Fort Lauderdale made a significant $500,000 grant to the museum that made it possible for us to continue to push forward in our mission to build community. One of our initiatives aims to increase engagement in the LGBTQ+ community of Broward, which has the highest per capita of same-sex households in Florida. The Community Foundation of Broward awarded the museum a grant last year to combat the isolation among LGBTQ+ seniors and teens. This program incorporated mindfulness, meditation, and a sense of wellness through artwork that emphasized expanding creativity. The goal of the program is to combat isolation by bringing people together.

130 | Invest: Greater Fort Lauderdale 2020 | TOURISM, ARTS & CULTURE

Joseph Cox

President & CEO Museum of Discovery and Science

How is the museum helping to address the lack of STEM workforce in Broward County?

South Florida is powered by industries that thrive on a strong, vibrant STEM workforce. From aviation to tech, there is a unique voice in the local workforce of innovators, tinkerers and problem-solvers. The Museum of Discovery & Science plays a crucial role in the community by introducing children of all ages to the exciting opportunities offered by careers in STEM. We recently opened The Leighton Family Hangar, our innovative Makerspace exhibit, a hands-on collaborative experience that fosters the learning of new skills, creating products and sharing ideas. Through partnerships with corporations, universities, technical colleges and, of course, our local school system, we will be offering an exciting range of programs and events that allow students to gain valuable skills for their future and ultimately our community’s future.

What is your view of the county’s support for arts and cultural institutions?

The Broward County Cultural Division clearly champions the arts in our community. The Cultural Division’s ongoing investment in cultural programming, public art and capital projects reflects the value attributed to the arts by the County. We are fortunate to have an incredibly vibrant cultural community where collaboration is celebrated. The Museum considers the Cultural Division a partner as we work together to strengthen local cultural offerings, from exciting exhibits and award-winning education programs to breathtaking IMAX documentaries.

TOURISM, ARTS & CULTURE ROUNDTABLE

Susan Danis

General Director & CEO Florida Grand Opera

What impact has your work in art education had on the local community?

With budget cuts and other issues, it is virtually impossible for large school districts in Miami-Dade and Broward to cover many of the arts. Getting to meet industry professionals as opposed to sitting in a teacher’s class can have a more meaningful impact on a young child’s artistic aspirations. Our activities in that regard range from inviting thousands of kids to dress rehearsals, to sending opera singers into classrooms and hosting family days with art-related activities, including a small performance at the end. We try as much as we can to meet the needs of the different classrooms without overwhelming them. One of our programs is called Cadenza, and it works with girls and boys who were victims in human trafficking. We have to do outreach because it is the right thing to do, to give people an artistic experience that gives them a chance to grow their self-esteem by gaining knowledge and being able to share it with others.

How would you rate Miami-Dade and Broward’s support for the arts?

We are blessed that both counties in South Florida have made major investments in the arts. I have worked in several other markets in America and there is nothing that comes close to this funding. The two counties are right up there in long-term cumulative giving as some of the strongest supporters of our company. An opera ticket maybe pays for 30 percent of what it costs to put it together. The government is constantly trying to come up with new ways to help us.

Kelley Shanley

President & CEO Broward Center for the Performing Arts

How did the success of Hamilton benefit your attendance numbers this year?

Our subscription base doubled while Hamilton was here and brought in an all new, younger audience.

From an attendance standpoint, it was the Broward Center’s biggest year ever. In fact, during the five- week run of Hamilton, more than 50% of the ticket buyers were first-time buyers at the Broward Center. We now have to focus on retention and keeping these people coming back and interested in all our offerings. The key to retaining guests as return customers is ensuring that their first experience is a memorable one and then continuing to build relationships with them.

How has Broward County shown its commitment to arts and culture institutions in the region?

Broward County has always been a great supporter of the Broward Center, as one of our original public partners. It has always made a healthy commitment to arts and culture. There is room for it to build that commitment and serve the community with continued growing investment in the arts. To that end, the county has hired a new director of the Broward Cultural Division. He is going to provide new leadership and vision, and hopefully make the case for continued growth and resources from the county. The county has always been generous, especially when it sees that there is public philanthropic support and corporate support behind the arts. The degree to which we as arts organizations build that private base of support will play a significant role in the county amping up its level of involvement. www.capitalanalyticsassociates.com

| 131

TOURISM, ARTS & CULTURE OVERVIEW

Jim Allen Chairman & CEO – Hard Rock International/Seminole Gaming

We created over 2,000 construction jobs during the building of the Hard Rock Guitar Hotel and Casino resort, with some days approaching almost 3,000 construction workers onsite at one time, coupled with the designers and architects that come with such a resort project, and with a variety of integrated businesses: restaurants, entertainment, retail, to name a few. Economically, the design and construction are the foundation. Most importantly, we provide permanent jobs. When we look at the Hard Rock brand on a global basis, we are approaching the 50,000 jobs mark, with 5,000 jobs at the Seminole Hard Rock Guitar Hotel & Casino resort complex.

( ) expansion to the Seminole Hard Rock Hotel and Casino, which opened on Oct. 24, 2019. The revamped resort features the world’s first guitar-shaped building, at a height of 450 feet, and offers 638 luxury rooms.

The complex includes the 168-room Oasis Tower, which overlooks a pool-lagoon area, and the classic Hard Rock Hotel. The new resort will also house a 3,200-square-foot fitness center, a salon and barber shop, and various spa amenities. Of course, there is also the casino, which is adding 200 table games, 3,100 slot machines, and a 45-table poker room, and the 6,500-seat Hard Rock Live venue that is expected to pull in major musical acts, and the fans who come to see them. In addition to tourism revenue, the project has created jobs: the expanded resort plans to hire

1,200 new employees for full-time, part-time, and oncall positions, and some 2,000 construction workers were employed in the construction and renovation.

While job creation is always good news, the sector is affected by the same talent challenges other industries face in a tight labor market. “Low unemployment in the current market is bringing on wage pressure, and there’s a shortage of well-trained hospitality talent in the area, as this is still a largely transient city. To address that, FirstService Residential is investing in technology for recruitment, training and development programs,” said David Diestel, regional president, south, at FirstService Residential Another interesting side of the hospitality industry is the burgeoning short-term rental industry, epitomized by

Third: Florida Grand Opera

TOURISM, ARTS CONSTRUCTION & CULTURE OVERVIEW

Tim Petrillo Co-Founder & CEO The Restaurant People

The Seminole Hard Rock Hotel & Casino underwent a $1.5 billion expansion that included the addition of the new iconic Guitar Hotel.

sites like Airbnb. The practice has generated a great deal of controversy thanks to the threat it poses to traditional hotels, the security threats faced by other residents in buildings where apartments are being rented out short term, and legal battles between Airbnb hosts and their landlords or local governments. Still, Miami-Dade and Broward counties both found a way to benefit from the practice, each signing a deal with Airbnb in 2017 to allow the site to operate in their jurisdictions so long as taxes were collected from hosts and paid to the counties. So far, it has proven to be a mutually beneficial transaction: as the site continues to grow in popularity, the counties rake in more and more revenue, with Miami-Dade receiving $10 million in 2018 and Broward pulling in $5.2 million. Airbnb also has a similar deal with the Florida state government and 38 other counties, which received $62.5 million from taxes on the siteâ&#x20AC;&#x2122;s hosts in 2018, a combined $27 million of which was divvied up among the counties, including Broward.

Some industry insiders say the arrival of businesses like Airbnb are related to the success of the timeshare industry, which is also a large part of the tourism and hospitality sector in Broward. Timeshares are even benefiting from their emergence, said Alan Levan, CEO of Bluegreen Vacations in an interview with Invest:. â&#x20AC;&#x153;We see brands like Airbnb as doing us a favor. In fact, we believe the timeshare is the forerunner to this industry.

Today, they are getting travelers to think outside of the traditional hotel room and demand a home-awayfrom-home environment. When a guest experiences a Bluegreen Getaway, they find spacious accommodations to comfortably fit the whole family; multiple bedrooms, a full kitchen; in-room washer and dryer, all of which

What do you consider when looking at potential new restaurant tenants for FATVillage?

We are trying to be extremely selective with the people we place inside FATVillage. Fortunately, I have been in the restaurant business in Broward County for a long time, so I have great relationships with other restaurateurs that might be the perfect co-tenants with us. We do not have a lot of square footage for restaurants, so we want to make sure that the people coming in are the right partners and have the right vibe for FATVillage. We want to curate the food, beverage and entertainment scene in line with how we curate the art scene.

How are you adapting to disruptive technologies within the restaurant space?

The biggest disruption in the restaurant space is the emergence of delivery platforms. To accommodate this increased demand we are looking at doing satellite kitchens, where we can put all our brands under one kitchen, and create the food from there. We have to look at delivery as putting additional seats in the restaurant, because when a restaurant is at full capacity, then all of a sudden it gets 15 more orders from delivery it is like we added 15 more seats in the restaurant. If we are not set up properly, it is going to disrupt the guest experience within the restaurant.

Do you believe there is a risk of an oversupply of restaurants in the city of Fort Lauderdale?

I believe that the market is already becoming saturated.

The only retail that is still growing is food and beverage retail, and there are too many options for the number of people living in the City of Fort Lauderdale. I do believe that this is going to change dramatically because developers are delivering 10,000 new residential units Downtown. The mistake lies in people opening up restaurants too far in advance of the residential growth, so it makes it extremely difficult for them to live through the slower months. www.capitalanalyticsassociates.com

| 133

TOURISM, ARTS & CULTURE OVERVIEW

Doug McCraw Founder – FATVillage Arts District

The southend of FATVillage is a block and a half away from the Virgin Train Station, which allows us to provide that benefit to people who choose to work and live in the village. Overall, we have found a lot of positive impact from the train station being situated so close to us. We are also close to Downtown, which is becoming a very walkable community. Every project in Downtown Fort Lauderdale going forward will help to enforce this, which ultimately benefits us as well

are very appealing for today’s traveler. Additionally, they have the peace-of-mind knowing that the amenities, security and service that they would expect at a traditional hotel stay are available at a Bluegreen Vacations property. Airbnb and similar offerings don’t provide the consistency and security as well as the resort setting and elevated amenities that the Bluegreen product provides.” Levan pegs the value of the timeshare industry at billions of dollars. “The timeshare vacation industry is over $10 billion annually and growing as more people are thinking about non-traditional vacations.”

There is also considerable attention (and money) being paid to further enhance the region’s appeal to both business and recreational tourists. One excellent example is the $900 million invested by Broward County in rebuilding and expanding the Greater Fort Lauderdale/ Broward County Convention Center. The revamped convention center will boast more than 1 million square feet of indoor and outdoor space, including 350,000 square feet of exhibit space, a 65,000-square-foot ballroom, and a scenic and luxurious waterfront event space, all of which are expected to attract more events with more attendees.

Similarly, Port Everglades is expanding to serve even more ships, most notably through the addition of a $120 million terminal for Celebrity Cruise Lines new ship, Celebrity Edge, which launched in 2018 to much fanfare.

With the Celebrity Edge launch, Port Everglades now serves nine cruise lines with more than 40 ships. As the port grows, so does the tourist traffic it generates: roughly 2.6 million cruise passengers came to Fort Lauderdale in 2008, and 10 years later that number had climbed to 3.89 million with projections that the region will see more than 7 million passengers annually within 20 years.

However, it is worth mentioning that the cruise industry in South Florida will likely feel the pinch of the Trump 134 | Invest: Greater Fort Lauderdale 2020 | TOURISM, ARTS & CULTURE

administration’s tightening of restrictions on recreational cruises to Cuba, a popular destination under the loosened regulation of President Barack Obama. Citing a desire to keep U.S. tourism dollars out of the hands of the Cuban military and intelligence agencies, U.S. officials have rolled back the Obama-era policies that permitted Carnival Corp., Norwegian Cruise Line Holdings Ltd., and Royal Caribbean Cruises Ltd. to offer cruises to the island nation. In the wake of the new ban, Carnival has already tempered its earnings expectations and revised down its anticipated 2019 earnings per share by approximately 4%.

There is also Fort Lauderdale-Hollywood International Airport, which has made more than $3 billion in capital improvements over the last few years. The airport carried out a runway lengthening project in 2014, extending the runway to 8,000 feet, and has also opened new concourses and U.S. Customs facilities. As with Port Everglades, infrastructural improvements at the airport, as well as its renowned affordability compared to other airports in South Florida, have led to an uptick in passengers: 35.96 million people passed through in 2018, which was a 10% increase over 2017’s traffic. Domestic travelers topped out at 27.35 million – an 8.2% increase – while international travelers totaled 8.6 million – a 19.8% increase and the fifth consecutive year of international passenger growth at the airport. Thanks to this steady growth, JetBlue, Southwest, and Emirates have added new routes to and from Fort Lauderdale over the past couple of years, helping to expand potential traffic.

Another boon to tourism throughout South Florida, including Greater Fort Lauderdale, is Virgin Trains USA, which connects Fort Lauderdale, Downtown Miami, and West Palm Beach by a 30-minute high-speed train ride.

This added accessibility allows visitors to easily stay in one of these destinations while engaging in tourist activities in the other two.

TOURISM, ARTS & CULTURE OVERVIEW

Arts & culture Greater Fort Lauderdale has long been a mecca for the arts and culturally enriching experiences for tourists, so it is only natural that the regionâ&#x20AC;&#x2122;s artistic resources appeal as a destination would come together and make Broward County the host of the annual Florida International Trade and Cultural Expo (FITCE) at the Broward County Convention Center. The 2019 FITCE featured about 300 international and 900 local businesses. The expo gives Broward County an opportunity to show off its chops as a cultural haven to global leaders and government officials, industry experts, and trade representatives. The FITCE also provides local artists with an opportunity to network and get their name out there.

Fort Lauderdale is also an ally of LGBT+ people and offers a variety of events attended by more than 1.5 million members of the LGBT+ annually, who spend some $1.5 billion while theyâ&#x20AC;&#x2122;re here. For example, Fort Lauderdale will be hosting the inaugural Pride of the Americas 2020 festival from April 21-April 26, 2020. The LGBT+ community-friendly festival, which is being held at Fort Lauderdale Beach, is expected to attract 350,000 visitors from all over the Western Hemisphere and beyond to the region for a

Broward County is home to many world-renowned arts and culture institutions.

Lisa Scott-Founds President & CEO Winterfest

How do you ensure a new and entertaining experience at Winterfest every year?

We always want to integrate the newest technology into our event, like the use of holograms. As a nonprofit organization, we are always searching for unique additions to our event that are not cost-prohibitive.

We are always asking people, “What is something that you’ve never seen us do before?” We take their suggestion, develop a budget to execute the idea and bring it to our board and possible sponsors to help with underwriting the “new wow factor idea.” It’s amazing what can happen when you bring together creative minds and supporters in the business community. The entertainment value is the most important element for our success to ensure we continue to be the “Greatest Show on H2O” and seventh-largest spectator event in the state of Florida.”

What safety precautions are in place for the event?

We work with all our law enforcement officials — the United States Coast Guard, Broward County Sheriff’s Office, Fort Lauderdale Marine Patrol, Fort Lauderdale Police Department and the Fire Department. When putting on an event of this caliber, safety is the No. 1 priority. Those who participate in the parade are educated on all our safety procedures. We send them messages on a daily basis to always be conscious of how important it is to keep safety first when you are on the water. As a parade on water, Winterfest needs to have proper procedures in place. Unlike a parade on land; you can’t just hit a brake on a boat to stop.

What factors drive the event’s success?

Our success is due to collaboration with organizations like our Greater Fort Lauderdale Convention and Visitors Bureau and working with area hotels. Tourists should experience a Winterfest weekend, a show at the Broward Center for the Performing Arts, eat at our restaurants and immerse themselves in our community.

136 | Invest: Greater Fort Lauderdale 2020 | TOURISM, ARTS & CULTURE

celebration consisting of conferences and symposiums, an international arts festival, concerts, and a parade.

Greater Fort Lauderdale also hosted the longestrunning transgender conference, the Southern Comfort Transgender Conference, for the fourth consecutive year in 2019. The conference consisted of workshops, seminars, and networking events at the Riverside Hotel in Fort Lauderdale. Hundreds of people from across the country attended to take advantage of the opportunity for education and social interaction.

In addition to top-name festivals and events, the Greater Fort Lauderdale area is home to numerous neighborhoods and communities that can be considered hotbeds of art and culture. Consider the Flagler Arts and Technology Village, known affectionately as FATVillage, which is home to numerous art galleries, independent businesses, and weekend events and gatherings. Hollywood, Florida, is also a magnet for artistic talent, and has become even more alluring in recent years. The city hosts countless events at the ArtsPark at Young Circle, supports the Downtown Hollywood Mural Project, and is seeing a bounty of new galleries open around Harrison Street and other areas around the city. Although longtime residents would argue that art isn’t really coming to Hollywood as such because it’s always been there if you knew where to look, many will also admit that the artistic vibe is getting stronger. In addition to galleries and studios, there are also art-focused nonprofits in Hollywood, such as The Art and Culture Center/Hollywood, which offers a selection of courses for children and adults in drawing, painting and designing, theatrical and acting skills, and exhibition space where young artists can showcase their creations.

Looking ahead Tourism in Greater Fort Lauderdale shows all the signs of continued growth, and perhaps the greatest challenges the area faces for the future are simply keeping up with the influx of tourists. So far, the region has been proactive: Port Everglades is adding space for cruise lines and expanding to serve more ships, Fort LauderdaleHollywood International Airport is renovating its facilities and partnering with more airlines to offer more domestic and international flights, and the Brightline is bringing South Florida’s tourist spots closer together than ever before. The area’s hotel offerings are also set to expand significantly by 2024 in order to offer more beds for more heads. Finally, there are numerous new and returning conventions, expos, and other events that are geared to attract more tourists to Greater Fort Lauderdale where they can enjoy all the area has to offer.