Invest: Miami 2017 by Capital Analytics Associates

Miami 2017 An in-depth review of the key issues facing Miami-Dadeâ&#x20AC;&#x2122;s economy featuring the exclusive insights of prominent industry leaders

Contents: 75 Transportation: 76 Transportation in numbers

9 Economy:

10 Economy in numbers

13 Interview: Rick Scott, Governor, State of Florida

15 Interview: Carlos A. Gimenez, Mayor, Miami-Dade County

16 Keys to success: Miami-Dade County is at the heart of one of the most valuable exporting states in the U.S.

23 Interview: Jared Davis, Miami Co-Managing Shareholder, Greenberg Traurig

77 Trains, planes and mobile apps: Connectivity in Miami-Dade, both county-wide and beyond, is improving

79 Viewpoint: Ralph Lopez, VicePresident, Miami Hub, American Airlines

80 Interview: Alice Bravo, Director, Miami-Dade Department of Transportation & Public Works

51 Construction:

85 Trade & Logistics:

52 Construction in numbers

86 Trade & Logistics in numbers

88 Go up with the flow: Miamiâ&#x20AC;&#x2122;s location makes it an important trade hub

90 Interview: Juan M. Kuryla, Port Director & CEO, PortMiami

94 Interview: Emilio Gonzalez, Director & CEO, Miami-Dade Aviation Department

54 Mixed Market: The market is demanding more commercial buildings, as land and labor costs increase

55 Viewpoint: Brad Meltzer, President, Plaza Construction

57 Interview: Keiran Bowers, President, Swire Properties

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

60 Interview: Albert Milo, Principal & Senior Vice-President, Related Urban Development Group

31 Real Estate:

32 Office, industrial and retail real estate in numbers

34 International buyers of real

63 North Miami:

64 A city on the move: New developments are driving positive change for the city

65 Interview: Smith Joseph, Mayor, City of North Miami

67 I nterview: Larry Spring Jr., City Manager, City of North Miami & Executive Director, North Miami Community Redevelopment Agency

68 I nterview: Larry Rice, President, Johnson & Wales University-North Miami

69 Rebirth of an agency: The North Miami Community Redevelopment Agency is having a positive impact

estate in numbers

36 B alanced property: Interest from foreign markets is revitalizing real estate

41 Interview: Matt Allen, Executive Vice President & Chief Operating Officer, the Related Group

42 Interview: Ken Krasnow, Executive Managing Director, South Florida Region, Colliers International

48 Interview: Gerald Greenspoon, Co-Managing Director, Greenspoon Marder

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CONTENTS

Contents: 95 I nfrastructure, Utilities & Environment:

96 Infrastructure, Utilities & Environment in numbers

97 Response and responsibility: Miami-Dade County is focused on growing sustainably

98 Viewpoint: Kerri L. Barsh, Shareholder & Co-Chair, National Environmental Practice, Greenberg Traurig, P.A.

101 Interview: Eric Silagy, President & CEO, Florida Power & Light Company

105 Overtown: 106 Things are cooking in Overtown: New investment spells a return to prosperity for the area 108 interview: Keon Hardemon, Chairman, Miami City Commission & Chairman, SEOPW CRA Board 109 Viewpoint: Clarence E. Woods, Executive Director, SEOPW CRA

111 Viewpoint: Ola Aluko, CEO & President, St. John Community Development Corporation

115 Banking & Finance:

131 Health:

116 Banking & Finance in numbers

132 Health in numbers

118 Cash and competition: A change in Federal interest rates only adds to the already great potential in Miamiâ&#x20AC;&#x2122;s financial sector

121 I nterview: Manny Perdomo, Perdomo, CEO & President, SunTrust Bank

122 Interview: Joe Atkinson, Regional President of South Florida Region, Wells Fargo

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

126 Interview: Pablo Pino, Market President, South Florida Commercial TD Bank 128 Banking Roundtable: Israel Velasco, Florida Regional Executive, Popular Community Bank Abel Iglesias, President & CEO, Professional Bank Calixto Garcia-Velez, Regional Executive & Executive Vice President, FirstBank Jay Pelham, President, Total Bank 130 Interview: Tony Coley, President, South Florida Region, BB&T 8 | Invest: Miami 2017 | CONTENTS

133 The healthy option: Miami has some of the stateâ&#x20AC;&#x2122;s best health facilities

134 Viewpoint: Steven Altschuler, CEO, The University of Miami Health System

135 Interview: Ben Riestra, Chief Administrative Officer, Lennar Foundation Medical Center

136 Interview: Jeffrey P. Friemark, President & CEO, Miami Jewish Health

137 Viewpoint: Jeff Johnson, State Director, AARP Florida

138 Interview: Akhil Agrawal, President, American Medical Depot 139 Interview: Rachel Sapoznik, President & CEO, Sapoznik Insurance 140 Interview: Michael J. Zinner, M.D., Founding CEO & Executive Medical Director, Miami Cancer Institute, part of Baptist Health South Florida

141 Viewpoint: George Foyo, Chief Administrative Officer, Baptist Health South Florida

Miami 2017

145 Education:

167 Arts, Culture & Tourism:

146 Education in numbers

147 Cultivated learning: Miami educational establishments are turning their focus toward technology and innovation to create a skilled workforce

148 Interview: Eduardo Padron, President, Miami Dade College 149 Interview: Alberto Carvalho, Superintendent, Miami-Dade County Public Schools

151 Interview: Dr. Julio Frenk, President, University of Miami

152 Interview: Mark Rosenberg, President, Florida International University

155 Miami Gardens: 156 The growth of opportunity: One of Miami-Dade’s newest cities is making the most of its advantageous location

157 Interview: Oliver G. Gilbert, Mayor, City of Miami Gardens

158 Viewpoint: Cameron D. Benson, City Manager, City of Miami Gardens 160 Interview: Roslyn Clark Artis, President, Florida Memorial University

163 Viewpoint: Monsignor Franklyn M. Casale, President, St. Thomas University

164 Interview: Jason Barker, President, ChenMed

168 Arts, Culture & Tourism in numbers 169 More than just sunshine: Already a thriving tourism hub, Miami is expanding what it has to offer for visitors

ISBN 978-0-9988966-0-1 General Manager: Abby Melone Chief Financial Officer: Albert E. Lindenberg Managing Editor: Alex Mazonowicz Executive Director: Erica V. Knowles Creative Director: Nuno Caldeira

171 Interview: William D. Talbert III, President & CEO, Greater Miami Convention & Visitors Bureau

Contributors: Lars Larsson Jasmine Whiting Ayla Jean Yackley

173 Interview: Lisa Lutoff-Perlo, President & CEO, Celebrity Cruises

Photographer: Luis Arturo Mora / LAMphotos

174 Viewpoint: Franklin Sirmans, Director, Perez Art Museum of Miami

175 Viewpoint: Howard Herring, President, New World Symphony

176 Viewpoint: John Padgett, Chief Experience & Innovation Officer, Carnival Corporation

181 Sports: 182 Team players: Sports in Miami play an equally important role in people’s lives and the local economy 187 Interview: Don Shula, Former Head Coach, Miami Dolphins

Invest: Miami is published once a year by Capital Analytics Associates, LLC. For all editorial and advertising questions, please e-mail: contact@capitalaa.com To order a copy of Invest: Miami 2017, 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.

188 Viewpoint: Udonis Haslem, Team Captain, Miami HEAT

Photo Credits: Contents: pg 5 – Top photo: Sole Mia pg 5 – Bottom photo: Miami Dade College (MDC) pg 6 – Top photo: Florida Power & Light Company (FPL) pg 6 – Bottom photo: Overtown CRA Economy: pg 9 – Small photo: Miami Dolphins pg 20 – Miami–Dade Department of Transportation and Public Works (DTPW)

Transportation: pg 75 – Large photo: DTPW pg 75 – Small photo: American Airlines pg 77 – Transportation Trust Trade & Logistics: pg 85 – Large photo: PortMiami pg 88 – PortMiami pg 92 – Miami International Airport

Real Estate: pg 31 – Large photo: Overtown CRA pg 36 – Swire pg 44 – Terranova

Infrastructure, Utilities & Environment: pg 95, 97 – FPL

Construction: pg 51 – Plaza Construction pg 54 – Miami Worldcenter

Health: pg 131 – Large photo: UHealth pg 131 – Small photo: Miami Cancer Institute pg 133, 142 – UHealth pg 138 – ChenMed

North Miami: pg 63, 64, 71 – North Miami

Overtown: pg 105, 106, 112 – Overtown CRA

Education: pg 145, 146 – MDC pg 150 – Miami–Dade County Public Schools Miami Gardens: pg 155, 156, 166 – Miami Gardens Art, Culture & Tourism: pg 167 – Large photo: SLS Lux Brickell pg 167 – Small photo: DTPW pg 169 – NWS pg 174 – Perez Art Museum of Miami Sports: pg 181 – Large photo: Miami Dolphins pg 181 – Small photo: The HEAT pg 182 – Miami Dolphins pg 185 – The HEAT

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Economy: Itâ&#x20AC;&#x2122;s a fine time to be in Miami-Dade County. Unemployment is falling, and businesses, both established and startups, have been boosted by state policy. Infrastructure improvements, including significant investment in PortMiami, are bringing more interest from the international sphere. Despite a price adjustment in real estate, ambitious construction projects throughout the county will offer up even more opportunities for retail and residential housing investment.

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Economy in numbers: 20

15.30

Greater Miami employment change, non-farming, 2016 (percent):

0.9 Other services

1.7

1.7 Leisure and hospitality

0.3

1.4 Education and health services

-1.3

0.2

1.2 Wholesale trade

0.9

-2.9

Manufacturing

2.4

4.4

Overall

Government

Professional and business

Financial activities

Information

Transport and warehousing

Retail trade

Construction

-5

Source: U.S Bureau of Labor Statistics, 2017

Greater Miami employment, non-farming, January 2017 (â&#x20AC;&#x2DC;000s):

311.3 Government

122

89.2

Construction

Manufacturing

128.4 Other services

600.4 330.7

Trade, transport and utilities

2,624

Leisure and hospitality

TOTAL 48.8 Information

390.2

173.8

Education and health services

Financial activities

0.7 Mining and logging Source: U.S Bureau of Labor Statistics, 2017

10 | Invest: Miami 2017 | ECONOMY

428.5 Professional and business services

Miami-Dade, Florida and the U.S. average personal income, 2013-2015($): 50,000

48,112

44,429

43,278

46,414

42,868

41,587

39,104

30,000

40,771

40,000

44,462

Miami-Dade Florida U.S.

20,000 10,000 0 2013

2014

2015

Source: U.S. Bureau of Economic Analysis

257,102

247,716

248,496

250,000

2010

2011

274,436

266,615

290,000

270,000

283,439

Greater Miami real GDP, 2010-2015 ($ million):

230,000 2012

2013

2014

2015

Source: U.S. Bureau of Economic Analysis

Top 15 metro areas by GDP, 2015 ($ million): New York-Newark-Jersey City, NY-NJ-PA

1,602,705

Los Angeles-Long Beach-Anaheim, CA

930,817

Chicago-Naperville-Elgin, IL-IN-WI

640,656

Houston-The Woodlands-Sugar Land, TX

503,311

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

491,042

Dallas-Fort Worth-Arlington, TX

485,683

San Francisco-Oakland-Hayward, CA

431,704

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Boston-Cambridge-Newton, MA-NH

411,161

396,549

Atlanta-Sandy Springs-Roswell, GA

339,203

Miami-Fort Lauderdale-West Palm Beach, FL

317,986

Seattle-Tacoma-Bellevue, WA

313,654

Minneapolis-St. Paul-Bloomington, MN-WI

248,779

Detroit-Warren-Dearborn, MI

245,607

San Jose-Sunnyvale-Santa Clara, CA

235,222

Source: U.S. Bureau of Economic Analysis

Miami-Dade unemployment rate, 2010 to 2016 (percent):

0 2010

2011

2012

2013

2014

2015

2016

Source: U.S. Bureau of Economic Analysis

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12 | Invest: Miami 2017 | ECONOMY

ECONOMY INTERVIEW

The state of play How Florida is tackling unemployment by encouraging growth and education

Rick Scott Governor — State of Florida Florida has seen the second biggest drop in unemployment in the U.S. What have you and your administration done to achieve these figures? Unemployment is at 4.9 percent, and we’ve added some 1.26 million private-sector jobs, which is double the national rate. Four years before I was elected, Florida lost 832,000 jobs. To tackle this, we cut 4,600 regulations, cut taxes 55 times and recruited 900 companies either to come to Florida or expand into the state. We’ve gone on trade missions around the world, and we’ve made sure that our universities are focused on where the greatest job needs are. We’ve asked “how can we help businesses here to be more successful than they are anywhere else?” That is our attitude, and we are better than anyone else in the country. We have to keep cutting taxes and reducing regulations. U.S. News & World Report has said Florida is first for higher education, but we have to keep getting better. We have to make education more affordable and make sure the colleges and universities are very focused on where the jobs are. We now have 25 percent of universities’ budgets tied to three things: What does it cost to get a degree? What field can you get a job in? How much money do you make? We’ve got to make sure we are focused on getting people ready for careers and dealing with the system. Technology, life sciences and healthcare are all growing sectors in the State of Florida. What is being done to encourage the growth of these sectors? We’ve got to make these sectors more successful here than in any other place in the world. We have to build relationships, which is why one of the things we do as part of Enterprise Florida is consultations with businesses to help them do better. We make sure they have the right workforce, and we do that through a variety of programs through our state colleges and universities. We’ve got to keep reducing their taxes so

they can reinvest in their businesses because when they reinvest in their businesses, we get more jobs. What impact has a greater emphasis on developing education had on Florida? How will education develop in the future? Tuition fee increases have been halted. They were increasing at 15 percent plus inflation every year when I came into office. We haven’t seen an increase in four years at our universities or state colleges. We reimburse the schools according to what’s important to students, lower tuition fees and getting a good-paying job when they finish. We have the highest graduation rates of the 10 most populous states. We’ve increased our funding for universities by almost 50 percent since I got elected. The most important thing is that every child has opportunity. It doesn’t matter where you live or how you grew up, I want every child to have the dream of this country. www.capitalanalyticsassociates.com

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ECONOMY INTERVIEW

Investing right How Miami-Dade is putting money where it is needed to encourage economic growth

Carlos A. Gimenez Mayor — Miami-Dade County What infrastructure improvements are being worked on in 2017 to keep Miami-Dade County an attractive investment destination? We are continuing our work on the multi-billion-dollar expansion and renovation of our water and sewer system. This is the largest Capital Improvement Project in county history and will continue for the next 15 to 20 years. At Miami International Airport, we are expanding our international carriers. We now have 109, which is the largest number of any U.S. airport. The downturn in Brazil and the impact of the Zika virus have had an effect here, not only at our airport, but also on tourism. Although it’s not a huge hit, it is a hit that we have to absorb. We have a partnership with Royal Caribbean for a $200-million project to expand PortMiami facilities and allow us to increase our passenger traffic. We expect to easily surpass 5 million passengers in 2017. With the unemployment rate at 5 percent, what is being done to keep it low, attract a skilled workforce and ensure high-quality and high-paying jobs? Employ Miami-Dade is a program that allows us to go into high-unemployment areas to recruit and train residents who have been chronically unemployed, underemployed or never employed. We train them to take jobs in the construction, culinary and hospitality industries. We’ve had close to 600 placements so far. A lot of those young people had never had a job in their life or definitely not like the type of job they have now. It’s very important that we provide opportunities to all areas of Miami-Dade. We have projects that will be providing job opportunities. We can be proud that we have led the state in job creation, and that the private sector has created 168,000 jobs since 2011. We have continued to diversify our economy by investing in various fields ranging from clean energy and ground transportation to art, film and

entertainment. But we need to continue to create jobs for everybody in Miami-Dade. We also have to be cognizant of disruptive technologies arriving in Miami-Dade. The county should be in the best position possible to experience the least amount of disruption when technologies like autonomous vehicles, become common. What are the main projects being implemented to provide affordable housing in Miami-Dade? Liberty City Rising is a top priority in 2017. We are leveraging more than $50 million in public funds and $300 million in private investment. The project is going to replace about 700 public-housing units and then add another 800 to 1,000 affordable workforce housing units, transforming 50 acres. It’s probably the largest public-housing community redevelopment in the U.S. www.capitalanalyticsassociates.com

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Keys to success: Miami-Dade County is at the heart of one of the most valuable exporting states in the U.S. and its ports are strategically located on the Americas’ trading routes, making it a prime stopping point for global trade and commerce Some $73 billion worth of merchandise exports flowed through the Sunshine State, the sixth highest in the U.S. in 2015. Miami-Dade County alone sends about 30 percent of all U.S. exports to Latin America and the Caribbean. In Miami-Dade, employment is up, house prices are up, trade is up and, at the helm of this growth, is Mayor Carlos Gimenez, who has a budget of $6 billion to spend on keeping the county at the center of the state and national economy. Location, location, location Miami-Dade is at the southeastern tip of Florida. It is the most populous county in the state, with an estimated 2.69 million people as of 2015. The City of Miami is its largest metropolis and economic heart. The county covers some 2,000 square miles, with 16 | Invest: Miami 2017 | ECONOMY

the world-famous Everglades National Park occupying about a third in the west, Biscayne Bay and the Atlantic in the east, the Florida Keys to the south and Broward County to the north. The county has hot, humid summers, with a long rainy season that extends from May until October and mild winters. Global scene The Organization for Economic Cooperation and Development predicts modest global growth of around 3 percent until 2018, with weak trade and investment. Miami-Dade’s economy is not immune to this trend. In 2016, the county’s trade with the world dropped for the fourth consecutive year by 2.21 percent from $106.85 billion to $104.49 billion. Exports fell by 4.23 percent and imports increased by 0.23 percent,

ECONOMY OVERVIEW

leaving the district with a trade surplus of $7.76 billion. The county’s most valuable exports were aircraft and parts, communications and technology equipment, gold (Miami-Dade is a gold trading hub, so the metal is also a top import) and medical instruments, which all accounted for 28.83 percent of the total. Miami-Dade’s economy is linked to the world, but Latin America is where its fortunes lie. Much of its bilateral trade and many of the county’s inhabitants have links with the U.S.’ southern neighbors, with Latinos making up around 65 percent of the population. The commercial roots are deep too, with almost 25 percent of state businesses owned by someone with ties to Latin America. More than half of the county’s residents are foreign -born, but despite its cosmopolitan fabric, ripples were felt throughout immigrant communities when Gimenez, himself Havana-born, said the county would comply with federal government detention requests for immigrant criminals. The message was clear: Miami would no longer be a sanctuary city that turned a blind eye to its undocumented criminal population. In terms of trade, the state as a whole exported 73 percent of its goods to Latin America and the Caribbean, worth $59.3 billion. While it is impossible to paint a picture of Latin America’s economy with one brushstroke, some of the economic leaders of

the continent have seen troubling times of late. The county’s number one trading partner, Brazil, is undergoing its worst recession in history. However, bilateral trade with Miami-Dade was up 0.15 percent to $14.27 billion, even with exports decreasing 8.13 percent. Trade with the county’s second biggest partner, Colombia, which has faced slow growth caused by the peace process and tax reforms, fell by 5 percent to $7.23 billion. China accounts for the third-largest trade partner, rising 4.15 percent to $6.68 billion. Trade with the Dominican Republic, which ranks fourth among trade nations, rose by 4.23 percent to $5.66 billion. This relationship has seen the strongest growth figures in the Western Hemisphere for three years in a row, in part due to strong exports and tourism. The fifth-biggest market is Chile, with whom trade rose by 3.52 percent to $5.13 billion, despite the falling price of copper, on which the Latin American nation relies. Formerly Miami-Dade’s eighth-biggest trading partner, Venezuela’s economic collapse after the price of its main export, oil, tumbled in global markets has weakened economic ties. Exports of bread, meat and fruit have been in freefall in 2016. Island hopping In March 2016, former President Barack Obama made the first state visit to Cuba since 1928, thawing www.capitalanalyticsassociates.com

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ECONOMY OVERVIEW

relations and opening the door to travel and trade, which had been frozen since the revolution of 1959. Nowhere was the impact of this breakthrough felt more than in Miami. Behind-the-scenes negotiations had been ongoing for at least two years, but once it was out in the open, reforms came quickly. At the start of 2016, almost a half-century of U.S. sanctions were amended with new export financing regulations that allowed for the movement of authorized goods. Soon, commercial flights were permitted, where before only occasional charter flights flew. Right before Obama’s visit, limited travel was permitted, and some business and banking restrictions were lifted, allowing U.S. companies to set up shop in Cuba, while Cubans were allowed to open bank accounts in the U.S. Many of Miami’s Cuban diaspora has no love for the Cuban regime and has typically protested any rapprochement with the communist leadership. But their views are slowly shifting. The community is split between those who fled Cuba as political exiles early on and those who have come later as economic migrants. Many now see there is an opportunity to help Cuban citizens and do business with their former foes.

18 | Invest: Miami 2017 | ECONOMY

Havana Club Class There are already 14 daily flights from Miami International Airport (MIA) to six Cuban airports operated by U.S. carriers. Arrivals and departures from Cuba into MIA increased by 32 percent to 1.2 million people in 2016, according to the Miami Herald. More travel occurs from other Florida airports, including Fort Lauderdale-Hollywood International Airport. However, whether this volume will be sustainable is already in doubt. While tourism to the island is now booming, American Airlines announced plans in mid-February to cut back on its trips to non-Havana destinations. The airline cited weak demand on those routes and competition from other airlines. Further flights may be canceled if President Donald Trump’s administration walks back on the Cuban opening. The White House in February 2016, said it would review the U.S. stance on Cuban relations, but has yet to announce any policy strategy. It may mean restored embargoes and the end to flights altogether. “If Cuba is unwilling to make a better deal for the Cuban people, the Cuban-American people and the as a whole, I will terminate the deal,” Trump tweeted in November 2016.

ECONOMY OVERVIEW

The impact on Miami-Dade could be felt more in restored cultural and familial ties that are being revived, rather than on economic ties. The fresh wave of U.S. tourists keen to take a firsthand look at the home of an old adversary will drop sharply if open relations are ended. This would be bad news for Miami-Dade and MIA, which is a major contributor to the county’s coffers, as well as local tourist operators, who hope to capitalize on the interest in cruises to the island. Cuban remittances were worth as much as $3 billion in 2015, making them a major source of hard currency in the Cuban economy. This could all end if the rapprochement is dead in the water.

MIA is one of the busiest international air-freight ports of entry in the U.S., handling 2.18 million tons, excluding mail, in 2016. This is a little less than half that of nearby Memphis, which is the largest with around 4.7 million tons. MIA also saw total passenger throughput of 44.35 million people in 2016, according to the airport’s website, not far behind Atlanta, which has the most, clocking 49.34 million passengers in 2015. The airport operates more flights to South America and the Caribbean than any other U.S. airport. There are 107 direct international flights and flights to 54 U.S. cities. MIA, and the other airports in the county, have a major impact on the local economy. A study by Martin Associates in 2015 showed that MIA sustained some 282,724 direct and indirect jobs and generated $33.7 billion in revenue.

With total passengers of 44.35 million people in 2016, MIA is one of the busiest airports in the U.S.

Sea crossing As of yet, there is no ferry from PortMiami to Cuba, but there are several companies that have been issued licenses by the federal government to operate passenger and cargo services. Cruises to the island are rapidly gaining in popularity, with operators Norwegian, Azamara, Carnival and Oceania all offering excursions. Overall cruise activity is worth almost $8 billion per year to Florida with much of this activity happening out of PortMiami, but competition is stiff with ports in Fort Lauderdale, Tampa and Orlando. The county’s position on the Atlantic and at the edge of the Caribbean makes it an excellent location for transocean and regional trade. The state’s two main economic drivers are its airport and seaport, claims the county webportal.

Good medicine MIA’s international links extend beyond passengers and freight into global industry. The airport signed an agreement in 2016 with Brinks Life Sciences and airports in Brussels, Singapore and Sharjah to create the first international pharmaceuticals air-hub association. The aim is to create a network “dedicated to growing the global pharma industry.” This agreement comes on the back of efforts to make Florida a life sciences and pharma hub, according to economic development organization, Enterprise Florida. There are some 1,100 biotech, pharmaceutical and medical-device companies operating in the state.

Alfred Sanchez CEO– Greater Miami Chamber of Commerce

Miami-Dade County already provides a very healthy environment for small and medium-sized businesses to thrive, and part of our mission at the Greater Miami Chamber of Commerce (GMCC) is to further strengthen that environment. One great way is to continue to offer opportunities for business professionals to meet, exchange ideas and create collisions that lead to new opportunities. At the GMCC, we have seen that our meetings and networkers, leadership programs, panel discussions and conferences are a great way to create these collisions.

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ECONOMY OVERVIEW

The Underline project will turn the area under the Miami-Dade Metrorail into a space for biking, leisure and art.

Links with the rest of the world are improving. MIA’s goal to offer nonstop flights to Asia took off in June 2016 with a nonscheduled charter flight from Taiwan landing for the first time. While this does not necessarily mean regular flights to and from Asia, it does indicate that MIA, the furthest international airport from Asia, could expand its global reach, and therefore trade volumes, in the future. “Among the key findings in a recent travel survey was that a majority of the respondents conduct business activity in Asia and travel to Asia regularly; and most of the respondents would use nonstop services to Asia,” Emilio Gonzalez, Miami-Dade aviation director, told Invest: Miami. Port of call PortMiami is the county’s second-largest economic driver, contributing some $27 billion in economic activity and some 210,000 jobs in southern Florida. Its location means that the state is a hub for trade routes from all four compass points, making it suitable for transshipment. “We have an interesting international seaport program, which opens doors for trade with 20 | Invest: Miami 2017 | ECONOMY

different regions. We are proud to have our top-10 trading countries coming from Asia, Europe, South America, Central America and the Caribbean.” Juan Kuryla, port director and CEO, PortMiami told Invest: Miami. It is the closest U.S. port to Latin America and the Caribbean, affording U.S. importers less time at sea, thus extending the shelf life of perishable goods. It claims to be the only U.S. Customs Center of Excellence and Expertise for Agriculture and Prepared Products. It is also the last deep-water port of call for ships entering the Panama Canal, making shipping times to and from Latin America shorter than any other U.S. port. Sea time is 17 days between Miami and Chile, a country that imports more goods from the U.S. than Russia, Spain and Italy and had $3.87 billion in bilateral trade with Florida in 2016, according to U.S. government statistics. The port is four days from Costa Rica, which had bilateral trade with Florida worth $2.06 billion in 2016. The proximity to the canal also opens up routes to the Far East and, specifically, China. Rail and highway connections to the port from across the U.S. mean that perishable goods, such as Costa Rican bananas and Chilean blueberries, can reach 70

ECONOMY OVERVIEW

percent of the country in four days or less. The total trade of goods into Miami-Dade from around the world in 2016 was $106.85 billion, up on $65.9 billion in 2005. Terminal velocity PortMiami is a leading cruise ship port, with 4.98 million multiday passengers in 2016, up from 4.77 million in 2015 and more than any other port in the world. A new $247 million cruise terminal project at the port, mostly paid for by Royal Caribbean Cruises, will earn the county $7.5 million in rent, pump $500 million into the local economy and create 4,000 jobs for state residents when it opens in 2018. This increase will feed through into tourism infrastructure, including new hotels and attractions, adding to an economic impact by visitor spending worth an estimated $24.4 billion.

markets, with a strong presence of foreign banks, including major global players such as HSBC, Standard Chartered, BNP Paribas and Bank of Nova Scotia, lured by the county’s infrastructure and close links with the rest of the U.S. and Latin America. Miami-Dade hosts about 100 foreign missions, trade offices and chambers of commerce, which all promote and facilitate international business with the county. Miami-Dade’s authorities, under the auspices of the Economic Development and International Trade unit, actively pursue commerce and cultural links with these foreign outposts. There were 44 visiting trade missions in 2015 to 2016 from almost every continent. International investment is also supported by The Beacon Council’s foreign trade missions. In 2016, members of The Beacon Council attended events in Barcelona and Madrid to further partnerships with companies in Spain. This was the council’s 16th visit to the county since 1996. In that time, the council has helped 102 Spanish

With 44 trade missions in 2015 to 2016, Miami has good foreign business relations.

Commercial ties Miami-Dade is also well connected through financial

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ECONOMY OVERVIEW

companies move to Miami-Dade, representing nearly 3,000 jobs and $223 million in capital investment. In addition to traditional markets in Latin America, Asia is one of Miami-Dade and MIA’s top trade destinations. The airport alone saw cargo services swell by 241 percent from 2005 until 2015, reaching 109,962 tons and valued at $5.2 billion. China made up more than 40 percent of that at $2.1 billion worth of cargo. Even though Florida is on the wrong side of the country to be a major competitor to West Coast ports such as Los Angeles, the Panama Canal expansion in 2016 will allow Miami to shoot for 1 million twenty-foot-equivalent units of cargo and be a for Asian imports. Miami’s imports and exports with China rose 4.15 percent to $6.68 billion in 2015.

prices rising. But as the big Latin economies are floundering, Florida developers are eyeing the other side of the Pacific for customers. Compared with other large U.S. cities, such as New York and Los Angeles, Miami is a more affordable place to live. Although no small chunk of change, $1 million buys on average 828 square feet, compared with 700 in Los Angeles and a claustrophobic 290 in New York City. “We are getting a lot more interest from the Chinese because they tend to be attracted to value-based opportunities. When you look at cities like Miami as compared with cities such as New York or Shanghai, the value proposition here is extraordinary,” Jay Parker, CEO of Douglas Elliman, Florida told Invest: Miami. Meanwhile, Asian developers are making inroads into the county’s property-development business. China City Construction Company (CCCC), owned by the Ministry of Housing, paid more than $110 million for properties in Brickell and North Beach, where it plans to build condominiums. One of the sites will host the

Property development in the city is seeing a lot more interest from Asian institutions.

High-end property At only 2 percent of market share, Chinese property buyers in Miami-Dade have yet to eclipse their counterparts from South America, who have traditionally kept

22 | Invest: Miami 2017 | ECONOMY

CONSTRUCTION ECONOMY OVERVIEW

$875-million CCCC Miami Towers, in a joint venture with partner American Da Tang Group and investor Chun Wo Development. Although the developers have enough cash to pay for the project outright, the project is an EB-5 development, which means that funds are sourced from Chinese individuals via a U.S. agent known as an EB-5 Regional Center. Participants get two-year green cards in exchange. Hong Kong developer Swire Properties is well established in Miami, having set up its U.S. business in 1979. It is currently developing Brickell City Centre, a mixed commercial, office and residential space in Brickell. Phase one was completed in 2016, with phase two slated for completion in 2018. Also on the cards for Swire is the $1-billion Brickell Key development of residences, offices and hotel space that has yet to be announced. Genting, a Malaysian gaming company, is planning to develop the old Miami Herald site on Biscayne Bay, which it bought in 2011 for $236 million. Legal wrangling over the site’s tax assessment netted the Malaysians a $23million rebate, much to the chagrin of the county, which has hit back with lawsuits to overturn the decision. Airborne opportunities Demand from Chinese property seekers looking to snag units in their compatriots’ developments may climb, along with trade, with MIA currently in talks with three Chinese carriers – China Eastern Airlines, China Southern Airlines and Hainan Airlines. Until now, there have been no direct flights to China, meaning Chinese property buyers, who had snagged $300 billion worth of U.S. property by mid-2016, find it inconvenient to travel to the county. Miami-Dade’s developed infrastructure, transport links and climate put the county in a strong position for Chinese people and businesses looking for investment opportunities. There are potential bureaucratic hurdles to this. On the books since 1990, the EB-5 visa program aims to stimulate growth by encouraging foreigners to invest between $500,000 and $1 million in projects that create at least 10 jobs. The quid pro quo is a fast-track green card, limited to 10,000 per year, with 90 percent of applicants being Chinese. There is, however, a proposal by the Department of Homeland Security to increase the minimum investment to $1.35 million. The county’s own efforts to attract investors from Asia have been advanced by trade organizations looking to foster growth. These include the Asian Real Estate Association of America, which set up shop in Miami-Dade in 2015.

Jaret Davis Miami Co-Managing Shareholder, Greenberg Traurig

How can Miami-Dade better support the growth of startups? Miami is a robust and sophisticated ecosystem that supports startups. Opportunities for improvement include access to additional sources of capital – particularly on the seed level below $1 million and Series B funding with a level of $10 million to $20 million – and enhanced collaboration with universities and other innovators. It is important that large corporations in Miami-Dade support startups by purchasing their output. They should also provide input on market needs to ensure startups don’t innovate in a vacuum – producing products and services that don’t address market needs. Universities and other innovators in Miami-Dade have a powerful role in ensuring research is commercialized and students are trained in the technical skills the startup community requires. How do you see The Beacon Council benefiting Miami-Dade’s growth moving forward? The Connect and Grow initiative is very powerful. We have launched a new accelerator program formed through our trade and logistics committee. Trade and logistics is an important target industry responsible for more than 20 percent of our jobs in Miami-Dade. We have seen that Connect and Grow goes much further than just innovation, it brings together various aspects of Miami-Dade County. Our Urban Initiatives Task Force is doing great work to ensure all sectors of the county are connected, including those that have been historically underserved. We have brought marketing opportunities to those regions of Miami-Dade, such as South Dade, which have not received as much attention as other areas. These could be major game-changers for the region if they deliver as we anticipate. We’ve seen the power of Connect and Grow in achieving better connections with organizations such as the Greater Miami Chamber of Commerce, plus state and national players such as Enterprise Florida and SelectUSA. www.capitalanalyticsassociates.com

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ECONOMY OVERVIEW

Partnership down Booming Asian trade would have been facilitated by the now defunct Trans-Pacific Partnership (TPP), a trade treaty covering markets of 500 million people from 11 countries, constituting 13.5 percent of the global economy. The deal would have done away with 18,000 taxes on U.S. products, greatly expanded export potential and laid out rules for labor and human rights, the TPP’s supporters claim. “If we don’t write those rules, our competitors will set weaker standards, threatening American jobs and workers while undermining U.S. leadership in Asia,” said Tom Vilsack, former U.S. Secretary of Agriculture in 2015. But the TPP was not to be. One of President Trump’s first actions in office was to withdraw from the treaty, concentrating instead on individual agreements. Critics of the TPP said the effect on trade would have been insignificant. Lack of enterprise Two local trade and development initiatives could be closed as well. The tourism marketing organization Visit Florida and the economic development agency are both private-public initiatives at risk of being defunded by the state. A bill proposed by Republican members of the Florida House that passed in March cut funding by 67 percent to Visit Florida in an effort, lawmakers said, to make it more transparent. The aim is to limit public input to a dollar-for-dollar funds match. If not achieved, all state funding is returned to the Treasury. “I am going around the state and explaining the importance of tourism and recruiting companies. I am talking to average citizens, asking them to meet with

24 | Invest: Miami 2017 | ECONOMY

Miami International Airport offers more flights than any other airport in the U.S. to Latin America and the Caribbean.

the members of their legislature and let them know the importance of these programs for jobs,” Florida Governor Rick Scott told Invest: Miami about the two agencies in question. Tourism industry leaders also fear the economic impact will be grave. Scott, who has earmarked $76 million for Visit Florida in 2017, opposed the bill. The discussion is ongoing at the time of Invest: Miami going to print. The state saw record numbers of tourists when more

ECONOMY OVERVIEW

than 112.8 million people spent some $109 billion in 2016. This is more than double New York, which saw $42.2 billion of direct spending by 58.5 million visitors in 2015. Jobs in leisure and hospitality increased by 4.8 percent in 2016. County incentives There are still several county-level development initiatives in place. These include the $90-million Economic Development Fund aimed at economic development that attracts companies and creates jobs. The Brownfields Program offers tax credits and cheap loans for development projects on contaminated sites. A scheme helps entry-level film crew find employment in an entertainment industry that supports 12,000 local jobs. Still more programs include a proposal for $10 million in small grants to small businesses that hire military veterans. The Beacon Council offers more schemes. A tax credit to attract and develop high-capital industries, a $3,000 per worker tax refund for high-wage jobs created by high-value industries, cash incentives of $3,000 to $9,000 for creating jobs in order to retain businesses and encourage expansion, an urban-jobs tax credit of up to $1,000 per job â&#x20AC;&#x153;for new businesses with a minimum of 20 new jobs and for existing businesses with a minimum of 10 new jobs,â&#x20AC;? and grants to build facilities

for a range of so-called high-impact industries, such as life sciences, finance and clean energy. A tangible development was the regeneration of the land under the elevated railway from the Brickell to Dadeland. The Underline project will transform 10 miles of disused land into park and art space. Mayor Gimenez, pledged $50 million for the $120-million project, which is estimated to increase economic output along the route by $50 million per year and raise property values by an estimated $650 million. The Underline is another example of the kind of public-private partnership favored by state and local officials. There are private projects too, such as the Miami Entrepreneurship Center, which houses 20 new companies and offers unlimited access to business services for a small yearly fee. The Microsoft Innovation Center opened in May 2014, the first of its kind in the U.S. It provides technical assistance for startups, offers specialized IT-training for students in the area and provides access to the latest technology for the local community. At the state level, there is the infrastructure investment program from the Water and Sewer Department. It will create 16,470 new jobs in the first 10 years by supporting new business and generating $24.9 billion in economic activity in the county. This state effort is being supported by the Internal Services Department, which www.capitalanalyticsassociates.com

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ECONOMY OVERVIEW

issued $367.66 million worth of construction contracts, most to its certified small businesses. Working district Private-sector unemployment in Miami-Dade is falling, and jobs are increasing, in line with national trends seen during Obama’s time in office. The number of unemployed people in 2016 fell by more than 10 percent, while over the past five years, employment has grown in the county by 3.3 percent per year, with 30 percent of these jobs being added to hotels and food service sectors. Jobs were up in many other sectors, including professional and business services, financial, retail and health. Only government jobs saw a decline, caused by reduced county income from lower property values during the latest recession. This is only about half of the highest job growth of any U.S. city – York, South Carolina saw 6 percent – but is above the national rate of 1.7 percent. An increase in county employment numbers has been assisted in part by local government initiatives to help Miamians back to work through training, placements and a mobile job seeker app. “Employ Miami-Dade is a policy where we go into high-unemployment areas to recruit and train people that have been chronically unemployed, underemployed or never employed. We train them to take jobs in the construction, culinary and hospitality industries. We’ve had close to 600 placements so far,” Gimenez told Invest: Miami.

dwelling dropped by 7.1 percent and condominiums and townhouses fell by 12 percent. The average prices of the same homes grew by 8.6 percent to $295,000 and 5.5 percent to $215,000, respectively. The rental market was also not in the favor of Miamians, who spend 43.8 percent of their income on rent, the highest share of the entire country, below Los Angeles with 47.6 percent of income, but above New York City, which stands at 41.4 percent. The county suffers from higher demand driven by foreign buyers, rising rents and stagnating wages. While the Los Angeles median household income was $59,839 in 2016, Miami-Dade’s was $43,000, an annual decline of more than $6,000. Workers in some sectors are worse off than others. According to the county’s 2015 figures, average annual pay in accommodation and food services was 48 percent less than average county wages, while the retail sector was 39 percent less, two traditionally low-paid sectors. Healthcare and social assistance, the largest employer, however, was 3 percent, transportation and warehousing 21 percent and professional and technical services 63 percent higher than the average wage. There is resistance among the state’s business leaders and legislators to close this gap. A proposal by the City of Miami Beach to set a minimum wage above the national average prompted a group of businesses and trade groups – among them representatives from Disney, the Florida Retail Federation, the Florida Restaurant and Lodging Association and the Florida Chamber of Commerce – to file a lawsuit claiming the ordinance contravenes a Florida statute that prevents local government from setting their own minimum wage. Florida joined 19 states across the U.S. that implemented

Employment in Miami-Dade has seen average annual growth of 3.3 percent for five years.

House keys While the number of jobless residents decreased, home sales shrank as affordability fell. Home sales were down in the second quarter of 2016. A single-family

26 | Invest: Miami 2017 | ECONOMY

ECONOMY OVERVIEW

a minimum wage increase in 2017, raising it from $8.05 an hour to $8.10. Startup city Innovations and the uptake of modern technology are helping drive Miami-Dade’s economy, as a number of new projects point toward the county’s technology potential. In 2016, for the second year running the Kaufmann Foundation put the Miami metropolitan area in second place on its Index of Startup Activity, with 247.6 startups per 100,000 people. The Inc. 5000, an annual list of the fastest-growing 500 companies in the U.S., includes 139 companies from the Miami metro area. The companies on the list range from hospitality and gastronomy to tech support and media. For example, Showroom Logic, which is ranked 505 on the list and had shown three-year growth of 750 percent by 2016, is a Miami-based technology starup that offers software tools and custom advertising programs for car dealers marketing online. The Cambridge Innovation Centre (CIC Miami) opened at the University of Miami Life and Sciences Park in the fourth quarter of 2016. CIC Miami is based on a similar idea in Boston-Cambridge area that houses startups and offered support to small innovators. Part of CIC Miami is a 70,000-square-foot co-working space, that features modern lab spaces and shared equipment. The eMerge Americas conference will take place in

Miami Beach in June 2017 and will feature a keynote address from Steve Wozniak, co-founder of Apple computers. The event, now in its fourth year, showcases some of the best homegrown innovations and helps startups connect with the business world. Looking ahead Where once Miami-Dade’s connections with Latin American economies was a benefit, economic sluggishness south of the border will continue into 2107. This was compounded in 2016 by a strong dollar and the Zika virus scare, which discouraged visitors. However, increased interest from Southeast Asia and Eurasia, both in terms of property investments and business potential may still make up for any shortfalls. While the county grew slower than the rest of the state in 2016, the outlook for Miami-Dade is sunny. As tax collections from property sales rise after the last recession, there may be more money available in public coffers for investment. The numbers of jobs and employed people in the private sector are steadily rising, and tourism continues to be a bulwark of the local economy, with major input from the cruise industry and the bustling international airport. Recent improvements at PortMiami will increase its potential both as a trade hub and as an entrance point for tourists. For investors, both at home and abroad, the forecast looks bright for the Sunshine State.

The Cambridge Innovation Center is one example of how startups are being nurtured in the county.

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Real Estate: Sales have dipped in 2016, but overall, prices have increased as Miami-Dadeâ&#x20AC;&#x2122;s property market continues to prove that a few ups and downs arenâ&#x20AC;&#x2122;t enough to kill interest. The high-end residential market is providing promise, while economic development across the county means there will be interesting opportunities in the industrial and commercial segments.

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Real Estate in numbers: Office, industrial and retail

Miami-Dade County office market overview: Historical trends

Historical trends Year

2011

2012

2013

2014

2015

2016

Quarter

Net Absorption (square feet)

Asking Rent (Gross)

143,874

$29.52

Year

Net Absorption (square feet)

Quarter

Asking Rent (Gross)

288,103

59,101

-203,330

$36.49

$24.51

$21.14

190,097

-217,874

18,359

$36.34

$24.36

$20.96

220,639

-45,259

26,292

$36.07

$24.58

$20.19

-9,418

$29.31

201,672

$28.99

119,379

$29.02

369,260

-105,675

-144,206

$35.96

$24.68

$20.98

88,430

$28.81

221,600

-67,035

-66,135

$35.56

$24.73

$20.71

262,152

$28.91

424,391

$29.01

134,503

$29.16

175,153

$28.98

-432,729

$29.28

208,399

$29.03

285,010

138,833

2011

88,120

153,521

20,511

$35.82

$24.64

$20.67

113,363

325,533

-14,505

$35.61

$24.79

$20.36

151,292

-67,986

51,197

$35.82

$24.91

$20.78

134,987

67,655

-27,489

$35.91

$24.70

$20.49

128,367

-531,009

-30,087

$35.42

$25.47

$20.68

280,021

-62,522

-9,00

$35.80

$25.15

$20.40

$29.74

246,416

37,960

634

$36.11

$25.42

$22.30

$29.75

161,409

98,527

-121,103

$36.08

$25.62

$22.26

717,677

$30.04

246,864

428,528

42,285

$36.59

$25.80

$22.83

388,571

$30.03

183,788

161,717

43,066

$37.12

$25.87

$22.42

308,409

$30.15

202,257

108,962

-2,810

$37.23

$25.98

$23.26 $23.23

2012

2013

2014

70,818

$30.12

87,715

-23,568

6,671

$37.65

$26.10

342,958

$30.58

327,176

38,559

-22,777

$38.55

$26.40

$23.27

425,176

$30.97

162,516

176,734

85,926

$39.23

$26.79

$23.28

352,120

$31.22

223,260

205,114

-76,254

$39.54

$26.90

$23.74

-108,916

$31.71

-104,878

8,845

-12,883

$40.19

$27.45

$24.03

-913

204,726

-49,027

$40.25

$27.87

$24.63

142,681

85,084

-35,111

$40.83

$28.51

$25.40

105,970

45,744

46,773

$41.28

$28.87

$26.25

154,786

$32.31

192,654

$32.92

198,487

$33.64

Includes Class A, B and C inventory sized 10,000 square feet and above.

2015

2016

Includes inventory sized 10,000 square feet and above.

Source: Colliers International

Miami-Dade office market historical net absorption, 2011-2016, (square feet):

Miami-Dade office market historical asking rent, gross, 2011-2016, ($ per square foot): A

800,000

$45 $40

600,000

$35 400,000 $30 200,000

$25

$20 $15

-200,000 $10 -400,000

-600,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011

2012

2013

Source: Colliers International

32 | Invest: Miami 2017 | REAL ESTATE

2014

2015

2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011

2012

Source: Colliers International

2013

2014

2015

2016

Source:

Miami-Dade industrial market overview:

Miami-Dade retail market overview:

Historical trends Year

Quarter

2011

2012

2013

2014

2015

2016

Historical trends

Industrial and flex net absorption (square feet)

Year

Quarter

Retail net absorption (square feet) 167,082

790,170

201,024

115,712

889,387

283,250

621,580

333,014

2011

451,099

68,785

623,643

-120,438

-128,613

1,154,133

2012

197,116

185,801 -68,555

447,983

177,939

99,964

1,333,128

-132,401 195,488

2013

388,523

72,691

1,169,118

161,360

709,355

593,307

2014

730,326

479,464

1,407,986

551,095

703,620

212,170

1,159,575

26,211

898,963

291,837

643,976

131,865

581,215

137,947

938,901

279,897

632,754

-217,272

2015

2016

Includes inventory sized 10,000 square feet and above.

Source: Colliers International

Miami-Dade industrial market historical net absorption, 2011-2016, (square feet):

Miami-Dade retail market historical net absorption, 2011-2016, (square feet):

Square Feet

1,600,000

700,000

1,400,000

600,000

1,200,000

500,000

1,000,000

400,000

800,000

300,000

600,000

200,000

400,000

100,000

200,000

-100,000

-200,000

-400,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011

2012

Source: Colliers International

2013

2014

2015

2016

-300,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011

2012

2013

2014

2015

2016

Source: Colliers International

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| 33

Real Estate in numbers: International buyers of real estate

South Florida top-tier foreign buyers countries of origin: 16

Venezuela

Argentina

Brazil

Colombia

Canada

Mexico

France

Peru

Italy

Ecuador

China

Dominican Republic

United Kingdom

2011

15 percent

11 percent

8 percent

10 percent

5 percent

3 percent

4 percent

3 percent

1 percent

3 percent

2012

15 percent

13 percent

12 percent

8 percent

9 percent

4 percent

3 percent

1 percent

3 percent

1 percent

2013

14 percent

11 percent

8 percent

4 percent

5 percent

3 percent

4 percent

2 percent

3 percent

2 percent

2014

16 percent

12 percent

11 percent

8 percent

7 percent

4 percent

5 percent

3 percent

2 percent

2015

14 percent

10 percent

12 percent

10 percent

7 percent

5 percent

4 percent

2 percent

4 percent

3 percent

2 percent

3 percent

2 percent

2016

15 percent

11 percent

10 percent

6 percent

4 percent

3 percent

Source: Miami Association of Realtors

Financing from foreign buyers (percent): 100

90 80

With mortgage financing from U.S. sources With cash Other

Dollar volume of sales of residential property ($ billion):

9.77 Domestic

International

60 50 40

2015

2016

30 20 10 0

Source: Miami Association of Realtors

34 | Invest: Miami 2017 | REAL ESTATE

6.2

Source: Miami Association of Realtors

Source:

Distribution of foreign buyers of residential property for Miami-Dade County (percent):

Venezuela

Brazil

Argentina

Colombia Italy

Mexico

Canada

France

China

Dominican Republic

Peru

3 20

Other

Unknown 0

Source: Miami Association of Realtors

600,000

2016

500,000

400,000

412,100

2015

300,000

200,000

477,500

570,000

Average purchase price among residential foreign buyers, 2016 ($):

Share of foreign buyer purchases, 2015-2016 (percent):

10 100,000

As percent of number of closed sales

As percent of dollar volume of closed sales

Source: Miami Association of Realtors **All figures on pages 34 and 35 are based on 2016 Miami Association of Realtors Survey

Foreign buyers of MIAMI Members*

Foreign buyers of Florida REALTORS members*

All foreign buyers in the U.S.

Source: Miami Association of Realtors *includes only foreign buyer purchases in Miami-Dade County, Broward County, Palm Beach County and Martin County

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Balanced property: Just as Latin American interest has been dampened by unfavorable exchange rates, interest is growing from other international markets to maintain Miami-Dade County’s real estate promise Greater Miami’s flourishing real estate sector has been a consistent highlight of Florida’s property market. The 12th fastest-growing metropolitan region in the U.S. as of 2017 according to Forbes, some 25 percent of the 326,000 people that moved to Florida between July 2015 and 2016 reside in Greater Miami. While 2016 saw a dip in total residential sales from the record years of 2013 to 2015, decreasing 4.3 percent in from 2015 to 2016, strong demand fundamentals suggest this reflects a normalization of the market. The decline in luxury residence sales will be counterbalanced by a modest increase in condominium sales and robust demand for single-family homes, currently the hottest segment of Miami-Dade County’s real estate market. Retail, office and industrial real estate vacancies have consistently fallen, and coupled with low unemployment and an increasing population suggest that 2017 will see continued development in this sector as well. While changes in global politics and currency values may pose challenges to international buyers that have in the past comprised the bulk of Miami-Dade’s luxury real estate purchases, socioeconomic push and pull 36 | Invest: Miami 2017 | REAL ESTATE

factors will see the area continue to sustain its status as one of the world’s foremost property investment destinations for foreign nationals. Market fundamentals Miami-Dade’s real estate market continues to offer a strong value proposition for investors, despite market challenges that have reined in the exponential growth of the past three years. A primary driver behind the slowdown is the strengthening of the U.S. dollar relative to global currencies, particularly in Latin America where many of Miami-Dade’s foreign property investors originate. Political unrest, economic stagnation and depreciating currency have hit countries that have, until recent years, led property purchases. These countries include Brazil and Venezuela, the latter of whose currency declined more than 400 percent between February and November 2016. Many foreign investors are choosing to bide their time until their domestic currencies start to see better days before making moves in the U.S. real estate market.

REAL ESTATE OVERVIEW

Irving Padron, president and managing broker of Engel & Volkers Miami, told Invest: Miami “The Latin American market is tremendously important for Miami’s high-end real estate market. Miami has traditionally risen and fallen with the Latin American buyer. However, it is becoming more of a global city. For example, in 2016, we saw an increase in Russian and Turkish buyers, relative to the Latin American market.” Nonetheless, demand fundamentals remain strong, due to Miami-Dade’s growing cosmopolitan reputation as a multicultural, multilingual city that has long attracted Latinos both domestically and abroad, as well as the warm climate that has made South Florida a favorite U.S. retirement destination for decades. An improving public education system alongside new art and cultural offerings have also caught the interest of young professionals and families. Economic pull factors are continuing to bring new residents and workers to Miami-Dade. Florida was one of four U.S. states that had employment growth of some 3 percent in 2016, and according to The Beacon Council, Miami-Dade’s official economic development partnership, the county experienced broad job growth across several sectors at an overall rate of 1.3 percent from September 2015 to September 2016. High-salary jobs saw significant increases, with a 6-percent growth in financial and professional services. There was also a nearly 11-percent growth in construction jobs. Unemployment during the same period fell 0.6 percent. Florida’s low tax structure, with no state personal income tax or state property tax, minimal sales taxes and flexible taxation for businesses, make it a competitive area for business incorporation as well as an attractive residence for high-net-worth individuals.

The county’s geographical location on the Eastern Seaboard is complimented by a sophisticated capital infrastructure system making it a national travel hub. The Brightline passenger train connecting South Florida to Orlando will begin full service in 2018, with services between the City of Miami, the City of West Palm Beach and the City of Fort Lauderdale on track for launch in summer 2017, adding further transportation options for those working and living in the region. These social, economic and lifestyle factors establish a solid foundation for Miami-Dade’s real estate demand that will allow it to weather global market uncertainties and sustain growth in 2017. Residential matters There was a decline in the sales of luxury residence and condominium in 2016, but there was a sharp increase in midrange, single-family home purchases. Years of catering to high-net-worth buyers and foreign investors have left developers with an oversupply of luxury residences, creating a buyer’s market during an economic period when many foreign investors are not actively looking to purchase. Conversely, a lack of affordable housing has seen low and midrange single-family homes and condominiums at as little as three months of supply, half of what is considered balanced, driving prices up and establishing a seller’s market for midrange residences. Overall home sales in Miami-Dade have continued to decline, dropping 13 percent between October 2015 and October 2016. In comparison, the national average for existing-home sales fell just 2.8 percent in 2016. The decline is partially a positive indicator of less foreclosure inventory in the county. Short sales and real estate-owned transactions decreased from 23 percent

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REAL ESTATE OVERVIEW

to 14 percent between December 2015 and December 2016, showing a healthy recovery from the highs of December 2009, when they constituted 70 percent of sales. An improvement in the sales of homes happened in November 2016, when buyers, spooked by uncertainties before the U.S. presidential election, regained the confidence to invest. According to the Miami Association of Realtors (MIAMIRE), single-family home sales spiked 13.1 percent in the penultimate month of 2016. Homebuyers are also taking advantage of low interest and mortgage rates, which are anticipated to rise in 2017 and beyond. While the U.S. Federal Reserve raised interest rates in December 2016, they remain at historic lows alongside mortgage rates, which average 4.2 percent for a 30-year, conventional fixed-rate mortgage. “We expect the price growth to continue because there is still a limited supply, particularly in some market segments. There will continue to be price growth for single-family homes. The prices for condominiums continue to increase, but because there is more supply of condominiums than single-family homes that growth is expected to be more moderate,” Lynda Fernandez, senior vice-president of MIAMIRE told Invest: Miami. Moving into 2017, key areas of growth in Miami-Dade

38 | Invest: Miami 2017 | REAL ESTATE

are expected to be Brickell, Downtown, Edgewater and Midtown, which comprise close to 60 percent of all new homes hitting the market in 2017 and 2018. The cities of Kendall, West Kendall, Hialeah, Cutler Bay, Palmetto Bay, Palmetto Estates, Miami Gardens and Richmond Heights are also generating consumer interest in 2017. Beyond 2018, the cities of Miami Beach, Sunny Isles and Surfside are expected to see upward movement. High-end hopes The luxury real estate market currently holds up to three years of supply, largely in luxury condominiums, a far cry from the six-month supply that is considered a balanced market. Sales of South Florida condominiums declined year-over-year from November 2015 to November 2016. Luxury condominium sales regained momentum at the end of the year, with December 2016 seeing the Auberge Beach Residences close $30 million in units, the Turnbery Ocean Club in Sunny Isles Beach closing $25 million and One Thousand Museum Downtown closing $30 million. With luxury developments such as Shoma Group’s Eleven on Lenox in Miami Beach debuting in 2017, new supply continues to flood the market and prices are expected to fall for units in the $1 million to $5 million bracket. Yet demand remains for Miami-Dade’s luxury

REAL ESTATE OVERVIEW

sector, which is already relatively discounted when compared to U.S. cities such as New York and Boston and global hot spots including London and Hong Kong. Moderate interest will be sustained in this buyer’s market for 2017. Condominium prices in Miami-Dade have been continuing their upward trend, increasing for 65 of the past 67 months. However, oversupply has begun to plague the market. Condominium inventory grew 16.3 percent between February 2016 and February 2017 and currently stands at a 12.7-month supply making it a buyer’s market. Sales of existing condominiums in South Florida have steadily declined for 13 consecutive months, falling 7 percent in 2016. The preconstruction resale market for condominiums in Miami-Dade continues to struggle as well. Sales have fallen consistently from November 2016 to January 2017, and with more than 10,000 units expected to debut in 2017 and 2018, oversupply will depress prices further. Resales are expected to take a loss in the medium term.

The midrange, single-family home market is flush with new buyers as well, who feel increased confidence after markets stabilized following the November 2016 presidential election, a sentiment buoyed by sustained low mortgage rates. Taken downtown Rental prices remained largely unchanged in Miami-Dade, which continues to rank ninth in the U.S. in apartment costs with a median one-bedroom monthly price tag of $1,800, representing a year-over-year decline of 2.2 percent. The median cost to rent in Miami-Dade’s most popular neighborhoods between winter 2016 and 2017 decreased slightly, with average Downtown rents falling from $2,100 to $1,920, Edgewater rents falling from $2,000 to $1,800, West Avenue rents falling from $2,100 to $2,000, Wynwood rents falling from $2,200 to $2,150, Brickell rents holding steady at $2,150 and Northeast Coconut Grove rents increasing from $1,600 to $1,750. The Miami Downtown Development Authority (DDA) expects rental vacancies in Downtown, Brickell and proximate areas to exceed condominium supply in 2017 for the first time in Miami history. Greater Downtown Miami, comprising Brickell, the Central Business District, Edgewater, Midtown, Wynwood and the Arts & Entertainment District, received an influx of newly completed condominium units at the end of 2016, with more than 6,600 units under construction and 14,000 proposed as of the third quarter of 2016. In 2017, more than 3,500 apartments are expected to hit the Downtown market, alongside 2,774 condominiums. This oversupply should bring about a slowdown in rental and leasing along with a further decrease in prices, resulting in a longer period for rental complexes to reach full occupancy.

Due to a supply shortage, prices for single-family homes have increased five years running.

The family way The bright spot in residential real estate is single-family homes, for which prices in Miami-Dade have increased for more than five years in a row, growing 9.83 percent in 2016 with a further 6.36 percent appreciation estimated for 2017. In 2016, the median price of single-family homes in Miami-Dade increased 17 percent to $310,000, compared to the national average of a 4-percent increase to $232,200. Significant price increases are expected to continue for midmarket, single-family homes in particular, which were an important new driver of Miami-Dade’s real estate activity in 2016. According to the MIAMIRE, close to 40 percent of all 2016 property sales in the county were in the $300,000 to $600,000 range. While overall single-family home sales dropped 5 percent in 2016, the year closed with a 27-percent growth in midrange single-family home sales in December 2016 alone. Part of the supply shortage can be attributed to developers that had previously focused on luxury residences, resulting in both higher construction costs for midrange homes and less such inventory coming onto the market. The availability of midrange, single-family homes has dropped 18 percent since 2015, with the typical home staying on the market for just 57 days, a 38-percent shorter time frame than in 2014.

A commercial market Demand for commercial real estate in Miami-Dade appears healthy moving into 2017, with the county’s strategic location and logistical connectivity for its growing population and workforce cultivating retail, office and industrial real estate demand. Retail real estate has traditionally been very strong for Miami-Dade, but took a dip in 2016 with vacancy increasing by 40 basis points. Yet, consumer spendwww.capitalanalyticsassociates.com

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REAL ESTATE OVERVIEW

ing remains robust, buoyed by the growing population. The seven top retail markets in Miami-Dade for 2017 include Midtown-Wynwood, with 88 percent occupancy and top-end rents of $65 to $80 per square foot; Brickell, with 79.6 percent and $75 to 125; the Design District, with 93.3 percent and $100 to $200; Coconut Grove, with 95.4 percent and $50 to $70; Miracle Mile, with 95.9 percent and $50 to $60; Lincoln Road, with 92.6 percent and $200 to $300; and Collins-Washington with 95.8 percent and $75 to $130. “What is happening in Miami is very similar to what happened in New York City: demand keeps coming from all over the world,” Ken Krasnow, executive managing director, South Florida region for Colliers International, told Invest: Miami. Sizable retail projects continue to progress in the county. In January 2017, Triple Five Group’s $3-billion, 200-acre American Dream Miami retail amusement park received preliminary approval for construction near Hialeah and aims to rival Minnesota’s Mall of America in scale and extravagance. Special Area Plans have also given developers holding at least 9 acres of land more zoning flexibility, resulting in large-scale mixed-use and retail projects. These projects include Swire Properties’ $1.05-billion Brickell City Centre which opened in November 2016, developer DACRA’s Miami Design District redevelopment featuring retail buildings across two public plazas and the River Landing multistory restaurant, retail and residential space. Other projects include the Turnberry Ocean Residences, a 54-story condo tower in Sunny Isles Beach, which will consist of 154 units. The project spearheaded by Turnberry Associates was started in November 2016. The Miami Worldcenter will feature a 10-block retail, hospitality and residential development. It

will also feature 4.5 acres of open space, and 600,000 square feet for conventions. Miami Worldcenter Associates are working with The Forbes Company and Taubman Centers to develop retail. The $2-billlion 27-acre project broke ground in March 2016. North Miami’s SoLē Mia is also mixed use and covering 183 acres promises to have a big impact on the local community. (See the North Miami chapter on page 63 for more details.) Office supply As companies continue to expand in Miami-Dade and bring a growing workforce with them, vacancy rates for office real estate in the county declined from 13.7 percent in 2015 to 11.7 percent in 2016 and are forecast to be 10 percent in 2017. “The long-term trends on office usage have not been great. The average space used by a major partner in a law firm 25 years ago compared to today is dramatically different: maybe a third of the size it used to be. In the past, every lawyer had a secretary, but today they don’t. So service companies whether they’re law firms or banks, have more people and less space. More people work from home. There has also been this giant appearance of shared workspaces.” Stephen Bittel, chairman and founder of Terranova, told Invest: Miami. With very little office construction taking place over the past several years in the county, co-working spaces such as Venture Hive, We Work and Cambridge Innovation Center have increased amid the dearth of space, and developers are taking note of these new opportunities. In Brickell, Class A office space has a vacancy rate of just 7.9 percent, with the asking lease rate at $49.98 per square foot, the highest in Miami-Dade. With little new office construction in the pipeline,( )

Jay Parker CEO – Douglas Elliman, Florida

The Chinese have become fatigued with the more typical markets that they seek to invest in. We are getting a lot more interest from the Chinese because they tend to be attracted to value-based opportunities. When you look at cities like Miami, as compared to cities like New York or Shanghai, the value proposition here is extraordinary. Once the desire to live here was not as stable, but now, it is without question much more stable.

40 | Invest: Miami 2017 | REAL ESTATE

REAL ESTATE INTERVIEW

Supply and demand How the real estate sector is adapting to regulatory and economic changes

Matt Allen Executive Vice-President & Chief Operating Officer — The Related Group

With the slowing of economic growth across Latin America, Miami’s traditional real estate buyer, what has been the main impact on the market? These kinds of market fluctuations are normal parts of the industry, and so it is key for developers to do their due diligence and only launch projects in line with the existing demand. Over the past couple of years, we’ve definitely seen less buyers from Latin American countries such as Venezuela and Brazil, but we’ve also seen a significant uptick in buyers from other, overlooked pools. Ultimately, this slowdown has ensured that only those projects with a strong development team, desirable location and bullet-proof financing structure will get built. This is key marker of a healthy industry and will ensure the continued growth of our city. The new administration implied that we may see some changes in regulations affecting real estate financing. How can developers prepare for this? There will be some lessening in the regulations surrounding residential and commercial lending. This will result in increased opportunities for both banks and builders. That said, it is critical both parties continue to do their due diligence and show sound judgment before embarking on new projects. The only other regulation in real estate that changes with every administration is the affordable housing incentives. Tax credits have been different under every president, and we are confident that the new administration will provide business friendly rules. Still, we need to wait and see what regulations will be put into place to include how corporations are affected by changes in the tax structure.

What areas of Miami-Dade present the most growth potential for the upcoming years? Brickell and Downtown Miami are rapidly growing and have proven to be prime locations for not only renters, but also investors looking into the condo market. Nearby in Edgewater, we were one of the first developers to invest in the area and are expected to deliver one of four Paraiso towers this year, with the three towers following in the next 15 months. In Wynwood, we forsee the potential for the micro-condo market to thrive as the millennial population continues to flock to the neighborhood and surrounding areas. We are also currently witnessing huge demand for retail space in some of the city’s most overlooked areas, such as Miami Gardens and Doral. Doral, especially, is becoming the go-to place to live, work and play, which makes the opening of our CityPlace Doral project so exciting for us. www.capitalanalyticsassociates.com

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REAL ESTATE INTERVIEW

Market change How Miami’s growth is changing the demands of the real estate market

Ken Krasnow Executive Managing Director, South Florida Region — Colliers International to know exactly what to build or where to locate; however, we are now providing that level of detailed data.

What changes has Colliers made to adjust to Miami’s fluctuating market? Miami is no longer a homogeneous market, it is a true global city, maturing and diversifying. It has many unique micromarkets that require professionals that are embedded in these areas. This is why we made this our strategic focus. We are no longer product-specific, but now also a neighborhood expert, understanding Miami on the microlevel. Miami is becoming a selfsufficient microcosm. Within three or four ZIP codes, you have an entire ecosystem of office, retail and multifamily that all talk to each other. Investors and occupiers need to understand this ecosystem to a degree that wasn’t necessary before. What we are finding is that new investors or occupiers can only find generic data. They are not well-equipped 42 | Invest: Miami 2017 | REAL ESTATE

What kind of products are most in demand in Miami? The Miami market is now calling for true mixed-use development. Companies and people want to be in self-contained, micro markets. Before, multifamily or condo developments were built with the retail and office component as an afterthought. Now, the market demand dictates that retail-office be planned and designed alongside the residential components. This is a paradigm shift in the way that we are approaching the business. The amount of information that is needed increases as pricing continues to escalate, something we foresee continuing for the years to come. What is happening in Miami is very similar to what happened in New York City: demand keeps coming from all over the world – not just from Latin America. Yet, our physical space is constrained, limiting the amount of building that can occur. When demand keeps increasing and supply has a limit, prices can only go up in the long term. What can be done to increase amount of affordable housing in the county? Affordable housing is a huge issue in Miami, and to address those concerns, we launched an affordable housing division in 2016. People should continue to be able to afford to live in Miami. We need to be able to provide workforce housing because if we want to continue to attract employers, we need to be able to attract and retain employees. When we look into all areas of the market, we need to take into account job, population and tourism growth. For the retail and condo segments, when you add in all of these factors our ratio is still at the low end. This means that there is much more to be built.

REAL ESTATE OVERVIEW

( ) Alphatur NV plans to replace an office building in Brickell with a new office and restaurant construction called 888 Brickell, a 38-story, 304,950-square-foot tower to appeal to high demand in the neighborhood. Former industrial area Wynwood has been attracting small businesses and artists and is now a thriving community in need of traditional office space. RedSky Capital plans to begin construction on the first new office building in the area, the 80,000-squarefoot, 8-story Cube Wynwd. Featuring retail spaces, a rooftop terrace and pedestrian walkway, the project has received significant interest from startups and technology firms. Family-friendly Coconut Grove will also gain a new office space to complement its residential and entertainment growth. Developer Terra and Mayfair Real Estate Advisors are adapting a public parking garage into a five-story office that will offer 75,000 square feet of Class A office space, the first new office building in the neighborhood in close to 30 years. According to Terra, its future clients in the building are seeking easier connectivity and less traffic compared to office spaces in hot neighborhoods such as Brickell. The project is slated to be complete in 2018. “The office sector was the last one to recover from the recession, but it has been coming back very strong. There has been virtually no new supply in South Florida, causing vacancy rates to go down and rental rates to go up. In addition, plenty of office assets in the suburbs have been very undervalued.” Alex Zylberglait, senior managing director for investments at Marcus & Millichap, told Invest: Miami. Logistical attraction Vacancy rates for industrial real estate in Miami-Dade continue to tighten, falling from 4.7 percent in 2015 to 4.4 percent in 2016 and are forecast to further

decline to 4 percent in 2017. Industrial real estate in Miami-Dade is expected to see a boost from the county’s position as a logistics hub and the growth of e-commerce platforms such as Amazon seeking rapid delivery times to urban customers in Miami. The retail giant signed a lease with Flagler Global Logistics in March 2016 for its second distribution center in Miami-Dade at the South Florida Logistics Center. The $13.5-million construction loan for the industrial warehouse follows the company’s first facility in Doral. The company is expected to take up another $198-million distribution warehouse in Opa-Locka, where construction is slated to begin in the third quarter of 2017. Miami-Dade’s location and industrial parks are attracting manufacturing industries as well. In October 2016, Flagler Global Logistics broke ground on a 500,000-square-foot headquarters and distribution hub for KLX Aerospace Solutions, situated at the Countyline Corporate Park. “We’re seeing an increase in demand for new, high-quality industrial real estate space with quick access to major transportation arteries,” Dan Marcus, executive vicepresident of Flagler Development, said in a statement on the project. The development is one of the largest industrial real estate projects of 2016 in MiamiDade, second only to Telemundo’s new $250-million, 560,000-square-foot global headquarters in the Prologis Beacon Lakes Industrial Park. Infill tenants also present opportunities for industrial real estate. If older industrial spaces are not rezoned to allow residential or retail establishments, they will likely attract infill and light manufacturing candidates requiring smaller spaces. With high demand and a shortage of vacancies, industrial real estate costs in Miami-Dade can be expected to rise, making it a key area of growth for the county in 2017.

Adam Walker Principal – Boardwalk Properties

The market has experienced a slowdown in activity over the past year. We have taken this opportunity to focus on our existing inventory, creating a pipeline for the stabilization and branding of our assets. Boardwalk Properties is placing a strong emphasis on tenant retention. We are actively improving our buildings to meet the Boardwalk standard.

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REAL ESTATE OVERVIEW

From the outside Arguably the most significant influence on the Miami-Dade real estate market has been a reflection of changing fortunes for foreign investors that have traditionally spent heavily in the county, with estimates that more than two-thirds of Miami-Dade’s residential real estate owners hail from overseas. Foreign investors primarily originate from Latin American countries, attracted by the country’s stable economic climate and familiar cultural makeup. Yet political unrest in the region has seen currencies depreciate against the dollar, giving investors pause. Latin American and European buyers had held strong purchasing power against the U.S. dollar when the current real estate cycle began in 2011, propelling luxury residence and condominium developments. Appreciation of the U.S. dollar in 2016 coupled with stagnating markets in their home countries have set these investors back. Venezuela has notably been in economic free-fall, with the Bolivar plunging against the U.S. dollar at the time of printing. Brazil, which vies with Argentina to account for the second-largest population of property investors in South Florida, has lost more than 50 percent of its purchasing power against the dollar over the same period. Argentina’s currency has also lost a staggering 70 percent against the dollar since 2011. This lack of purchasing power has affected cash real estate purchases, which are overwhelmingly preferred by foreign investors. Cash real estate transactions declined in Miami-Dade from 51.8 percent of all property deals in 2015 to 45.7 percent in 2016 and continue to fall, though the figure remains well above the national average of 21 percent. The decline of cash purchases can also be attributed in part to favorable mortgage rates enjoyed by domestic U.S. buyers. While the broader Latin American market does not look poised for improvement in the medium term, there is optimism on the horizon from neighboring Mexico, as well as investors from further afield, in particular China. Wealthy Chinese investors have acquired coveted real estate across the continental U.S. to the tune of $27.3 billion in 2016. Yet Chinese account for just 2 percent of foreign residential sales in Miami-Dade and Broward counties combined. Miami-Dade developers have been tailoring developments more closely to Chinese aesthetic tastes to capture this market, as well as establishing projects funded by investors participating in the U.S. government’s EB-5 visa program. The scheme grants U.S. residency to foreigners who invest $500,000 or more in a project and create at least 10 jobs within two years. 44 | Invest: Miami 2017 | REAL ESTATE

Lincoln Road’s lease rates remain some of the highest in Miami-Dade.

Chinese account for 85 percent of EB-5 visas granted annually. The EB-5 has been used as a financing vehicle for Miami-Dade real estate in the past, largely in partnership with Latin American investors. Slated for completion in summer 2017, the Doral DoubleTree by Hilton Hotel financed $10 million of its $16-million development through the EB-5 program. Other notable EB-5 projects in South Florida include the currently under-construction 65-acre Metropica development in Sunrise, Broward County, the $1-billion CCC Miami Towers, the proposed $430-million SkyRise Miami tower, the Panorama Tower in Brickell, which will be the tallest tower south of New York City and the $9.5-million Riviera Point Business Center Doral. Despite the recent stagnation of some Latin American economies affecting real estate purchases in Miami-Dade, underlying demand from Latin American investors remains. Foreign nationals still invested $6.2 billion in South Florida residential property in 2016, an increase from $6.1 billion in 2015, with 80 percent of that spending in Miami-Dade. Venezuela, Argentina, Brazil and Colombia continue to lead investment at 15 percent, 11 percent, 10 percent and 10 percent, respectively, with Canada following at 6 percent. Many are willing to play the long game and are waiting for currencies to recover to the point that real estate purchases will deliver a solid return on investment. Growing neighborhoods Little Haiti has become synonymous with gentrification in Miami-Dade, due to increasing high-end residential

REAL ESTATE OVERVIEW

development. The eclectic neighborhood, which has been traditionally home to Haitian immigrants, artists and low-income communities, continues to attract largescale residential and commercial property projects, with developments only poised to grow further in 2017. SPV Realty’s Eastridge Special Area Plan is one such project. The 22-acre, 28-story development will replace 500 town home rentals with 2,800 apartments as well as a hotel, commercial space and train station. Concern lies in rising costs that could price out local residents, as well as the changing flavor of the neighborhood as new developments cater to incoming young urban professionals, such as Panther Coffee’s

3,000-square-foot roaster, training facility and coffee shop and Conway Commercial Real Estate and Urban Atlantic Group’s co-working space MADE at the Citadel, opened in 2016 Investors also have commercial potential in mind for Little Haiti, notably developer Tony Cho and Silicon Valley entrepreneur Bob Zangrillo’s Magic City mixed-use technology and culture development. The $1-billion, 22-acre project will include office and retail space, a boutique hotel, studios and an innovation center housing co-working spaces. Edgewater continues to be hot property for luxury buyers in search of a bargain relative to Miami Beach prices. Located at the intersection of Downtown, the Design District, Wynwood and the beach with close proximity to the airport, five large-scale luxury residences and condominiums are slated to be delivered by the end of 2017, with many more on the cards. One World Miami Realty’s planned Ellipsis boutique condominium is a near 80,000-square-foot, 13-story development which would replace the property’s current pre-WWII-era single-family homes. Other planned condominium projects in Edgewater include Related Group’s One Paraiso Tower and the Melo Group’s Aria on the Bay, as well as ultra-luxury offerings Elysee Miami by Two Roads Development and Missoni Baia by Russian real estate mogul Vladislav Doronin. Unsurprisingly, Downtown will sustain the expansion and popularity that has seen real estate prices in the neighborhood increase 275 percent since 2015. Buoyed by new infrastructure developments including Brickell City Centre, Miami Worldcenter and Brightline train, Downtown will continue to be one of the most coveted real estate markets.

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High-earning millennial young professionals will likely drive a great deal of the development in this area, which is catering to their preferences for urban public transportation connectivity, as well as choice in nightlife and entertainment. Affordable housing The push for development in neighborhoods such as Little Haiti and the sharp rise in midmarket single-family home prices reflects Miami-Dade’s chief real estate challenge: a lack of affordable housing in the face of high demand. With a steadily growing population since 2011, housing prices in the county have climbed while wages stagnated, pricing many buyers out of the market. With business and community leaders concerned that Miami is at risk of losing members of its workforce and young professionals, developers are taking to take note. In 2016, mixed-income project Brickell View Terrace by developer Pinnacle Housing debuted with 100 of its 176 units marked as affordable housing in the upscale Brickell neighborhood. Developer Related Urban will also include mixed-income housing at its $307-million redevelopment of the Liberty Square housing project and Lincoln Gardens development in the low-income neighborhood of Liberty City. Liberty Square will feature 1,322 new housing units for public housing, affordable elderly residences, family units, workforce housing units and home-ownership

units. Lincoln Gardens is planned to feature 105 public housing units and 111 affordable housing units. A rental tower has also been proposed in Downtown Miami by entrepreneur and arts magnate Moishe Mana comprising “microunits” or small apartments designed for young professionals who commute by public transport. Looking ahead With the external factors that created a tumultuous 2016, Miami-Dade’s real estate professionals are tentatively bullish for 2017. While the cooling of luxury and condominium sales is largely expected to continue into 2017, a survey conducted by law firm Berger Singerman revealed that 53 percent of South Florida’s real estate professionals are anticipating a better 2017 for the local market. This was an increase of 4 percentage points from the previous year’s survey, where the majority accurately forecast a slowdown in the sector. Greater economic certainty along with support for new U.S. president, Donald Trump, colored the positive sentiment for 2017, with 32 percent citing economic improvement and 28 percent citing the presidential election results as reasons for their positive outlook. A reversal of interest from luxury and condominium sectors to single-family homes and commercial developments is a healthy correction to the market. With steady demand fundamentals currently in place, there are certainly targeted investments to be made in Miami-Dade’s real estate market for 2017.

Beth Butler President — Compass Florida

2017 will be a better year than 2016, and some areas will start to see real appreciation again. In Coral Gables, you can see where the inventory has now peaked and is coming back down again. The supply is going to be short in some single-family home markets. Certain markets have already started to bottom out and are going to come back up again, Coral Gables being one of them specifically. Other markets will have more challenges where there is more inventory. The real question for places such as Brickell and Downtown, as well as the condominium market and the residential market overall, is how much traffic can we drive into Miami from domestic sources. We have been so externally focused that we never really had to look inside our country.

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REAL ESTATE INTERVIEW

Commerce hub How Miami-Dade’s unique characteristics are creating an optimistic investment environment

Gerald Greenspoon Co-Managing Director – Greenspoon Marder world will create a more attractive business environment. We see Miami continuing to be one of the fastest growing regions of the U.S. What is the current demand for legal services coming from international investors into Miami? Miami is an attractive location and a hub for foreign investment. Whenever we think foreign investment is slowing down, another part of the world becomes interested. We continue to have strong investment and trade ties with South America and Central America. It all starts at PortMiami. The expansion of the Panama Canal created incredible opportunities in Miami, South Florida and the State of Florida. In addition to that, the reach has become even broader over the years. The European influx of interest and investors in real estate and business has taken off and continues. We are also seeing the same from parts of Asia. We have a tremendous transportation hub in South Florida and Miami that makes it extremely attractive and simplifies the access into our region. How do you assess the business climate for Miami? We are quite optimistic and very positive about the continued growth of Miami’s economy. The real estate sector has been strong for several years, for both residential and commercial development. However, some of the high-end residential development could possibly be overbuilt, which could create a market correction and an opportunity for investors. In addition, we have seen strong commercial development, which is exciting to see because it generates additional growth, attracting businesses and creating jobs. This means there are new people joining the market looking for residential housing opportunities. The commercial and residential markets go hand in hand. We feel that the new administration is going to create more opportunity. Less regulation on the business 48 | Invest: Miami 2017 | REAL ESTATE

What are some of the main challenges for Miami as an investment destination? As with any major city with people visiting, we should watch out for the increase in the cost of living. The price of condominiums and residential property in prime areas has increased dramatically. Miami recovered very quickly from a major real estate recession in 2008 to 2009, and has now achieved the highest prices that we’ve ever seen. That is always problematic. In addition, we always want our political atmosphere in the region to be welcoming. We have to promote and fund the infrastructure that is required in order to handle the large increase in population and investment. This includes transportation and mass transit. These are all critical issues.

Construction: Construction saw one of the biggest gains for employment statistics in 2016, which points toward the importance of the sector in a region experiencing growth. Despite slowdowns in some segments, new projects, both planned and underway, have whet the appetites of developers and financers alike.

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Construction in numbers:

32.56 17.33

19.85

19.61

18.24

22.47

DEC

200

16.63

21.20

400

NOV

600

51.63

46.38 32.38

1,287

1,302

1,152

1,308

26.22

Source: Department of Regulatory and Economic Resources, Miami-Dade County

SEP

AUG

JUL

JUN

MAY

APR

MAR

FEB

OCT

DEC

NOV

OCT

SEP

AUG

JUL

JUN

MAY

APR

MAR

FEB

JAN

0 JAN

800

987

1,000

1,310

1,280

1,200

1,377

1,400

1,452

1,291

1,600

1,421

Estimated cost of new residential buildings in Miami-Dade by month, October 2015 to September 2016 ($ million):

1,411

Building permits issued in Miami-Dade County by month, 2016:

Source: Department of Regulatory and Economic Resources, Miami-Dade County

Residential construction October 2015 to September 2016, by unit type:

935

New apartment building (three or four units)

New apartment buildings (five or more units)

2,069 TOTAL

1,100

Single family homes, townhouses

Two family units

Source: JLL Research

52 | Invest: Miami 2017 | CONSTRUCTION

Office inventory in Miami-Dade by area, fourth quarter of 2016 (‘000s of square feet):

8,074

CENTRAL BUSINESS DISTRICT

Downtown

1,051 Aventura / North Miami

6,762

964

Brickell

Coconut Grove

37,526

936 Miami Lakes

5,920

TOTAL*

Coral Gables

1,934 Miami Beach

SUBURBS

2,882

8,998

Kendall / Dadeland

Miami Airport Source: JLL Research

*total derived from unrounded figures

Ongoing office construction in Miami-Dade, fourth quarter of 2016, by area (‘000s of square feet): CENTRAL BUSINESS DISTRICT

SUBURBS

311 Downtown

225

989

30 Brickell

ventura / North A Miami

TOTAL * 0

246

Coconut Grove; Kendall/Dadeland; Miami Beach; Miami Lakes

Miami Airport

178 Source: JLL Research

Coral Gables

*total derived from unrounded figures www.capitalanalyticsassociates.com

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Mixed market: The growing demand for commercial buildings is set against the increasing costs of land and labor Miami-Dade Countyâ&#x20AC;&#x2122;s construction sector is seeing mixed fortunes, and construction companies spent 2016 reacting to a mix of conditions. There were the usual hallmarks of a strong market such as rising land costs and labor shortages, but also weaker indicators such as a saturated residential segment, in particular for condominiums. Construction activity overall in South Floridaâ&#x20AC;&#x2122;s three counties was flat over the first nine months of 2016, then dipped toward the end of the year. While some sectors remain in growth mode, and the overall picture remains positive, challenges are emerging. With time, 2016 could end up being perceived as an adjustment period, in which developers and builders reacted to a clear market shift in 2015. In that year, demand for commercial real estate jumped and demand for condos plunged, a level of change that was not necessarily reflected in the figures for the sector overall. Construction starts amounted to $7.79 billion in the first nine months of 2016, against $7.8 billion in the same period a year earlier. In the fourth quarter however, starts fell. The total for November 2016 was 26 percent lower than in November 2015. The rotation out of residential projects and into commercial ones seemed set to continue into 2017, with strong demand for industrial and warehouse space. 54 | Invest: Miami 2017 | CONSTRUCTION

Challenge and opportunity The total numbers show clearly the pivot to commercial projects. Sales volume in this segment of Miami-Dadeâ&#x20AC;&#x2122;s real estate market had bounced between $71 million and $714 million from 2009 to 2014, and then surged to more than $2 billion in 2015. In the condo market, by the third quarter of 2016, sales in key downtown districts had plunged by 35 percent from the same period in 2015. To be sure, the trend of softer sales was repeated across the U.S. in major markets in 2015, but there are some causes specific to Miami-Dade. One explanation is the coming oversupply in condos, with an estimated 22,000 new units planned in the next six-year period, in a market in which the typical absorption rate is 2,000 per year. Another is a change in buyer profiles and appetites. Investors from other countries in particular have been moving to more-predictable cash-flow projections from commercial investments. The strong U.S. dollar also played a role, as buyers from Latin America found their domestic currencies worth less in the Miami-Dade market. Builders faced further challenges in 2016 with rising costs such as increases in impact fees and a difficulty in finding enough workers to staff construction crews. A survey by the Associated General Contractors of America

CONSTRUCTION OVERVIEW

found that 69 percent of firms across the country were struggling to meet staffing needs, and 61 percent in Florida. However, Florida’s market was also more likely to work overtime, at a rate of 64 percent of firms compared with an average of 47 percent nationwide. Of the Florida-based firms in the 1,500-company survey, 61 percent reported hiking pay rates for salaried positions and 71 percent for those paid by the hour. Contractors had begun recruiting by hosting job fairs and looking to import workers from other states. Finance matters With market shifts and rising costs have come financing constraints, and as 2016 progressed, the availability of finance had fallen, in particular for condos and for smaller developers. Developers are looking beyond banks for sources of capital and have succeeded in attracting investment from asset managers such as Blackstone Group and Texas Pacific Group, the latter through its TPG Real Estate Finance Trust. Specialist lenders in the real estate sector include Mack Real Estate Credit Strategies of New York, Los Angeles’ Canyon Partners Real Estate, and Hall Structured Finance of Dallas, Texas. Foreign capital could also find its way into the mix. The impact is spreading to buyers too, who are being asked to pay more up front – 50 percent deposits are now the norm, compared with 20 percent in the past. Financing factors are a diminishing concern for land use questions, however. In past years, developers have found it easier to finance multifamily projects rather than office space, but with demand and rents rising in the office segment, those factors are playing a smaller role in decision making, according to market research from Cushman & Wakefield. Residential plateau With the pipeline filling up and developers slowing the pace of building, the stock of contracted and reserved inventory dropped by 42 percent in 2015. The market segment looks set for equilibrium at best, and potentially oversupply. Nonetheless, as of early 2016, among existing projects under construction an average of 85 percent of units had been presold, which was taken as a sign of resilience with market maturation in research from Integra Realty Resources done for the Downtown Development Authority. Many of the major developments currently underway are geared toward higher-end buyers looking for luxury properties. The average price of units under construction in Downtown districts as of early 2016 was $751,342, and in the pre-construction

Brad Meltzer President, Plaza Construction

Plaza Construction has a strong year in 2016. South Florida’s population continues to grow while tourism figures remain strong, which is fundamental to continued opportunity. We are seeing a great deal of strength in the retail segment and marketplace requests for these services reflect that. High-end retail, restaurants, office build outs and mixed-use developments are in great demand. Overall, prices for real estate have continued to rise in Miami. International demand is driving some of our on-going projects such as the Ritz-Carlton Residences, One Thousand Museum and The Paraiso community. South Florida’s prices are still considered low in comparison to many international and domestic destinations and therefore more attractive to buyers. However, these rising prices are causing deal making to become more difficult as the spread between profitable and unprofitable projects is narrower. For this reason, increasingly fewer developers want to take this risk. This has led to growth in sectors that have a long-term view on investment as opposed to condominiums, which are a historically short-term marketplace analysis. This tells us that the long-term outlook for Miami is on all accounts, strong. Now that the election has passed, we are going to see growth in international demand, again, as political uncertainty has waned. In general, because Miami is a very young city, offering much investment opportunity, while being a safe haven for that investment, we have a competitive advantage that advantage will continue to burgeon growth in the near term. Allapattah, west of Wynwood, is one of the next frontiers that will be developed in the next 10 to 15 years. One of the factors behind this is the increasing land value in the east and the relatively lower land value in the west. Miami has the ocean to the east and a highly densifying urban core. We must explore new areas of the county to build in.

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CONSTRUCTION OVERVIEW

pipeline $1.15 million, according to market data from Integra. Projects representing about 500 of the more than 9,300 units total under construction or in the pipeline sold for an average of $1 million or more. That includes units in properties such as Gran Paraiso and the Elysee in the Edgewater district. At lower price points are developments such as Brickell Heights, with an average selling price of about $540,000, and Hyde Midtown at $565,900. New growth in the condo market is likely to correspond to a return of foreign demand at previous levels, and would likely represent a return to this type of property from commercial alternatives. Florida accounted for 22 percent of real estate sales to foreign buyers in 2016, down from 31 percent in 2011. The strongly regional flavor of that element of the Florida market, with buyers coming mostly from Latin America, explains why sales to foreigners have contracted in Florida more than in other key

states. Florida still had the biggest share of outside sales amongst states in 2016, but that gap has been narrowing. In 2011, its share of foreign sales was 19 percent higher than that of the second-most popular state, California, but by 2016 the margin was 7 percent. “The slowing of economic growth across Latin America has caused a slight slowdown in overall demand, causing developers to put their projects on hold. The slower growth has been felt all across the supply chain,” Brad Meltzer, president of Plaza Construction told Invest: Miami. “I’m highly convinced that there will be sustained growth very soon in Miami.” For now, as developers adjust to demand-and-supply shifts, they are also coping with rising costs, including for land and labor. But concerns appear manageable and the human-capital challenge looms smaller than it once did. Foreign demand may also pick up now that the U.S. election has passed, and Miami could also profit from London not being part of the European Union.

Demand from overseas is driving up-market real estate and a demand for more inventory.

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CONSTRUCTION OVERVIEW

Commercial appeal The rotation out of residential and into commercial properties is specific to several market segments, rather than all of them. “Even though both residential and commercial sectors are growing simultaneously, commercial will start to see an important increase in the hospitality sector, especially restaurants. Miami has developed its culinary offerings extensively over the past couple of years.” Alex Wertheim, president of SPACIO Design Build told Invest: Miami. In the industrial sector, the warehouse vacancy rate dropped to 4.1 percent at the end of 2016, continuing a slow and steady decline this decade. The rate was about 9 percent in 2010. Absorption has outpaced new deliveries in every year since, and rents have climbed to new norms, with an average of $6.84 per square foot and highs nearing $8.76 per square foot in traditional strongholds such as Airport West. This market segment appears set for continued growth, according to research from Jones Lang Lasalle, as well as a geographical expansion into new areas. Warehousing space has long been clustered west of Miami International Airport and northwest of it in Medley, but these two spots may be close to peak pricing. Areas such as the City of Miami Lakes, Airport North and the City of Hialeah are further away from peaks and potential drops in rent. Of the total of 24 million square feet of planned construction in Miami-Dade, half is in Miami Lakes, and the overall theme for new construction is a move north from the existing established areas around the airport. In the office segment of the market, construction firms may be spotting opportunities thanks to market indicators that suggest a need for new projects soon. The vacancy rate has gone from above 18 percent in 2011 to below 14 percent – after being flat in 2012, the indicator has been on a steady march lower since then, and fell below the historical average of 15.8 percent in 2014. Absorption rates have plummeted by more than 50 percent over the course of 2016, from more than 200,000 square feet in the first quarter to less than 100,000 in the fourth. Rents are expected to rise, in particular in the central business district. As in the residential market, the office segment includes projects with the design flair for which Miami-Dade is famous. The Miami-based firm led by Chad Oppenheim, Oppenheim Architecture + Design, has built signature high-end projects in New York, Dubai and elsewhere, and has proposed applying its modern and angular style in a six-story building in north Miami-Dade near the City of Aventura.

Keiran Bowers President, Swire Properties

Having just joined Swire from their Hong Kong headquarters, what can you tell us about Miami’s similarities and differences? Hong Kong is geographically predisposed to be the trade link with China and the rest of the world. You have the protection of Hong Kong with rule of law as well as the professional services that trade requires. It is a great place to be headquartered while you are doing business in China or other parts of Asia. Similarly, Miami is the interface between U.S. and Central and Latin America. It is in a country with reliable laws as well as providing professional service infrastructure – legal, accounting, management consultancy – that a global company would expect. Much like Miami, Hong Kong has one of the busiest ports and airports, serving as an Asian transportation hub, as Miami is for Latin America. They are both geographically well positioned. In Hong Kong, you can quickly reach China, Singapore and Thailand, while in Miami, you can reach New York or Buenos Aires daily. Brickell City Centre’s Phase One was released in 2017. How have sales for the tower performed? The buyer profile remains largely overseas, but the mix is forever changing. We have seen a lot of Argentinean and Venezuelan interest, with a slight decline from Brazil. While those interested in buying are still representative of a largely international market, we are beginning to see more interest from people living in New York who are looking for an urban center with a beach. The market, has definitely slowed. There is a whole host of reasons why, from a strong U.S. dollar to political uncertainty in the region. However, what we are seeing, is just a pause for breath, which is healthy for the market. I don’t think there will be a large-scale correction because you can see the breaks already being applied. www.capitalanalyticsassociates.com

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CONSTRUCTION OVERVIEW

A notable element of the project is reduced parking. If permitted, the development would have 98 spots rather than the 147 that would typically be required, because of its proximity to high-frequency public transit. Retail curve Builders have been busy with new retail space, with 2.3 million square feet under construction as of the first quarter of 2016. That includes Brickell City Centre, the $1.05-billion mixed-use project totaling 4.9 million square feet of total development, including 500,000 square feet of retail and entertainment space. The retail market also saw one of the more notable sales of 2016, when Spanish fashion magnate Amancio Ortega, who recently passed Bill Gates as the world’s richest person, purchased a city block in the Lincoln Road shopping district of the City of Miami Beach for $370 million. However, the retail market’s considerable construction pipeline could suggest saturation, with new projects such as the American Dream Miami project, a mall that would be the country’s largest, at 3.5 million square feet. Ongoing infrastructure projects have also provided a buffer for the construction industry against volatility in other areas. Transportation improvements include

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the Deep Dredge project, which makes PortMiami the only facility on the U.S. Atlantic coast south of Virginia that can accommodate the new breed of larger cargo freighters. Another key infrastructure plan is the Miami-Dade Water and Sewer Department’s Capital Improvement Plan, announced in 2014 as a long-term project that could provide new construction opportunities. The plan specifies an investment of $12.6 billion over 10 years, creating 16,470 new jobs in the process. Construction is also underway at the Miami Intermodal Center, a $2-billion transportation hub situated just east of the airport that links road and rail options. Social infrastructure projects such as the Lennar Foundation Health Center have also brought business. Looking ahead With conditions softening in the residential segment of the real estate market, and in particular for condos, Miami-Dade’s construction is likely to face a period of reprioritization. The main theme on both sides is cost control. Costs are rising for land, labor and finance. As the search for capital extends beyond traditional lenders, developers report quicker processes and more flexible approaches, but also higher premiums demanded.

CONSTRUCTION INTERVIEW

A maturing market How developers in Miami are adapting to a maturing real estate market

Edgardo Defortuna President & CEO — Fortune International Group How was the performance of Fortune International Group during the slight sector downturn in 2016? We are very happy with what we accomplished in 2016, even though, from a real estate standpoint, it was challenging in comparison to 2010 to 2015, where we saw very strong growth and plenty of activity. Toward the end of 2015 and throughout 2016, we saw a deceleration in terms of the speed of the sales and the projects being either built or launched. However, this shows that Miami, from a real estate point of view, has matured as a city. The economic cycles are not that extreme anymore. In 2016, even though there was a deceleration, the markets behaved very well. Developers weren’t selling as many as 20 units a month, but they did sell five to 10, which is considered a success in many cities around the world. The previous speed could not have been sustained for a prolonged period. Projects that are well funded with great sponsorship and great products will continue to be successful and continue to produce positive results. This may not be at the same pace as the period of 2010 to 2015, but they will still be producing value, without decreases in price. Given that Miami’s real estate sector relies heavily on international buyers, how has the local market been impacted by the current global climate? A lot of the pre-construction sales in Miami depend heavily on foreign buyers, mainly in Latin American countries. They all have been affected by the current slowdown of their economies and rate of exchange, making it a little bit more difficult to invest in Miami. However, in Latin America there is a culture of investing at least part of the wealth in safe tangible assets like real estate. Demand will continue to be strong. Miami is also seeing a strong focus from the Turkish market. Miami can provide the safety that they need to be able to diversify their assets. The U.K. is also an

important market, not only because London has become incredibly expensive, but also because Brexit has forced many investors to look at diversifying their portfolio. Miami offers a lot to these investors. In a market with many new players entering, how does Fortune International stay competitive? We stay competitive by staying disciplined, concentrating in a small number of projects but at a high-end level. We love to do that for two reasons. First, with fewer projects, you are able to pay a lot of attention to the details. The key component of all of this is the people you surround yourself with. The quality of the architect and the interior designer, combined with the materials and spaces in which you create – the combination of all these assets together is what makes us successful. www.capitalanalyticsassociates.com

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CONSTRUCTION INTERVIEW

Project: Liberty How construction is providing homes for a new demographic of young professionals

Albert Milo Principal & Senior Vice-President — Related Urban Development Group What have been the main achievements of the Liberty Square project? By far, our biggest achievement is creating a redevelopment plan that fulfills the needs and desires of those that will ultimately call Liberty Square home. From the onset, we faced significant anxiety, fear of gentrification and displacement. We’ve taken those concerns and, along with the community, created a phased redevelopment plan that completely eliminates any displacement and greatly improves the lives of all residents. With Liberty Square, we have an amazing opportunity to not only redevelop 58 acres within Miami’s urban core, but to also create a catalyst for broader redevelopment throughout the area and the city as a whole. There are very few times in your career when you’re able to make such a drastic difference, where you can take something that is in a pretty desperate state as well as creating something that is truly magnificent. What are the main benefits and challenges regarding workforce housing? The main challenge of workforce housing is the significant number of young professionals with a salary that is above the cutoff point to qualify for affordable housing but not enough that they can afford to live downtown. So, we have a whole generation of Miamians stuck in limbo and unable to find a home that they can afford. In order to achieve the goal of creating middle income workforce housing, we have been advocating for policies and incentives that the local government can put in place to help us and other developers be able to build the type of housing Miami so desperately needs. We believe it is not only important to focus on areas like Downtown and Brickell, but also bring this approach to areas around the in desperate need of mixed-income housing solutions.

What public policies can be pursued to help build up Miami-Dade’s affordable residential real estate market? The future of Miami-Dade’s residential market is mixed-income housing. It will require some changes at the local level, which is why we have been advocating specific initiatives such as the deferment of impact fees for workforce housing units, a measure that the City of Miami agreed to implement. Another measure that has been adopted are ordinances that allow for increased densities for mixed-income developments, specifically focused on low-income units. This means that developers can obtain additional density if they take a portion of their workforce and affordable housing projects and make units for extremely low-income residents. www.capitalanalyticsassociates.com

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North Miami: The revitalized North Miami Community Redevelopment Agency is just one part of the continued efforts to turn the City of North Miami back into an economically vibrant city. Those efforts will pay off with the SoLÄ&#x201C; Mia mixed-use development, a planned Chinatown and infrastructure development projects all promising to bring new businesses to the area, with dividends that will crucially pay off for the cityâ&#x20AC;&#x2122;s residents.

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A city on the move: With a history that dates back more than 150 years, the City of North Miami has seen turbulent times, but in recent years it has become an attractive prospect for those looking to live and work in South Florida. New construction with important private sector developments are ensuring the cityâ&#x20AC;&#x2122;s growth doesnâ&#x20AC;&#x2122;t lose momentum The City of North Miami is located in northeast Miami-Dade County, along the northern reaches of the Biscayne Bay waterfront. It lies 20 miles south of the City of Fort Lauderdale and 10 miles north of the City of Miami and is situated along the I-95 corridor. It takes 30 minutes by car to reach Fort Lauderdale and 20 minutes to arrive to Miami via I-95 and Biscayne Boulevard. North Miami is also conveniently located close to multiple airports and seaports along the I-95 corridor such as Miami International Airport and PortMiami to the south and Fort Lauderdale-Hollywood International Airport and Port Everglades to the north. It has easy access to areas for relaxation, entertainment and tourist and cultural attractions, such as beaches and museums, furthermore, it has a station for the Florida East Coast Railway. North Miami is the sixth-largest city in Miami-Dade and has one of the youngest and most ethnically diverse populations. 64 | Invest: Miami 2017 | NORTH MIAMI

Small beginnings North Miamiâ&#x20AC;&#x2122;s early history began in the 1890s with a small settlement called Arch Creek. Its population continued to grow in the early 20th century aided by Florida land projects, and it was eventually incorporated as the Town of Miami Shores in 1926. It changed its name to the Town of North Miami in 1931. Returning veterans and young families led to a population boom following World War II, causing a rapid expansion of the town, quickly followed by its municipal services. By the early 1950s, the area was one of the fastest growing towns in the county, and to manage the fast growth in the area, voters approved the adoption of a charter and took on a new name. This led the Florida Legislature to enact an official statute on May 27, 1953, to change the name of the city to its current iteration and incorporate it as the City of North Miami. To accommodate the needs of the swelling community,( )

NORTH MIAMI INTERVIEW

Open for business How the City of North Miami is attracting commercial interest to create positive growth

Smith Joseph Mayor — City of North Miami What are the most important aspects of the North Miami comprehensive plan? To me, the single biggest opportunity from the plan is the height increase that we have implemented as part of our North Miami downtown development campaign. The new height restrictions should encourage more development projects downtown as well as bring more activity to the area. Another aspect of the plan is that we are the first city to take on the leading role in dealing with the threat of rising sea levels. Global warming is a major concern and, as a city government, it is important to take the appropriate steps to address these concerns. As part of community planning and development, we have policies in place for existing construction and programs to pinpoint buildings that may be at risk if we should have any incident of sea-level rise. My vision is to have a city that is resilient and able to withstand any adverse weather or climate change that will cause damages. I’m very proud of the fact that we took the leading role after Miami-Dade County. What are the city’s current strategies to continue to attract and retain businesses? Attracting new business or having them join this community is one our highest priorities. As mayor, I started a campaign to bring businesses and tackle unemployment in our city. Our unemployment rate was at 9.8 percent. First, I made sure that the North Miami Community Redevelopment Agency (NMCRA) was extended. The NMCRA is key in attracting investment into the area, and it will benefit many of the small businesses planning to come to North Miami, even offering partial subsidies. The Solē Mia Local Preference Office (LPO) managed by Garth Solutions will be very important in increasing community involvement, not only for residents but also small businesses. The LPO offers free job training and

scholarship opportunities to North Miami residents in addition to offering essential consulting services to local firms. These local businesses are part of the fabric of our city, so it’s important to look after them. We have to make sure that they stay in the city and become part of the economic machine. What would you identify as the biggest areas where new businesses or investors can get involved? We have several main corridors. The main one is 125th street, heading east to west. West Dixie Highway is an area that I would really like to see developed. We need to attract more investment into these areas, because there is so much potential, but the city cannot development it alone. We are trying to encourage public-private partnerships. www.capitalanalyticsassociates.com

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NORTH MIAMI OVERVIEW

( ) its first high school, North Miami Senior High School, opened for the 1954 school year. On the up According to U.S. Census Bureau estimates from 2015, the population of North Miami is 62,435 up 4.7 percent from 2010. The city sits on approximately 8.4 square miles and has a diverse population, 58.9 percent of which are black, non-Hispanic, 32.6 percent white, non-Hispanic and 27.1 percent Hispanic. Some 49.9 percent of the population is also foreign born. The city has an average of 3.3 people in each of its 18,302 households, and it currently has a median household income of $36,537. North Miami continues to be a more affordable option to other cities in Miami-Dade, with house prices ranging from below $200,000 to more than $5 million. The city is also well known for its large Haitian-American and Caribbean population. Once known as “The City of Progress,” North Miami is retaking its founding mantle and working toward increased growth through innovative projects and development-friendly municipal regulations. The North Miami Comprehensive Plan, first initiated in 1989, continues with regular updates, now in its 28th year, is working to create and incentivize more business opportunities by rewriting land-use regulations to attract more restaurants, entertainments venues and retail space, as well as allowing for higher density.

Mama mia! Central to the resurgence of economic development in North Miami are commercial projects that both create jobs and bring value to the area. The $4-billion master development, SoLē Mia, is exemplary in this regard. The project, a joint venture between real estate developers LeFrak and Turnberry Associates, will create 1.5 million square feet of commercial space and 4,390 residences just east of Biscayne Bay. It is on one of the largest sections of undeveloped land in South Florida. The local preference requirement of the SoLē Mia project mandated a minimum of 10 percent of the estimated 14,000 short- and long-term jobs to residents of North Miami, with an actual target of 25 percent. This is being achieved with a series of job fairs held by SoLē Mia Local Preference Office, and as of the fourth quarter of 2016, almost a third of all jobs had gone to North Miami locals. The project started in June 2015 and is expected to open in 2018. Once complete SoLē Mia will consist of 3,755 residential units, a hotel and 1.5 million square feet of retail, commercial, office and auto sales. The first residential tower, which will consist of 400 units, will be rental.

The SoLē Mia project will create residential, commercial and office space as well as job opportunities.

Well-ordered growth From large to small, public works projects continue in North Miami. Roads and alleyways are being resurfaced and seawalls and city-owned lots are

Michael Tillman Managing Director — Lefrak SoLē Mia is a joint venture between LeFrak and Turnberry Associates. We have developed a fantastic relationship with local authorities in North Miami and we look at them as our partners at SoLē Mia. Mayor Smith Joseph coined the term “the city on the move”, and I think it is a good description of the city. The administration has demonstrated its desire and willingness to update and modernize as seen by their recent revisions to the city’s Master Development Plan which calls for significant upzoning throughout the city.

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being maintained. Streetscaping projects include plans to coordinate roadways, sidewalks, swales, landscaping and infrastructure improvements within the downtown district and along commercial corridors to improve access to businesses, walkability and to further beautify the city. Other projects include the improvement of neighborhood signage throughout the city, which will have the result of increasing property values, safety and sense of community. On the more expansive side of development, in addition to the luxury SoLē Mia Miami project rising on Biscayne Bay, North Miami has been working on establishing its very own Chinatown Cultural Arts and Innovation District. The project will be South Florida’s first Chinatown district, and will encompass 16 city blocks on 92 acres along the major north-south corridor of NW 7th Ave. adjacent to Interstate 95, encouraging tourism, economic growth through commercial development and technological innovation. The city has been working in conjunction with advisors from Florida International University (FIU) while bringing in investors and advisors from China to be involved in the large municipal project. Elected officials from North Miami traveled with members of FIU for a graduation ceremony at the institution’s hospitality campus in Tianjin and to speak to potential investors in the Chinatown project. The project was approved by the city council in early 2016, with a 12-person delegation of potential investors from China visiting in July of the same year. North Miami estimates $30 million to $40 million spent on infrastructure is expected from private investment. More generally, the city is working with the private sector to encourage and facilitate sound real estate acquisitions, assemblage, development as well as public-private partnerships. It is incentivizing business opportunities by fast-tracking permits, providing grants for build outs and renovations as well as property tax breaks and tax credits in a variety of areas. Easy on the pocketbook Life in North Miami also will not break the bank, with one of the city’s drawing points being that its rental market is more affordable than the surrounding areas. From 2011 to 2015, the median gross rent per month in North Miami was 11 to 17 percent less expensive than other areas in South Florida at $985, compared to $1,112 in Miami-Dade, $1,087 in Fort Lauderdale and $1,191 in Broward County to the north. The market for homebuyers is also advantageous, with the median value of housing units in the same period coming in at $143,400, 30 percent less than in Miami-Dade. The city

Larry Spring Jr. City Manager, City of North Miami Executive Director, North Miami Community Redevelopment Agency

What incentives does North Miami offer to investors? Through the North Miami Community Redevelopment Agency (NMCRA) we have a lot of incentive programs such as assistance for acquisition, buildout and renovation grants. Through the NMCRA we are able to help pay the county impact fees for businesses in North Miami. These figures can be high for some of these businesses and we are able to help them. One of our new programs with the NMCRA is tax rebates. We do it through a tax increment finance agreement where, if you bring your business and create a number of jobs, we will give you a rebate of a portion of the property taxes generated by the business. How are cities such as North Miami setting a good example when it comes to combating crime? We have seen a reduction in our crime over the past several years. Our police department engages in the community and tries to be responsive to get ahead in areas where we see potential issues. We have added a number of resource officers into downtown and into the 7th Ave. corridor. These officers will be on Segways so that they are accessible to the community. Their presence creates an air of safety, and they have been successful in stopping crimes. This then creates awareness. Crime has not been a great issue in our city. What is your vision for North Miami? My vision is to help internally with the things people don’t see, such as improving our processes and making it easy to do business. We can provide incentives, attract businesses and provide basic services, but we also need to attract big projects. We are working diligently to invite the world into our city. We want to embrace the past and keep the charm of what was North Miami, with new developments and businesses. You have the opportunity to live, work and play in our city. We are open for business. www.capitalanalyticsassociates.com

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Larry Rice President, Johnson & Wales University-North Miami

How can the universities better connect academia with industry to better facilitate praxis? Generally speaking, all higher education has a desire to create a balance between theory and practice, or praxis. We know that is how students learn best. From my perspective, that is a good reflection of who we are at Johnson & Wales University (JWU). This is why we have been implementing project-based learning for some time now. Of course, the perfect combination is always aspirational, but it is our goal and where we want to be. For this, we have been investing our efforts in training our faculty members to better balance both. For example, if a faculty member is specialized in research and theory, we will train him or her to also implement practical problem-solving, and vice versa. We train our professionals who are specialized in practical cases to also give theory the importance it deserves so students can maximize their learning opportunities. JWU creates partnerships with industry. Our curriculum is designed in concert with industry, which serves as a great benefit to our students, as well as industry leaders seeking to hire top talent. What efforts is JWU making to ensure diversity at the institution? Diversity is not the end-game. It all begins with diversity. I believe that diversity becomes the foundation of any institution. We have created a campus environment that respects diversity in a high level. But I believe that hiring is just as important. It is not enough to say that we can bring in students who are reflective of a diverse environment. We have to be able to introduce them to individuals who provide that same level of variety. We also integrate diversity into our programs. A good example of this is every year we collaborate with the Multicultural Foodservice and Hospitality Alliance. Recently, the Wall Street Journal published a ranking of diversity in the country and JWU came in No. 1 in South Florida and No. 3 in the nation. This is a reflection of our commitment to welcoming a diverse mix of students and faculty. 68 | Invest: Miami 2017 | NORTH MIAMI

is hoping to attract young professionals and families with its new projects, working toward revitalization to increase the young and vibrant portion of its population with more young professionals. The city is encouraging the private sector to build a healthy mix of luxury, market-rate, workforce, affordable and mixed-income housing to be able to meet the needs of all of the city’s current and future residents. The city also works with the public sector to create affordable and mixed-income housing through the Community Development Block Grant Program, Home Investment Partnerships Program, State Housing Initiative Partnership, Neighborhood Stabilization Program and other funding available to the public sector. Heading for transportation Connectivity throughout Miami-Dade is a key issue for all areas. North Miami is in the process of linking the Tri-Rail Coastal Link network with a station at NE 125th Street to better connect the city to the denser urban areas of Fort Lauderdale and Miami and the greater South Florida area as a whole. This would help bring people to the city from surrounding areas, and ease the commutes of the many North Miami residents who work in downtown areas. Greater ease of access for the airports in Miami and Fort Lauderdale, giving out-of-state and international visitors direct access to North Miami is another positive outcome. The city is currently working with the Florida Department of Transportation (FDOT) to ease and better coordinate traffic flows along the city’s main thoroughfares of NE 125th St., Biscayne Boulevard, West Dixie Highway, NE 6th Ave., NW 7th Ave. and NW 119th St. Upcoming projects include providing raised medians and improving sidewalk connectivity on 119th Street. Improvements on 125th St. includes the installation of left turn lanes at NW 2nd Ave. and a dedicated right turn lane to access I-95 Safety will be further improved with features to restrict left turn movements to and from the side streets and along NW 125th St., upgrading traffic signals and improving drainage. Design is currently underway for downtown improvements to NE 125th Street from NE 6th to NE 10th Ave., which will include landscaped bulb-outs, a median, new lighting and landscaping funded by an FDOT grant. The city is also participating in the design of improvements to intersections along Biscayne Boulevard to alleviate congestion. On NW 7th Ave., one lane in each direction is being taken out as part of a “road diet” that will allow for permanent on-street parking and additional landscape and

NORTH MIAMI OVERVIEW

lighting to enhance walkability. The city is also working with FDOT to install medians and aesthetic features on 135th St. from NW 2nd Ave. to Biscayne Boulevard for safety and beautification. Other transportation projects the city is undertaking include expanding bike paths and integrating them with existing ones to connect to the larger, regional network, while also installing more bike racks to make cycling in the city easier, safer and more convenient. It is also complementing the existing, free NOMI Express bus service, which is to be expanded with a downtown trolley circulator to better connect the city’s public transportation options. Public-private partnerships will be utilized to create more public parking facilities in the parts of the city that are being revitalized, including downtown, while also implementing programs and strategies to encourage shared use of public and private parking facilities. Increased intra- and inter-urban public transportation options will be available to both residents and visitors and will attract more businesses to the city in conjunction with business-friendly city initiatives. Better-designed and well-maintained road and parking facilities will then allow easy access to the city’s new and existing businesses, increasing commerce and the city’s tax revenues. Staying well North Miami has various healthcare options to choose from, including the Miami Beach Community Health Center North location and Jackson North Medical Center, part of Jackson Medical Systems, the Villa Maria Nursing Center, a Borinquen Medical Center, as well as urgent care and walk-in centers, such as a MD Now Urgent Care Walk-In Medical Centers and Walgreens Healthcare Clinic. Miami Beach Community Health Center North is part of the Florida Department of Health. The center offers immunizations, clinical and nutrition services, wellness programs, community health planning, environmental health, emergency preparedness and response and infectious disease services. Borinquen Medical Centers have grown to become a Comprehensive Primary Health Care, Dental and Behavioral Health Center serving Miami-Dade. It offers primary care such as internal medicine, obstetrics and gynecology (OB/GYN), including delivery, family planning, nutrition, psychiatry and substance abuse services; specialty care such as podiatry, optometry, speech language and communication disorders treatments, and specialty services such as laboratory work and X-rays. The center also includes a pharmacy.

Rebirth of an agency In September 2016, the North Miami Community Redevelopment Agency (NMCRA) was reauthorized by Miami-Dade County for a further 29 years. Commissioners voted for the NMCRA unanimously, a move that showed absolute confidence in the agency. Established in 2005 by North Miami and Miami-Dade, the NMCRA is charged with eliminating conditions of blight that exist within the city and helping to improve the quality of life by developing physical, economic, educational, and social resources. The organization works over a community redevelopment area of 3,250 acres, approximately 60 percent of North Miami. Its primary project is the city’s new Chinatown Culture Arts and Innovation District, which will be located along the NW 7th Ave. corridor between NE 119th St. and NE 135th St. The city sent a delegation in conjunction with Florida International University in April 2016 to China for consultations to attract investors interested in the district’s business opportunities. So far, 60 investors have come to North Miami to tour the area. It is the first municipality to pass legislation that delegates land specifically for a Chinatown district. The new district’s master plan will be released in June 2017. The city’s work to secure a station for the new Tri-Rail Coastal Link rail network is in line with its priorities to better connect North Miami along the South Florida corridor to provide better access to local businesses and increase freedom of movement for its community. Infrastructure and business incentives are not the whole picture, as the city also undertakes workforce development to connect residents with skills-training programs. These include educational opportunities, business retention and expansion to supporting local businesses through grants, technical assistance, business surveys and organizational resources. The NMCRA is also active in identifying businesses to open in North Miami through site selection, marketing, public-private partnerships and incentive funding. The city’s marketing works to create a sense of place by utilizing branding and marketing strategies to positively promote the area. These efforts are preparing the community to actively take part in the city’s growth as skilled workers and new business owners. www.capitalanalyticsassociates.com

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Founded in North Miami more than 40 years ago, the Villa Maria Nursing Center is one of the most recognizable health institutions in North Miami. The 212-bed facility offers 24-hour care, a fenced, secure campus environment and a range of qualified healthcare professionals including physical therapists, nurses and language pathologists. It is run as part of Miami-Dade Catholic Health Services and offers shortterm rehabilitative care as well as long-term care.

series was filmed. It also offers waterfront access for filming. Some of the projects filmed in North Miami include HBO’s “Ballers,” “The Kardashians,” “Burn Notice” and “Graceland.” There are also a number of advertising studios. There are 18 recording studios in North Miami, and one of them, The Hit Factory Criteria, was where The Eagles’ “Hotel California” was recorded. In line with the city’s history of hosting many well-known artists, it is in the process of creating a district to be home to new venues to increase the space for up-and-coming artists to perform. The 2016 North Miami Community Redevelopment Agency (NMCRA) Plan includes an initiative called Music City, which is an entertainment venue district to add to its already robust music recording industry, giving space to musicians to perform while increasing residents’ access to entertainment and bringing in more entertainment businesses. A projected $20 million to $25 million has been slated for economic development initiatives, including the proposed Music City, as part of the plan, which is expected to go into effect over the next decade. The city hosts the North Miami BrewFest, which features more than 30 of South Florida’s best local breweries and serves up more than 120 different drinks. It has been running for the past five years and attracted more than 1,000 people to the three-day

The North Miami BrewFest, features more than 30 of South Florida’s best local breweries.

City of arts North Miami has rightly earned reputation for creativity and entertainment over the years, with over 70 music, video production and post-production businesses and over 250 entertainmentrelated businesses. The city features a wealth of arts and culture venues and events, chief among them being the Museum of Contemporary Art (MOCA), one of only four in the country. The museum presents eight to 10 exhibitions annually and its permanent collection has some 350 works by established and emerging artist from the U.S. and abroad, and also hosts monthly Jazz at MOCA concerts. The city is in the process of revitalizing the museum, bringing in new curators and a new director. The city also has a bustling movie industry and has been called the “Film Capital of the South.” It is home to a Greenwich Studios, South Florida’s largest studio facility and where the iconic “Miami Vice” television

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NORTH MIAMI OVERVIEW

La Gran Fiesta is one of North Miami’s many events celebrating the diverse heritage of the city.

event in 2016. The festival also has an educational aspect, bringing in academics from FIU and industry professionals to give seminars. The closest local establishment is the Wynwood Brewing Company in Miami to the south. Due to the lack of its own local brewer, North Miami has a focus on bringing microbreweries to the city, actively recruiting three, including the Descarga Brewing Company. Mishka Vodka is also moving production from New York. Building minds North Miami is home to a range of education organizations and institutions of higher learning preparing

future professionals and business and community leaders, including FIU, Johnson & Wales University North Miami (JWU) and Barry University in nearby Miami Shores. The North Miami Educational Foundation, Inc. and Youth Opportunity Board (YOB) are also located in the city, providing opportunities for continuing education and development for youth and at-risk residents. FIU is Miami’s first and only four-year public research university and part of the 12-campus Florida State University system. It is designated as a top-tier institution and emphasizes research as a major component of its mission. The university’s Biscayne Bay Campus in North Miami is its second largest, serving around 7,000 students. FIU offers 280 undergraduate majors, 81 master’s programs and 34 doctoral programs as well as three professional degree programs. JWU is a private, nonprofit and career-oriented university with four campuses in the U.S. Its North Miami campus offers associate’s degrees, 20 bachelor of science degrees in programs such as business management, criminal justice, marketing and software engineering. It is also a leading educator in tourism and hospitality management. It also offers multiple MBA programs. Barry University in nearby Miami Shores is a private Catholic institution with a diverse student body of 7,000. The university has more than 50 undergraduate programs that include accelerated bachelor’s programs design for working adults, and more than 50 graduate programs. The North Miami Educational Foundation, Inc. was established in 2012 and endeavors to help economically disadvantaged residents in the area achieve educational success. It provides scholarships for night school as well as English as a second language (ESL) courses.

Jimmy Tate President — Tate Capital I appreciate the outside-of-box thought process in regards to the proposed Chinatown project. In my opinion, it will create an economic boom for the west side of the city if the proposed concept is properly designed and professionally implemented. The key for its success is authenticity. They need to make sure that this themed designation district remains true to itself and the original intent. The city must control the commercial uses within this new Chinatown district to keep it real.

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NORTH MIAMI OVERVIEW

North Miami Youth Opportunity Board works with the city to bring in local high school students for summer internships in multiple fields. It will start a partnership in summer 2017 with the Miami Dade College Foundation to offer Hispanic and black men scholarships to go back to school with annual summer internships. Healthy environment Since 50 percent of North Miami sits below the floodline, the city has many environmentally friendly initiatives to lessen its impact on the environment and help counter and promote awareness of climate change. The city’s Green Business Rehabilitation Grants program aims to both meet environmental goals and create economic opportunity. The citywide program provides up to $5,000 in matching grants to businesses to encourage the installation of energy-efficient appliances, replace old light bulbs or light fixtures, fund solar panels, impact windows, insulation, A/C units, rooftops and other improvements. The intended economic impact of this program includes reducing energy costs and creating new employment opportunities. North Miami is also an Arbor Day Foundation-designated Tree City USA. The program helps “communities manage and expand their public trees” and maintain an urban tree canopy to help stave off climate change with the added effect of beautifying communities and raising property values. Looking ahead The future for North Miami will see expanded business and increased employment opportunities through the

72 | Invest: Miami 2017 | NORTH MIAMI

city’s business-friendly initiatives and public-private partnerships, capitalizing on its existing industries while bringing in new ventures. “Being in the restaurant business for 20 years, it is really refreshing to see how a city is willing to support local businesses to redevelop areas.” Cory Finot, co-owner of local French restaurant Café Crème told Invest: Miami, adding “Nobody believed that a restaurant would survive in this area. Now, it is a Miami hot spot.” Transportation and infrastructure improvements and expansion are both increasing interconnectivity and quality of life through beautifying the city, helping to create a greater sense of pride in community. The development of the “city-within-a-city” of SoLē Mia Miami and the new Chinatown will create a wealth of commercial, retail, entertainment and residential opportunities serving new and existing residents and an increase in outside visitors. Initiatives to counter climate change will help ensure that the city remains safe and productive for years to come without being negatively affected by wasteful energy use and its effects on the environment and sea levels. North Miami looks set to experience a population and business boom due to the projects already underway and those to come. Capital Analytics would like to thank the City of North Miami for its contribution in compiling this chapter. To learn more, visit their website www.northmiamifl.gov

Transportation: Despite slowed grow, both Miami International Airport and PortMiami are still breaking records, with the transport sector remaining as busy as ever. The extension of the Tri-Rail system, the Miami-Dade Expressway and new ride-sharing apps are all promising to change the way people travel throughout the county.

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Transportation in numbers: Expected cost of 2035 transportation plan ($ million):

10,400

Transit: operating and maintenance

200

Congestion management

19,500

100

TOTAL

Bicycles and pedestrians

2,800

6,000

Transit: capital

Highway

Source: 2035 Miami-Dade Transit Plan

Miami International Airport, monthly passenger traffic*, 2016 (â&#x20AC;&#x2DC;000s):

International

1,620 1,682

1,696 1,824

JUN

1,536 1,631

MAY

1,923 1,920

1,755 1,959

APR

2,041 2,058

1,679 2,068

FEB

1,666 2,004

JAN

1,000

1,841 2,167

1,627 1,892

1,500

1,973 1,958

2,000

SEP

OCT

NOV

2,046 1,983

Domestic

2,500

500 0 MAR

JUL

AUG

Source: miami-airport.com

DEC

*deplaned and enplaned total International

Miami International Airport, total passenger traffic*, 2006-2016 (â&#x20AC;&#x2DC;000s):

Domestic

2011

2012

2013

2014

21,381 23,204

2010

21,207 23,144

2009

20,097 20,845

16,892 18,806

2008

20,202 20,361

15,970 17,916

2007

19,372 20,096

16,147 17,917

10,000

15,541 18,199

15,000

14,728 17,806

20,000

18,418 19,897

25,000

2015

2016

5,000 0 2006

Source: miami-airport.com

76 | Invest: Miami 2017 | TRANSPORTATION

*deplaned and enplaned total

TRANSPORTATION OVERVIEW

Trains, planes and mobile apps: As Miami-Dade County grows, connectivity within its districts, and with the rest of the world, is becoming increasingly important Miami-Dade County’s transportation system consists of highways, a bus system, a rail system and one of the world’s busiest airports. The Miami Department of Transportation and Public Works (DTPW) and the Miami-Dade Metropolitan Planning Organization (MPO) oversee much of the transportation activities and improvements to infrastructure in the county. Despite the importance of connectivity, transportation in Miami still faces many challenges. Traffic congestion is notorious and unpredictable, rail and bus systems need upgrading to stimulate usage and air traffic has experienced its slowest growth in almost a decade. Despite this, new technologies such as Waze, coupled with principles of sustainable urban development such as transit-oriented development, have proved up to the task of tackling these challenges and have guided county leaders in their implementation of longterm plans for transportation improvement.

Initiatives, projects and investments Miami-Dade’s current Transportation Improvement Plan (TIP), approved in May 2016, highlights the upgrades to the area’s transportation that will take place before 2021. The plan to work on the area’s highways, aviation facilities, seaport facilities and rail transport infrastructure will cost the county an estimated $7.7 billion and serves as part of Miami-Dade’s 2040 Long Range Transportation Plan (LRTP). The goals of the plan are to enhance the mobility of the urban population, achieve a balanced transportation system, meet energy conservation needs, improve air quality and preserve or enhance the physical and social environment of the community. To achieve this, the county will support, among other things, activities such as the improvement of Metrorail facilities and the cities’ bus services, the management of traffic congestion, improvements to streets and the implementation of transportation system management projects. www.capitalanalyticsassociates.com

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Transportation update In October 2015, Miami-Dade Mayor Carlos Gimenez established the DTPW to encompass the functions of Miami-Dade Transit, County Engineer, Traffic Operations, Construction and Maintenance, Highway Planning and, finally, the Passenger Transportation Regulation function of the Regulatory and Economic Resources Department. The goals of the DTPW are in line with the goals of the LRTP for 2040 and, as such, will be oriented toward improving the sustainability of the area’s transportation networks to both improve the quality of life of the area’s residents and to foster a more vibrant city culture. The department employs “mobility management,” a concept that follows the global trend in public transportation and distances itself from the role the previous department played as a fixedroute service operator. The current department will collaborate with the area’s other public and private transportation providers to establish an array of mobility services that are synchronized throughout the community. Miami-Dade has also requested $20.3 million in funds for fiscal year 2016-17 from the State of Florida’s Public Transit Block Grant Program to meet the needs of its fixed-route bus operations. To receive these funds, the DTPW developed a Transit Development Plan (TDP) in 2014 known as MDT10Ahead, which is updated annually. In addition to being required for receiving funds from the state, the TDP will also guide the county’s transportation strategy for the next 10 years. Identifying long-term as well as short-term measures that must be taken to improve the county’s infrastructure, it is the second-longest of the county’s plans for transportation improvement. As such, it serves as the lens through which the vision of the LRTP is concentrated onto the financial realities of shorter-term plans such as the Transportation Improvement Plan, the Florida Department of Transportation’s Five-Year Work Program and the county’s Budget and Multi-Year Capital Plan.

such as improvements to all types of transportation infrastructure, the operation and maintenance of these transportation services, and the fixed capital for Miami’s Work Program development, financial services and budget, information systems, legal, personnel and contract administrative functions. Of that amount, 75.9 percent will fund construction projects, 15.3 percent will fund public transportation programs and services, 7.5 percent will go to right-of-way purchasing and 1.3 percent will go to funding other programs such as the Transportation Alternatives Program and the county’s Incentive Grant Program. Despite the financial assistance offered to the county by Florida State, the major passenger rail service of the Greater Miami area is facing challenges to its funding. In November 2016, the South Florida Regional Transportation Authority (SFRTA), the agency responsible for the operations of Tri-Rail, was informed that FDOT might change the way it doles out the $30.6 million to cover the $70 million operations budget required by Tri-Rail. Rather than issuing the funds quarterly, the state may stipulate that SFRTA cover its costs upfront and inform FDOT of any expenses so that the authority could be reimbursed at a future date. The prospective changes, which would take effect July 2017, come in the wake of a 2016 state audit that determined FDOT’s Tri-Rail agreement was not compliant with state law.

DTPW employs mobility management concepts to identify and adapt to transportation trends.

Initiatives and investments The Florida Department of Transportation (FDOT) provides funding for various projects in Miami-Dade. FDOT has already allocated $3.75 billion to the county for the next five years for transportation products 78 | Invest: Miami 2017 | TRANSPORTATION

Express goals The Miami-Dade Expressway Authority, or MDX, is improving the infrastructure of Miami’s roads. MDX is funded by tolls collected on five major thoroughfares in the county, through partnerships with the DTPW and the FDOT and through various bonds. The authority’s goal is to alleviate traffic congestion by increasing the number of cars that can drive on the expressway through the execution of a number of projects on various highways. For example, projects to have been completed so far include the interchange reconstruction of SR 826/SR 836, mainline improvements to Expressway SR 874, the reconstruction of the Killian Parkway/SR 874 interchange and the construction of an auxiliary lane on eastbound SR 836. All of these projects were undertaken through a $1.5-billion reinvestment of tolls collected on the Expressway. The county also has a number of other crucial projects in the works, such as a diamond interchange

TRANSPORTATION OVERVIEW

on the SR 836 from NW 57th Avenue to NW 17th Avenue to be completed in the summer of 2018. MDX will also partner with DTPW and FDOT to establish the Dolphin Station Park and Ride Transit Facility to provide support for the Dolphin Expressway Bus Service and a stop or terminus for a number of local bus routes which run to Dolphin Mall and the cities of Doral and Sweetwater. Finally, there is hope that this station will be the site for a potential east-west commuter rail service. Rail development Plans to extend Tri-Rail, South Florida’s commuter rail service linking Fort Lauderdale and West Palm Beach, to Downtown Miami, have been finalized by the city’s commissioners and the SFRTA. According to the plans, there will be a new Tri-Rail station at Miami Central station running parallel to NW 1st Avenue. The station will also house Brightline, the privately-operated passenger rail service to Orlando which will be offered at the end of 2017. “The topping out of our Fort Lauderdale station marks another important milestone in the development of our Brightline train service,” Mike Reininger executive director of Florida East Coast Industries, Brightline’s parent company said. “More than 65 percent of the work has been completed on the entire system between Miami and West Palm Beach, and our team is expanding each week as we look forward to launching service in less than a year.” To fund the undertaking, the commissioners plan to issue tax-exempt or taxable special purpose improvement bonds to earn back the $18 million in funds the city will offer in advance to develop Miami Central. In total, bringing the link to the new station will cost $50.4 million and will be funded by Miami-Dade, the City of Miami, the Omni/Midtown Community Redevelopment Agency, Miami’s Downtown Development Authority, Bayfront Park Management Trust, All Aboard Florida and the State of Florida. This development will give passengers of the Florida East Coast Railway easier access to Downtown Miami by rail and will also link the downtowns of the three major cities on its path. The county plans to further modernize its public transportation system with 136 new rail cars by 2019, an initiative which cost the county $300 million. The cars were created by Hitachi Rail, a company from Italy, and designed to cater to the U.S. market for rail cars with accommodations such as a wifi system. Following the principle of transit-oriented development, a deal was also made in July 2016 to direct an estimated $464 million in funds over the course of 30 years to the transit agency of Miami-Dade. The deal is ( )

Ralph Lopez Vice-President, Miami Hub, American Airlines

As the hub carrier for Miami International Airport (MIA), we produce just over 70 percent of the total volume in traffic and travel in and out of Miami. We understand our responsibility in delivering a worldclass product that is reliable and safe. Our view of 2017 is to make sure that we improve our delivery of services and continue to find ways of improving the experience for our passengers. Miami is a unique hub – it is built to connect domestic and international traffic; it is the gateway to Latin America and the Caribbean; and it is a transit point from the Atlantic to South America. We are keenly focused on improving the connecting experience as well as our reliability. As MIA is the largest cargo hub in the U.S., we also want to produce a good product for our cargo customers. In 2016, we moved close to 50 million tons of cargo. We want to improve systems, platforms and tools to enable better delivery and weight management of our aircrafts. The biggest advantage of MIA has been Miami’s location, which has been a mutual benefit for both the county as well as American Airlines. We are the Southeastern most point of the U.S., centrally located within the Americas. From a distribution standpoint, Miami is incredibly well positioned. There is substantial local demand, which is well supported by connecting traffic. There will be a lot happening in 2017. We are focused on having the best network and schedule and want to enable the right timing, capacity and destinations. We are working on designing the next generation’s schedule. In 2017, We will have the third iteration of a Miami flight structure that we developed in 2014. We are looking at the directional plans of our flights, making sure they are optimized. We are looking at our fleet, rationalizing and managing it optimally. At the same time, we are incredibly focused on ensuring that we build the schedule to capitalize on demand, but also operable and reliable. We have seen great improvements relative to the last decade, and we are expecting this trend to continue in 2017.

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TRANSPORTATION INTERVIEW

Smart plan How the Department of Transportation and Public Works is using information sharing to make a better transport system.

Alice Bravo Director â&#x20AC;&#x201D; Miami-Dade Department of Transportation & Public Works

What are the most important milestones achieved by the Department of Transportation and Public Works in 2016? When I started in this position, we were focused on the basics: clean, safe and reliable transportation. Along the way, we worked on the merger of the Miami-Dade Transit Department with the Public Works Department, which was formally approved in February 2016. We have been working with both sides to increase their synergies and leverage by pulling our resources together. In addition to paying more attention to cleaner trains, buses and other forms of transport, we have stepped up security by developing an app so people can report immediately if something happens to them. We will also soon launch new Metrorail cars, which use improved technology to run their systems and enhance reliability. 80 | Invest: Miami 2017 | TRANSPORTATION

How has the investment in new technology helped to market transit services? Investing in technology is one of our top priorities. Our buses have real-time tracking. We have revamped our app to make it more user-friendly and provide real-time tracking information. Recently, we debuted EASY Pay. This mobile ticketing system does two things. First, it eliminates the hurdle of dealing with a ticket vending machine. Second, it will help us provide incentives because we will be able to do cross-promotions with local businesses. With the data gathered, we know where our passengers get on and off. With this information we can, for example, offer coupons to use in the shops near the stops they use. With an account-based system, we can communicate better with our customers, enhancing information availability and thus encouraging people to increase their use of public transport. We believe that public transportation could work for a lot of people, but it has just never crossed their minds. Therefore, the first thing we need to do is to get them thinking about public transport. Second, we need to get them to use the app and trip planner to understand its ease and convenience. Lastly, we need to get people to realize that they can take Metrorail to the airport. Which is being done to help promote awareness of the advantages of using public transportation? We are combining better information with increased knowledge. A good example of this is the fact that we have uploaded information to our website about our corporate and student discounts. We also added other promotions, such as taking Metrorail to the airport. We know that many of our corporate clients will want to take advantage of these offers. For this, we teamed up with the Greater Miami and the Beaches Hotel Association, which has been actively promoting this option.

TRANSPORTATION OVERVIEW

( ) to help residents who live around Metrorail stations rely less on cars. The Link at Douglas, for example, is a joint venture between the Adler Group and 13th Floor investments whose goal is to redevelop the Douglas Road Metrorail station to include some 1,000 new apartments, a number of shops and a 150-room hotel. Aviation innovations Florida airports take some of the highest ranks for customer satisfaction according to a survey on North American airports done by J.D. Power in December 2016. Miami International Airport (MIA), ranked fifth on the list while other airports such as Tampa International Airport and Orlando International Airport ranked second and fourth respectively. Given that MIA jumped from a ranking of 18 as of the same time in 2015, this represents a significant increase in the quality of passenger experience at the airport, something the county-owned facility attributes, among other things, to the new local restaurant options the airport offers. The airport is also recognized both nationally and internationally for its role as the “Gateway to the Americas.” The airport offers more flights than any other airport in the U.S. to Latin America and the Caribbean, has direct connections to Canada, Mexico, Europe and the Middle East, and also handles one of the highest cargo volumes among airports worldwide. Moreover, total passenger traffic has grown seven years in a row to 44.5 million passengers in 2016, an increase of about half a percentage point from 2015, the weakest growth rate since 2009. Passenger traffic to Latin America was reduced due to the region’s economic difficulties. Traffic to Brazil, the top international destination for MIA passengers, fell by 600,000

travelers. Despite this decrease in traffic between Latin America and MIA, domestic traffic through the airport grew 0.26 percent in 2016 to 23.2 million passengers, while international traffic also rose by 0.82 percent to account for 21.4 million passengers. This large volume of international and domestic passenger traffic has attracted attention from both the U.S. government and privately owned airlines. MIA became the first airport in the U.S. to engage in a partnership with U.S. Customs and Border Protection (CBP) as part of a program to make entry into the country easier for international passengers by reducing both congestion and time spent waiting. This pilot program lets many passengers clear passport control and leave the customs area after retrieving their luggage without undergoing another inspection by officers of the CBP. In 2016, the airport also experienced “one of its biggest years,” said Greg Chin, MIA spokesperson. It added four new cargo airlines and six new passenger airlines to bring the total number of airlines it serves to 109, making it host to the largest number of airlines of any U.S. airport. MIA is also slated to bring on four new carriers to serve international destinations, including WOW Air, a European airline which will provide nonstop service to Reykjavik, Iceland, beginning in April 2017. These trends reflect the airport’s growing popularity as both a destination and starting point for international travel and cargo shipment. PPP One way in which Miami is planning to develop its infrastructure is through public-private partnerships (PPPs). In September 2015, Mayor Carlos Gimenez

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indicated that the county would take such partnerships into consideration for every potential transit project in the future. For example, Baylink, the light rail planned to connect Miami to Miami Beach by way of the MacArthur Causeway, could be completed as a PPP, as could an east-west line connecting MIA to Kendall. Furthermore, Miami’s Metropolitan Planning Organization (MPO) plans to develop six rapid transit corridors, an undertaking for which the MPO has considered enlisting the assistance of PPPs. Such partnerships seem desirable to county officials because they will not have to wait for the required amount of public funds to accrue to complete the project and are thus considered to better at overcoming budget shortfalls. Transit-oriented development (TOD) provides another example in which PPPs will play a role in developing the transportation infrastructure of Miami. As of December 2016, TOD leases had been approved by Miami-Dade at its Coconut Grove and Douglas Road Stations. To illustrate what such a development would look like for the county, the plans for the Douglas Road Station include the construction of a mixed-use development of 970 residences, a 150-key hotel, 70,000 square feet of retail space and a public plaza once its four phases of construction are completed. Because property in the vicinity of other Metrorail stations is still undeveloped, PPP TOD is touted as an easy way to increase ridership and to fund potential expansions of the Metrorail system. Public plans The City of Miami along with Miami-Dade have engaged

in a number of initiatives to improve transportation in the city. For example, the city has recently established the Citizens’ Independent Transportation Trust composed of 15 members to administer the People’s Transportation Plan (PTP). The PTP was created in 2002 by the Miami-Dade Metropolitan Planning Organization (MPO) through the implementation of a half-penny sales surtax with the goal of upgrading transportation facilities in the county, specifically its rapid transit corridors. In February 2016, a policy was approved by the MPO to make the improvement of the county’s transit supportive projects and rapid transit corridors the highest priority. After this, in April 2016, the Governing Board of the MPO began to implement the Strategic Miami Area Rapid Transit, or SMART, Plan, a measure that is slated to accelerate the development of six of the rapid transit corridors identified in the PTP. Furthermore, the SMART Plan will establish what planners refer to as a Bus Express Rapid Transit service. Together, these measures will serve to aid in the implementation of the area’s mass transit projects. App approach Ride-sharing services such as Uber and Lyft and the contention surrounding their use has created a stir in the Miami community. The companies drew attention from county officials due to the fact that they conducted their operations as transportation companies but ultimately sold themselves as tech startups. The county resolved this discrepancy by designating companies that provide such a service as transportation network

Arthur Noriega CEO — Miami Parking Authority

From a revenue standpoint, the Miami Parking Authority has had an excellent year, which is reflected in our bond rate review that Fitch published. Given the size of our agency and the size of our budget, it is difficult to get rate increases. This makes our rating a major milestone for us. The main challenge to achieve this has been that we have seen a reduction in parking spaces because of the city’s massive growth and development. However, there has been an important increase in the number of people utilizing the system, leading to a growth in revenues. This is attributed, in part, to the PayByPhone absorption fee program that we instituted a couple of years ago as well as an efficiently-run operations department.

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TRANSPORTATION OVERVIEW

entities (TNEs). In 2016, TNE ordinances were passed in the counties of Miami-Dade, Broward and Palm Beach and, though taxi companies vigorously opposed these ordinances, the lawmakers of South Florida have acknowledged that these TNEs will have a long-term presence in the region. Tech solutions Technology continues to be integrated into the Miami area’s transportation network. One goal of this integration is the creation of a more sustainable transportation system, to which end Miami-Dade established the DTPW. Following trends observed in major cities across the world, DTPW will employ the concept of “mobility management” to distance the role of the area’s transportation network from that of a fixed-route service operator to one that involves both public and private transportation providers to coordinate the county’s mobility services to better serve the community. A number of steps have already been taken to achieve this goal. Firstly, in October 2016, DTPW acquired 11 60-foot, articulated, eco-friendly hybrid buses via both local and state funds, the latter of which were granted to DTPW in June 2015. These buses can accommodate 100 riders comfortably and are equipped with high-tech amenities such as wifi. Miami-Dade also began a partnership in June 2016 with the Connected Citizens Program offered by Waze, the navigation application program that alerts drivers to potential traffic problems and offers them alternate route suggestions to reach their destination. The terms of the partnership stipulate that the county will pro-

vide Waze with real-time, government-reported crash, road closure and construction data, while Waze will give the county anonymous information provided by users with the goal of further easing congestion and reducing commute times. Finally, the DTPW of Miami-Dade completed the renovations to its Traffic Management Center (TMC) in August 2016. As an element of the People’s Transportation Plan, the $1.3-million upgrade of the facility gave it the ability to obtain the technological infrastructure that is required for synchronizing and optimizing the efficiency of the county’s traffic signal system. The TMC will do this by introducing adaptive signal control to the system and by actively managing Miami-Dade’s major traffic arteries, allowing the DTPW to employ detection equipment to monitor traffic conditions in real time.

The new Waze app allows citizens to send a receive real-time data on the state of traffic in the county.

Looking ahead With a number of federally funded and state-funded projects already underway to improve Miami-Dade’s highways, rail system and bus system, the county is poised to offer a better transit experience to residents of, and visitors to, the county. Highway improvement coupled with the use of applications such as Waze will ease the congestion that automobile traffic in the county has long dealt with. The construction of Metrorail stations following the principles of transit-oriented development may also improve transit within the county, by increasing the amount of people that live near Metrorail stations and use the rail service. With these things in mind, traveling through Miami-Dade is likely to become a much more enjoyable experience within the next few years.

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Trade & Logistics: Miami-Dade Countyâ&#x20AC;&#x2122;s location makes it a natural import and export hub for the U.S. to trade with the rest of the world. Its PortMiami and Miami International Airport regularly set national records for volume of moved goods. Both are seeing continuous improvements to capitalize on their positions, as Miami officials travel overseas to encourage more trade.

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Trade & Logistics in numbers: Top-10 imports Miami International Airport, January-February 2017 ($ million): Gold

606Â million

Imports of returned exports

462

Landline, cellular phone equipment

418

Heterocyclic chemical compounds

249

Fresh-cut flowers

229

Exports of charitable items, returned as imports

225

Fish fillets, chilled or frozen

184

Oxygen-function amino-compounds

147

Military aircraft engines and engine parts

115

Computers

94 0

Source: WorldCity Trade Numbers

800

400

PortMiami imports and exports by month, March 2016 -February 2017 ($ billion): Imports

1.6

Exports

690

OCT

NOV

DEC

JAN

0.4

758

727

1.16

1.15

764

1.16

1.19 775

1.17 824

1.16

1.35 755

858

1.29

1.33 832

1.05

1.21 810

0.6

840

1 0.8

790

1.2

1.23

1.4

0.2 0

MAR

APR

MAY

JUN

JUL

AUG

SEP

Source: WorldCity Trade Numbers

PortMiami tonnage, January-February 2017:

114,072 Honduras 97,257 Costa Rica

443,593 China

89,916 Dominican Republic

67,764 Guatemala

1,639,131

65,381

TOTAL

46,088

Colombia

The Netherlands

45,162 Panama

41,953

587,317 Other Source: WorldCity Trade Numbers

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Russia

40,628 Mexico

FEB

Miami-Dade trading partners January-December 2016 ($ billion): 14.27

Brazil 7.23

Colombia China

6.68

Dominican Republic

5.66

Chile

5.13

Honduras

4.17

Peru

3.92

Argentina

3.30

Costa Rica

3.24

Italy

2.93 0

Source: WorldCity Trade Numbers

Top exports from Miami-Dade, January-December 2016 ($ billion): Civilian aircraft and parts

5.77

Landline, cellular phone equipment

4.32

Computers

2.81

Gold

1.80

Medical instruments

1.48

Plasma, vaccines, blood

S1.37

Medicine

1.22

Computer chips

1.05 980

Printers, printer parts

921

Computer parts Source: WorldCity Trade Numbers

Top 10 U.S. exporters by Metropolitan Area, 2015: Houston-The Woodlands-Sugar Land

$97.1 billion

New York-Newark-Jersey City

$95.6 billion

Seattle-Tacoma-Bellevue

$67.2 billion

Los Angeles-Long Beach-Anaheim

$61.8 billion

Chicago-Naperville-Elgin

$44.8 billion

Detroit-Warren-Dearborn

$44.3 billion

Miami-Fort Lauderdale-West Palm Beach

$33.3 billion

Dallas-Fort Worth-Arlington

$27.4 billion

New Orleans-Metairie

$27 billion

San Francisco-Oakland-Hayward

$25.1 billion

Source: WorldCity Trade Numbers

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Go up with the flow: Trade and logistics are an essential part of the South Florida economy, and Miami-Dade’s location gives it strategic importance for the global movement of goods Touted as the “Gateway to the Americas,” the ports and airports of Florida are responsible for some of the largest volumes of the entry and exit of goods in the U.S. According to Enterprise Florida, a nonprofit organization that focuses on economic development and promotion, the state is home to 20 commercial airports, 15 deep water seaports, 3,000 miles of rail track and more than 122,000 miles of highway allowing $160 billion of goods per year to flow through the state’s ports and airports. Nationwide, Florida handles the most air cargo of any state, is home to the second-largest Foreign Trade Zone (FTZ) Network and has the third-largest cluster of logistics and distribution establishments in the nation. Moreover, if the State of Florida were its own country, it would have the world’s 18th-largest economy. Miami-Dade County is a key component of Florida’s strength, being home to four of the state’s FTZ’s, Miami International Airport (MIA), the country’s third busiest airport in terms of trade, and PortMiami, and of one the state’s busiest seaports by trade volume. Global mover According to Miami-Dade statistics, international trade 88 | Invest: Miami 2017 | TRADE & LOGISTICS

employs around 100,000 people in the county and is also the most important sector of the county’s economy as far as wages are concerned. Furthermore, the Miami Customs District #52 enjoyed a $6.91-billion trade surplus in 2015 and remains one of the few customs districts that still enjoys a surplus in the U.S. Despite the importance of international trade to the county, Miami-Dade’s trade with the rest of the world decreased by 3.04 percent from January to December 2016, according to a report by WorldCity Trade Numbers. The report also indicates that the city’s top five trading partners were the countries of Brazil, Colombia, China, the Dominican Republic and Chile and that the largest exports from the county are of civilian aircraft and parts, landline and cellular phone equipment, computers, gold and medical instruments. Logistics promotion Miami-Dade has worked to promote international business development through inbound and outbound missions such as the one to China and Taiwan in April 2016 to highlight what the county has to offer in business development, trade and tourism. To promote

TRADE & LOGISTICS OVERVIEW

the image of Miami-Dade to investors around the world, city and county officials have been highlighting the area’s world-class infrastructure, advantageous geographical location, multicultural composition and what it can offer to international trade as a global gateway. As part of these inbound and outbound missions, representatives of Miami-Dade conduct branding presentations to raise awareness of the role the county plays as the “Gateway to the Americas” and to create a forum for international trade discussions to economic development agencies, government officials and the media. Another important element of these trade missions is what the county refers to as a “business matchmaking program” through which economic representatives of the county, in conjunction with the local economic development agencies of host countries, coordinate meetings in order to give delegates from the private sector an avenue through which to promote international business development. During outbound missions, Miami-Dade gives government and economic development agencies the opportunity to bring similar events to the Greater Miami area. Local Miami-Dade institutions have also taken steps to prepare the next generation of the trade and logistics workforce. For example, Ron Mesia, director of Florida International University’s Ryder Center for Supply Chain Management and professor of supply chain management in the university’s business school, brings students to visit PortMiami in order to get a glimpse of the high volume of trade conducted there. Through the visit, undertaken as part of both the Business College’s Logistics and Trade program and the Logistics and Supply Chain program, the latter of which was introduced in the spring 2015 semester, students are introduced to the basics of international trade, the assets of the port, the challenges faced at the facilities and the obstacles that people face trying to move goods across land and through the oceans. These programs allow students to travel to other important port cities, such as Barcelona, Shanghai and Dubai, to give them a comparative perspective on the inner workings of international trade and logistics.

eastward, it has taken major steps in the past few years to accommodate post-Panamax vessels, or those too large to fit into the canal’s original two lock systems. To prepare for the increased traffic and larger vessels arriving in South Florida since the Panama Canal expansion reached completion in mid-2016, PortMiami is currently undergoing a renovation worth $2 billion. Part of the renovation was the PortMiami Tunnel, which opened in 2014 and provides access to the port from major interstate roads in order to reduce the distance large vehicles need to travel to transport imported and exported goods. A four-way partnership between the U.S. Department of Transportation, the Florida Department of Transportation, the Florida East Coast Railway and PortMiami has resulted in the completion of a $50-million on-dock intermodal rail service, which provides distribution, trans-loading and warehousing along the East Coast. The move gives the goods entering the port access to 70 percent of the U.S. population in four days or less. Finally, a dredging project funded by a $77-million grant from Florida Governor Rick Scott and the Florida Department of Transportation increased the depth of the port’s waterways to 50 feet to accommodate post-Panamax vessels that have begun to enter South Florida’s waters. This project was coupled with the construction of gantry cranes, which can handle cargo vessels that are up to 22 containers wide and have up to nine levels of containers above deck and 11 containers below deck. These developments make PortMiami the only Eastern seaboard port capable of accommodating such vessels. These infrastructure developments will support the increasing volume of PortMiami, which the U.S. Chamber of Commerce listed as one of the top fastest-growing ports in the nation. According to data reported by the Sun Sentinel, as of March 2016 containerized cargo shipments had increased 8.8 percent to 519,342 twenty-foot equivalent units from the same measurement taken in March 2015.

PortMiami is undergoing a renovation worth $2 billion to accommodate traffic from the Panama Canal.

The port of call PortMiami, located in the City of Miami, is one of the most important ports in the U.S. As one of the major destinations for ships leaving the Panama Canal traveling

To the skies In line with the developments of PortMiami to accommodate higher volumes of imported and exported goods and larger ships, MIA has also taken measures to deal with rapidly increasing growth. ( ) www.capitalanalyticsassociates.com

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TRADE & LOGISTICS INTERVIEW

Bigger and better How PortMiami is growing to accommodate bigger vessels and larger volumes Invest: Miami speaks with Juan M. Kuryla, Port Director & CEO — PortMiami

What were the major highlights for PortMiami in 2016? If you look at our business model and our achievements in 2016, we had a very strong year for both cruise and cargo. It was the first time in 11 years that more than 1 million twenty-foot equivalent units (TEUs) have passed through the port two years in a row. That is a big accomplishment. We entered into our first private-public partnership with Royal Caribbean to build a large cruise terminal. It will be funded, operated and maintained by Royal Caribbean. We also received commitments from almost all cruise lines to renew their agreements and build upon their 2016 volumes at the port. We saw some steady cargo volumes in 2016. We are excited about 2017 in terms of seeing larger vessels come to the port of Miami because of the completed Deep Dredge and expanded Panama Canal projects. Panama deepened its canal, which allows larger ships to go through. Today PortMiami is the only port south of Virginia that can accommodate the largest ships that are laden and can go through the canal. We are already receiving larger ships transiting via the Canal. What are the expectations for the cruise terminal? What are better ways the port can better its infrastructure? One project that has been approved by the county commission is with Royal Caribbean. They are going to fund, construct, operate and maintain probably the largest terminal in the U.S. It will be able to berth the largest cruise vessels that exist today. That terminal and the commitments from Royal Caribbean, as a 90 | Invest: Miami 2017 | TRADE & LOGISTICS

result of that construction, should take us from about 5 million cruise passengers to 6 million by the fiscal year 2018 to 2019. With the completion of recent projects, such as the Panama Canal project, how has the cargo sector economically impacted Miami-Dade? We are seeing an incredible investment that was put on the table by our elected leadership that allows us to invest in the port. We have received unanimous support from our mayor, our board and our governor, with a commitment of more than $100 million to fund the dredge and other projects. Recent figures say the port represents more than 207,000 jobs with an economic impact of around $28-billion impact. Those numbers were generated when we were doing about 20 percent less volume in cargo and 25 percent less for cruises. We anticipate our economic impact that we will be well above that. What has the PortMiami’s 2035 Master Plan achieved so far? In 2011, the board approved the 2035 Master Plan, and requested installation of additional cranes, which we have completed. They also mentioned the additional cruise ship berths, which we are building. We are beating the projections, particularly on the cruise side. By 2021, there’s going to be close to 7 million passengers per year. According to the plan, Miami was not supposed to experience that many until the late 2020s. This means we have to speed the project up.

TRADE & LOGISTICS OVERVIEW

( ) A December 2016 report issued by MIA indicated that total international freight handled to and from points outside U.S. jurisdiction dropped 1.2 percent from 2015 to 2016 with 1.91 million tons handled in 2015 and 1.89 million tons handled in 2016. Total international cargo experienced a similar decrease of 1.22 percent in volume with 1.91 million tons and 1.93 million tons being handled in 2016 and 2015 respectively. For domestic freight, or freight traveling to and from points within the jurisdiction of the U.S., the amount handled by MIA totaled 288,000 tons in 2016, a 12.09-percent increase from the 257,000 tons handled in 2015. For domestic cargo, MIA handled 314,000 tons in 2016, an 11.92-percent increase from the 281,000 tons that were handled in 2015. Total freight handled in 2016 therefore experienced a 0.37-percent increase from 2015 while the change in total cargo for that period totaled 0.45 percent. Miami-Dade’s geographical position facilitates the handling of this considerable amount of cargo. MIA handles the most international freight of any airport in the world and, being close to Latin America and the Caribbean, controls the longitudinal flow of cargo in the Western Hemisphere. MIA handles 84 percent of all air imports and 81 percent of all air exports for Latin America and the Caribbean, making it a hub for the distribution of crucial products such as perishables, high-tech commodities, telecommunications equipment, textiles, pharmaceuticals and industrial machinery.

Such high levels of activity have prompted MIA officials to apply to the U.S. Department of Commerce to expand PortMiami’s FTZ 281 site to include space within the airport. The application was approved in November 2016 and allows for the movement and processing of goods without the involvement of U.S. customs officials. Users of the MIA FTZ pay no duties on re-exports and exports and also pay no federal excise taxes on imports. Finally, with almost 250,000 square feet of warehousing space and 176,000 square feet of office space available for lease within this FTZ, officials estimate that leasing out such space would generate an annual revenue of some $8 million for the airport.

At almost 2 million tons per year, MIA is one of the world’s busiest international freight hubs.

Policy impact To highlight the centrality of trade to the Miami-Dade economy, Miami business leaders have taken measures to ensure that the roughly 100,000 people who rely on trade for their well-being have the opportunities to move their goods without being subject to costly intervention. In December 2016, officials of PortMiami designated the county’s 79th Street Corridor, an area of the county that is being redeveloped by the 79th Street Corridor Neighborhood Initiative, as an FTZ. The goal of the designation is to help the corridor, an economically disadvantaged urban area, become a nexus for entrepreneurship and innovation in partnership with MiamiDade’s own Green Tech Corridor. Small businesses within the geographical area of the FTZ will reap the benefits

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TRADE & LOGISTICS OVERVIEW

One of the world’s premier carriers, Qatar Airways, launched a new service from MIA in February 2017.

such a designation confers upon an area, such as a reduction in or elimination of Customs duties. The Trans-Pacific Partnership (TPP) had looked to be a key trade deal for the Miami-Dade economy. However, President Trump signed an executive order in January 2017, withdrawing the U.S. from the agreement, which has yet to come into effect. This is of concern for many South Floridians who rely on trade relationships with countries who are parties to the TPP, relationships which in 2014 accounted for $53.9 billion in exports among 14,000 Florida businesses, 90 percent of which employed fewer than 500 people, according to the U.S. International Trade Administration. However, some political commentators have suggested that the U.S. withdrawal might end the TPP. Big pharma Trade in pharmaceuticals is one of cornerstones of Miami-Dade’s economy. In 2016, pharmaceutical exports ranked seventh among exports from the Miami-Dade area in 2016 and contributed $1.12 billion to the Miami-Dade economy. In total, the airport handles $2.95 billion in pharmaceutical traffic, which is the largest dollar amount of pharmaceutical products handled by any pharmaceutical hub in the U.S. International organizations have been recognizing the importance of Miami-Dade’s role in the global 92 | Invest: Miami 2017 | TRADE & LOGISTICS

pharmaceutical industry. In November 2015, the Pharma Certification Program of the International Air Transport Association (IATA) highlighted the safety and efficiency with which the airport’s employees and officials bring to the trade. The IATA certified the airport as a pharmaceutical hub to ensure that global best practices are followed when transporting and handling the high-value and temperature-sensitive pharmaceutical products at MIA. In October 2016, MIA partnered with another IATA certified pharmaceutical hub, Brussels Airport, to create Pharma.Aero, an organization focused on improving the handling of pharmaceutical goods in air cargo worldwide. The airport has become the second airport in the world, behind the Brussels airport, to take the necessary steps to be certified under the IATA’s Center of Excellence for Independent Validators for Pharmaceutical Handling, or CEIV, program. This certification ensures that the companies in the value chain who participate in the movement of pharmaceutical goods will have the means through which to conduct their operation at the highest global standards. Local officials anticipate that the more companies able to be certified under this program, the more the airport will attract businesses from both the U.S. and from untapped markets across the globe. Pharma.Aero will work with key stakeholders in

TRADE & LOGISTICS OVERVIEW

pharma shipping and focus on improving the handling of pharmaceutical goods in air cargo worldwide. Looking ahead Miami is positioning itself to build upon its current standing as global trade and logistics hub. The measures the county has taken to accommodate the increased traffic in trade, provide space for the increased volume of goods, support the workers whose livelihoods are earned through trade activities and train the next generation of trade and logistics workers is expected to be of benefit to the cityâ&#x20AC;&#x2122;s role in global trade in the coming years. For example, the expansion and dredging projects undertaken at PortMiami is accommodating even more ships carrying cargo and further cement its centrality to interhemispheric trade as the only port south of Virginia to have the capacity to handle post-Panamax vessels. In addition to this, the designation of a number of FTZs over the course of the past year have paved the way for a more business-friendly environment that business leaders hope will make Miami a point of entry for goods heading to and from the growing cities of the southeastern U.S. and beyond.

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TRADE & LOGISTICS INTERVIEW

Flight position How Miami International Airport is expanding to better serve the city

Emilio Gonzalez Director & CEO — Miami-Dade Aviation Department capital improvement plan for MIA’s Central Terminal, which began in 2015. Phase I of the TOP includes pre-construction work that began in 2016 to completely replace the baggage screening systems in MIA’s south and central terminals. The project, partially funded by a $101-million grant from the Transportation Security Administration, will double the systems’ current screening speed by installing the latest in Explosives Detection Screening (EDS) technology. MIA is also partnering with U.S. Customs and Border Protection to renovate and re-open the Concourse E international arrivals facility by the summer of 2017. In another innovative approach by MIA, the redesigned facility will be one of the first in the country to screen passengers primarily via self-service technologies such as Global Entry, Automated Passport Control kiosks, and the Mobile Passport Control app.

How will the increased investment in infrastructure lead to sustainable development of the economy? Each daily international passenger flight at Miami International Airport (MIA) generates $33 million annually in business revenue, making international air service one of the biggest drivers of economic development locally and one of our community’s greatest assets. Our infrastructure improvements are focused squarely on international air service expansion. On the heels of successful north and south terminal redevelopment projects, the Miami-Dade Aviation Department (MDAD) is continuing to renovate MIA’s central terminal six of the Concourse E-Satellite’s nine gate areas and its second and third floor lobbies were upgraded and re-opened in 2016. MIA’s Terminal Optimization Program is a 10-year 94 | Invest: Miami 2017 | TRADE & LOGISTICS

What is your strategy to continue expanding into new markets for both passengers and cargo? MIA is continuing its reinvention from being the Gateway of the Americas to a truly global gateway. Three of 2016’s new carriers are European-based, and two more European airlines have announced Miami launches in 2017. MDAD fortified its existing global business ties and established new ones in 2016 by investing in mission trips to strategic locations around the world. MDAD representatives traveled to Dublin, Ireland in June to participate in the International Air Transport Association (IATA) Annual General Meeting (AGM) and World Air Transport Summit, the world’s largest gathering of airline leaders. MIA was one of only a handful of airports in the world invited to attend the event, which drew more than 1,000 delegates. During the three-day gathering, I led an MIA team that met with high-level executives.

Infrastructure, Utilities & Environment: Investment, both from the public and private spheres, is key as the Miami-Dade looks to prepare for a future that holds a growing population and the possibility of rising sea-levels. Power providers are looking to alternative energies and the county continues to work on ambitious projects to protect areas most at risk from flooding.

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Infrastructure, Utilities & Environment in numbers: Florida Power & Light Energy Sources (gigawatt-hours) 2016:

237 Solar

616 Other

1,748 Annual energy interchange

121,620

86,161 Natural Gas

28,033 Nuclear

TOTAL

4,165

660 Source: Florida Power and Light 10-year site plan

Coal

Oil

Projected increase in solar energy usage (gigawatt-hours): 157

2015

237

2016

707

2017

1,995

2018

2,246

2019

2,948

2020

3,634

2021

4,324

2022

5,013

2023 2024

5,558

2025

5,529

2026

5,513 0

1,000

2,000

Source: Florida Power and Light 10-year site plan

96 | Invest: Miami 2017 | INFRASTRUCTURE, UTILITIES & ENVIRONMENT

3,000

4,000

5,000

6,000

INFRASTRUCTURE, UTILITIES & ENVIRONMENT OVERVIEW

Response and responsibility: With one of the largest infrastructure systems in the U.S., Miami-Dade County is focused on growing sustainably With an estimated population of some 2.5 million in 2017, a bustling tourism industry and as an active trade hub, Miami-Dade County infrastructure is a key priority. To that end, a number of projects have been implemented in recent years. For example, the Miami-Dade Water and Sewer Department (WASD) has embarked on a multidecade, multibillion-dollar Capital Improvement Program (CIP) to upgrade facilities and ensure the quality of the area’s drinking water remains at a high standard. The area’s Metrorail corridor is also witnessing an expansion with The Underline, an initiative to promote the use of alternative means of transportation in the county, and Florida Power & Light (FPL), is carrying out improvements on the electricity grid to increase energy efficiency and bring on alternative sources of fuel such as wind, solar and methane. Eco-concerns Miami-Dade is unique among counties in the U.S.

in that it is home to two national parks, a national marine sanctuary, aquatic preserves and water conservation areas. Such a large amount of conservation areas lights the role that the sensitive ecosystem of the area, with its coral reefs, Biscayne Bay, marshlands of the Everglades and pine forests, plays in its appeal to tourists and residents alike. In addition to these preservation zones, the county’s beaches have made it the source of international recognition for decades. Altogether, not only do these natural landmarks support fisheries, wildlife habitats and recreational activities for residents and tourists, they also keep water and air clean and reduce both flooding and erosion. To protect, maintain and enrich these areas, the county has implemented an Environmentally Endangered Lands (EEL) Program which, since its establishment in 1990, has been responsible for bringing more than 20,700 acres of land into the hands of the public and for managing an additional 2,800 acres. However, www.capitalanalyticsassociates.com

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INFRASTRUCTURE, UTILITIES & ENVIRONMENT OVERVIEW

Kerri L. Barsh Shareholder & Co-Chair, National Environmental Practice, Greenberg Traurig, P.A.

Although the impacts of climate change are varied, two of the most important issues for residents and businesses in South Florida are sea-level rise and extreme storm events. But there are also less obvious, although equally important, concerns such as the effects of saltwater intrusion on the potable water supply. In Miami Beach, the local government has implemented a robust stormwater management program to protect from increased sea levels and flooding. The city has also raised roads up to six feet to combat the effects of rising sea levels. One of the challenges of climate change occurs when addressing unexpected consequences. For instance, a restaurant in Sunset Harbour experienced flooding during a torrential downpour and although the street had been raised, the elevation of the restaurant was below the crown of the road. The insurance claim was denied because the area was deemed to be a basement and no longer insurable. The impact on insurance and reinsurance raises critical issues related to climate change. What happens if you can’t insure beyond 15 years because you don’t have accurate projections of the impact of climate change? This issue is likely to have a considerable effect on the affordability of housing in coastal areas and other regions prone to flooding. Miami-Dade County officials have met with representatives of global insurance and reinsurance institutions to discuss methods of identifying and projecting risk, as well as ways to stabilize the market and minimize issues of insurance affordability. Miami-Dade is expected to employ greater usage of public-private partnerships as a means of funding future infrastructure needs, pointing to its recent multi-billion dollar investment in water and sewer infrastructure as one successful, large-scale example. The county is also exploring ways of engaging with the private sector to share the risk, and helping with the financial impact of infrastructure projects over time. Dealing with the effects of climate change will present unexpected issues and unintended consequences that will require considerable ingenuity to address. The success of these initiatives will require local governments and the private sector to work together and take the lead in connection with these critical issues. 98 | Invest: Miami 2017 | INFRASTRUCTURE, UTILITIES & ENVIRONMENT

the most recent request, a $60,000-purchase of 10.56 acres of wetlands, was deferred by the Miami-Dade Infrastructure and Utilities Committee in March 2017. Prepare for the worst Scientific data suggest that sea levels will rise on both the eastern and western sides of the Florida Everglades by as much as 2 feet by 2060, a change which would decrease the living space in Miami-Dade and also damage the area’s infrastructure. A number of measures have been taken to deal with this potential sea-level rise. In 2009, Miami-Dade established the Office of Sustainability for the purposes of evaluating the threats posed by potential climate change and of assessing the planning and response efforts that are already in place. Furthermore, as part of the county’s sustainability plan, known as GreenPrint, the office will develop new measures in addition to the existing ones to tackle these threats. The county has also sought assistance from the National Oceanic and Atmospheric Administration (NOAA) to identify the short- and long-term steps that should be implemented to mitigate the effects of flooding and sea-level rises. NOAA has advised Miami-Dade and adjacent counties in developing the Digital Coast in Action data set to assist them in implementing a regional climate change plan. The $100-million flood prevention project for the City of Miami Beach involves a series of measures including the raising of roads and the installing of pumps and new water mains to mitigate the effect of increased sea levels. Expected to start in fall 2017, many residents of the affected areas have voiced concerns about the project increasing the likelihood of flooding on their properties as raised streets are kept dry. Miami Beach has already spent 300 million on pumps in a project that was acknowledged by President Obama in a visit to the Florida Everglades in 2015. Miami-Dade has also become a hub in recent years for private-sector involvement in the fight against potential climate change. Companies v. Climate Change (CvCC), a media and events company, hosts an annual event which was first held at the Hyatt Regency in the City of Fort Lauderdale from November 30 through December 2, 2016. The event is focused on uniting companies around the common goal of providing solutions to the problems posed by climate change to the world’s cities. The 2016 event featured speakers representing a diverse array of companies such as Citigroup, Avery Dennison, Bacardi, Alaska Airlines, Office Depot, Subway and Walgreens. CvCC will hold another conference at the same time in 2017 to highlight how

INFRASTRUCTURE, UTILITIES & ENVIRONMENT OVERVIEW

companies cannot only implement measures to help cities cope with climate change, but also how such measures can improve business performance. Even flow WASD serves nearly 2.3 million residents as well as thousands of visitors daily over 400 square miles. The system has an average daily flow of water and wastewater of 303 million and 315 million of gallons respectively, as well as a treatment plant capacity of 461 million and 375 million gallons per day for water and wastewater respectively. It is the largest water and sewer utility in the southeastern U.S. The most notable development in the areaâ&#x20AC;&#x2122;s water infrastructure is the continual investment in the largest CIP in the countyâ&#x20AC;&#x2122;s history. Announced in September 2014, the 15-to-20-year undertaking requiring roughly $13.5 billion in investment will create an anticipated 16,470 new jobs during the first decade of its implementation to generate a projected $24.9 billion in economic activity for the county. The CIP consists of three sub-programs for infrastructural improvements and investments that will be implemented by the WASD: Consent Decree Program Management Construction Management (CD-PMCM), the Ocean Outfall Legislation (OOL) and the Pump Station Improvement Program (PSIP). The main goals of the CD-PMCM are to spend roughly $1.6 billion in improvements over 15 years, to ensure that these improvements comply with Environmental Protection Agency standards and to formulate a small business plan which will target small businesses in the Miami community, whose trades are suited to the improvements. CD-PMCM will also implement a local workforce program that will encourage the participation of Miami-Dade residents in the trades and skills needed for the improvements. The OOL Program will also engage small businesses as well as local residents in addition to requiring the completion of roughly $3.3 billion worth of projects over 11 years as well as the design and construction of a West District water treatment plant with a capacity to handle 102 million gallons per day. Finally, the PSIP, a five-year improvement program, will complete 136 pump station and force main projects as well as sewer system repairs, all of which are worth roughly $212 million. As of February 2017, WASD had already invested $772 million in projects and upgrades, an investment which has created $1.1 billion in assets for WASD with 775 projects being completed either on-time or ahead of schedule and 861 still in the pipeline.

Jose R. Mas CEO, Mastec

Consumer demand is an important driver of infrastructure development and what MasTec undertakes as a company. Telecommunications is a good example because it is not highly regulated like energy or water, and there is a lot of competition. Municipalities want their residents and businesses to have the best services and best internet speeds, so it is not difficult to get permission to build infrastructure. Local governments are also open as to how they deal with telecommunications companies. This is one of the main areas of infrastructure improvement. While the continued roll out of 4G has been a big driver of growth, there has also been a lot of activity in fiber-to-the-home infrastructure. The desire for increased internet speeds means fiber lines are an important product for us. More and more is being doing over the internet, so consumers are demanding higher speed at home. This is driving our business. Companies such as AT&T have been providing normal internet speeds of up to 50 Mbps. However, in the past year, a new product has come on the market, Gigabit Speed, which is 1,000 Mbps. AT&T already has significant infrastructure in the state because it has provided telephone lines for more than 100 years. Over time it has improved lines, eventually building internet infrastructure which has the main backbone of optical fiber lines, with the lateral, coaxial cables connecting homes and business. The next move is improving this with fiber lines to homes and businesses replacing coaxial cables. A lot of money is spent doing this work in Florida. New fiber infrastructure, called fiber-to-home, provides substantial speed improvements. The same demands are transferring over to the wireless space with mobile technology. This is where 5G will come into play, which is being discussed by all the major telecoms providers. It could be starting as early as 2018. This is a huge driver for our business and the infrastructure sector in general. www.capitalanalyticsassociates.com

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Power play The cost of electricity went down for households in the Miami metropolitan area in 2016. According to a December 2015 study conducted by the Bureau of Labor Statistics, households in the Greater Miami area paid an average of 10.8 cents per kilowatt-hour of electricity in November 2016 compared with 11.6 cents for the same amount in November 2015. Furthermore, according to the same study, electricity prices in Greater Miami for November 2016 were 17.6 percent lower than the average rate for electricity across the nation, which was valued at 13.1 cents per kilowatt-hour. FPL, a subsidiary of NextEra Energy, which serves roughly 10 million people across the state, is the main provider of electricity to Miami-Dade. In 2016, the company invested more than $50 million in Downtown Miami to improve electricity transmission and distribution to both adjust for the recent boom in downtown construction and to strengthen the grid so that it can provide electricity to both residents and large-scale facilities such as PortMiami in the event of a natural disaster. Furthermore, the company has averaged $3 billion in investment in the state per year for the past six years to create one of the most advanced smart grid in U.S. The system can inform the company of problems in the grid before they happen, a development which, among other things, has allowed the company to reduce its consumersâ&#x20AC;&#x2122; bills by 14 percent from 2006. Finally, in 2016, the company added

alternative sources of electricity to its grid by installing more than 1 million solar panels with a capacity of 225 megawatts. FPL also owns Turkey Point Nuclear Generating Station, the largest generating station in Florida and the sixth-largest power plant in the nation in terms of both power capacity and electricity generated. The plant, which has been operating at Homestead, a city in the south of Miami-Dade, has been supplying the area for more than four decades. Though it has come under fire in recent years for the potential threat it poses to the waters of Biscayne Bay, which provides a source of drinking water for much of South Florida, the plant has implemented a plan to remove 15 million gallons of hypersaline groundwater per day. FPL will install a network of wells for this purpose and to freshen its canals of cooling water with 14 million gallons per day of water from the saltier Floridan aquifer. The State of Florida announced that it was ready to approve the plan in March 2017, however, environmental organizations have raised concerns that it could cause additional environmental harm to the Everglades.

Miami-Dade has been looking to wind, solar and methane gas as alternative sources of energy.

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The alternative Wind, solar and methane gas have been considered as potential alternative energy sources for Miami. The county has received millions of dollars in federal Recovery Act funds to support its Energy Efficiency and Conservation Block Grant (EECBG) program, which ( )

INFRASTRUCTURE, UTILITIES & ENVIRONMENT INTERVIEW

Smart energy How Florida Power & Light is investing in infrastructure to increase efficiency

Eric Silagy President & CEO — Florida Power & Light Company What have been the most important milestones for Florida Power & Light Company (FPL) in 2016? This past year, in Miami, we invested more than $50 million in transmission and distribution in the Downtown area. The Miami construction boom has been tremendous, but it has also created a lot of challenges. A lot of planning needs to be done in advance to be able to meet the needs of the new developments. That’s why we try and work really closely with the developers, the city and the county to be able to understand what is going to be happening in the next six to 12 months – and even beyond– so we can anticipate and execute the proper investments in an orderly and efficient way. We have to find the right balance so we can have growth that is done in a way that is the least impactful to residents as possible, but also provides future opportunities for those who live and work in Miami. Another factor that we need to take into account is being prepared for hurricanes. It is very important that we continue to be able to respond quickly because otherwise, the economic damages could be far worse than the physical ones. For example, electric cranes operate PortMiami, meaning they need electricity to operate reliably. If the power goes out due to a storm, the port stops operating, which is why we made important investments to strengthen the infrastructure of the port. What has been the impact of the smart grid technology in Florida’s electric grid? We have one of the smartest grid systems in America. Smart grid technology has completely changed the way we see and operate the electric grid. All customers have smart meters, except a small handful that specifically requested not to have them. We have invested a significant amount of resources in technology that now allows us to anticipate possible problems with the grid. The electric grid sends us signals about how it’s

operating in real time, showing us what possible failures we could experience so that we can correct them before a problem occurs. We are also using mini-drones to identify certain problems that arise. Once the drone shows us what exactly the problem is, we are able to go in with the correct resources to fix it. This allows us to approach day to day issues proactively instead of reactively, saving a lot of time and money, which helps to keep the electricity bills low. On average, we have been investing in Florida around $3 billion per year over the last six years; in 2016, we invested more than $3.5 billion, and in 2017 we plan to invest more than $5 billion. Yet, in the last 10 years, our bills to customers have gone down 14 percent – primarily because the efficiency gained through technology and process improvements provides greater benefits than the cost to invest in it. www.capitalanalyticsassociates.com

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( ) is administered by the U.S. Department of Energy. The 12 initiatives that the EECBG Program provides assistance to include a countywide energy efficiency campaign to change the culture of energy consumption, a Grants to Green Nonprofits (G2GN) program that gives small business nonprofits financial support in performing energy audits and upgrades to facilities in order to enhance their energy efficiency. They also include a methane sequestration program from landfills and other waste facilities that will provide 33,500 kilowatts of power per year and a program for powering county buildings using solar panels. A number of private companies have also taken steps to increase the presence of alternative energy production and storage in the county. For example, in June 2016, Conergy, one of the world’s foremost solar power companies whose design, finance, construction and asset management activities have been involved in the construction of solar facilities that produce more than 1.5 gigawatts worldwide, relocated its U.S. headquarters from Denver to Miami. According to The Beacon Council, Conergy’s CEO Andrew Pass cited the diverse composition of the city’s population as well as its proximity to and relationship with countries in Latin America as the motivation behind the move. Also in June 2016, FPL announced that it would install many different varieties of battery systems in Miami-Dade and Monroe counties to research the potential of energy storage technology for South Florida, a technology which could help integrate more renewable sources of electricity into the grid. Solar power would particularly benefit from this type of storage technology, as energy generated by solar panels is often produced in excess with no way to store and reuse it when it is needed. Despite this, solar panels are being installed across the county. For example, the roof the IKEA store in Sweetwater is outfitted with a 178,000-square-foot array of solar panels which can generate enough electricity to power 169 homes per year and reduce CO2 emissions from coal and fossil fuels by roughly 1,227 tons per year. “Solar power has many advantages and we have made important investments in this area, installing more than a million panels in 2016 at three different solar projects for a total of 225 megawatts,” Eric Silagy, president & CEO of FPL told Invest: Miami. He added that “it has limitations such as the fact that it can’t provide power to the grid 24/7. We cannot generate power at night using solar panels and battery storage technology is not where it needs to be today to be considered a viable, economic solution.” 102 | Invest: Miami 2017 | INFRASTRUCTURE, UTILITIES & ENVIRONMENT

The prospect of a sea-level rises is a very real one in Miami-Dade, and much is being done to mitigate the effects.

Stay in communication As the “Gateway to Latin America,” Miami-Dade plays an important role in telecommunications infrastructure in the Western Hemisphere. With cloud-based applications gaining in popularity, so have both storage needs and rates for data throughput, which in turn increases demand for data centers. According to The Beacon Council, the City of Miami ranks among the top five in connected cities worldwide, a fact which, due in no small part to its advantageous geographical position, has cemented its position as the leading international gateway for voice, video and data traffic to Latin American destinations. Verizon Terremark’s NAP of the Americas, a 750,000-square-foot, Tier-IV facility, was the first carrier-neutral, purpose-built NAP or Network Access Point and serves as the only facility which is designed specifically to connect Latin America with the international community. This NAP, along with other data

INFRASTRUCTURE, UTILITIES & ENVIRONMENT OVERVIEW

centers such as Telefonica USA’s Key Center, supplies the region with the telecommunications infrastructure that brings together and provides operation support for global carriers, internet infrastructure providers, government agencies, education institutions and largescale businesses. Moreover, local data centers such as ColoHouse, Miami Data Vault, QTS, Telx MIA1 and zColo provide similar services for companies who may not have the data needs of such large-scale institutions. Urban connections Construction on The Underline, a 10-mile-long linear park and urban trail which runs underneath the city’s Metrorail and will create a corridor through which various modes of transportation can move freely throughout the city, is slated to begin in fall 2017. Conceived in 2013 by Meg Daly, a Miami-Dade resident and guided by a master plan formulated in December 2015 by James Corner Field Operations, this massive undertaking

has the multifaceted goal of connecting communities, improving pedestrian and bicyclist safety, creating open space, restoring natural habitats, encouraging healthier lifestyles for the city’s residents by providing easy access to exercise facilities, creating a canvas as long as the trail for artistic expression, attracting development along US-1 and generating a considerable economic impact. “Our impact zone is a third of a mile in each direction, reaching thousands of residents. Anyone with access to the 26 miles of transit, within walking distance, can get to one of the public parks without the need for a car. We interphase with one university, 24 schools, two hospitals and three major malls, one of them being Dadeland.” Daly told Invest; Miami The construction of The Underline is guided by three pillars – transportation, restoration and reforestation of the urban core and public art. Projected costs for The Underline are $120 million to $130 million with $80 million going to the two trails, lighting, seating and other items, $20 million to the improvement of more than 30 intersections and another $20 million slated for parks which will be added to the trail. The project is low in costs in comparison to the Atlanta Beltline, which will cost $4.8 billion. A study undertaken by HR&A Advisors estimates that The Underline will generate $170 million in economic output during construction and $50 million per year once complete. It will create an estimated 1,000 jobs for construction and another 400 annually once completed as well as raise the property value of lots directly abutting the corridor by 25 percent, an increase that could result in an additional $120 million to $200 million in new tax revenue during the next 20 years. Looking ahead Climate change will constitute the most formidable challenge to development in Miami-Dade in the years to come. To meet these challenges, some local area leaders have taken steps to adapt to the potential rise in sea levels, such as Miami Beach Mayor Philip Levine, who in 2016 announced a plan to invest $400 million in developing valves and pumps to drain water from the city as well as raised roads to keep thoroughfares from flooding. Furthermore, with the population of Miami-Dade expected to expand to 3.02 million people by 2025, meeting the demand for drinking water and wastewater treatment will be of utmost importance. As more new construction projects are undertaken to accommodate this growing population, finding a balance between the area’s sensitive ecosystem and an increased human presence poses a formidable challenge to county officials. www.capitalanalyticsassociates.com

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Overtown: One of the oldest neighborhoods in Miami, Overtown has seen its fortunes rise and fall over the years, going from a vibrant cultural center, to an area plagued by slum and blight. A new emphasis on constructive investment that both benefits the economy of the city while celebrating its rich cultural heritage will bring jobs, visitors and a new era of prosperity to the area.

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Things are cooking in Overtown: The tide is turning for one of the countyâ&#x20AC;&#x2122;s most culturally important neighborhoods For years, Overtown has suffered from the lack of economic development, private investment and unemployment. However, in recent times, the area has experienced a renaissance, building on its rich heritage and enthusiastic arts community. The local government has catalyzed meaningful investment into the neighborhood, transforming Overtown into a hotbed of cultural and economic activity. Financing mechanisms from both the county and the city provide tax dollars that are being injected into infrastructure, while improving the local environment and creating much-needed jobs for residents. Overtown is an area of the City of Miami that predates the city itself, and its potential is being rediscovered through a variety of redevelopment projects. Situated roughly south of NW 20th Street, north of Northwest 5th St., east of the Miami River and the Dolphin Expressway, and west of the Florida East Coast Railway and west of 1st Ave. The 1.32-square-mile neighbor106 | Invest: Miami 2017 | OVERTOWN

hood is home to roughly 22,000 residents, a number which has grown by 4 percent since 2010. The population is split 50-50 between men and women with the median age of 36. The median annual income of those in the age range of 25 to 44 is $30,713 and those between 45 to 64 is approximately $20,000. The neighborhood is also one of the most economically disadvantaged in Miami and Miami-Dade County. As such, numerous redevelopment initiatives have been initiated in an effort to reinvigorate this once-vibrant area in the heart of the city. History Overtown is one of the oldest neighborhoods in Miami and is extremely important in understanding the cityâ&#x20AC;&#x2122;s African-American history. Henry Flagler, a railroad magnate and oil tycoon, was one of the earliest developers of Miami. In the early 1900â&#x20AC;&#x2122;s, he built the first highways in the city along with luxury resorts and the

OVERTOWN OVERVIEW

Overseas Railroad, which linked the Florida Keys to mainland Miami. Even before 1896, the year in which the City of Miami was incorporated, Overtown housed the black laborers whom Flagler employed on these projects. From the 1930s through the 1950s, Overtown was known as “The Little Broadway of the South” due to the high-profile artists and musicians that often visited and performed in the community. However, during the 1960s, the neighborhood went into sharp decline following the construction of two large highways that ran through the neighborhood’s center. This construction resulted in the razing of more than 20,000 homes and a sharp reduction in population from 50,000 residents, before the highways were built, to fewer than 10,000 as businesses left the neighborhood and economic activity ground almost to a halt. Today, the neighborhood’s Black Archives History & Research Foundation of South Florida Inc. (Black Archives) is revisiting Overtown’s vibrant history as well as its role in the cultural development of the Miami area.

The CRA offers four types of economic development incentives: a Direct Grant Program (DGP); a Tax Increment Rebate Program (TIRP); a Commercial Facade Improvement Program (CFIP); and technical assistance. The DGP provides direct funding to commercial properties and multifamily developments in the form of a grant. The TIRP is limited to large scale developments and provides a reimbursement to the developer for up to 50 percent of the capital costs of their project once completed. The CFIP provides funding to applicants that wish to undertake exterior improvements to their properties like new sign installation, awnings and painting. As far as technical assistance is concerned, the CRA helps facilitate, among other things, assistance with project permitting, reviews and waiver requests with the City of Miami Building Department. The CRA also assist with grant writing and provides access to small business loans that originate through strategic partnerships. A number of grants have been issued by the CRA to organizations in Overtown to assist with job readiness and placement among other things. For example, in May 2016, $165,000 was granted to Miami Dade College to operate and manage its Hospitality Institute Job Training and Job Placement Program. In March 2017, the CRA issued a grant to Suited for Success worth $112,000 to help the non-profit to continue to operate its employment skills training program that provides participants with free professional attire to utilize for interviews and the workplace. Another $320,000 was awarded to Human Resources of Miami Inc., which operates the Overtown Beautification Team Program that beautifies the NW 3rd Avenue business corridor and also offers on-the-job training for landscape services and property maintenance. In March 2016, $500,000 was granted to the Black Archives for its continued operation of The Black Archives Historic Lyric Theater Cultural Arts Complex. Finally, in March 2017, a $200,000 grant was approved by the CRA to Neighbors and Neighbors Association to manage the Business Incubator and Development Program at the Overtown’s Business Resource Center. The center provides technical assistance, workshops and training, office services, assistance with identifying capital funding sources and business mentoring partnerships for small businesses and residents within the CRA.

From the 1930s through the 1950s, Overtown was known as “The Little Broadway of the South.”

Community focus The Southeast Overtown/Park West Community Redevelopment Agency (CRA) was established in 1982 in accordance with the State of Florida’s 1969 Community Redevelopment Act. Its goal is to spearhead new development and redevelopment efforts that provide affordable housing and business opportunities and to enhance the quality of life of those who reside in the redevelopment area (RA). Furthermore, it is also tasked with improving the public health, safety, morals and welfare of the stakeholders and residents in the RA. The CRA is funded through a unique financing tool called Tax Increment Financing, which earmarks a specific portion of property tax dollars collected by the Miami and Miami-Dade. The CRA then reinvests these funds into projects such as infrastructure improvements, renovations of buildings, facade enhancements and the establishment of economic incentive programs within the RA. Finally, the CRA is able to purchase and develop property within the RA, and invest in public parks and spaces. The governance of the CRA is undertaken by the CRA Board, which is comprised of the City of Miami Commissioners, and the policies for redevelopment are enacted by the board’s executive director; a position that is currently filled by Clarence E. Woods.

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OVERTOWN INTERVIEW

For the people How the Southeast Overtown / Park West Community Redevelopment Agency (SEOPW CRA) is making the city a better place to live

Keon Hardemon Chairman — Miami City Commission Chairman — Southeast Overtown / Park West Community Redevelopment Agency Board investments in improving businesses. The restoration of Overtown’s historic Josephine and Dunn Hotel is an example of this effort. The formerly dilapidated structure will now operate as a bed and breakfast. We are taking community assets that were in disrepair, repairing them and providing destinations for visitors to come and experience Overtown. The development of the Overtown community also encompasses the development of its people. Here in the CRA, we have made a substantial amount of investment into job training for our residents. Programs such as Hospitality Employees Advancement and Training Inc. provide a curriculum for Food and Beverage, Culinary and Hotel Operations. This initiative will help to enhance resident’s ability to secure employment opportunities in South Florida’s growing industries.

What are Overtown’s current major needs and how is the CRA and the board overall addressing them? The needs of the Overtown community varies – affordable housing, infrastructure, and job training are the foundation. The CRA has invested millions into enhancing the quality-of-life. The agency is responsible for the creation of several new affordable housing developments, such as Island Living, Courtside Apartments and Plaza at the Lyric. In addition to creating new housing stock, the agency works to preserve existing structures. Town Park North, South and Village are housing communities that are recipients of the CRA’s rehabilitation grants that will restore and enhance the homes. This effort is intended to preserve homeownership within the community. In addition to housing, the CRA has also made 108 | Invest: Miami 2017 | OVERTOWN

What are Overtown’s plans for the workforce housing segment? To me, workforce housing should be affordable housing because affordability is relative. Individuals such as our young attorneys, government employees, and educators struggle to pay market rate for housing. People who work, need an affordable place to live, that’s safe and appears in the same light as market-rate units. The CRA has plans to develop these types of properties. We have issued bonds that will generate funds to go towards developments. We also have financing that we are capturing money from through the development that’s happening with Moishe Mana in Wynwood. That will result in contributions upwards of $7 million. In the CRA, we are always looking at ways to involve new partners. Anytime we do a new development, we want to increase the number of housing units. The affordability part of the development, for the market and for the workforce is important to that mix.

OVERTOWN OVERVIEW

Housing initiatives There are three existing multi-family housing developments in Overtown that are currently being renovated by the CRA. They are: Town Park Plaza North, Town Park Plaza South and Town Park Village No. 1. The CRA has invested $15 million in Town Park Plaza North, which was erected in the 1970s and has endured decades of deterioration. It consists of 20 buildings and 169 condominium units and, upon its completion, will feature new doors, windows, central air systems and appliances, renovated landscaping, and upgrades to the water and sewer lines. Town Park Plaza South has received a $13.5 million grant from the CRA. Built in 1971, it is also in need of repair and will include external and internal renovations similar to the ones taking place at Town Park Plaza North for its 116 units. Finally, the CRA has granted $1.5 million to Town Park Village No. 1 to cover partial renovations of the 147 Housing and Urban Development Cooperative Apartments. In addition to Town Park, there are four new affordable housing developments that have been granted a total of $43.5 million in funding by the CRA. The smallest grant of these four, totaling $7.5 million, went to Courtside Family Apartments, a midrise Affordable Housing Development which features 84 one, two and three bedroom units which are available to families earning no more than 60 percent of the area’s median income. Island living at 1201 NW 3rd Avenue received $9 million in funding from the CRA and features 70 units with 5,000 square feet of retail space on its ground floor. The CRA also provided $10 million in funding for 90-units at St. John’s Plaza, which will feature a day care center for residents in addition to its own retail space of 8,000 square feet once completed. Finally, the CRA provided $17 million in funding for the 158-unit Affordable Housing Development known as Plaza at the Lyric. In addition to the 11,000 square feet of commercial space on its ground floor, the Plaza at the Lyric features two separate standalone buildings, a parking garage lined by townhouses, a playground, community room, gym, computer room and library. Furthermore, the CRA mandated that during construction, the general contractor hold job fairs and provide training for individuals that included an internship program to officially certify them for the trades in which they are trained. Large-scale developments There are a number of high-profile developments currently being undertaken in Overtown, including Miami Worldcenter, and a station for All Aboard Florida’s, commuter rail service Brightline.

Clarence E. Woods Executive Director, Southeast Overtown / Park West Community Redevelopment Agency

The Community Redevelopment Agency (CRA) was created by state statute and our governing bodies are Miami-Dade County and the City of Miami. As such, the mission of the CRA is to eliminate slum and blight. Behind that, the mere elimination doesn’t paint the full picture. We are eliminating slum and blight in an effort to incentivize private investors to come and build projects that would increase the tax base. This would eventually provide more taxes so that we can continue to make investments that will improve the quality of life for the residents of the CRA. The CRA receives funding from both the city and the county through ad-valorem taxes. The county’s portion of those ad-valorem taxes is about 39 percent and the city’s portion is 61 percent. Being within the city, we are a municipal CRA and our board members are the five commissioners of the City of Miami. Any redevelopment efforts that we undertake is approved by our board, from the City of Miami commission. They are more hands on and they help create the vision for where we’re going with our redevelopment efforts. But because we also get funding from the county, the county approves our budget as well. We also have a working relationship with the county commissioner for this area. With the strategic location of Overtown, the CRA has been able to successfully attract large scale projects such as Miami Worldcenter and All Aboard Florida’s office headquarters. This is due to our proximity to Downtown Miami, the beaches and the airport that are also close to Overtown. Modality is a factor because Brickell, Miami Beach and the airport are all places within 30 minutes or less from Overtown. This attracts our partners. The land right now is also the least expensive in the area. The CRA also has the ability to provide incentives for their projects. We have tools such as tax increment financing, bond issuance and assistance with permitting. Additional tools include infrastructure upgrades, as well as land assemblage for large scale projects.

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Miami Worldcenter The development of Miami Worldcenter is being conducted by Miami Worldcenter Associates, a joint venture between Falcone Group, CIM Group and Centurion Partners. Its goal is to transform the Park West area and to create a bridge between the Central Business District and the Arts and Entertainment District that will to generate the demand pedestrian friendly activities. The development will sit on 27 acres near Downtown Miami and will feature 450,000 square feet of retail, 2,000 residential units, 1,700 hotel rooms, 600,000 square feet of exposition space, and 100,000 square feet of parks and public space. The center’s main point of interest will be its retail promenade, which will include high street shopping, dining and entertainment options and will be developed by the Forbes Company and Taubman. The residential component of the center will include a mix of luxury condominiums,

boutique hotels and market-rate apartments. It will have four towers: the 700-foot high PARAMOUNT Miami Worldcenter, which will house more than 500 residences; LUMA, the 429-unit luxury rental tower developed by Orlando’s ZOM and two other towers lining northeast 7th Street offering 863 market-rate rental units. The completed project is predicted to be worth $2 billion.

The Miami Worldcenter will transform the Park West area and connect the business and arts districts.

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Brightline Brightline is a South Florida rail service operated by All Aboard Florida, a subsidiary of investment company Florida East Coast Industries that connects Miami to Orlando. The Brightline station that will come to Overtown will be part of a complex known as 3 MiamiCentral and will feature 20 restaurants and food stalls that showcase local companies in a marketplace known as Central Fare. Around and below this, 130,000 square feet of shops will occupy the property’s street level while above the marketplace there will

OVERTOWN OVERVIEW

be two residential towers with 800 rental apartments as well as an office high-rise. A grocery store will also be situated beneath the garage, and above the garage, there will be more office buildings which will house, among other things, All Aboard Florida’s new office headquarters. The construction of the station will impact the community’s economic activity as more trains and businesses come into the neighborhood. MLS Stadium The proposed construction of David Beckham’s MLS stadium will be a landmark for Overtown. After failing to secure a spot for the stadium near PortMiami, Beckham and his investors have purchased about 9 acres of land for $18.95 million between NW 6th and 8th Streets and NW 6th and 7th Avenues just north of Overtown’s stretch of the Miami River. The stadium will seat roughly 30,000 fans and cost an estimated $200 million to construct. According to a November 2016 report, the plans to construct the stadium are already having a positive effect on real estate values in the neighborhood and are attracting high-profile residential and hospitality investors. Challenges Despite the redevelopment that is taking place in the neighborhood, the challenge of renovating dilapidated buildings and eliminating crime still exist. To tackle crime-related issues, the CRA has signed an agreement with the City of Miami Police to establish a six-member problem-solving team, known as the CRA police. Because development increases property values, there is concern that residents will not be able to afford the properties they once lived in after the renovations are complete. To combat this, there are land-use restrictions on many of the new and existing developments that mandate that the properties remain affordable for 50 years after completion. Community boost Positive actions are being taken to create an atmosphere of positivity and tackle unemployment. Known as “the Blue Shirts” because of their distinctive bright blue t-shirts, the Overtown Beautification Team is part of a program to create employment opportunities and improve the environment of Overtown with regular maintenance and street cleaning. The program is sponsored by the CRA, which in March 2016 voted to increase the hourly wage of participants from $11 to $15 per hour. Started in 2011, participants of the Overtown Beautification Team also receive support in financial

Ola Aluko CEO & President, St. John Community Development Corporation

St. John Community Development Corporation (CDC) was founded by St. John Missionary Baptist Church in 1985. It was founded on the premise to help rid slum and blight in Overtown and to economically empower its residents through development. This long-awaited project will help fill the gap of the much needed “quality” affordable housing stock in Overtown. Much development is occurring around Overtown and projects such as this, within Overtown, will not only serve the residents, but also provide them with a sense of pride and empowerment knowing that they too can live in quality residences. St. John Plaza Apartment has a mix of efficiencies one-, two- and three-bed room apartments. We want to ensure that we cater to the vast array of families – such as the single mothers, single individuals and large families – all who need accommodation. A plus with St. John Plaza is that there is a child-learning center serving children from one to five years old which will be used as a feeder institution into the neighboring elementary schools. We are promoting ourselves as a “true community builder” and will remain in Overtown after the project is finished. We have to ensure that we produce a product that the community can appreciate and enjoy for years to come. Following our objective of empowerment, St. John Town Homes I was designed to enable the ownership of townhomes. It was a way to get those born in Overtown, or those with a close association, to move back and own in Overtown. With St. John Town Homes II we are mirroring that concept; however, as a workforce and affordable housing complex. As a community developer, we have heard the cry by many stating that they are over qualified for affordable housing, but cannot afford market rate housing as it’s offered today. There is a serious need for workforce housing in the Miami-Dade Downtown area. Those who work downtown want to live within minutes from work, but are unable to. Our response to the need is to develop a workforce and affordable housing mix.

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management, soft skills training, counseling and assistance in transitioning into full-time employment. The developers of Miami Worldcenter has also earmarked local employment opportunities as an essential part of a community benefits agreement. Local residents are encouraged to attend ongoing job fairs for possible employment. Applications are accepted from local skilled workers, such as plumbers, carpenters and painters as well as unskilled positions. Altogether, the project is expected to create 33,500 jobs. The Overtown Business Resource Center is a shared office space designed to offer help, advice, technology and facilities to small businesses and individuals looking for employment opportunities. Supported by the CRA, its business incubator program, provides wifi, business-related workshops and technical assistance for startups. The center also offers a Community Workforce Training Program which consists of screening services, work placement and referrals for Overtown residences. Art and culture The CRA, along with other community organizations, have taken steps to preserve and showcase the colorful cultural and artistic heritage of Overtown. The Black Archives is an organization within Overtown with the goal of preserving and documenting the photographic history of black culture in South Florida. Founded in 1977, by Dorothy Jenkins Fields, it houses manuscripts, typescripts, electronic media, photographs and its archives are open to professional and amateur historians. The Black Archives research center is housed in another cultural landmark of Overtown: The Black Archives

Overtown’s historic Lyric Theater has been a prized centerpiece of the community for more than a century.

Historic Lyric Theater Cultural Arts Complex. Founded in 1913 by Geder Walker, a black community businessman, it featured gospel, jazz, vaudeville plays, stage/ film performances and the literature of the Harlem Renaissance. It was renovated in 1999, and in 2005, the theater was expanded to include a welcome center, concession stand and dressing rooms. A third expansion took place in 2012 under the Black Archives’ current Executive Director Timothy A. Barber, and included a research center, stage expansion to augment the stage capacity of the theater and a gift shop and exhibition hall. In December 2016, the Black Archives Historic Lyric Theater Cultural Arts Complex partnered with the

Nitin Motwani Principal Associate — Miami Worldcenter

I’ve been involved with the Miami Worldcenter project for almost 11 years, and the reality is that we could just sell the land to condo developers. If that was the plan, Overtown would look like many other parts of downtown. We feel that when you own 30 acres in the middle of a city, you have a responsibility to its residents. We’ve always envisioned wider, 18- to 35-foot sidewalks that allow people to run, walk, push strollers, ride bikes or sit outside and enjoy the weather. We’re planning for great public spaces in which people can get fresh air and we want to improve infrastructure that hasn’t been improved in decades. We need to continue to invest and not take the opportunities in Miami for granted.

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OVERTOWN OVERVIEW

Urban Collective to host an exhibition of contemporary art from the global African diaspora as part of the Soul Basel arts event. Soul Basel is a collaborative effort between the CRA, community organizations and the Greater Miami Convention & Visitors Bureau Art of Black Miami, to showcase black art exhibitions in Overtown during Miami’s Art Basel Week. From November 2016 to February 2017, it hosted “Visions of our 44th President”, a retrospective of pieces featuring and inspired by President Barack Obama. Regular programming includes the “Lyric Live” Amateur Night Showcase, held on the first Friday of every month. During the event, contestants share their talents on stage and receive either boos or an applause from the audience. The monthly showcase includes live music and performances from an authentic Junkanoo Band and the annual “South Florida Marching Band Precision Camp,” which is a chance for student musicians from 13 to 18 to receive music lessons and perform at the end of the one-week course. Overtown’s Folklife Village will be a four- to sixblock cultural entertainment destination, inspired by the history of Overtown. The area will feature a mixed-use marketplace with art, retail, restaurants and live entertainment. Overtown is also hosting a series of installations from the Perez Art Museum Miami (PAMM) from April to May 2017. The installations come to Overtown as part of a grant that a local community group, the Urban Collective received as part of the Inside|Out program, which is funded by the John S. and James L. Knight Foundation. Works by artists such as Colombian Fernando Botero and Haitian-born American Edouard

Duval Carrie are featured in the exhibition. The CRA also funds the annual Overtown Music and Arts Festival in partnership with Headliner Market Group. Free to the public, the festival was started to highlight the history, culture, music and arts of the community, as well as create vending opportunities and attract investment to the area. The festival has been running for seven years and includes live performances by nationally-known recording artists and local musicians and a vast array of vendors showcasing artwork, ethnic cuisine, unique crafts and jewelry, and an expanded youth zone with interactive arts activities for children. The 2017 event will be held in July in the Overtown Business District. The previous years’ attendances have reached more than 10,000 people and featured performances from Grammy-nominated vocalist Ameriie, and Grammy-winning UK musician Estelle. The Sweet Butter Miami Pop-up and Dinner show is one of the unique events held at newly renovated Overtown Performing Arts Center. The event combines a four-course meal of southern and New-Orleans style cuisine with a show featuring dancing and live music. Looking ahead With both housing and business development initiatives in place, the goal of the Overtown CRA is to continue to improve the lives of residents in the redevelopment area. As housing becomes more available in Overtown, the CRA will look to bring in residents that have more disposable income that can drive the need for goods and services and create a nightlife for Overtown, which has been absent from the community for more than half a century. With the boom of crowd-drawing events, along with the recognition of historic landmarks such as the Black Archives Historic Lyric Theater Cultural Arts Complex, Overtown is rediscovering its soul. Strategic investments in transportation, infrastructure and essential housing; bolstered by the renewed economic interest in the city with large projects popping up should mean that the current growth of the area will not lose momentum. As anyone at the Sweet Butter Pop-up Dinner Show will tell you, Overtown really is cooking.

Capital Analytics would like to thank the Southeast Overtown/ Park West CRA for its contribution in compiling this chapter. To learn more, visit their website www.miamicra.com/seopwcra

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Banking & Finance: With a Federal Bank interest rate increase in March, small businesses thriving, more investment coming in from overseas and a real estate market in recovery, banks and other financial institutions in MiamiDade County have a raft of opportunities ready for the taking.

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Banking & Finance in numbers: South Florida midrange bank by asset ($500 million-$1 billion) banks, second quarter 2016, ($ million):

Banesco USA

987

U.S. Century Bank

885

Helm Bank

750

Biscayne Bank

737

677

Coconut Grove Bank

613

The First National Bank of South Miami

543

Apollo Bank

Brickell Bank

515 0

Assets ($, ‘000s)

250

Loans ($, ‘000s)

500

Net Income ($, ‘000s)

Deposits ($, ‘000s)

1,000

Non-current Loan Ratio (percent)

Banesco USA

987,003

717,949

1,492

825,836

1.05

U.S. Century Bank

884,904

699,731

1,082

745,441

2.19

Helm Bank

749,749

437,129

799

639,758

1.21

Biscayne Bank

737,443

600,471

2,372

611,317

0.11

Coconut Grove Bank

677,455

217,909

1,422

563,243

0.26

The First National Bank of South Miami

613,153

352,090

519

493,240

1.07

Apollo Bank

543,167

397,761

928

469,593

0.77

Brickell Bank

515,035

345,913

-1405

390,695

3.50

Source: South Florida Business Journal

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Bauer Financial Star Ratings

BANKING & FINANCE OVERVIEW

South Florida banks with assets more than $1 billion, second quarter 2016 ($ billion):

BankUnited

26.21

Mercantil Commercebank

8.3

Florida Community Bank

8.07

City National Bank of Florida

7.27

Sabadell United Bank

5.45

Ocean Bank

3.46

TotalBank

2.93

Stonegate Bank

2.40

BAC Florida Bank

1.86

Gibraltar Private Bank & Trust Co.

1.63 0

$5 billion

Assets ($, ‘000s) BankUnited

$10 billion

Loans ($, ‘000s)

$15 billion

Net Income ($, ‘000s)

$20 billion

Deposits ($, ‘000s)

$25 billion

Non-current loan ratio (percent)

26,218,377

18,083,884

60,714

18,392,197

0.46

Mercantil Commercebank

8,297,089

5,442,795

7,777

6,500,065

1.08

Florida Community Bank

8,074,885

5,963,441

24,152

6,473,419

0.30

City National Bank of Florida

7,269,121

4,729,475

15,727

4,846,978

0.33

Sabadell United Bank

5,451,623

3,690,365

8,793

4,300,572

1.52

Ocean Bank

3,458,938

2,653,064

5,721

2,892,714

0.43

TotalBank

2,925,661

2,101,463

5,672

2,090,034

0.48

Stonegate Bank

2,404,896

1,943,881

6,687

2,035,038

0.21

BAC Florida Bank

1,865,329

1,463,829

3,141

1,509,355

1.56

Gibraltar Private Bank & Trust

1,634,073

1,444,081

863

1,074,789

0.65

$30 billion

Bauer Financial Star Ratings

Source: South Florida Business Journal

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Cash and competition: Positive financial indicators, robust economics and a favorable legal environment mean banks are thriving With a solid real estate sector, a booming local economy and the possibility of a regulation relax, things are looking good for Miami-Dade County’s banking institutions. The growth in startup loans, demand for insurance and the buildup of international finance mean banking and related institutions have a market ready for attention, with considerable dividends for those that can offer the best services. One of the main drivers of growth for Miami-Dade in 2016 was the value of the county’s real estate, which has seen a resurgence following in recent years and is also relatively inexpensive compared to other major cities around the globe. Moreover, the area’s largest banks lent more small business loans to borrowers in 2016 than in 2015, a figure which some see as the sign of an economy on the mend. However, despite this growth, the county’s industry faces a number of challenges, the two most notable ones being the threats posed by cybercrime and the increased burden that federal regulations have placed on financial institutions across the nation. It is in this environment that Miami-Dade’s banks enter 2017. 118 | Invest: Miami 2017 | BANKING & FINANCE

Performance boost A number of indicators suggest that the conditions of the area’s banks are improving. For example, the number of Florida banks receiving a Bauer rating of “recommended” in the third quarter of 2016 was 81.2 percent, an increase from the 68.3 percent of banks, which received the rating in the same quarter of 2015. Furthermore, the number of banks designated as “troubled or problematic” decreased from 7.9 percent to 6 percent over the same period. Finally, 29 banks in the counties of Miami-Dade and Broward received a five-star rating while none of the area’s banks received a one- or zero-star rating. There were different levels of performance among Miami-Dade’s differently sized banks. The area’s 10 South Florida-based banks with more than $1 billion in assets reported loan growth of $1.04 billion and $2.4 billion in the first and second quarters respectively of 2016. South Florida’s largest local banks also performed well, with seven of the 10 largest banks reporting increases in assets and none of them reporting losses in Q2 2016. Together, the area’s 10 $1-billion-plus banks recorded a $139 million profit in the second quarter of

BANKING & FINANCE OVERVIEW

2016, an increase from the $132 million profit they generated in the first quarter of that year. Among these 10 banks, all but Mercantil and Ocean Bank reported an increase in assets with Miami Lakes’ BankUnited logging the most assets and an income of $58 million. (see Banking & Finance in Numbers: on page 1117 for more details) Smaller banks have experienced different challenges. The area’s seven midsized banks, or those with total assets valued between $500 million and $1 billion, recorded $43.6 million in loan growth in the first quarter of 2016, a $30-million decrease from the fourth quarter of 2015, in which these banks added $73.8 million in new loans. Miami-based Brickell Bank also reported such a loss in assets that it dropped below the $500 million in total assets necessary to be categorized as a midsized bank. Apollo Bank, a Miami-based institution, led these seven in the first quarter of 2016, reporting $43.3 million in new loans and leases. (see Banking & Finance in Numbers: on page 116 for more details)

enough to allow them to offer their products at more attractive rates. This increased interest rate will also benefit buyers given that banks are going to have more available cash to allow them to merge with or acquire other financial institutions, something which only happened once in 2016 when Stonegate Bank of the City of Pompano Beach announced that it had agreed to purchase Insignia Bank of the City of Sarasota for $36.5 million, or 1.48 times its value. Abel Iglesias, president and CEO of Professional Bank, spoke to Invest: Miami on how the competitive landscape of Miami-Dade’s banking and finance industry might change in the medium term. Speaking early in 2017, Iglesias said “Banks may see an increase in their profit margins, which would be good news for the sector. This might cause an increase in mergers and acquisition activity, as investors will be willing to pay greater multipliers now that banks’ profits are expected to rise.”

The Federal Bank interest rate increase looks likely to create a much more competitive banking sector.

Competitive landscape The banking and finance industry is slated to become more competitive in 2017 than in recent years. Leaders of the Miami banking industry feel that, with the increase in the short-term interest rate of the Federal Reserve, banks will enjoy profit margins that are high

Growth drivers Commercial lending, small- and medium-enterprise lending, private equity lending and nontraditional lending in Miami’s banking and finance industry experienced significant developments in 2016. As of December 2016, small businesses can now take advantage of the Microloan Program of the federal government’s Small Business Administration (SBA)

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throughout the state. This program is centered around helping startups, minority and other underserved markets and offers loans up to $50,000 to assist small businesses. Because the average amount of these loans is $13,000, individuals or organizations who traditionally have not had access to bank loans now have an opportunity to finance their endeavors. Many startups rely on loans like those offered by the SBA. Startups in Florida in the fourth quarter of 2016 received $98.7 million in investment, twothirds of which went to South Florida companies. The three startups receiving the highest dollar amount in loans were Carecloud, a Miami-Dade-based healthcare-technology startup which received $31.5 million; Boatsetter, a boat-chartering platform based in the Aventura which received $13 million; and Batanga Media, a Coral Gables-based digital media company received two loans totaling $15 million. These 7(a) loans, as they are known, are not lent by the SBA. Rather, the SBA guarantees these loans to the lending institution in the event of a borrower default. The top-five lenders of these loans in South Florida as of September 2016 were Wells Fargo, JPMorgan Chase, SunTrust Bank, TD Bank and Celtic Bank. In addition to this, the total number of loans made by these lenders through the first three-quarters of 2016 was 684, an increase from the 648 made in the same period in 2015. Despite the increase in the number of loans issued, the $136.5 million volume in 7(a) loans issued by these five institutions was significantly lower than in 2015, when they lent $189.74 million in 7(a) loans. The 25 other institutions, which issued the most of these loans, however, compensated for the decrease in dollar volume issued by the top five, lending out $369.02 million by September 30, 2016 compared to $342.53 million during the same period in 2015. Across the nation in 2015, $24.12 billion in loans were approved by the SBA. Miami-area borrowers have also

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begun to make use of nontraditional means of procuring financing including online lending and venture capital (VC) funding. For example, Regions Bank has begun to work with Fundation, the online small-business lender, to provide prospective borrowers with a loan application process that takes place online. As far as VC investment is concerned, startups based in Florida received $1.12 billion in VC funding in 2016 despite a nationwide drop in VC capital being injected into startups. This suggests that small businesses see the city as an attractive place to do business compared to other cities across the country. Play it safe Property insurance plays a key role in the South Florida economy. Given that the area is such a target for large-scale hurricanes, homeowners in South Florida consistently pay the stateâ&#x20AC;&#x2122;s highest rates for property insurance. Citizens Property Insurance Corp. (Citizens) the state-run property insurance provider was founded in 2002 to provide homeowners access to coverage when they could not afford what was offered on the open market. Citizens, covers a significant portion of the population, as do smaller private insurance companies such as Florida Peninsula. As of August 2016, the largest five companies offering insurance policies in South Florida are Citizens with about 256,000 policies, Universal Property & Casualty with around 198,000 policies, Heritage Property & Casualty with about 99,000 policies, Peopleâ&#x20AC;&#x2122;s Trust with 62,000 policies and Homeowners Choice with 61,000 policies. In addition to these companies, the state provides additional coverage capacity through the Florida Hurricane Catastrophe Fund. The fund was created in 1993 to give insurers assistance paying claims in the event of catastrophes such as Hurricane Andrew, which the year previously had devastated South Miami-Dade. Because the state has gone so long without enduring ( )

BANKING & FINANCE INTERVIEW

Steady growth How local banks are meeting the needs of the market in South Florida

Manny Perdomo CEO & President â&#x20AC;&#x201D; SunTrust Bank What were the main growth drivers for the sector in 2016? We believe that healthcare, in all areas such as aging services, medical devices and treatment centers for substance abuse, is going to be a big growth driver in Miami. Other sectors that are rising very fast are ports and logistics, transportation, both international and domestic and education. As for consumer lending, it is safe to say that as employment growth continues, consumers will benefit. Residential real estate is a different story, especially because it has always seen waves of ups and downs. One market stabilizer we have seen is the steady demand from colder regions of the country and Europe. Comparative to some of the major cities like New York, San Francisco, Vancouver, Hong Kong or Singapore, prices in Miami are very reasonable. Crises in other parts of the world have also brought demand to our real estate and banking sectors. The fact that the U.S. has legal and economic stability allows us to offer some level of safety that our clients may not enjoy in their home country. We are seeing a lot of investment in the area now coming from Eastern Europe and Russia. What are the main challenges regarding security automation? Where do the main opportunities for automation lie? According to the National Center for the Middle Market, more than 54 percent of organizations in the middle market across the country have experienced at least one type of cyber-security incident over the past year, with 39 percent reporting two or more, meaning that in todayâ&#x20AC;&#x2122;s economy, every business must take this issue seriously. Florida is a state with one of the largest number of fraud cases in the country. A good way for businesses to address this is to have better internal controls and employ the fraud protection services provided by their

bank to improve security. A SunTrust study showed that 35 percent of fraud is internal, which illustrates the importance of how companies manage themselves. With the population in Miami and South Florida in general being significantly younger than in the rest of the state, how has this affected the demand for retirement investment planning and long-term savings? In 2017, we launched onUp, a program designed to promote financial confidence for all Americans, regardless of age or financial status. Our goal is to encourage 5 million people to take steps toward improving their financial confidence in the next four years. Already, more than 1 million people have taken action. SunTrust believes that this is a crucial issue for our country. Tackling the issue of financial stress is a core goal of onUp. www.capitalanalyticsassociates.com

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Joe Atkinson Regional President, South Florida Region, Wells Fargo

Which business line saw the most growth in 2016? I have the greatest interaction with the community banking line of business, which is our community, retail, consumer and small business focus. As I look at 2016, we benefitted from that distribution because our focus has always been on not only acquiring new customers, but also taking care of our existing customers. We want to build lifelong relationships and the best way to do that is to take care of your existing customers. What are the expectations of the small business segment? About 96 percent of businesses are small. They are the largest employer of people. In South Florida, it’s no different. We know that we have a high concentration of small businesses. We have people with entrepreneurial spirits who want to start businesses. Our expectation is that this will continue to grow. For us, it’s a really important segment of our business customer base. Recently, we launched through our Wells Fargo Works website, a new addition to give small businesses more access to credit. Through our small business credit center, now people who are in business can expand and grow. They can acquire other businesses and use our website to learn about what they need to apply for a loan. Once the loan is approved, they can learn about what options they have to use it. We found that, because we pay attention to our small business customers, we know that there is a huge need to develop access to credit in this way. Our expectation is that it will continue to be like it was in 2016. How might recent regulatory changes, such as the Dodd-Frank, affect institutions in South Florida? The administration needs time to get settled. We always value consumer protection. We know that good regulation is important. As we look ahead, our hopes will not change. We hope the regulation put in place will protect consumers, expand business and continue to allow us to provide products and services that are important to our customers and our communities. 122 | Invest: Miami 2017 | BANKING & FINANCE

As Miami-Dade attracts more capital from overseas, the banking sector is taking on a more international flavor.

( ) an event as severe as Andrew or the 2004 to 2005 season, the fund now has $13.7 billion of cash at its disposal in addition to $17.4 billion worth of claims-paying capacity, a record amount for the fund and more than would be required if inclement weather caused damage on par with the most severe events of the past. Also, as of August 2016, the number of policies issued by Citizens has decreased from a record 1.5 million in 2011 to less than 500,000. This decrease can be attributed in part to small, Florida-based “specialist insurance firms” having assumed responsibility for hundreds of thousands of Citizens’ policies to win coverage of about 60 percent of the state’s market. These specialist firms, which generally focus on a specific geography or disaster and have had a number of years to increase their reserves since establishing themselves after the 2004 to 2005 season, have yet to ride out a major storm, which has led to some cause for concern about their ability to pay in the event of a catastrophe. Despite not having witnessed such an event, the state’s largest property insurance companies, as well as many of these smaller, newer companies, have passed the Florida Office of Insurance

BANKING & FINANCE OVERVIEW

Regulation’s stress test, which evaluates the ability of insurance companies to deal with specific hurricane scenarios. Foreign affairs The financial standing of many of the area’s top banks has improved and the county is developing attractive destination for international capital as international institutions open more branches in the area. The community’s top banks have all experienced an increase in assets since the middle of 2015. Ranked by assets, Miami-Dade’s top-five banks are Miami Lakes-based BankUnited with $26.22 billion in assets as of June 2016, up from $21.28 billion as of the same time in 2015; Coral Gables-based Mercantil Commercebank, which had $8.3 billion in assets up from $8.19 billion; Weston-based Florida Community Bank, with $8.07 billion in assets up from $6.43 billion; Miami-based City National Bank of Florida, with $7.27 billion in assets up from $6.11 billion; and Miami-based Sabadell United Bank NA, with $5.45 billion in assets up from $4.88 billion. City National Bank and Sabadell United Bank NA are both located in Miami’s Brickell neighborhood,

a growing area south of Downtown that is an essential part of the city’s international banking culture. This neighborhood is referred to as Miami’s Wall Street due to the capital that has flowed into its banks from Latin America and elsewhere during the past 15 years. It now houses 53 banks and the finance, insurance and real estate industry makes up 17 percent of the jobs within the neighborhood’s ZIP code. Major financial institutions such as Pan American Finance and Credit Agricole attract investors from Brazil, Venezuela, Colombia and other South American countries, with two-thirds of the demand for neighborhood units coming from that continent. Most of the remaining capital comes from sources such as Russia, other European countries and cities in the U.S. that do not have as favorable financial climates as South Florida. The international banking environment in Miami is not without its challenges, though. According to Iglesias, “International banks have seen a slowdown. They are facing issues such as currency devaluation, the strengthening dollar and the political, social and economic factors that are impacting many countries in Latin America.” www.capitalanalyticsassociates.com

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The industry leaders in Miami are hopeful that the new administration will cut back some of these regulations and that, despite the potential rise in the interest rate set by the Federal Reserve, business lending and activity will increase. Tony Coley, regional president for South Florida at BB&T, told Invest: Miami “The hopes are that there will be less regulations and lower taxes, which should lead to higher overall growth. Of course, this is going to be phased in. Nothing happens overnight. As companies get more confident with the direction of the economy, business activity and investment will rise and the banking industry will benefit.” According to a report from Reuters, some of the largest banks in the U.S. are planning for Congress either to do away with or to ease the burden of the Volcker rule of the 2010 Dodd-Frank Act, which prohibits the use of depositors’ funds in a bank for speculation on the bank’s own accounts. These banks now sense potential under the more business-friendly administration of Donald Trump and Congress to undo reforms enacted under the Obama Administration as part of the bailout of the financial system.

To attract the growing group of young professionals, banks are offering improved personalized services in their branches.

The changing tides Regulations are a contentious issue in the banking and finance industry nationwide. While the reforms were instituted to protect and educate consumers, many executives in the industry maintain that the reforms impose undue compliance requirements on financial institutions. Many hope that both the new administration of President Donald Trump as well as the Republican-controlled Congress will ease the regulatory burden that has been placed on the industry. Part of the concern across the industry is that the regulations have burdened smaller banks with adhering to unrealistic and financially infeasible compliance measures. Israel Velasco, Florida region executive for Popular Community Bank, told Invest: Miami “compliance costs have been a big part of the overall personnel costs of a bank, which makes it harder for smaller banks to make money. The ‘one-size-fits-all’ regulation is a flawed approach; once you handcuff the small- and medium-sized banks with over-regulation, you will not be able to cater to the smaller segment of borrowers. Banks should be regulated according to their size.” 124 | Invest: Miami 2017 | BANKING & FINANCE

Techno-woe The industry also faces a number of risks, challenges and disruptions. One of these is the threat posed by cybercrime, although the more tech-savvy institutions are finding opportunities. Manny Perdomo, CEO and president of SunTrust Bank South Florida, told Invest: Miami, “From treasury management reviews to credit underwriting, we spend a lot of time with our clients on financial education, security, controls and audits, to make sure that if they are targeted by cyber criminals, they have the proper safeguards in place. It has to be a collaborative effort. Of course, law enforcement also plays a key role in prosecuting these criminals.” As with regulations, cybersecurity impacts large banks and small banks differently. Because large banks have so much more staff and assets, they have, larger systems that need to be converted. “Cyber security is one of the largest challenges that the business community faces. It is imperative that we educate our clients and provide them with the necessary tools and services to help protect them.” Guillermo Castillo, region manager-South Florida for JPMorgan Chase told Invest: Miami. Technology in the banking sector is not only devoted to combating and preventing fraud and cybercrime. It also highly relevant when it comes to changing demands placed by clients on financial institutions, which is another major challenge faced by South Florida’s ( )

BANKING & FINANCE INTERVIEW

Main drivers How small businesses are driving South Florida’s economic growth

Jorge Gonzalez President & CEO — City National Bank In which area of business do you expect to see the most growth for South Florida? Small business will continue to be the main economic driver in South Florida, and this is an underserved segment when it comes to banking. Our value proposition is particularly attractive to small and midsized businesses that really want a partner, not just a bank. There are various growing sectors in South Florida, including distribution, technology, healthcare and professional services. We see great opportunity there. Small businesses will continue to grow and expand as the economy continues to strengthen, and we’ll see job growth and innovation across various of these sectors. City National Bank has added new segments – leasing and specialty finance – allowing us to support companies of all sizes with their equipment and financing needs. These new offerings allow us to provide more solutions to existing clients and broaden our ability to serve new clients of all sizes. The marketplace has really embraced our banking model based on personal relationships, local decision-making and providing an excellent client experience. What regulatory frameworks would you like to see addressed? I wholeheartedly believe that banks need to be closely regulated, but that regulation should focus on the areas where there is risk and exposure. There has to be a prioritization of regulation to focus on areas with the most risk. Technology is one area that I think we’ll see more regulation, and that makes sense, because of the risks associated with electronic fraud. Information security and cyber security are emerging areas that banks and regulators need to be focused on. It is a new and quickly growing threat that needs to be managed very carefully.

What challenges need to be overcome? Miami is a brand that has tremendous national and international appeal, and it has emerged as one of the most important places for business in the world. But that growth comes with challenges. Our infrastructure needs to be properly developed to support long-term growth. This is best illustrated by the traffic situation. Affordable housing is another area that we need to find innovative ways to increase the inventory. Companies want to ensure employees have a certain quality of life and that includes being able to live closer to work. Education is an area that we need to continue focusing on. Our public schools have made great strides, but more work is needed, particularly in ensuring we provide opportunities for individuals to be productive members of our community. www.capitalanalyticsassociates.com

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BANKING & FINANCE INTERVIEW

International impact How global issues are impacting banking in South Florida

Pablo Pino Market President, South Florida Commercial — TD Bank climb a little bit. People that have been standing on the sidelines thinking of acquiring equipment or investing in real estate are moving quicker before the rates get away. Overall it is very positive.

What are South Florida’s greatest needs in relation to market demands? When we speak to business owners, everyone is optimistic about 2017. The recent administration seems very pro-business. People are optimistic, but cautious at the same time, because we are getting broad indications of potential changes, but we have to make sure there aren’t any unintended consequences. A lot of the business owners that we deal with are global players, buying and importing from different parts of the world. They are optimistic that it will be a great 2017, but they are careful about the unintended consequences that may come out of all of these changes. In general, people are positive. We are seeing companies investing in equipment and positioning themselves for 2017. We also see that interest rates are starting to 126 | Invest: Miami 2017 | BANKING & FINANCE

What are the main growth drivers in South Florida? We saw growth in commercial real estate because people were coming from different parts of the country buying commercial real estate, including shopping centers and apartment buildings. The stronger dollar did mean slight weakness in demand coming from Latin America. South Florida has always been a beneficiary of different parts of the world. If South America weakens a little bit, we see domestic customers come in and invest in South Florida. With the euro being a little weaker also, we haven’t seen a lot of demand from Europe. While demand has shifted from international to domestic, Miami is still one of the great places to do business. We have no state income tax. People with an investment portfolio outside of Florida can come down here and redeploy their assets down here. A lot of investors say doing business here is a lot friendlier than in New York, for example. With a slowdown in Latin American investors in South Florida and a slowdown in real estate lending, what have been the effects on banks in South Florida? We weren’t really affected by the slowdown in Latin America. We did see that companies that we deal with in South Florida slow down, but I think that toward the end of 2016, there was some positive things and the problems were more political than anything. Brazil and Argentina, for example, had new presidents. It was a step in the right direction and it created a lot of confidence. In Argentina, the new president is very pro-business. Here in South Florida, exporters are seeing a stronger demand than 18 months ago.

BANKING & FINANCE OVERVIEW

( ) banks. Jorge Gonzalez, president and CEO of City National Bank of Florida told Invest: Miami that “clients are looking for multiple channels of connectivity to financial institutions. A challenge for us is to provide them with access to capital and products that are there to meet their needs. Furthermore, because some banks are unwilling to take these measures to improve the client experience, banks can set themselves apart from the rest by reaching out to clients who want a more involved relationship with their financial institution.” Coley also weighed in on this matter in his interview with us, pointing out that “consumers are increasingly engaging their banks through technology. The industry will therefore continue to focus on digitization that lets clients engage with us in a way in which they want to engage with us.”

work in the banking and finance industry. Though this optimism mostly stems from the changes in the federal government, there are also opportunities presented by developments in Miami-Dade and South Florida. The county continues to be a destination for foreigners and their capital, Jay Pelham, president of Total Bank told Invest: Miami that “Miami has much more to offer than New York, Paris or London, so we expect there to be continued immigration of affluent households.” As far as the sources of revenue for the area’s banks are concerned, many anticipate that, along with commercial real estate, which has traditionally been a part of every bank’s product set, the main drivers for growth will be found in healthcare, the development of Miami-Dade as a logistics base and education. These developments as well as the anticipated loosening of federal regulatory burdens indicate that it might be easier for Miami-Dade banks to reach customers and generate profit in the medium term.

Foreign interest in Miami is increasing, and banks are adjusting product offerings accordingly.

Looking ahead The near future is a source of optimism for those who

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oundtable:

Miami’s growing economy is underpinned by a robust banking sector made up of large international and national banks, along with more local, community-focused institutions. Invest: Miami spoke to Popular Community Bank, Professional Bank, FirstBank and Total Bank about the big issues facing banking in Miami – the impact of the federal point increase on lending, new regulations such as Dodd-Frank and their outlook for the sector.

Israel Velasco

Florida Regional Executive, Popular Community Bank

The mortgage lending market has performed well. With rates as low as they are now, despite the Fed’s recent increase, buyers and homeowners continue to refinance. However, the new regulation on residential mortgage lending has made it tougher for clients to understand the process. After the 2007-08 debacle in the mortgage industry, we saw a complete pendulum swing to the other side. Now, there are greater requirements for documentation, making the overall process longer. If you haven’t applied for a mortgage since 2008, you’ll be shocked by how much harder it is today. Compliance will also cause issues, becoming a big part of the overall personnel cost for banks. When regulations get tougher, it gets harder for small banks to comply. That’s why there will be more mergers and acquisitions in the upcoming years. The concept that banking regulation is one-sizefits-all is flawed because not all banks are created equal. Putting the same burden on banks regardless of their size distorts competition. This is a factor that needs to be considered. However, deposits continue to be strong and have been for some time now. South Florida is a good market for deposits and rates will continue to help. The amount of small businesses and wealth we have is also positive for deposits. We will continue to see consistent deposit and loan growth, provided credit quality remains strong. There is growth in other asset classes such as retail, industrial and to a lesser extent, office. The short-term growth may be more evenly distributed among these business lines. 128 | Invest: Miami 2017 | BANKING & FINANCE

Abel Iglesias

President & CEO, Professional Bank

Mortgage lending is an area where Professional Bank has done exceptionally well. Even so, we are cautiously optimistic as the rates are increasing. While homes priced under £1 million are doing very well and are expected to continue to do so, rising rates, higher inventories and a stronger dollar have caused a slowdown in the upper end of the market. One item the banking industry anticipates is the possibility of some regulatory relief in the near future. Modifying the Dodd-Frank Act would be very welcomed by the banking sector as a whole, and by smaller- and medium-sized institutions in particular. Dodd-Frank has some good aspects, but it has also been very onerous on the residential lending front. We want to see some common-sense modifications to diminish the difficulties associated with compliance. Unintended consequences and costs occur because of these difficulties, like the distortion in the burden of compliance between big and small banks. The former has armies of people working on compliance but the latter does not. Going forwards, despite a strong dollar and the headwinds we are currently facing in Latin America, Miami continues to offer a strong business environment with expectations of growth in 2017. Our main growth driver in South Florida, commercial real estate, will continue to be a part of every community bank’s product set in Miami. One area in this space that will continue to grow and do well will be construction loans for the middle market homes. We see a lot of opportunity in areas like West and South Miami-Dade.

BANKING ROUNDTABLE

Calixto Garcia-Velez Regional Executive & Executive Vice President, FirstBank

The development slowdown will most drastically affect luxury high-rise residential condominium buildings, which we are not in the space of financing. The high-rise condo market is extremely cyclical, while other property sectors are more stable and allow us to better manage risk. We have had a record year in residential mortgage. As for regulatory burdens, we are optimistic because all banks have to deal with them. It gets in the way of our agility, responsiveness and costs, which unfortunately get passed on to the consumer. There is a happy medium that is good for everyone, but the pendulum swung to another extreme after the most recent financial crisis. First and foremost, when dealing with a bank our size or smaller, it is with real people that know you. When taking a closer look at what happened during the crisis, the syndicated loan market and the decoupling of the individual with the financial institution, the stripping of residential mortgages on Wall Street and all of the complex structures are what caused the crisis. At the end of the day, if a client ever has a problem, they know they can call us, and we’ll figure it out together. On the positive side, factors propelling the strength of the real estate market – particularly commercial and industrial – have contributed to opportunities for the growth of FirstBank. Foreign capital continues to pour into Miami, and the bank’s expanding portfolio is a reflection of what is available. As the economy continues to do well, our job is to target the right sectors and to deliver on what we promise.

Jay Pelham President, Total Bank

There is a favorable tax environment here in South Florida and, when compared to other world-class cities, we are still relatively affordable. We will continue to see some adjustments in the condominium market. There were a lot of projects developers Total Bank was planning to go to market with but we have decided to see how current units are absorbed. I’m bullish about Miami and that ties in with our business. We want to continue to do all the right real estate projects. We have capacity to lend, and we want to continue to do more. We want to continue providing mortgages to foreign nationals in a very prudent and deliberate manner. When it comes to regulations, the general consensus in the industry is that this administration will be good for the banking industry, whether you are looking at Dodd-Frank or the other myriad regulations that have been applied to banks and other businesses. Regulations, in general, are not bad. We need them. But overall, it has increased the cost structure for banks tremendously, and community banks have been impacted more than regional or national banks. A reduction in some of the overall regulation would allow banks to operate with a lower expense structure, which would allow them to pass on savings to clients. Providing services faster would cause a positive ripple effect in way of job creation and economic stimulation. It’s an exciting time to be in Miami and an exciting time to be in our industry. We really made a point in the last 18 months to rapidly evolve and leverage our company’s core strengths. www.capitalanalyticsassociates.com

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BANKING & FINANCE INTERVIEW

Expansion trends How the South Florida market is impacting banks of all sizes

Tony Coley President â&#x20AC;&#x201D; South Florida Region BB&T nature. However, there are some specific challenges depending on size. A good example of this is the competition community banks face from regional banks and big banks who have enough scale to provide a larger array of products to their clients and have a proportionally lighter burden when it comes to regulatory compliance. That being said, it is important to underline that all banks are doing better. How could higher interest rates affect the mergers and acquisitions market? One of the main impacts of an increase in interest rates is a higher profit margin for the financial sector. As a consequence, on the one hand, financial institutions will have more cash to spend on acquisitions, but on the other hand, the companies that would be willing to sell would get a better price. Therefore, the most likely scenario is an increase in mergers and acquisitions activity.

In 2015, Florida banks grew loans at more than twice the average percentage growth of other U.S. financial institutions. What are the main differences in such growth for the different type of institutions? South Florida is such a dynamic market. There are always opportunities here because of the international influence and our tremendous diversity. For example, we may have a deceleration in a certain sector in the U.S., but internationally that sector may be growing. In that scenario, South Florida may still benefit because of the impact that international demand has on our market. These opportunities impact banks of every size. Therefore, it doesnâ&#x20AC;&#x2122;t really matter if you are a large bank, a community bank or a regional bank, there are always going to be new opportunities because of South Floridaâ&#x20AC;&#x2122;s dynamic and fast-growing 130 | Invest: Miami 2017 | BANKING & FINANCE

What are the main opportunities for community banks to grow in the corporate banking market? The positive overall business environment in the region will naturally bring important growth opportunities for community banks. Another interesting aspect that will potentially benefit community banks; and all banks for that matter, will be the new regulatory environment that could arise from the changing political landscape. The hopes are that there will be fewer regulations and lower taxes, which should lead to higher overall growth. Of course, this is going to be phased in. Nothing happens overnight. But as companies get more confident with the direction of the economy, business activity and investment will rise and, therefore, the banking industry will benefit. In 2017, we will see a much better performance of the banking sector as a whole than 2016. We see plenty of business opportunities.

Health: Healthcare reform has been on the lips of lawmakers both at a national and state level, with more people insured and stricter transparency in the industry. Providers are turning to new technologies to improve patient outcomes and Miamiâ&#x20AC;&#x2122;s older demographic will be served with new innovations. Medical research is also an essential part of the sector, with new partnerships and institutions in the county.

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Health in numbers: 74.4

59.5

60.2

58.3

69.1

69.2

56.9

60.2

63.9

74.5

76.3

73.6

Miami-Dade County adults with health insurance, age breakdown, 2015 (percent):

74.5

Miami-Dade County, adults with health insurance, 2008-2015 (percent):

0 2008

2009

2010

2011

2012

2013

2014

2015

Source: miamidadematters.org

18-24

25-34

35-44

45-54

55-64

Source: miamidadematters.org

Medicaid enrollment in Miami-Dade County, per 100,000 of the population: 2008 20,417 2009 20,596

22,588

2010

*2011

23,111 24,448

2012

25,390

2013

25,813

2014

27,221

2015 20,000

21,000

Source: miamidadematters.org

132 | Invest: Miami 2017 | HEALTH

22,000

23,000

24,000

25,000

26,000

27,000

*prior to 2011, a different methodology was used

HEALTH OVERVIEW

The healthy option: Miami-Dade County is growing a reputation for excellence in medicine. Cancer research, technological innovation and better care practices make this reputation well deserved The healthcare sector in Miami-Dade County is robust. It makes up a significant portion of the areaâ&#x20AC;&#x2122;s educated labor force and retains many of the finest institutions and practices in the State of Florida and nationwide. The number of people employed by the Miami-Dade healthcare and education services industry supersector, according to the U.S. Bureau of Labor Statistics, grew by 0.6 percent compared to a national increase in the same supersector of 2.8 percent from September 2015 through September 2016. Some 178,900 people were employed in education and health services in December of 2016. Miami-Dade is currently served by 21 hospitals, according to the most recent data compiled by the Florida Hospital Association. The top-five hospitals in terms of net operating revenue, according to the most recent available data provided by the South Florida Business Journal, were the Jackson Health System, Baptist Hospital of Miami, Memorial Regional Hospital, Nicklaus Childrenâ&#x20AC;&#x2122;s Hospital and the University of Miami/Sylvester Comprehensive Cancer Center.

Together, these accounted for more than $4.05 billion in net operating revenue and employed more than 4,600 physicians. Service expansion A number of new facilities were opened or announced over the course of 2016 in Miami-Dade. New departments at medical facilities were created as the area enjoyed a significant increase in hospital profitability coupled with a slight increase in jobs in the education and health services supersector. The growth in employment in health services in the Greater Miami area fell slightly short of growth in the same sector across the country. According to the U.S. Bureau of Labor Statistics, from September 2015 to September 2016 the Miami-Miami Beach-Kendall, Florida Metropolitan Division recorded a 0.6 percent employment growth in the education and healthcare services supersector. This was compared to a 1.9 percent growth in that the Miami-Fort Lauderdale-West Palm Beach metropolitan area and a growth of 2.8 percent nationwide. www.capitalanalyticsassociates.com

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HEALTH OVERVIEW

Steven Altschuler CEO, The University of Miami Health System (UHealth)

The population of South Florida is not only growing dramatically, but it is also aging. Because of our extensive data analysis, we know how the needs of this growing and aging population will translate, with emphasis on oncology, ophthalmology, sports medicine, dermatology and cardiovascular services, and are designing our process accordingly. First, we are restructuring our three hospitals into one medical center to allow us to accommodate more cancer patients. Second, we are recruiting a number of new positions to meet the needs of cardiovascular disease, surgical procedures and final clinical stages, focusing on the needs of the community to deliver care in the appropriate way. Finally, we are placing continued emphasis on expanding outpatient care through a growing regional network. Shifting to outpatient care, when appropriate, enables us to offer better care and will always help to reduce the cost of healthcare. We have continued to develop our services in Broward and Palm Beach Counties. We have also continued to add more services, such as our Bascom Palmer Eye Institute facilities in Naples. One aspect of the Walgreens relationship is for us to develop a regional urgent care presence. We will be providing urgent care services in conjunction with Walgreens in the stores throughout South East Florida. Additionally, as part of the relationship, Walgreens will be helping us manage our pharmacy benefits for employees at the University of Miami and will be working with us on hospital-based pharmacy services, particularly the 340B program, which is an important component in the way that we provide medications. As healthcare providers, we all have to become much more cost sensitive and start looking for ways in which to provide the same level of services while highly reducing the cost. The pressure will be to provide services that reduce costs and it is likely that the Federal Government will maintain the instead of reducing the rate of reimbursement for hospitals. 134 | Invest: Miami 2017 | HEALTH

Despite this minimal increase in jobs added, the areaâ&#x20AC;&#x2122;s hospitals experienced an 11.5-percent increase in profits from 2014 to 2015, earning a combined $1.29 billion, according to statistics released by the Florida Agency for Health Care Administration. The profitability of the healthcare sector in Miami-Dade has given rise to new investments by hospitals, universities and real estate developers alike. In October 2016, the University of Miami created a Department of Interventional Radiology to showcase its leadership in this versatile therapy. The department will be chaired by Govindarajan Narayanan, M.D., who has worked to build the Division of Interventional Radiology at the University of Miamiâ&#x20AC;&#x2122;s Miller School of Medicine for 11 years. The field of interventional radiology has grown substantially over the course of the past eight years in both clinical and research applications at both the Miller School of Medicine and the University of Miami Health System, (UHealth). Another part of UHealth, the Sylvester Comprehensive Cancer Center, has begun to offer its groundbreaking multidisciplinary care to its Coral Gables campus with a $155-million project known as the Lennar Foundation Medical Center (LFMC), which opened in January 2017. The LFMC houses 50 physicians offering ambulatory care in a wide range of outpatient services and a ground-floor diagnostic imaging facility featuring cutting-edge scanning technology in addition to radiation oncology services. Finally, northeastern Miami-Dade municipality, Aventura, is witnessing the construction of a $22.97-million, 12-story, 99,870-square-foot medical office building near the Aventura Hospital & Medical Center. Policy update With the largest portion of Floridaâ&#x20AC;&#x2122;s budget devoted to healthcare and the average cost per family of $1,347 per month according to the Kaiser Family Foundation, health policy reform is one of the key issues Florida lawmakers will focus on in 2017. Measures have been taken at federal and state levels to reduce healthcare costs and improve the services healthcare institutions offer. In July 2015, the Supreme Court decided in favor of upholding subsidies for health insurance under the ACA, on which more than a million Floridians depend. These are subsidies which save most policyholders in the state an average of $300 per month. With an estimated 1.7 million residents who subsidize their health insurance costs through the ACA, the state is one of the largest beneficiaries of this ( )

HEALTH INTERVIEW

Expanding reach How turning to technological solutions is improving the patient experience

Ben Riestra Chief Administrative Officer â&#x20AC;&#x201D; Lennar Foundation Medical Center In a such highly competitive market, what makes the Lennar Foundation Medical Center unique? We were able to bring our existing excellent medical expertise from our Downtown Miami campus into a more minimally invasive environment without compromising any quality of care and safety. The advances in technology combined with the techniques of our physicians, who are able to provide top care in this minimally invasive setting, make it possible for patients to come, have an operation and go home that same day, for operations that normally require a three to four-day hospital stay. That is why this center is essentially a hospital without beds. Providing high levels of care in an outpatient setting is where medicine is going, and it is what we are doing. We have the ability to recover our patients overnight within a 23-hour stay. What is also unique about this center is the interconnectivity we have to our Downtown campus. For example, in the operating room, a physician can consult with colleagues at the Downtown campus, through our interconnectivity system. How do specialty centers such as the Sylvester Comprehensive Cancer Center and the Bascom Palmer Eye Institute fit into the overall ecosystem? These centers will continue to have major locations Downtown, with the satellite locations offering the same services. This enables us to extend the reach of our services with an intensive use of technology to be able to take the maximum advantage of our human capital. How will new technologies at the Lennar Foundation Medical Center affect the patient experience? We have an app that directs patients straight to where they need to go, depending on their treatment and the doctor they are going to see. The app has unlimited capacity, meaning there are no limits on how many

people it can manage at the same time. By telling patients the location of doctors, we can help them to find their way around our facilities as well as save time. How is the healthcare industry responding to patients seeking a higher quality treatments? Healthcare is the only sector where consumers are not paying directly for what they buy. Historically, the bulk of the cost was in the insurance sector. However, as the costs are shifting toward consumers, they are making more informed decisions and are looking for the best quality to cost ratio. That is what we are delivering here at Lennar Center and across the UHealth system. This is where the greatest challenge is: to see how the industry is going to respond to a patient that is seeking for more value. www.capitalanalyticsassociates.com

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HEALTH INTERVIEW

Community commitment How Miami Jewish Health is improving the lives of many of Miami’s elderly residents

Jeffrey P. Friemark President & CEO — Miami Jewish Health access to nature, other people, and a village square where residents can socialize, listen to music, shop or just relax in a serene environment.

What is the main concept behind the Memory Village, and how does it impact senior care when it comes to dementia and in particular, Alzheimer’s? The Memory Care Village arose from an event we held on campus a couple of years ago to discuss the future delivery of care with the objective of a long-term master plan for the main campus. One of the things discussed was creating a new model of care for people who have some form of cognitive disorder, from early onset dementia all the way through the various stages of Alzheimer’s disease. One of the buzz terms in our industry is resident-centered care, and we intend to elevate this concept. There are several projects under development. The first is the village itself, designed to house 99 people in individual households. It will be in a setting with open and safe 136 | Invest: Miami 2017 | HEALTH

How are centers like Miami Jewish Health System changing what it means to offer care for an aging population? There is no simple answer to that. The average age of our residents and patients has increased over the years. Of course, people are living longer and that creates both challenges and opportunities. At Miami Jewish Health, we work hard to keep our residents and our patients active. We are very proud of the quality of care provided. Miami Jewish Health actually provides care for more people in the community than in our facilities with the objective of keeping them out of nursing homes and institutions. Everybody wants to be able to live in their own home and neighborhood for as long as possible. We take care of several thousand individuals in South Florida, both in terms of case management as well as through the Program of All-Inclusive Care for the Elderly (PACE) with the objective of keeping people out of nursing homes. How can hospitals, especially nonprofits, manage costs at a time when they are on the rise? We are, by our nature, committed to providing services to our community that we are in. We would not do anything to cut back on quality of care. I am sure that the same response would come from hospitals. However, we have to overcome the issues. Not all organizations will be able to do that, so there will be changes. The marketplace is dynamic. Organizations such as Miami Jewish Health committed to providing services, and doing it the right way, will solve issues. At the same time, we are going to advocate strongly that we are treated equitably from a reimbursement perspective, and not punitively from a regulatory perspective.

HEALTH OVERVIEW

( ) legislation according to figures published by the U.S. Department of Health and Human Services. Cost efficient In Florida, a number of measures to reduce the $20 billion the state devotes to healthcare have been proposed. The first would steer patients away from expensive emergency stays toward ambulatory care and recovery care centers. Another idea is to let highly trained nurses and other high-level medics prescribe more drugs to patients due to a perceived shortage of physicians. A third proposal would tackle informing consumers about balance billing, a practice in which patients are billed for services not covered by their insurers. Early in 2017, Florida lawmakers took legislative steps to reduce healthcare costs. HB 145, for example, would amend the current law that prohibits patients from staying overnight at ambulatory surgical centers and allow them to stay there for 24 hours instead. The bill also proposes establishing new organizations referred to as recovery care centers where patients could stay up to 72 hours after surgery. Another Florida House bill, HB 161, would clarify that direct primary-care agreements no longer be categorized as insurance and therefore not be governed by state insurance laws. A recovery care center bill, SB 222 and direct primary-care bill, SB 240, have also been filed in the Senate for the 2017 session. Market forces Enrollment in ACA coverage in Florida accounted for 14 percent of the national total as of March 2016 with approximately 1.5 million people covered by insurance purchased on the Florida exchange, according to U.S. Department of Health and Human Services. By December 2016, almost 1.3 million people were enrolled in plans offered by the state’s exchange, a number which did not include auto-renewals. The number of people enrolled in ACA coverage in Florida surpassed that of Texas, the state with the second-highest number of ACA enrollees, by nearly 600,000 as of December 2016. Despite this large number of people enrolled, there remain about 850,000 residents who are unable to attain coverage as a result of the “healthcare gap.” This gap results from the fact that thousands of Florida residents are ineligible for Medicaid because the state has not expanded the program and that they do not earn enough to qualify for tax credits under the ACA, which would allow them to purchase more affordable health insurance on the federal exchange.

Jeff Johnson State Director, AARP Florida

While South Florida, like the state as a whole, has in past generations been known as a retirement hub, the changing wants and needs of the baby boomers is recalibrating what it means to age in ways that should cause all of us to rethink everything related to aging. South Florida in particular brings a unique mix of cultures as the “Gateway to the Americas.” As a membership organization, AARP is intent on finding ways to connect with the very diverse audiences within the market, and to do that, we must find innovative ways to engage locally. While the AARP Foundation has partnered with the Miami Dolphins to raise awareness about the realities that economically vulnerable elders face, the primary issues – adequate and affordable housing, financial stability, adequate nutrition, and connection to the broader community – extend to a much broader swath of South Florida. AARP Florida is focused on working with allies in the for-profit, non-profit, academic, governmental and philanthropic areas in South Florida who have joined the World Health Organization/AARP Age Friendly Network of Communities. This is a network to identify what communities in the region are doing well and how to improve livability for people of all ages and economic circumstances. Our focus is to identify the needs of members in the community as a whole, so we can meet in ways that empower them to choose how they live as they age. For some, that comes through our advocacy and for others, it comes through the opportunities to learn and grow that we offer and for some it’s through the products and services that AARP Services works with providers to offer. The key opportunity for us is to identify in this diverse market the needs that aren’t being met in our current value proposition and innovate new solutions that are consistent with our values. AARP Florida works with organizations on a variety of education, outreach and advocacy efforts, for which we share common goals, including forprofit companies as well as non-profit agencies and associations. www.capitalanalyticsassociates.com

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Akhil Agrawal President, American Medical Depot

How was the demand for medical supplies in Miami-Dade in 2016? The demographics in South Florida are compelling. Baby-boomers are aging, the population is living longer, and that translates to an increasing need for medical care and medical supplies. Demand continues to grow. Weâ&#x20AC;&#x2122;re seeing mid to high single digit growth in our local economy. Nationally, access to quality medical care, products and services has been a bigger problem than it has been in Miami. How do you address these challenges? There is a major shift in the delivery of healthcare from traditional in-hospital care to alternative settings as patients start to exercise choice, and as insurance providers look to squeeze cost out of the system. Procedures are moving out of hospitals to surgery centers as more surgeries occur on an outpatient basis. Care is moving more to patient homes and physician offices and out of emergency rooms. The big move in the supply world for us is how to meet that challenge. In 2012, we acquired a company that focuses specifically on physician offices and surgery centers. We have a focus on investing in our e-commerce capabilities for all our clients. Supplies that normally would have only been consumed at a hospital or surgery-level are made publicly available to people accessing care in their homes with family members or other caregivers supporting the administration of those supplies. What will be the main growth drivers in 2017? There is no question that the move outside of hospital settings will continue. The question is what will happen to the access points that were provided through the Affordable Care Act. Will they go away? If they do, what will they be replaced with? Will care move backwards for those that are uninsured, will they no longer have access? These are the big questions for us. Weâ&#x20AC;&#x2122;ve heard repeal, l and replace. Changing things rapidly is a relative term on the insurance bearer side. 138 | Invest: Miami 2017 | HEALTH

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Rising costs are also a concern for Florida residents. As recently as September 2016, those who purchased their own health insurance experienced rate increases of up to 19 percent in plans that are compliant with the ACAâ&#x20AC;&#x2122;s minimum coverage requirements. This increase was driven by three factors: the expiration of the Transitional Reinsurance Program; the cost of hospital services, which account for about 53 percent of the growth; and the exit of high-profile insurers such as UnitedHealth and Aetna from the exchange. Data compiled by state insurance regulators indicate that the average premium for a subsidized plan offered on the exchange will cost $229 per month for a single person earning $27,000 per year and $538 per month for a family of four earning $53,000 per year. The state of Florida has also passed groundbreaking legislation to tackle some controversial aspects of insurance billing. For example, HB 221 took effect in July 2016 and has been touted as a model for future states who are seeking to pass similar consumer protection legislation. The law addresses balance billing, a term which refers to the practice of patients being billed for services rendered by out-of-network providers despite using an in-network facility. Specifically, HB 221 outlaws balance billing in circumstances where the patient uses an in-network hospital or urgent care

Rachel Sapoznik President & CEO, Sapoznik Insurance

facility and “does not have the ability or opportunity to choose a participating provider at the facility.” The bill, which was signed into law in April 2015, also stipulates that insurers are required to pay for treatment at in-network rates regardless of whether or not the providers are in-network. The other bill impacting the financial side of the healthcare industry in Florida is HB 1175, which aims at providing better billing transparency. Hospitals and institutions supplying ambulatory and surgery services are now required to inform end users of the average price of procedures and bundled services. New projects, new focus Cancer care has seen significant activity in the Greater Miami area in 2016 with major investments in new facilities, new grants and funding, and partnerships with other institutions in the South Florida Region. Leading the way is the Miami Cancer Institute (MCI) created by Baptist Health South Florida. It is headed by physician Michael J. Zinner M.D. and is the realization of Baptist Health South Florida’s goal to deliver cancer care on a large scale. MCI will include a proton beam radiation facility, which should begin operation during 2017. Millions of dollars in grant money were awarded to Miami-Dade area healthcare institutions in 2016. ( )

What is the potential for telemedicine in South Florida? I think the potential for telemedicine is tremendous. We have such a lack of primary care physicians here. If you need to go to the doctor right away, many times you can’t get an immediate appointment. Telemedicine would provide us with instant access to a network of doctors and allow employees to get their prescriptions without having to leave work, thus minimizing absenteeism. However, there is still a barrier to entry. We need to continue educating both doctors and patients on the benefits to ensure the concept takes hold. What are the challenges in educating people about personal responsibility in using their healthcare insurance? One of our biggest challenges is at the C-level. Executives look at their employee benefits as a costly line item as opposed to something crucial for their employees. Critical information is lost when using web portals as the whole landscape of healthcare is challenging. We have found that the employers that really believe in and care about their employees have less turnover and fewer claims. How competitive is the health insurance market? Miami has always been known as one of the most competitive and expensive insurance markets in the country. One of the reasons why is because the population has historically been on the older side. However, our population is getting younger and over the next decade, we will see a reduction in the average age. If we continue the wellness journey, people of all ages will be healthier and this will enable healthcare costs to come down, and continue the availability of affordable health insurance coverage. Another thing to consider is if in fact the ACA is repealed, this will allow insurance companies to sell across state lines, increase competition among each other and lower cost for both employers and employees. www.capitalanalyticsassociates.com

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Alliance of care How Miami Cancer Institute’s role in the Memorial Sloan Kettering Cancer Alliance improves treatment options for cancer patients in South Florida

Michael J. Zinner, M.D. Founding CEO & Executive Medical Director — Miami Cancer Institute, part of Baptist Health South Florida creates the idea of better practices. This is not what we have done. For the past two years, Miami Cancer Institute has gone through a series of checks to ensure that the standards of care offered here in Miami are the same standards offered at Memorial Sloan Kettering and through the Cancer Alliance. For each cancer, there is a list of everything that needs to be done, for instance the preparation for surgery and during surgery in the operating room. There is a checklist the size of a telephone book that need to be prepared. This method is very different from other relationships and institutions around the country.

As the third member of the Memorial Sloan Kettering Cancer Alliance, what is the importance of the hybrid academic and community cancer care model? Around 85 percent of cancer care in this community is delivered in a hospital setting, not in highly academic research settings. A hybrid cancer center, of which there are now several in the U.S., is the marriage of a community hospital and an academic research institution. Our institution is Memorial Sloan Kettering in New York City. It means we are able to offer the same standards of care including clinical trials, resources and capabilities as one would receive in Manhattan. There is a distinction between what other national cancer centers do and what we are doing. Unfortunately, there are a lot of cancer centers that are branding exercises where the nationally-recognized name on a building 140 | Invest: Miami 2017 | HEALTH

What are the advantages of proton therapy? There is a difference between traditional X-ray therapy and proton therapy. Traditional X-rays are used to essentially burn a tumor. It burns the tissue on the way in, gets the tumor and then burns the tissue on the way out. There is a lot of harm to normal tissue. Proton therapy, however, has virtually no normal tissue side effects. It is very precise. Essentially, it only burns the tumor, but not the tissue around it. This is critical in children because if the normal tissue of a child is burnt, it interferes with development. It will also be critical in cases of brain tumors where you don’t want to damage the normal nerves around the targeted area. The same could be applied to spinal areas. We are expanding its use into other areas. For example, women who have had radiation therapy for breast cancer are at a higher risk of contracting a heart disease because of the cancer’s close proximity to the heart and the imprecise nature of that therapy. We might be able to eliminate that side effect by using proton therapy. The proton therapy unit is a very high-tech piece of equipment. It will take up to six months to get is calibrated and we expect to be treating patients in late summer 2017.

HEALTH OVERVIEW

( ) In February, Florida Health awarded more than $16 million in research funding to 17 projects in eight institutions through the Bankhead-Coley Cancer Research Program and the James and Esther King Biomedical Research Program. The goal of the award is to support researchers to improve prevention, diagnosis and treatment of cancers and to develop cures for cancer and other diseases related to tobacco use. The cancer research will focus on common cancers such as breast, lung and prostate cancer while the other research supported by this grant will address facilitating smoking cessation, gene therapy for stroke patients, lung cancer immunotherapy and bio-behavioral intervention for smokers with HIV. In February 2016, MCI signed an agreement with Memorial Sloan Kettering (MSK) Cancer Center to become part of the MSK Cancer Alliance. The group consists of healthcare providers that specialize in cancer diagnosis and treatment. Members of the alliance share educational resources and develop treatment and research strategies as well as participating in on-site observation of new techniques and disease management teams. Members also have access to MSK clinical trials. In August 2016, a member of the Sylvester Comprehensive Cancer Center, Associate Professor of Biostatistics at the Miller School of Medicine Xi “Steven” Chen, received a $1.8-million grant from the National Cancer Institute (NCI) for precision medicine research investigating triple-negative breast cancer using statistical genomics approaches. The tumors of this type of breast cancer are more likely to recur after chemotherapy than other tumors. A number of grants were also issued in September 2016. Sylvester Comprehensive Cancer Center and University of Miami Miller School of Medicine researchers, Priyamvada Rai, associate professor of medicine/hematology and oncology, and Kerry Burnstein, professor of molecular and cellular pharmacology, were awarded an Idea Development Award of $1.15 million from the Department of Defense to research a new method of inhibiting incurable prostate cancer. Specifically, their research will discern how redox-protective pathways, which are more elevated in human prostate cancer, influence development and progression to the terminal form of the disease. In addition to this award, NCI issued a $3.4-million grant to another interdisciplinary team of researchers at Sylvester Comprehensive Cancer Center, which is developing an understanding of how doctors can deliver safer and more effective chemotherapy with fewer long-term negative health consequences.

George Foyo Chief Administrative Officer, Baptist Health South Florida

Consumer choice is becoming more prevalent because either employers are not covering as many of the healthcare needs of their employees, or some employers are no longer covering their employees at all. With federal and private exchanges, the landscape of how people are acquiring healthcare has changed significantly. People are now forced to make a choice in what plan to buy, and they’re generally not well informed. People know how to buy a car, but buying a healthcare plan is very different. You have to know what network it covers and what the deductibles are. Some consumers are buying plans based on price alone, without realizing they have high deductibles or a narrow network. Whether you go through a private or federal exchange, you have to be mindful of what you’re buying. You may not realize the deductibles could end up being thousands of dollars. There needs to be a lot more education. Private exchanges will continue to grow, and time will tell how well that works. It will be interesting to see how the acquisition of healthcare plans change for consumers, based on availability, price and network. As Baptist Health grows and evolves, so does our patient profile. Because some of our technology and services are unique to the area, we collaborate with other healthcare organizations, such as children’s hospitals, to provide services. In Latin America, there are few similar facilities so we communicate our capabilities to doctors there, and they refer patients when necessary. For example, we recently had more than 100 doctors from Latin America present as we opened the doors of our Miami Cancer Institute. We hosted a series of lectures to familiarize them with the Institute and let them know how we can work together. One of our special services in the area of medical tourism is the focus on continuity of care. After patients leave us and return to their home cities, we connect with their local physician to ensure the care loop is closed. www.capitalanalyticsassociates.com

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Millions of dollars have been granted to Miami healthcare institutions to offer innovative high-tech treatments.

Partner up There were also many partnerships formed in 2016 in the Miami healthcare community. Firstly, a partnership between the Kentucky-based insurance company Humana and Florida International University (FIU) Nicole Wertheim College of Nursing and Health Sciences is designed to place FIU students at Humana-owned clinics and move them from Miami-Dade, Broward and Palm Beach counties to facilities in Orlando to let students gain broader insight into caring for the needs of the community. There was also a partnership announced in late 2016 between UHealth and Walgreens that will focus on offering coordinated clinical care and pharmacy excellence to patients across South Florida. The agreement allows UHealth to manage and provide a complete array of clinical services at 17 retail clinics within Walgreens stores in South Florida. The 17 Walgreens Healthcare Clinics will transition to the UHealth in the spring of 2017 and will be known as 142 | Invest: Miami 2017 | HEALTH

UHealth Clinic – University of Miami Health System at Walgreens. These clinics will operate seven days a week, including evenings, and will give patients the opportunity to receive a variety of healthcare options with or without an appointment. The golden years Geriatric care has also seen developments in helping keep elderly patients at home instead of sending them to nursing homes. The Program of All-Inclusive Care for the Elderly (PACE), is a joint coordination between Florida’s Department of Elder Affairs and the Agency for Health Care Administration. The program uses funds from Medicare and Medicaid to offer not only medical care, but also other services such as transportation, meals and social activities. Enrollees in PACE have contact with a team of medical professionals. One geriatrician takes charge of each enrollee’s medical care while nurses, therapists and social workers work together

HEALTH OVERVIEW

with the physician, the participant and the participant’s caregivers to monitor the participant’s needs. Moreover, PACE supplies both home health workers and contractors to create a safer and more accessible home environment for participants. The Miami Jewish Health Memory Care Village is a plant campus-based community, which will provide tailored care for those suffering from Alzheimer’s. The village, planned to open in 2018, will cost $51-million and comprise 99 units. It will offer a safe place for those with cognitive disorders and have roundthe-clock care from medics without being a sterile environment. “Nearly half a million people in Florida live with Alzheimer’s disease. The Memory Care Village will provide personal attention to all residents of the village, and create personalized care plans for each. The memory loss in Alzheimer’s is one of the greatest challenges of the disease both for the patient and those close to them. It can lead to disorientation and confusion, and many Alzheimer’s patients require round-theclock supervision. The village offers a safe place for residents to live with a degree of independence.” Jeffrey P. Friemark, president and CEO of Miami Jewish Health told Invest: Miami. Jewish Community Services of South Florida (JCS) are also help to make growing old more comfortable for some often overlooked parts of the community.

Fred Stock, president and CEO of JCS told Invest: Miami, “We identified that the LGBTQ elderly community was lacking safe places to live. So we partnered with SAGE, who are the experts in New York, to provide a platform where we can provide specific services for this elderly community.” Looking ahead The healthcare industry for the Miami area faces a number of opportunities and challenges going forward. With more enrollees and people receiving health insurance coverage through the ACA, the impact of the legislation will continue to be felt throughout the city and its surroundings. Moreover, there is a large portion of the Hispanic population that remains uninsured even though members of this demographic would qualify for subsidies for affordable health insurance under the ACA. With millions of dollars being granted to Miami healthcare institutions, there will continue to be more innovative healthcare methods and products coming out of the Miami area. In parallel with the reception of outside funds by Miami organizations, the Florida state government will look to reduce the $20 million of the state budget it already gives to healthcare while also coming up with legislative measures to resolve perceived confusions and inefficiencies created by the ACA.

Healthcare providers in Miami are focusing more on providing targeted services for an aging population.

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Education: Dr. Julio Frenk becoming the first native Spanish speaking president of the University of Miami is indicative of the international nature of the countyâ&#x20AC;&#x2122;s education system. Students are coming in from overseas, adding to the already multicultural makeup of higher education and important research is helping combat disease in the U.S. and abroad.

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Cultivated learning: Miami-Dade’s educational establishments are turning their focus toward technology and innovation to create a skilled workforce Miami-Dade County is seeing a growth in enrollment in higher educational establishments as the global trend for international study brings students from outside the U.S. to the county’s educational establishments. The county is continuing to build a reputation for educational excellence and is leading the way for medical research and commercial innovation. South Florida is home to around 438,000 full- and parttime college and university students, while the area’s public schools serve roughly 350,000 students per year. With the county retaining 67 percent of its graduates, it is a hub for the high-tech and entrepreneurial activities that such an educated workforce brings. Natural defenses South Florida’s recent experience combating the Zika virus coupled with the potential threat that rising sea levels and floods could have on coastal communities such as those in South Florida have generated both programs in and awards for the area’s universities. Professors from the School of Journalism and Mass Communications at Florida International University (FIU) have created eyesontherise.org, a website whose app will provide residents of Miami-Dade, Broward, Palm 146 | Invest: Miami 2017 | EDUCATION

Beach and Monroe counties with assistance in dealing with potential floods by letting homeowners ascertain whether or not their property may be underwater at some future date. Users of the app are also able to crowdsource flood reporting by generating information real-time information about the flooding situation on their property. The role the area’s educational institutions will play in combating the potentially international threat that Zika poses has been highlighted by funds granted to the area’s universities by both state and federal organizations. For example, the Centers for Disease Control and Prevention (CDC) in December 2016 granted $10 million to fund a collaboration among the University of Florida, the University of Miami (UM), FIU and the University of South Florida to determine how to curb the spread of the Zika virus as well as other vector-borne diseases. In addition to these funds, UM has been awarded a grant totaling $13 million from the Florida Department of Health to finance research related to the Zika virus. Strong vision The development of the education sector in Miami-Dade is in part being driven by strong leadership. Ex-Mexican minister of health, Dr. Julio Frenk became the UM’s first

EDUCATION OVERVIEW

native Spanish speaking president in January 2016. “UM has always been connected to the city. Miami is not only one of the most global cities in the U.S., but also in the world,” Frenk told Invest: Miami. “Our advantage in Miami is that we are truly a crossroad between the cities of the Americas. To better study the hemisphere, we have created the University of Miami Institute for Advanced Study of the Americas,” he added, highlighting UM’s strong connections with South America. Eduardo Padron, president of Miami Dade College (MDC), was awarded the Presidential Medal of Freedom in November 2016. President Barack Obama gave the nation’s highest civilian honor in person to the MDC president for his lifetime achievement of making higher education accessible to people from all walks of life. Higher growth Miami’s universities are planning to expand facilities and the programs they offer. UM is in the process of adding 1,104 student housing beds along with many other amenities as part of a $100-million undertaking. Designed by Arquitectonica, the 515,220-square-foot facility would stand where a parking lot currently does on an 8.6-acre site between Stanford Drive and Lake Osceola near Eaton Residential College and the University Center. The plans also entail the removal of the connection between Merrick Street and Dickinson Drive and will replace this connection with a garden, green space and a breezeway between the dorms. This Launch Pad, which was founded in 2008, is part of UM’s overall goal to make the university one of the centers for entrepreneurship in the city. Another measure it has taken to achieve this goal is the rebranding of UM Life Science & Technology Park to Converge Miami. The facility features the Cambridge Innovation Center, a venue which provides 70,000 square feet of open work areas, labs and offices, and Venture Café, a nonprofit that hosts events for the community with information and resources for entrepreneurs. MDC also has its own center for entrepreneurship known as the Idea Center, an organization which helps the college’s 165,000 students as well as community members with every stage of the entrepreneurial process including designing, validating and building their ideas as well as coding, prototyping, fundraising and marketing.

In 2016, MDC began the second semester of its 10,000 Small Business program, in conjunction with Goldman Sachs. Originally started in 2014, the program features practical classes to develop the right skills to develop small business as well as one-on-one support and advice on networking and raising capital. Local involvement The FIU Business School is partnered with the Florida Small Business Development Center network to offer consulting and training for local startups and established small businesses. The center opened in Brickell in 2014 offers one-on-one advice session with successful entrepreneurs, as well as larger sessions focusing on financing, marketing and business development. In February 2017, the UF opened an office in the City of Coral Gables. The new building is not intended as a campus, but will house alumni outreach and fundraising staff. The office also includes admissions, with a view to attracting more students, both from the Miami-Dade area and internationally. The UF Institute of Food and Agricultural Sciences also has and extension office situated in Miami-Dade, which serve as a liaison between scientists and other academics in the Miami-Dade area. Among the center’s focus include marine, horticulture, agriculture, environment and pest management programs. It also offers educational outreach with workshops, seminars and field visits for the local community.

Eduardo Padron, president of Miami Dade College was awarded the Presidential Medal of Freedom in November 2016.

Essential class With Miami-Dade a hotbed of talents across its multicultural demographic, a number of smaller, but no less effective establishments contribute to higher education. St. Thomas University (STU) in the City of Miami Gardens serves more than 5,000 students with courses including pre-medical and pre-law. Also in Miami Gardens, the Florida Memorial University (FMU) is the only historically black college and university in South Florida and is home to 1,800 students, and the College of Business and Technology has four campuses with some 1,000 students. (Further details can be found in the Miami Gardens chapter on page 155.) In addition to FIU, the City of North Miami is home to Johnson & Wales University (JWU). JWU offers course in computer sciences and business management ( ) www.capitalanalyticsassociates.com

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Skills for tomorrow How Miami Dade College is preparing its students for the future job market

Eduardo Padron President — Miami Dade College a microcosm of Miami, and as such, our student body is representative of this city, especially in terms of diversity. We have students from more than 180 different countries who speak over 90 different languages. Miami Dade College (MDC) is an institution that opens doors to everyone and, therefore, we must communicate effectively with all segments of our population.

How are programs at Miami Dade College helping to create a skilled workforce? In 2016, we introduced a number of very important programs – some of them were a first not just for Miami, but also for Florida. They are designed to meet the needs of local businesses and industries and provide a trained workforce that is able to help with the economic development of the area. This will mean well paid jobs, which will improve and diversify the economy. This includes areas intended to embrace important aspects of Miami’s economy, such as animation, game development and big data. We are also doing a lot to transform the way we approach achieving student success. We want to make sure that all our students have the necessary tools to be able to excel in college. We’re an institution that is 148 | Invest: Miami 2017 | EDUCATION

What are the main challenges of offering affordable higher education? The key is making sure those that fund us – meaning the State of Florida – are able to look at education as a vital investment, not an unnecessary expense. Unfortunately, nowadays too many decisions are made strictly in terms of cost analysis. The most important investment we can make in people is to give them the tools they need to help themselves. We are not getting enough support to be able to do the job, to provide a quality education program, to hire the best possible faculty or to introduce the modern technology that we need. This community needs to remind our legislators of this underlying principle of democracy: the institutions such as MDC need to be supported because the create the necessary informed, engaged and skilled workforce crucial to our nation’s success. Business leaders have a special role to play in this effort. What we need to keep in mind is that the world of work today is very different from 20 years ago. The skills that are necessary have changed significantly. When you talk to employers you find that their requirements are much higher than they used to be. They are not only looking for technical competency, but also strong soft skills, the ability to work in teams, be problem solvers, have critical as well as analytical skills and the ability to work collaboratively with other employees. Employers are looking for diversity and people who can be helpful in innovation.

CONSTRUCTION ECONOMY OVERVIEW

( ) along with a number of MBA programs. Barry University has more than 50 graduate and undergraduate programs with accelerated learning for students who are also working. (Further details can be found in the North Miami chapter on page 63.) Public sphere Miami-Dade public schools consists of 392 schools with 345,000 students and more than 40,000 employees. It includes 2,000 square miles of rural, suburban and urban communities and a student body that represents 160 countries and speaks 56 different languages. Since 2008, the year in which the leadership of the school district went to Superintendent Alberto Carvalho, the district’s student achievement and graduation rates has increased, resulting in both state and national recognition. Public schools across the state and in South Florida perform well when measured against national averages. According to the most recent assessment of academic performance of fourth- and eighth-graders released by the National Assessment of Educational Progress Florida, students are either outperforming or performing as well as students in other states in nearly every section assessed. The study was issued by the U.S. Department of Education to track the academic performance of students throughout the nation on subjects such as civics, U.S. history, economics, geography, mathematics, reading, science, writing and technology and engineering. The only section in which Florida students scored lower than the national average was in eighth-grade mathematics. The National Assessment Tests are taken every two years, with the 2017 tests scheduled for the first half of the year. In 2015, Miami-Dade students performed higher than average, in comparison to large cities, posting gains in almost every area. Public schools in Miami-Dade and Broward counties are hoping to take advantage of the above-average performance of Florida’s schools by observing how blended learning, which integrates technology into the student’s experience, will assist students in their academic performance. The program, known as D-5 in Broward County, gives each student a laptop and allows them to work at their own pace online to make their educational experience further resemble everyday life. Choice is an option Parents have had the option of specialized magnet schools since the first program opened in Miami-Dade in 1973. Some 82,000 students submitted applications for choice programs for 2017 to 2018, more than doubling in a decade, with 34,000 in 2016. There are

Alberto Carvalho Superintendent, Miami-Dade County Public Schools

How prepared is the county to compete for new funding? We are well-poised for federal investment because we have demonstrated a high level of performance in the areas that matter most to Secretary DeVos, and we are working to further expand educational options. While there was once only one Design and Architecture Senior High School (DASH), today we have the Arthur & Polly Mays Conservatory of the Arts and the Miami Arts Studio, which give DASH, or at least its visual arts program, a run for its money. Similarly, there are now a number of programs on equal footing with the New World School of the Arts. How do your standards compare to those of the rest of the country? Ours are state standards. They are fairly new and reflect high-stakes accountability. Compared to the rest of the country, we do very well in terms of the levels of complexity, rigor and relevance to the future needs of our community, country and world. The expectations of our elementary education have been further aligned with those of the international community, and Florida’s fourth graders are performing extremely well on international assessments. However, the comparison is less favorable when we look at secondary education. Students in most West European countries, and in places like Hong Kong, Shanghai and Singapore, consistently outperform American students, particularly in reading, mathematics and science. To a certain extent, this reflects the demands of our secondary education, and it is why the requirements to graduate in Miami-Dade exceed those of the state. We demand participation in foreign language programs and exposure to higher-level math and science courses, particularly in choice programs. www.capitalanalyticsassociates.com

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Under Superintendent Alberto Carvalho, Miami-Dade’s student achievement and graduation rates have increased.

currently more than 500 such programs on offer, including robotics, forensic science and linguistics. “We’re predominantly a choice district – more than 60 percent of our students are enrolled in nontraditional programs, including career academies, K–8 centers and charter schools, as well as courses related to design, fine arts, performing arts, dual language and the international baccalaureate program.” Alberto Carvalho, superintendent of Miami-Dade county public schools told Invest: Miami. Four of Miami-Dade’s magnet high schools were among a list of the best 1,000 schools in the country from Newsweek, and 37 were ranked in The Washington Post’s most challenging schools list. Florida has the largest virtual school system in the U.S. The Miami-Dade Online (MDO) Academy is began offering courses in 2009, and currently has 350 students. The MDO allows students throughout Miami-Dade to study from a laptop during their own time at their own pace. According to the school, it has an 86.5 percent graduate rate and has had students go on to study at Harvard and Miami Dade College. It is fully accredited and offers course from kindergarten through to 12th-grade. To spur innovation According to a study conducted by The Beacon Council’s One Community One Goal initiative, for the area to have the employees and managers it requires, Mi150 | Invest: Miami 2017 | EDUCATION

ami-Dade needs to cultivate an enhanced workforce and develop an educational pipeline for that purpose. The industries targeted as part of the study are aviation, creative design, hospitality and tourism, information technology, international banking and finance, life sciences and healthcare and trade and logistics. The initiative is a five-year economic development plan headed by Miami-Dade’s Beacon Council, the economic development partnership of the county, To create this pipeline and to ensure that programs offered at their respective institutions of learning are geared to meeting the needs of these seven industries, The Beacon Council has established an Academic Leaders Council whose members are the presidents of Barry University, FIU, FMU, MDC, STU and UM, as well as the superintendent of Miami-Dade public schools. UM and MDC already have programs in place to meet these goals. For example, the Idea Center of MDC has teamed up with Tel Aviv University’s Entrepreneurship Center, known as StarTau, to connect the high-tech community and startups of Israel with people and resources in Miami. According to the agreement, professors at Tel Aviv University will hold visiting professorships at MDC, Israeli hightech community members will attend the Innovation Nation conference in Miami to meet innovators and leaders in Miami’s high-tech community and Miami investors, digital marketing firms and designers will be introduced to Israeli startups. UM’s Center for International Business Education & Research (UM CIBER) was the only university based in Florida to receive $1 million in grant funding from the U.S. Department of Education in December 2016. UM CIBER programs, which were generated by the U.S. Congress as part of the Omnibus Trade and Competitive Act of 1988 and are administered by the U.S. Department of Education, connect the technology and workforce needs of business communities across the nation with resources offered by universities such as international education, language training and research capabilities to help businesses in the U.S. compete internationally. The UM CIBER program occupies a unique position in that it is able to use Miami’s position as the gateway to the Americas to strengthen its ties to universities and businesses in Latin America and China. International focus In January 2017, the U.S. Department of Education released a new framework for international study. The Framework for Developing Global and Cultural Competencies to Advance Equity, Excellence and Economic Competitiveness sets out a number of goals ( )

EDUCATION INTERVIEW

Embracing globality How University of Miami is capitalizing on the county’s unique location

Dr. Julio Frenk President — University of Miami What is the main role of University of Miami as an institution within Greater Miami? This university was opened only 29 years after the City of Miami was founded. The founders realized, as early as 1925, that the city needed a higher education center. We have developed a hemispheric strategy, which has five pillars. First, we need to study the hemisphere. By this, I mean the entire continent from Canada to the southern parts of Latin America. Because our hemisphere is the New World, you cannot understand it without also understanding the Old World, emphasizing a global perspective. Our advantage in Miami is that we are truly a crossroad between the cities of the Americas. To better study the hemisphere, we have created the University of Miami Institute for Advanced Study of the Americas. The second pillar surrounds education exchange. We want to take education exchange to a whole new level, and for this, we have created the Hemispheric University Consortium where students will be able to move around universities and get credits for the courses they take. The third pillar is research. We already have an extensive and vast network of very talented researchers. The fourth is technological innovation. By partnering with businesses, government and civic organizations in Miami-Dade and South Florida, we can become the most comprehensive research university of the region. And the last pillar is healthcare. Our aim is to expand our already vast amount of patients and forge strategic and collaborative arrangements. What are the main challenges in preparing today’s youth for an ever-changing job market? Our success will be measured in how well we prepare our students for the rapid changes they will face in the labor market. Our graduates are entering a labor market

that has never changed as fast as it is doing so right now. This is mostly because of advances in automation and artificial intelligence. This means that machines will displace plenty of jobs, but it also means that an important number of new jobs will be created. Some studies show that children entering elementary school this year will, by the time they graduate, work in jobs that don’t exist today. The way to address this is to have a university with an open architecture that allows people to enter as many times as they need to keep themselves updated. In addition to developing certain specific skills in specific areas, we also develop cross-cutting competencies that have to do with critical thinking, creativity, good communication skills, emotional intelligence and entrepreneurship. www.capitalanalyticsassociates.com

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Talent development How Florida International University is nurturing students to create the best opportunities

Mark Rosenberg President — Florida International University The facilities are critical because advanced research is expensive we need great facilities. We are fortunate that the state has been willing to invest in science and laboratories, as well as engineering laboratories, at Florida International University (FIU). We have been able to double our research since 2009. In 2016, Forbes named us as one of the top large companies to work for in the U.S. We were ranked 64, with more than 5,000 employees, and were ranked second in Florida.

What policies could be implemented so as to further expand research? We have to find a way to incentivize faculties to be more innovative and creative. That involves giving them a significant part of the revenue created by anything they might invent. Great faculties also need great graduate students, and they need postdoctoral scholars. Postdoctoral scholars are individuals who have got their PhD, but are willing to work as assistants to professors who have already been on the field for a long time. What are the main challenges to remaining leaders in research? What differentiates the facilities of Florida International University facilities from others? The main challenge is to continue to maintain the talent here and to continue hiring great professionals. 152 | Invest: Miami 2017 | EDUCATION

How can the universities better connect academia with industry? You have to look at what we’ve done with The Beacon Council with the One Community, One Goal initiative where, of seven sectors, we identified six and developed a plan to work directly with industry. Secondly, we are in discussions with The Beacon Council’s advisory group, academia and the business community to determine how we can collaborate. Third, is that we set up the talent development network, which is a portal providing internships for students to work in industry. Industry often claims that we aren’t responsive to their needs but it’s a shared responsibility because the occupational spectrum is so specific and so detailed that it’s hard to believe that industry thinks that we could produce specialists for each of the specializations that they have in their respective company. The Talent Development Network, which isn’t just FIU, has placed over 200 students in careers. All of the institutions of higher learning in Miami-Dade County working together assure that students can understand what their career is going to look like and that they are going to have a potential opportunity with a company. The company can train students and they can come back and take full-time positions. The national data is that 65 percent of students who take internships eventually work with the same company at a salary premium of $12,000 to $13,000.

EDUCATION OVERVIEW

( ) for institutions, academics and dents enabling them to engage on an international level. Miami-Dade is already acting well within this internationalist philosophy. FIU has an international student population of around 7 percent, campuses in Italy and China and partnerships with some 20 universities around the world, including institutions in Argentina, Peru, Panama and Colombia. There were more than 2,700 international students at UM in 2016. In March 2016, FIU was given the Andrew Heiskell Award for its Global Learning for Global Citizenship initiative. The award recognized the Global Learning for Global Citizenship initiative, which was designed to capitalize on the diversity of the student body – over 60 percent of the student population is Latino – and enforces FIU’s internationalist philosophy. Within the university-wide initiative, students have been required to take classes on foreign languages and look at key global issues.

Looking ahead Education will play a vital role in the economic life of Miami in the years to come as more centers for entrepreneurship and innovation such as UM’s Launch Pad or MDC’s Idea Center are established. As more partnerships are developed with universities and communities across the world, Miami’s institutions of higher education could develop a reputation for facilitating economic activity and high-tech development. Overseas enrollment in Miami-Dade’s educational institutions is likely to increase along with the county’s overall economic internationalist attitude and appeal. Finally, if the area’s K-12 schools continue to implement progressive educational initiatives such as blended learning, it might be shown that these initiatives produce graduates who exhibit a higher degree of workforce readiness and can contribute to the economic well-being of their communities.

FIU has an international student population of around 7 percent and campuses in Italy and China.

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Miami Gardens: Founded with a view to capitalize on its strategic location, the City of Miami Gardens has undergone growing pains to become an area ripe for investment. A revamp of local regulations and a citizenapproved $60-million bond for investment are signaling a bright future. Encouraged by the changing nature of the city, newly arrived businesses offer more employment opportunities.

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The growth of opportunity: With an enviable location and raft of exciting projects coming through, one of the county’s newest cities holds much promise The City of Miami Gardens is the third-largest city in Miami-Dade County with a population of 113,187, according to 2015 U.S. Census Bureau estimates, and comprises 20 square miles. It is Florida’s largest predominantly black municipality, with blacks non-Hispanic making up 76.3 percent of the population, followed by Hispanics at 22 percent and whites at 18 percent. It has a strong working- and middle-class population, with families making up 78.4 percent of households. The city is perhaps most famous for being home to the Miami Dolphins and the Hard Rock Stadium. Its convenient location is one of its strongest selling points, located on the south side of the Broward County line and bounded by NW 151st Street to the south, NE 2nd Avenue to the east, and NW 47th and NW 57th Avenues to the west. The city is midway between the City of Fort Lauderdale (20 miles to the north) and Miami (15 miles to the south), accessible by Interstate 95 (I-95), the Palmetto Expressway and the Florida Turnpike, known as the Golden Glades Interchange. 156 | Invest: Miami 2017 | MIAMI GARDENS

A new hope Although Miami Gardens was not incorporated until 2003, the roots of the city go back to the movement of families into the area during the 1960s. The area became more accessible with the building of I-95, and the Fair Housing Act opened the area up to middle and high-income African-American and Afro-Caribbean families. It became Miami-Dade’s 33rd city May 3, 2003, with Shirley Gibson elected as its first mayor. Facing complaints of crime and drug use from residents, Gibson said in 2007 that the city would no longer allow the building of low-income housing developments. Miami Gardens’ second and current mayor, Oliver Gilbert, has implemented initiatives to incentivize commerce and beautify the city. Housing and business rehabilitation programs have been implemented to create a greater sense of urban community and increase tax revenues. For example, the Strategic Plan 2009 to 2013 focused on boosting business and economic development in the city by improving existing industrial parks. ( )

MIAMI GARDENS INTERVIEW

In the zone How strategic city planning is helping Miami Gardens grow its economy

Oliver G. Gilbert Mayor — City of Miami Gardens What has been the city’s steps to improve development? While the City of Miami Gardens was created in 2003, it had evolved in an unplanned way. There was neither a central commercial area nor a stream of commerce unique to this area. For this development, we needed control over the largest piece of property, taxpayer or economic generator, but we were the only city in Miami-Dade County that didn’t have any zoning or building control over Hard Rock Stadium. Miami-Dade had that control. We eventually started a series of discussions and we were able to come to an agreement and now share control and we’re the primary voice in what goes there. Having control is important because we are going to develop this area in a way that meaningfully affects how services are provided and what people can do in the city. The latter is the one that transforms the city into a community. We have seen community involvement in the referendum on the stadium. We are now working with Calder Race Course Casino to the north. We are decoupling the racing and gambling. Calder sits on 170 acres of land, and if we decouple the racing from the casino, they can have the casino without expanding gambling, and we can develop the area around it into a place where people can spend money. It will create jobs, improve the tax base, improve the general quality of life and decrease traffic. One way to improve traffic is by having restaurants, shopping and movie theaters closer to where people live. We are developing businesses by helping them to function more effectively. Hard Rock Stadium was a part of that and now we are moving on to Calder. My message is “I’ll be as fast as you are, and make it as easy as I can. What I need you to do is come here and make your money but provide services in a way that creates an added bonus for the people who live here and creates a reason for other people to visit.”

What is being done to attract business? One of the things that is interesting is that a lot of major commercial corridors in this area were zoned for residential uses, so we changed that and added things like an entertainment overlay that allowed more uses. That means that when you bring your business here, you have more money. You can incentivize people to do things because people act in their own interest. You find a way to make your interests match theirs. The back part of Calder has now been rezoned to part commercial and part industrial. This is because we want to build an office park back there. We can keep the front edge for retail. Property developer Bridge has a huge site that used to be a landfill. We are working with them to transform that into a modern industrial park so that we can bring in more businesses. www.capitalanalyticsassociates.com

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MIAMI GARDENS OVERVIEW

Cameron D. Benson City Manager, City of Miami Gardens

At one time, the city owned more than 60 acres of land. The philosophy during that time was that by maintaining ownership of the land, the city would control the type of development on the sites. However, I look at it differently. My approach is that by controlling zoning and to some degree the land use, the city can encourage the best development for not only city-owned properties but also for those owned by the private sector. This allows us to attract the right companies and investors to help the city grow in the best way possible. We’ve made changes throughout the city to encourage more investment. One area in particular is the adoption of the Entertainment Overlay District (EOD) along the NW 27th Avenue Corridor. The purpose of the EOD is to encourage various uses, such as movie theaters, hotels, restaurants, retail, commercial and mixed-use opportunities. The $60-million General Obligation Bond (GOB) voted for by city residents has been a tremendous selling point to the private sector looking for opportunities. Once private investors know public investment is being pumped into a community their interest grows, and they are more inclined to invest in the vision regarding those communities. The GOB has sent a positive message to the business and residential communities that the city is willing to take the lead in making investments in its own neighborhoods. This approach has led to attracting more investment opportunities in our city, proving private dollars truly follow public dollars. We have two large tracts of land that are going through a transformation. Both will have a positive impact on our tax revenues for years to come. Finally, we constantly review and restructure the fees that investors pay to the city to ensure they are comparable with other cities. This encourages those who might want to make improvements to their facilities and, of course, for the larger scale developments.

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Miami Garden’s Jazz In The Gardens Music Fest is the city’s premier festival, attracting artists from around the globe.

( ) Active participation The Miami Gardens Comprehensive Economic Development Strategy (CEDS) is designed to establish public-private partnerships (PPP) in efforts to diversify and strengthen the city’s economy and increase the standard of living by strengthening business opportunities and jobs potential. A charter amendment passed in 2016 transferred authority over property use, planning and zoning of the Hard Rock Stadium and the surrounding areas from the county to Miami Gardens. The Hard Rock Stadium has been the city’s largest property, tax revenue stream and economic generator since the incorporation in 2003. The charter allows the city to develop the area with strategic city planning to increase services and create an established corridor for commerce. Cash injection In a 2014 referendum, the residents of Miami Gardens sent a clear and positive message that they wanted more investment into the city. The vote approved a $60-million General Operation Bond to revamp parks and public spaces as part of the city’s Capital Improvement projects. Completed projects include new playgrounds at Bunche and Rolling Oaks Parks, and athletic field

MIAMI GARDENS OVERVIEW

lighting at Norwood Park, Myrtle Grove and Rolling Oaks Parks. Improvements also include the Betty T. Ferguson Recreation Complex, which houses an auditorium, indoor basketball court, swimming pool, dance studio, fitness gym, locker rooms and amphitheater and offers many programs and classes. Ground breaking on the new Bunche Park pool began in August 2016. The project will also include two new buildings along with an expanded and renovated parking lot. The referendum also included funds for crime fighting equipment and a new police facility. “[This bond] sends a message to the business community and to the residential community that the city is willing to make an investment in its own neighborhoods and governmental uses in its own area.” City Manager Cameron D. Benson told Invest: Miami. Another initiative centers around the decoupling of Calder Casino and the Race Course, which sits on 170 acres and is currently zoned for agricultural use for the horse race course. Changing the zoning will open

up the area along the main NW 27th Ave. thoroughfare to restaurants, retail space and entertainment venues. This will in turn bring jobs and increase the city’s tax revenues and quality of life by decreasing traffic due to retail space being located closer to the community. New commercial areas are helping to create a greater sense of community by providing shopping and leisure activities within the city’s residential enclaves. The city’s plan to incentivize businesses to come to Miami Gardens involves creating a more attractive atmosphere by rezoning areas for commercial development and entertainment venues. The city’s Business Incentive Program has received federal funding to provide economic and development assistance to local businesses for beatification, accessibility and build-outs. The city is also experiencing increased activity in the industrial parks in the south and industrial development in empty areas in the north due to easy access to shipping ports both to the north and south.

The city’s plan involves creating a more attractive atmosphere by rezoning areas for business and entertainment.

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Roslyn Clark Artis President, Florida Memorial University

From an education standpoint, what are the main challenges to prepare the workforce for an everchanging job market? We need to focus on the technology and innovation sector, which is the significant driver of today’s global economy. We must be particularly mindful of South Florida’s needs. High demand areas like aviation and cyber security require a talent pipeline. How can universities better connect academia with industry to best facilitate praxis? Florida Memorial University received a significant grant from the Lilly Endowment and the United Negro College Fund. When we were writing for the grant, there was a planning phase where we met with local industry leaders on campus to talk about what they want to see in graduates, what the current market demands were and the skill sets that industries are looking for. Our faculty members then submitted ideas to better connect academia with the needs of industry. The results have been incredible and give us confidence that we are equipping our students for the jobs the market is demanding. What are the main efforts being done to ensure the affordability of higher education in South Florida? I am proud to say that we are the least expensive private institution in the State of Florida. We are trying to keep our costs flat because we understand the difficulties that our population has when it comes to being able to afford higher education. This is why for the past four years our costs have not increased. How does Miami Gardens factor into the equation? Miami Gardens is a uniquely strong location. The mayor and members of the city council have taken important steps to seek out new opportunities and investments as well as attract new businesses to the city. The stadium is creating job growth, technology firms are investing in the area and schools are opening. You quickly realize that Miami Gardens is full of opportunities. 160 | Invest: Miami 2017 | MIAMI GARDENS

Major sectors South Florida’s healthcare industry is booming, and Miami Gardens is no anomaly. There are numerous healthcare clinics and assisted living facilities in Miami Gardens. Whereas there is no hospital within the city limits, Jackson North Medical Center and Concentra Urgent Care are both very close to the city and provide care for the people of Miami Gardens. Within the city, services include general medicine, walk-in and urgent care, obstetrician-gynecologist services, prenatal care, X-rays, vaccinations, osteoporosis screenings, physical therapy, dental services and chiropractic services, as well as general health and exercise programs. The city’s Children’s Rehab Network is a prescribed pediatric extended-care program that provides habilitative and rehabilitative nursing care, physical therapy, occupational therapy, speech therapy, respiratory therapy, education and medical transportation to the children and families of Miami Gardens and the surrounding area. The Jessie Trice Community Health Center (JTCHC) Miami Gardens medical center opened in February 2014, as part of the greater JTCHC network in Miami-Dade, providing comprehensive primary medical care services and increasing accessibility to the community. It is a Florida not-for-profit Federally Qualified Health Center with a specific mission to serve the uninsured and underinsured. It is also the largest healthcare facility in Miami Gardens. Get around As Miami-Dade’s northern-most city, on the county line with Broward County to the north, Miami Gardens has easy access to I-95 and state routes 817, 826, 836, 847 and 823. This means easy access for the city’s warehouses, nearby shipping hubs and surrounding cities. Although this increases commercial opportunities, the commitment to quality of life improvements also rely on a robust public transportation system. The Miami Gardens Express went into service in 2015 with routes connecting it to public transportation in the Greater Miami-Dade area. The city is continuing to establish new routes and stops so that all neighborhoods are well served. In order to further integrate into transportation systems in South Florida, the city is moving forward to be included in the Brightline high-speed passenger rail system with a station that would be between Fort Lauderdale and the City of Miami. This would further facilitate commuter access along the north-south corridor. In addition to alleviating traffic, it has the potential to increase commerce along the rail line.

MIAMI GARDENS OVERVIEW

Book smarts The question facing newly established cities such as Miami Garden is not just how to attract talent, but also how to grow talent locally. Institutions of higher learning St. Thomas University (STU), Florida Memorial University (FMU) and the College of Business and Technology (CBT) are part of the effort to develop skills in the local population. STU is a private institution with more than 5,000 students enrolled during the 2013-14 academic year. It offers a range of bachelor degrees and in addition to premedical and pre-law programs among others. STU’s postgraduate offering is a number of masters and doctorate programs, and its law school offers multiple program opportunities. The institution has taken cues directly from The Beacon Council in terms of meeting the needs of the business community and also offers an outreach program to help adults living in Miami Gardens that didn’t graduate from high school.

As of March 2017, there are more than 1,200 students from Miami-Dade studying at STU, of which 409 are enrolled as undergraduates, 449 are doing graduate studies and 397 are in the law faculty. Students from Miami Gardens make up 95 of the enrolled, with 37 undergraduates, 32 graduates and six students studying law. FMU is one of the state’s oldest higher learning institutions, founded inw 1879, and is the only recognized historically black college and university (HBCU) in South Florida. The Baptist-associated university is home to 1,800 national and international students. FMU’s 41 undergraduate and four graduate degree programs are offered in its eight divisions in six schools. The university’s Lion’s Pre-College Institute is a community outreach program to address the needs of the community by focusing on academic achievement and higher learning. Miami Gardens is currently home to one of CBT’s four

Developing partnerships and working with industry leaders are important for educational establishments.

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MIAMI GARDENS OVERVIEW

campuses. It is a for-profit college founded in 1988 with approximately 1,000 students across its campuses. It offers academic degree programs, technical professional certifications and vocational diploma programs with focuses on business, information technology and allied health and science programs. Fully recognizing the need for synergies between the worlds of business and education, both the development of partnerships and working with industry leaders are important for educational establishments. The Gus Machado School of Business at STU will open in fall 2017 and will be equipped with Bloomberg terminals, a trading floor and an ethical hacking lab. The FMU School of Business offers experiential learning opportunities with internships at more than 40 businesses including ExxonMobil and Bank of America. Live it up Quality-of-life improvements include implementing programs to bring residences up to code and increase property value. The goal of the first, the Neighborhood Stabilization Program, is being made possible through almost $9 million in federal grants from the Depart-

162 | Invest: Miami 2017 | MIAMI GARDENS

ment of Housing and Urban Development (HUD) and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The program aims to â&#x20AC;&#x153;return vacant, foreclosed or abandoned residential properties to occupancy as quickly as possible, revitalize neighborhoods through the rehabilitation, redevelopment and reuse of these vacant properties, and to provide affordable homeownership within the city.â&#x20AC;? The city has so far acquired 79 abandoned and foreclosed properties. Of those, 72 properties have been rehabilitated and sold to first-time homebuyers. The program has also seen 16 unsafe properties demolished, with another three pending, two properties have been given to nonprofit organization to offer as low-income housing and another five properties under rehabilitation or awaiting sale as of time of print. The Housing Stabilization Program allows residents to apply for city grants to repair housing. The application process opened in September 2016 and received 550 applications. These programs are designed to return blighted properties to use as quickly as possible and increase the property value of occupied residences while increasing the opportunities for affordable homeownership in the community.

MIAMI GARDENS OVERVIEW

Go large Concerning the development of commercial real estate and bringing businesses to Miami Gardens, Gilbert told Invest: Miami that he wanted to make the development of commercial property and businesses as easy as possible. One recent development project is I.M.C Property Management’s purchase of the Carol City Shopping Center, which had been in use as a flea market, in order to develop a 300,000-square-foot, Class-A retail center with $50 million of investment. The existing building was demolished in the first quarter of 2017 with development following. The new retail center will provide Miami Gardens with an influx of commerce and job opportunities for the local community. MDH Partners is also investing in Miami Gardens. In January 2017, it acquired six warehouses and an office building, totaling 600,152 square feet on 22.2 acres for $44 million. One of MDH Partners’ latest acquisitions, EastGroup Properties, bought 61 acres of land in the city in November 2016 to build a 850,000-square-foot industrial park. An office park is slated for construction after decoupling the Calder Casino and Race Course After having and rezoning the land for light commercial, which will include street-side retail space. Job smart Employment in Miami Gardens is on the rise with the Topgolf facility project having broken ground in January 2017. Construction of the $23-million, three-story sports entertainment facility, which will include a driving range, restaurant and bar, is creating 262 immediate jobs. In addition to the immediate construction jobs, after it is built, the facility is expected to create 450 permanent jobs and bring in $200,000 in tax revenue annually for the city. Other large employers in the city include the Amazon Distribution Center, which opened in December 2015, Wal-Mart, which has two locations in the city, discount grocery store Aldi, which opened its second store in 2016, Amscot Financial, which also opened in 2016, and the Jessie Trice Community Health Center. In addition to the city incentivizing more businesses to set up shop in the city, the planned retail center in place of the Carol Shopping Center, which will include a Wawa convenience store/gas station, as well as the establishment of the industrial park and retail frontage by Calder Casino and Race Course are expected to bring many new permanent job opportunities. This will help further alleviate the city’s unemployment rate, which stood at 7.2 percent in December 2016, a reduction of more than 1 percent from the previous year.

Monsignor Franklyn M . Casale President, St. Thomas University

Miami Gardens faces challenges, but we are working with the community. We have many initiatives in both the public and charter schools here, and use state and federal grants to increase educational success. We also have important programs at St. Thomas University (STU) that are geared toward helping mature students who want to begin or complete a college education. We have developed many of our new programs based on what The Beacon Council, the County’s business development agency, has identified as target industries through their One Community One Goal Initiative. To best serve the employment market, we have added market-ready programs in cybersecurity and big data, along with expanded nursing and health sciences offerings. There has been a significant expansion of our business advisory board, and we have a president’s advisory board made up of mostly business people and people who are related to the different fields in each one of our schools. Additionally, we are proud that over 1,200 of our students in our undergraduate, graduate and law programs are Miami-Dade natives. The government has to remain involved in supporting higher education, especially if it is going to be more accessible. We cannot do it ourselves, especially as private independent institutions. Money is not wasted in higher education at STU. We are constantly looking at our finances in order to offer the best for our students. We need to ensure that people appreciate what we are doing and make funds available. The business community also needs to be slightly more forthcoming, not only with resources, but also with opportunities. We have wonderful higher education institutions in this community, and local businesses need to embrace this. They need to consider our institutions while recruiting. The trustees and friends of STU are very generous. We actually have scholarship funds that are entirely created through donations and private foundations. That is how we are able to help provide support for many students. The state and federal governments provide some funding, but it is not enough.

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Jason Barker President, ChenMed

What business advantages do you enjoy from your home base in Miami Gardens? Our headquarters location is perfect. We are where several highways come together. Because of this, we have easy access to our clinics both north and south. Plus, the busy highway system gives us great visibility. Thousands of potential customers drive past ChenMed every day. We also benefit from a diverse and excellent talent pool with competencies in healthcare. Our centers are multilingual and multicultural, effectively serving, Cuban, Haitian, and African-American patients in convenient neighborhood locations. Our centers are not located in high-rent areas. So, we can focus more resources on serving patients; and can continually test and refine innovative approaches to care. Ours is a culture of love, accountability and passion. Our physicians annually see fewer than 400 patients on average, intentionally. As a result, our physicians frequently see patients up to 12 times per year. Because our patient panels are one-fifth as large as the national average, our doctors nurture outstanding relationships with each of their patients. Better physician/patient relationships, combined with onsite specialists, laboratory tests, medication delivery, and courtesy transportation really make Chen Senior Medical Centers special places – especially for seniors living with major and complex health challenges. How do technology innovations improve your patient care? Our nimble IT company, ChenTech, is constantly improving our electronic health records system and other end-to-end technologies designed specifically for medical practices that deliver value-based care. We leverage technology to empower ChenMed doctors, so they can continuingly help patients achieve better health outcomes. ChenTech offers custom services like Silicon Valley – all to help doctors stay focused on patients and best practices. 164 | Invest: Miami 2017 | MIAMI GARDENS

Crime prevention pays The city is making use of smart land use, business development and social engagement to reduce crime. It is employing deterrent factors such as security cameras in parks with the ability to monitor them, activating public space and parks and encouraging entertainment venues to open as well as enforcement such as enforcing public housing lease agreements and hiring more local police officers to create a greater sense of community. The city’s drive to make use of empty space, brings in new business opportunities and lights while removing areas where people might congregate. Gilbert has said that, as a former prosecutor, he is ready and willing to clamp down on the small fraction of the population responsible for the majority of crime. The Miami Gardens Police Department also opened its Real-Time Crime Center in August 2016. This hightech crime enforcement center allows the police to monitor daily operations in the control room with video analytics programs, license plate scanners and real-time gunfire detection. The center also includes a Joint Operations Center that facilitates collaboration with federal agencies. Through the uniting of multiple data streams, this new system allows the police to better “identify crime trend and hotspots, use its resources more effectively and work faster and safer” with a better understanding of the community. Stadium rock Opening in 1987 as the Joe Robbie Stadium, the Hard Rock Stadium remains one of the city’s main attractions and one of its largest payers of tax. The stadium has undergone a $500-million renovation to improve seating and screening with phase one finishing in 2015 and phase two completed in 2016. Dolphins owner Stephen Ross paid the majority of the costs, $350 million, with $50 million met by the NFL and the remaining $100 million borrowed. the Hard Rock International paid $250 million for an 18-year naming deal. In 2015, the stadium saw revenues increase some 11 percent in an early indication that the renovations were paying off. Despite the overall reduction in the number of seats, higher priced innovations such as the Hard Rock Living Room boxes and the 72 Club are increasing the revenue stream. In addition to football, the stadium will also play hosts to the El Classico, a sold-out soccer match between Spanish teams Real Madrid and Barcelona, and a number of high attraction rock acts are planning performances at the revenue in the coming months. The success of the Dolphins and the stadium has impacted the local community not just in terms of

MIAMI GARDENS OVERVIEW

visitors, tax revenues and employment. The Miami Dolphins Foundation has donated more than $50,000 toward the renovation of the Lester Brown Park and Brentwood Pool. In 2015, as part of a $1-million, fouryear partnership with City Year Miami, the foundation sponsored a training program at the Norland High School in Miami Gardens. Vibrant culture Miami Gardens is host to many events throughout the year. Premier among them is the Jazz in the Gardens music festival, held annually during the third weekend in March at the Hard Rock Stadium. Now in its 12th year, Jazz in the Gardens Music Fest “celebrates diversity, culture and art through various genres of music.” With an $80,000 grant from the Knight Foundation, the 2017 festival included a Film, Music, Art and Culture (FMAC) conference March 17 and 18 at the Florida International University Kovens Conference Center. The event showcased and celebrated a diverse range of arts from South Florida and offered networking for professional artists, educators and students. The conference also played host to the finals for the

National Poetry Competition March 16 and concluded with a luncheon March 18 that featured talks with prominent industry leaders on longevity, business and other topics of interest as well as a women’s panel. The city’s Martin Luther King Jr. Celebration, Unity in Community Day takes place annually in January as an event to further build community while celebrating the legacy of Dr. Martin Luther King Jr. Gilbert hosts the celebration, which “includes community resource information, live entertainment, bounce houses for the kids, food trucks and more.” The local culinary festival, the Miami Gardens Wine and Food Experience, is held annually in November at Calder Casino. The festival offers the chance to sample food from around the world and meet food industry professionals. It includes the chance to see the best at work with professional cooking and baking contests. Proceeds from the festival benefit the Grandparents Raising Grandchildren Association of Miami Gardens and the Juvenile Diabetes Research Foundation. The city also organizes the Miami Gardens Cultural Express, monthly trips for children aged five to 13 to museums and cultural events such as music, theater

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The Real-Time Crime Center, Miami Garden’s high-tech crime enforcement system, opened in August 2016.

and dance performances and book fairs throughout Miami-Dade. The beginning of the NFL season brings the Miami Dolphins back for home games at the Hard Rock Stadium from September through January. The stadium also hosts the NCAA Orange Bowl in late December and early January. The Orange Bowl, a highlight of the stadium’s calendar, is an annual college football game and is part of the College Football Playoff. The game has been played in Miami since its inception in 1935 and moved from Little Havana to its current home in 1996. Traditionally played at the end of December or beginning of January, the 2016 game between Florida State and Michigan had an attendance of 100 percent capacity, more than 65,000 seats. The close match saw Florida State beat the visitors by one point at 33-32. Looking ahead Miami Gardens is looking forward to the new jobs that have already been created by construction and those that will be created by Topgolf, a new industrial park and surrounding retail space once construction is complete. MDH’s renovation of office space will also offer incoming businesses space to establish and expand. Miami Gardens, unlike many cities, has a wealth of space for new businesses to build and open amid an established community. 166 | Invest: Miami 2017 | MIAMI GARDENS

By rezoning parts of the city for commercial use with an entertainment overlay, Miami Gardens has primed itself for an influx of new businesses. In addition, the city’s business initiatives expect to attract new enterprises such as restaurants and other entertainment venues that will both add to the community’s quality of life while reducing trouble areas by further building up the city as a cohesive community and reduce crime through preventative measures. Gilbert’s business-forward strategy is working to build the city’s commercial fabric in-line with the community, aiding both businesses coming from outside as well as offering funds to local business owners to renovate and increase quality. These measures will in turn create job growth, strengthen community, increase quality of life and bring in more tax revenue to the city so it can continue to build and improve on its initiatives for both residential and commercial properties.

Capital Analytics would like to thank the City of Miami Gardens for its contribution in compiling this chapter. To learn more, visit their website www.miamigardens-fl.gov

Arts, Culture & Tourism: There is plenty to boast about when it comes to tourism in Miami. With the growing cultural offerings from modern art exhibitions to funky music festivals, or the simple fact that Miami offers year-round sea, sun and sand, itâ&#x20AC;&#x2122;s no surprise that tourism and hospitality account for a major slice of the countyâ&#x20AC;&#x2122;s economy. Even with the Zika virus and traditional overseas markets turned off by unfavorable exchange rates, visitor numbers keep on growing.

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Arts, innumbers: numbers: Arts,Culture Culture&&Tourism Tourism Greater Miami visitors year-on-year change (percent):

Greater Miami total visitors December 2015-November 2016:

900,000

574,200 617,100

540,300 549,100

400,000

-2

528,300 552,100

652,900 607,500

646,700 623,800

609,800 682,000

559,200 678,000

616,800 695,500

742,900 851,300

640,100 742,400

-0.3

-5.7

-1.3

-0.5

500,000

1.5

2.3

2.9

5.4

4.9

4.8

1.8

600,000

754,800 736,900

700,000 2

Domestic 734,700 792,800

800,000

International

300,000

-4

200,000 -6 -8

100,000 DEC 2015

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

2016

DEC JAN 2015

Source: Greater Miami Conventions and Visitors Bureau

FEB MAR APR MAY JUN JUL AUG SEP

OCT NOV

2016

Source: Greater Miami Conventions and Visitors Bureau

Top 25 international markets for Greater Miami (2015):

382,225 Germany 325,993 The UK Colombia 554,606 312,643 Venezuela 263,666 Bahamas 212,276 Costa Rica 208,914 France Canada 696,297 206,057 Ecuador 176,789 Italy 175,858 Peru 173,157 Jamaica 172,253 Chile 140,346 Mexico TOTAL FOREIGN VISITORS Brazil 747,452 69,437 Netherlands 64,980 Switzerland 63,980 Bolivia 39,202 Sweden 34,713 Denmark 32,653 Norway 28,649 Spain 22,485 Dominican Republic Others 1,947,353 21,540 Panama Argentina

432,168

7,506,000

Source: Greater Miami Conventions and Visitors Bureau

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ARTS, CULTURE & TOURISM OVERVIEW

More than just sunshine: Miami-Dade is evolving beyond its reputation as a beach and party destination to become an international hot spot with worldclass cultural offerings Miami-Dade County is catering to both domestic and international visitors as well as business travelers as a major destination for high-end, luxury tourism and cruises as well as promoting heritage neighborhoods addition to the picturesque area and attractive climate. It is working to promote its gastronomic and cultural offerings and the area is also considering niche areas such as its burgeoning medical tourism industry. Miami-Dade is in the top-five domestic tourist destinations in the U.S. and experienced a significant, 2 percent increase in 2016. The Greater Miami Conventions and Visitors Bureau (GMCVB) works with and has partnerships with the government, the private sector, Visit Florida and BrandUSA to expand the areaâ&#x20AC;&#x2122;s tourism industry and destinations. Money maker The tourism industry brings in, on average, $2 billion annually to Miami, making it one of the busiest

destinations in the world. It attracts domestic visitors as well as those from South and Central America, the Caribbean and Europe, and tourism revenues account for 3.92 percent of Floridaâ&#x20AC;&#x2122;s total gross domestic product (GDP) and 5 percent of Miamiâ&#x20AC;&#x2122;s GDP, not including air travel, shopping and the cruise industry. According to Miami-Dade Mayor Carlos Gimenez, Miami Beach alone provides jobs for 60,000 to 70,000 people of the more than 150,000 employed in the hospitality and leisure services industries. Miami has been seeing record-breaking arrivals since the bumper year of 2014, which saw a 6.4 percent increase in visitors. Even the statewide Zika virus alert in 2016 did not put too much of a dampener on the industry. The alert was issued in February 2016, and Miami-Dade was able to eradicate all mosquitoes carrying the virus in its locality by the following December. The GMCVB is also helping the area capitalize on www.capitalanalyticsassociates.com

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Miami’s diversity by encouraging cultural tourism and partnering with local communities. North Miami, Overtown and Coconut Grove are three areas that are experiencing an increase in interest because of their cultural significance. The Historic Virginia Key Beach Park is also attracting interest, having played an important role in the Civil Rights movement. Little Havana and Little Haiti are important communities of international diaspora, with touristic charm. According to 2015 figures from the GMCVB, Brazilians were the largest single group of foreign tourists, leading the pack with 747,542 visitors, up 2 percent from the previous year despite the massive fall in the value of their currency. This was followed by 696,597 visitors from Canada, 554,606 from Colombia, 432,168 from Argentina, 382,225 from Germany and 325,993 from the U.K., with visitors from Venezuela, the Bahamas, Costa Rica and France rounding out the top 10. The increase in visitors has in part been fueled by larger number of international flights, with new routes from Europe added by carriers such as Lufthansa’s Eurowings, Austrian Airlines, Scandinavian Airlines and Turkish Airlines.

Business Enhancement Program to reach out to businesses to help them expand and become more tourist ready. The initiative included a college training program, social media outreach and marketing to expand the scope of Greater Miami’s potential in collaboration with local communities such as Coconut Grove. Approved in January 2016, the GMCVB has also been promoting the development of a 100-percent privately funded 800-room headquarter hotel next to the Miami Beach Convention Center. It is hoped the hotel, slated to open in March 2019, will help to attract business to the convention center, which is currently undergoing a $615-million renovation and expansion. The “Market the Welcome” campaign is a new program from BrandUSA, in conjunction with Miami International Airport (MIA) and the GMCVB. The campaign aims to maximize the arrival experience of those landing in the MIA, the busiest airport in Florida by annual passengers, with a series of electronic signs and artworks. The organizers hope to create a positive image for the state and country as well as promote local companies, cultures and attractions. In a similar move, Miami-Dade is also working to boost its national park tourism by partnering with award-winning photographer Clyde Butcher in an exhibition of his works. Featuring South Florida’s national parks such as the Everglades National Park, Biscayne National Park and Big Cypress National ( )

A number of new international routes are likely to bring visitors to the county from new markets.

Take the initiative With tourism being such an essential part of the area’s economy, publicly funded agencies have been playing a major part in promotion. In 2016, the GMCVB’s implemented its Tourism

Rick Sasso Chairman – MSC Cruises USA

Cuba is a market that we have been in for some time and know very well. Our industry has enormous growth potential worldwide and Cuba is no exception, so competition will not be a problem for the moment. When we look at markets like Cuba, there is opportunity for all of us. Of course, we will compete – who has the biggest ship, the longest stays, Cuba as the only destination or as part of an itinerary – but in the end, it turns out that we are adding a nice new dimension to the landscape of the Caribbean.

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ARTS, CULTURE & TOURISM INTERVIEW

Record breakers How Miami is experiencing great tourism numbers despite set backs

William D. Talbert III President & CEO — Greater Miami Convention & Visitors Bureau What were the main achievements of Greater Miami Convention & Visitors Bureau (GMCVB) in 2016? Tourism was up 2 percent in 2016, making it a record year. That is a significant achievement, accomplished as a result of partnerships the bureau has with government, the private sector, Visit Florida and BrandUSA. This is despite a number of serious challenges, including the Zika virus. The governor declared a statewide alert for Zika in February 2016. Miami-Dade County, and specifically the mosquito control division, along with the state health department and various cities, aggressively went after the mosquitos carrying the virus. By December, we had eradicated locally transmitted Zika. It is the first place in the world to do that. The development of a vaccine is now being fast-tracked, so we are really pleased. Hurricane Matthew hit in October 2016, closing the airport over a holiday weekend. Also, tourism from Brazil, which has been our top international market, saw a sharp drop in the first nine months of 2016. For the calendar year 2016 to have record tourism with overnight visitors up 2 percent in the face of Zika, a hurricane, fluctuation in international currency exchange rates and our largest international market down almost one-third, is impressive. Other markets, such as Colombia and Argentina were up double digits. Also of note is that the Miami Beach Convention Center, the region’s largest convention center, is undergoing renovation and expansion. This reduced the amount of business coming to Miami, yet we still had a successful year. That shows the brand is very strong. Are you concerned about the strengthening of the U.S. dollar and the impact on visitors coming to Miami? Even with currency issues in countries such as Brazil, visitors from our other top-10 destinations were up. Columbia and Argentina were up double digits. Germany

was up a point and a half, the UK was up 5 percent, the Bahamas up 8.5 percent, Costa Rica 1 percent and France 3 percent. So we’ve had these currency issues over time, but only two out of 10 were down. What are your expectations for the high-end tourism? Miami is a luxury destination, ranked in the top domestic markets based on hotel inventory. In 2016, we were in the top-five tourist destinations in terms of revenue, which reflects the luxury segment. Much of this is due to the strategy of year-round tourism – with each of the four quarters of the year having about the same number of visitors. Spending increases a little during certain periods, such as during the summer months of July and August, when it is winter is the Southern Hemisphere. www.capitalanalyticsassociates.com

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( ) Preserve, the exhibition is also at MIA and should encourage the nearly 40 million visitors that come through the airport annually to explore what the region’s national parks have to offer and diversify the state’s tourism industry. Despite the recent threats to its funding, Visit Florida, the state’s official tourism marketing corporation, has continued to work closely with events planners, tour operators and travel agents to maximize visitors. The organization operates the state’s five official welcome centers, as well as organizing trade and consumers shows. The possibility of losing finance could mean disaster for the numerous attractions and event planners throughout the state, which rely on Visit Florida for advice and promotion. On March 29, 2017 the organization agreed, along with Enterprise Florida, to more transparency as part of an ongoing attempt to retain state funding.

The shipping news Miami is “the cruise capital of the world” and the cruise industry has not been left behind with the increase in tourist numbers. The president and CEO of MSC Cruises, Rick Sasso, explained that the 18 cruise lines operating out of PortMiami, rather than saturating the market, need more bays to be able to meet already large and growing demand. PortMiami’s renewed contracts with Disney Cruise Line and MSC Cruises will bring in a minimum of 425,000 passengers to the port and $17.4 million in revenue annually. MSC Cruises and Miami-based Norwegian Cruise Line Holdings and Carnival Cruise Line are in the process of expanding operations to tap the large and emerging Asian market with cruises from China. With almost 1 million Chinese passengers going on cruises in 2015, up from just over 700,000 the previous year, numbers are sure to rise with increased calls at Chinese ports.

The opening up of U.S. and Cuba relations has created a new destination for cruise operators to explore.

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ARTS, CULTURE CONSTRUCTION & TOURISM OVERVIEW

Norwegian Cruise Line Holding will have four ships that can accommodate 7,000 passengers visiting Hong Kong, Xiamen, Shanghai, Dalian and Tianjin while MSC Cruises will be adding a second, 4,363-passenger ship to serve Asia making port stops in China, Japan and Korea. Carnival launched a new Miami-Cuba cruise in May 2016, making it the first U.S. cruise company to visit the Cuba since the beginning of the embargo in the 1960s. The historic voyage saw U.S. tourists warmly welcomed by Cuban locals. Recently mended ties between the U.S. and Cuba are creating cruise opportunities for voyages to the island as well as introducing it into existing itineraries. PortMiami is also set to open a new terminal in partnership between Miami-Dade and Miami-based Royal Caribbean in 2018 that will be able to accommodate the cruise line’s massive, 6,000-plus passenger, Oasis-class ships. The terminal is expected to generate 4,000 jobs and a have a financial impact of $500 million. Increasing passengers coming to PortMiami will boost the Greater Miami area’s land-based tourism and hospitality industries along with the local economy. The agreement with Royal Caribbean will keep the ships in Miami-Dade for at least 20 years and up to 60 years, creating a regular revenue stream to the city. Walking the grove Coconut Grove is another area of the city that hopes to profit from Miami’s promising tourist industry. Coconut Grove was established in the mid-1800s, by settlers from the Bahamas, and the area still retains much of its Bahamian heritage. South of the downtown area, the Coconut Grove Business Improvement District (BID) was established in 2009 by local property owners and merchants. BID works to improve the area by sponsoring special events, create business relationships and ensure the Grove, as it is locally known, stays in the best condition to receive visitors. The Coconut Grove Collaborative Development Corporation (CDC), founded in 2010 led by Jahil Rashid also seeks to maximize the potential of the area with private support and an emphasis on community involvement. “We have a focus on business and economic development. This is critically important because there has been a lot of emphasis on the artifacts of the community, but not as much on the people. In Coconut Grove, tourism is a leading industry. We want to give the historical residents a role in that tourism,” Rashid told Invest: Miami.

Lisa Lutoff-Perlo President & CEO, Celebrity Cruises

How have changes in the Miami tourism sector impacted the cruise market? At Celebrity Cruises, we have seen a growth in a number of areas, including millennial travelers looking for new experiences, requests for off-the-beaten-path destinations, and longer overnights in popular cities. We have also had a surge on our signature sailings, where we take guests to in-demand destination-specific events like Mardi-Gras in New Orleans, celebrating the Pingxi Sky Lantern Festival in Taiwan, Chinese New Year in Hong Kong, Fourth of July in Boston and now we have year-round cruising to the Caribbean. So far, we have not seen a decline with the number of guests we are seeing from Latin America. Our four source markets there have seen steady interest and bookings, and we continue to have new offerings to entice them. Latin America as a destination, continues to be popular for guests. Cuba has become one of the fastest-growing cruise destinations under former President Obama’s “people to people” license encouraging cultural and humanitarian exchanges. There are still some tourism limitations, and we are hopeful that relations will stay strong opening Cuba to all who want the experiences. What are the main expectations and opportunities with the building of the largest cruise port in the country at PortMiami? Richard Fain, Chairman and CEO of Royal Caribbean Cruises, has long dreamed of building the PortMiami Terminal. It will have a significant economic impact on Miami-Dade area. The expectations are that the design and flow of the terminal will ease the embarkation and debarkation process for guests, making it easy to experience cruising, access transportation options and navigate their vacation experience without the stress that sometimes comes along with it. The financial implications on Miami-Dade include 4,000 jobs and an annual infusion of $500 million annually. www.capitalanalyticsassociates.com

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Franklin Sirmans Director, Perez Art Museum Miami

When people think about Miami, often, they think about private art collections that have historically driven the arts scene. We are trying to reshape that conversation to include the importance of an institution. Our goal is to be one of Miami’s great public institutions, dedicated to international contemporary arts, reflective of our surroundings, representing the work of the Caribbean and Latin America and a place for community conversation and dialogue. Miami is rapidly evolving right now and is home to more and more arts institutions. There is a real sense of collectivity and a relationship to art and cultural institutions. But, we are also a city that is growing in every single way. Our artists are choosing to live here. We have great programs at the preschool levels up to high school like New World and DASH. Undergraduate programs at Florida International University and the University of Miami are also doing well. There is a foundation strengthening and the conversation is evolving. One of the most important trends has been the evolution of Miami as a year-round destination for arts and culture. There was a time when one talked about an “arts season” but over the years an explosion in the Miami arts scene has led to MiamiDade being a must-visit location to see important work by a variety artists throughout the year. One example of this is PAMM’s first major exhibition focused on Jean-Michael Basquiat’s notebooks that ran from August until mid-October. The beautifully organized retrospective of this very important artist and accompanying interactive gallery was well received by visitors and journalists alike during a time that was once considered “out of season.” Miami has indeed become a global arts capital. The biggest challenge is getting people to understand a level of civic interaction that is still part of a young, growing city with people who are coming from all over the world. The biggest challenge is getting everybody to buy in on the idea of representing who we are through our institutions, as opposed to as individuals. That is what we are working on. 174 | Invest: Miami 2017 | ARTS, CULTURE & TOURISM

The Perez Art Museum of Miami features works from local and international artists.

Business is centered in the area known as the Village, which features restaurants and retail establishments. In addition to its picturesque seafront, Coconut Grove has its own take on Miami’s cultural offerings. KROMA Art Spaces and Studios is focused on promoting the best the community has in visual arts with 18 creative studios and two communal exhibition spaces. A new visitor center was opened at KROMA with the support of GMCVB in 2014. One of the innovations of the CDC has been the Grand Avenue Kiosk project. Along the central road through the main district, tourists can find newly renovated yellow kiosks with guides, coupons and information about local attractions and places to eat and shop. During peak hours, the kiosks are staffed by Brand Ambassadors. Cultural center Although associated in the past with visitors searching out hot weather and parties, the Miami area is home to myriad cultural and art centers such as museums, art galleries and performing arts venues. Perez Art Museum of Miami (PAMM) The Perez Art Museum of Miami features permeant exhibitions with works from Overtown’s Purvis Young and pop art pioneer James Rosenquist as well as Kiki

ARTS, CULTURE & TOURISM OVERVIEW

Howard Herring President, New World Symphony

Smith, Joseph Cornell, Kehinde Wiley and Frank Stella. Other artists featured include Latin American artists such as Wifredo Lam and Diego Rivera. Temporary exhibitions have included Inside|Out, Sarah Oppenheimer: S-281913, Susan Hiller: Lost and Found and Julio Le Parc: Form into Action, Routes of Influence. The gallery also does educational outreach. “PAMM has a robust arts education program and is the largest provider of art education outside of Miami-Schools, reaching more than 130,000 children since opening in December 2013. Programming is a big part of what we do and we do that both inside and outside the museum. We have a program where our education outreach is paramount,” Franklin Sirmans the director of PAMM told Invest: Miami Frost Science Museum The Frost Science Museum is currently undergoing a $305-million renovation its new location in Downtown Miami’s waterfront Museum Park. Financing issues have pushed back its opening, but administrators say it will hold a grand opening event on May 8, 2017. The museum features a planetarium, aquarium and science exhibitions. It has earned national awards for its summer camps and after-school programs.

The New World Symphony (NWS) – America’s Orchestral Academy, began as an idea in the late 1980’s as a fresh approach to music education. It is a fellowship program that selects 87 talented graduates of distinguished music schools and conservatories for three years of study. The curriculum is based on the aspirations of each individual player and the faculty assessment of the future of the art form. Alumni of the New World Symphony are members of orchestras across the U.S. and in Europe, South America and Asia. The New World Center is an educational facility designed to engage indoor and outdoor audiences in the heart of Miami Beach. Its outdoor projection wall – an outward-facing expression of NWS’ institutional goal of engaging a broad public – has created instant community, attracting audiences that regularly assemble outdoors for New World Symphony concerts, weekly films, Art Basel Miami Beach video art and other cultural content. As part of New World Symphony’s practical curriculum, fellows are designing performance and engagement strategies to attract multiple audiences. Millennials are a specific target audience. They have come of age in a digital and visual environment. Fellows use social media and visual elements to make the musical experience more powerful. New World’s community programs, such as MusicLab and Side-by-Side, are investing in Miami’s youth, helping to position them for bright futures, while simultaneously giving fellows firsthand experience with mentorship. NWS fellows partner with local programs that have flourished based on the vision and hard work of their leaders. Two prime examples are the Miami Northwestern Senior High School band program and the Miami Music Project. The mission in the beginning is the same today – to prepare post-graduate music students to be leaders. Just now in Miami, donors are becoming investors in art forms and institutions, realizing the work of artists and institutions has direct impact on the economic sustainability and social viability of the community. New World is seeking philanthropic partners who are interested in building a city of the future. www.capitalanalyticsassociates.com

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John Padgett Chief Experience & Innovation Officer, Carnival Corporation

The cruise industry has become the fastest-growing part of the global vacation sector. South Florida, and Miami in particular has reaped huge dividends as travelers from around the world descend on the region to enjoy what we have to offer. In an effort to create even more reasons for consumers to consider ocean vacations, Carnival Corporation has been developing the cruising’s next major transformation. The One Cruise Experience Access Network (OCEAN), creates the opportunity to deliver ever more personalized and memorable experiences to cruisers, through original, authentic broadcast content and our amazing vacation experiences. The centerpiece of OCEAN is a device called the Ocean Medallion. It can be worn or carried and provides the means to amazing personalized experiences based on a guest’s location, their personal preferences and cruise history. The Ocean Medallion leverages the internet of things to create a stress-free time filled with the things holidaymakers enjoy, personalized to their own tastes. The medallion changes everything about the cruise vacation experience by enhancing how our crew interacts with our guests in innovative ways with a focus on making the most of their vacation experience. Medallion Class vacations debut in November 2017 onboard the Regal Princess cruises departing Fort. Lauderdale, followed by the Royal Princess and Caribbean Princess, which will begin offering Medallion Class voyages in early 2018. Looking further ahead, Princess will transform all of the vessels in its fleet to Medallion Class ships in coming years. And we as a corporation plan to expand the innovation to additional cruise brands in the future at a pace and schedule that makes sense for our guests, shareholders and operations teams. This is an extraordinary innovation that will not only change what consumers expect from the guest experience in the cruise industry, but in the broader vacation sector, with applications in other industries.

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The Wynwood Walls have attracted some of the best street art and graffiti artists from around the world.

New World Symphony Named after Dvorak’s Americana-inspired final work, the New World Symphony, the New World Symphony (NWS), is a breeding ground for the classical music stars of tomorrow. Both an academy and a respected concert venue, the NWS has community programs that include MusicLab and Side-by-Side, which gives young musicians the chance to perform with full fellows at the academy. Utilizing social media and visual elements to increase the power of the musical experience it presents, NWS regularly attracts audiences to its outdoor Wallcast concerts and other community-oriented events. Adrienne Arsht Center for the Performing Arts The Adrienne Arsht Center for the Performing Arts

ARTS, CULTURE & TOURISM OVERVIEW

presents more than 300 dance, theater and musical performances every year including family shows, operas and contempered singers. The center features an opera house, studio theater and concert hall. In 2017, it will host the International Hispanic Theatre Festival, the British progressive rock act YES, an Ella Fitzgerald 100th Birthday Tribute and the famous ballet, The Nutcracker. The center has relationships with Miami-Dade public schools, local teaching artists, arts organizations and resident companies to help involve the local community. It sees audience numbers of around 400,000 annually. “It is the diversity of our community that causes the arts to resonate on our stages in the street on the walls of our museums. We are working collectively to leverage that excitement. The arts have caused an intensity in Miami, as a place where the quality of living is important. The arts help people speak to each other as a community, and the arts are becoming more and more part of the Miami brand,” John Richard, president & CEO told Invest: Miami. Miami City Ballet The Miami City Ballet’s (MCB) is also committed to community involvement with an outreach program to connect with the area’s youth through schools. Its Ballet Bus initiative provides full scholarships for dance programs for underserved children. The MCB’s 2017 to 2018 season includes a new Nutcracker production, and it offers classes in its MCB School for children, students and pre-professionals. Time to get down Miami-Dade is also host to numerous events and festivals, including Miami Live Arts Month, music

Jared Galbut – Managing Principal, Menin Hospitality & Keith Menin – Principal, Menin Hospitality It is an interesting time for hotels to attract new visitors to the market. Our normal visitors from Latin America are now facing a strong dollar, making it less attractive to vacation in Miami. For some countries, the situation is too unstable to allow them to travel. It forces hotels to look inwards to remain competitive and differentiate ourselves in the market. Miami has always been a destination for high transient business. That is now changing. We are focused more on social, military, educational, religious and fraternal clientele to help boost business and remain competitive.

www.capitalanalyticsassociates.com

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festivals such as Ultra, Winter Music Conference and Jazz in the Gardens Music Fest in the City of Miami Gardens. There are also culinary festivals such as the South Beach Wine and Food Festival and culture and arts events such as Art Basel. Miami Live Arts Month takes place every November and features Miami’s best music and arts with live performances throughout the city and on its beaches. The festival is known for its jazz program, combining a mixture of local and international acts. The Winter Music Conference is a weeklong, electronic music conference on Miami Beach that takes place in March. It presents seminars panels and workshops for industry professionals and those interested in electronic music. The yearly event attracts 60,000 visitors from almost every country in the world. The South Beach Wine and Food Festival features more than 85 events over five days in November, “showcasing the talents of the world’s most renowned wine and spirits producers, chefs and culinary personalities” and draws in more than 65,000 guests annually. The festival is hosted by Southern Glazer’s Wine & Spirits and Florida International University (FIU), and gives a chance for FIU’s hospitality

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Miami Beach attracts the most tourists within Miami-Dade, 40-50 percent of overnight hotel guests per year.

ARTS, CULTURE & TOURISM OVERVIEW

and tourism students to get real world experience. The event also helps the university financially with all proceeding from the festival going back to the FIU. Art Basel takes place in December the Miami Beach Convention Center. It is a premier art event for the Americas, presenting exhibitions from around the world, attracting with 77,000 visitors over its five days of event. Keep it classy Miami is seeing an increase in its high-end, luxury tourism sector, with new hotels including the billiondollar Faena Hotel, the first East Hotels outside Asia, SLS Brickell and Starwood Capital hotel. All of these hotels offer the highest services and luxury throughout Miami’s yearlong tourist season. Miami-Dade saw a drop in occupancy rates following a record year in 2015 amid Zika virus warnings although the county was successful in its efforts to eradicate the threat from the area. Other reasons for the drop were the rise in hotel inventory of 4.5 percent, beating the demand, which only rose 2.5 percent, and the effect of home-sharing apps, such as AirBnB, taking a slice of the hotel market. In March 2017, Miami-Dade and AirBnB agreed on a 6 percent tax on AirBnB bookings, although the levy does

not extend to all municipalities. A number of different municipalities within Miami-Dade have differing tax structures for short-term accommodation, The Miami Convention Center is currently undergoing a $600-million expansion and renovation that would include a 288-foot-tall hotel with 800 rooms to accommodate the increasing number of visitors to the center. Voters narrowly turned down the use of public funds for the ground lease for the hotel, so Atlanta-based developer Portman Holdings will be footing the $400-million bill with no public subsidy. The planned completion date is March 2019. Miami-Dade’s many festivals and events that take place throughout the four seasons of the year, with many drawing over 60,000 visitors each, help to increase occupancy the area’s hotels from budget lodgings to the highest luxury. Dream the possible dream When commissioners at Miami-Dade County Hall granted preliminary approval for the American Dream Miami project in January 2017, the project took a step closer to turning from a dream into a reality. American Dream Miami is a multifunction theme park and megamall proposed by Canadian developer Triple Five. If current plans are approved, www.capitalanalyticsassociates.com

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the development will happen in an unincorporated section of northwest Miami-Dade, just south of the Broward County line, at the intersection of I-75 and Miami Gardens Drive. At a proposed 6.2 million square feet, it would be the largest mall in South Florida and feature modern retail opportunities along with a live performing arts center, and indoor and outdoor theme park with amusement park rides, indoor ski and water parks, a skating rink and an Art Deco village, among other attractions. The estimated building cost is set at $3 billion, with a projected completion date of 2022 at the time of Invest: Miami going to press. The design is based on another project by Triple Five, Minnesota’s Mall of America. The developer has stated that the project will attract 40 million visitors per year, create 32,000 construction jobs and have a net benefit of $15 million to $21 million per year. Opponents to the projects have pointed out the traffic issues that would be caused by the development. “We are moving forward with the approvals for the American Dream project. If approved, it will create 15,000 to 25,000 additional permanent jobs. There are also thousands of construction jobs attached. It’s the largest project in Miami-Dade history. We’re looking at the possibilities of other kinds of projects and companies that will add thousands of jobs and opportunities,” Gimenez told Invest: Miami. At the time of going to press, the project was with Florida State legislators for final approval.

Agency for Health Care Administration claimed medical tourism in the state was worth some $6 billion per year. There has been a massive growth of medical establishments in Miami-Dade over the past 15 years, and health institutions have been drawing thousands of patients from outside the U.S. every year. The state’s official medical tourism program Discover Florida Health was launched in 2014, and along with GMCVB is formulating a strategy to increase this nascent, but potentially lucrative, segment. Looking ahead Miami’s tourism industry and its related associations and organizations are continuing their outreach efforts. The area is an easy sell with its picturesque beaches and a climate that almost guarantees good weather 365 days per year. However, much is being done to promote the more cultural side of the visitor experience. Markets such as gastro and medical tourism offer a massive potential to Miami-Dade, which excels in both healthcare and culinary offerings, but agencies need to do more to promote these overseas. The work over of PortMiami has meant an increased capacity for cruise numbers, which along with MIA that is continually adding routes, should increase the number of visitors. Other current and proposed developments in addition to Miami-Dade’s growing stature as a cultural destination will also attract more visitors. This will boost hotel occupancy rates and encourage more cultural happenings, creating employment opportunities in hospitality industries for this unique destination.

Medical and gastro tourism both offer massive potential for tourism in Miami-Dade.

Healthy visit A study done on tourists using hospital services in the year 2013 to 2014 by Florida Tax Watch and the

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Sports: If thereâ&#x20AC;&#x2122;s one thing Miami has no shortage of, itâ&#x20AC;&#x2122;s sports fans. With four major league teams and a newly renovated Hard Rock Stadium, thereâ&#x20AC;&#x2122;s enough going on. A significant Latin American population means soccer is also growing in popularity, with major games being played in the county and the possibility of a new team on the cards.

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Team players: With a mixture of both Latin American and U.S. culture, sports in Miami play an equally important role in people’s lives as the local economy While the home teams have seen mixed fortunes in recent years, Miami-Dade County is attracting major sporting events. Home to numerous professional and college teams in a variety of sports, the county is also an attractive destination for one-time or annual international sporting events such as the Miami Open tennis tournament, the Miami Marathon and international friendly soccer matches, such as the Mexico-Senegal game that took place at Marlins Park in February 2016. The county also plays host to a number of sports conventions, including most recently the 46th Annual Society for American Baseball Research, which took place at Hyatt Regency Miami in June 2016 and the annual convention of the Association of Women in Sports Media which took place in July 2016 at the Mandarin Oriental Miami. These international events, conventions and the area’s own university and professional sports teams generate millions of dollars in revenue each year and play a major role in the economy. The HEAT is on At the end of the 2015 to 2016 season, the Miami HEAT was valued at $1.3 billion, an 11-percent increase from 182 | Invest: Miami 2017 | SPORTS

the 2014 to 2015 season and just above the mean $1.25 billion worth of teams in the NBA. Under the ownership of Micky Arison, chairman of the Carnival Corporation, the team takes in about $180 million in revenue and have an operating income of about $20.8 million. The team’s payroll comes in at fifth-highest in the NBA at $91 million. These numbers make it one the most successful organizations in the NBA. Despite this success, the HEAT is currently in a transition period, bringing in new talent to replace old. In addition to the loss of Lebron James at the beginning of the 2014 to 2015 season, two of the team’s other high-profile players, Dwyane Wade and Chris Bosh, have also left the franchise. Wade left the HEAT as a free agent to join the Chicago Bulls while Bosh, the 11-time All-Star who will collect the $76 million remaining on his Miami HEAT contract, will likely never return to the game due to continued problems with blood clotting. The loss of James, Wade and Bosh, also known as the Big Three, signals an end of an era. Among the 27 NBA players who signed contracts worth $50 million or more in the summer of 2016, the HEAT’s Tyler Johnson, the 24-year-old perimeter

SPORTS OVERVIEW

player and graduate of Fresno State University, was ranked eighth in true shooting percentage, 10th for player efficiency rating and 15th in scoring as of November 2016. Furthermore, his age makes him younger than all but six of the 27 players and no more than just over a year older than any of them. Considering the team’s transitional status, the 2015 to 2016 season was a success for the franchise. Despite a 9-percent drop in the team’s average rating by Sun Sports, the HEAT enjoyed the NBA’s fifth-highest local television ratings, won the league’s Southeast Division and reached the Eastern Conference semi-finals. Looking toward the future, the franchise has also started to branch out beyond basketball into the rapidly growing eSports market. In January 2017, the HEAT established a partnership with the organization known as Misfits, an eSports group which has teams and players in a number of games including League of Legends, Super Smash Bros. and Hearthstone. This move falls in line with a number of other NBA franchises extending their presence in the eSports industry, which was estimated at $900 million in July 2016.

finalized to rename the venue from SunLife Stadium to Hard Rock Stadium after the hotel, casino and restaurant brand took over the rights. Hard Rock is one of the best internationally known names with Hard Rock Cafes in more countries than Starbucks. That the stadium’s revenue has increased despite the decreased seating capacity suggests that the Dolphins are capitalizing on their luxury products such as the living room boxes offered by Hard Rock and the stadium’s own 72 Club, an exclusive indoor lounge. Moreover, because of the change in price points accompanying the complete overhaul of the stadium’s seating, the venue can now accommodate fans from all demographics including corporate clients, families and young fans. The stadium’s owners are also looking to capitalize on the incorporation of Miami-Dade’s heritage into the design of the stadium, which will feature murals by area artists, local materials and a comprehensive wayfinding and branding package. Finally, the directors of the Hard Rock Stadium have integrated technology into the entire fan experience at the facility. In 2016, for example, the franchise established partnerships with SunPass, the state’s electronic toll collection system, and Uber, partnerships which have led to expedient and cashless parking experiences for fans. The Dolphins have also focused the fan experience around the team’s app, which gives them access to mobile tickets and wallets as well as stadium wayfinding. In the future, the executives in charge of the fan experience plan to use technology to enhance tailgating activities, a move which will provide younger, tech-savvy fans and families a more interactive experience at the stadium in the future. The stadium has been awarded the 2020 Superbowl LIV, the first time Miami will hold the event since 2010, and during the NFL’s centenary celebrations. In addition to being home to the Dolphins, Hard Rock Stadium hosts international soccer matches between national soccer teams from Latin America, and the International Champions Cup. In 2017, Spanish teams Real Madrid and FC Barcelona will meet in the International Champions Cup, any game between the two teams is referred to as El Clásico, and is one of the most popular soccer matches in the world. In March 2017, Ross expressed his interest in bringing the Miami Open tennis tournament to the Hard

Luxury sections at the Hard Rock Stadium have helped increase revenue despite renovations reducing seating.

Renewed plays Miami’s professional football team, the Miami Dolphins, is owned by Stephen Ross, who purchased the franchise in 2008 for $1.1 billion. The franchise is now valued at $2.38 billion with an operating income of $58 million. In addition to the team’s increase in value, its revenue also increased 11 percent from 2014 to 2015 by $37 million to $359 million. According to Football Stadium Digest, this increase in revenue can be partially attributed to a renovated stadium, an undertaking which cost the franchise $500 million. The renovation outfitted the venue with completely new seats, four new video boards totaling 22,400 square feet, a new audio system, fiber-optic wifi, new patio areas, new suites and canopies which cover many of the seating areas. Furthermore, the stadium’s capacity was reduced by 10,000 seats, new club seating was added and the stadium’s bowl and sightlines were improved. These renovations to the stadium will be completed before the 2017 season starts once the improvements to the stadium’s access points and club level are made. Along with the renovation, a naming rights deal worth $250 million spanning 18 years was also

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Rock Stadium. The tournament is reportedly worth $300 million and would mean creating a tennis complex and additional hospitality area. Other events held at the Hard Rock include live concerts from high-profile artists such as Beyonce, Coldplay and Metallica. Room to recover The Miami Marlins, the area’s professional baseball franchise, have experienced their own hardships in recent years, most notably the untimely loss of 24-yearold pitcher Jose Fernandez in a boating accident in September 2016. The team has begun to take measures to improve both its financial well-being as well as its winning percentage. The team has recently been ranked among the lowest of the 30 teams in Major League Baseball (MLB) in terms of both value, which Forbes estimated at $675 million, or 29th in the league, and attendance, which totaled only 1.71 million in 2016, the third-lowest in the league. However, because of baseball’s revenue-sharing system, the team has received $142 million over the past four years, the highest revenue in the MLB. Despite the lackluster performance of the franchise, the Marlins have taken steps in recent years to improve

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the team’s performance and increase its revenue. Firstly, Marlins Park has been given the opportunity to host the MLB’s 2017 All-Star Game and Home Run Derby in July, a move which will have an estimated economic impact on the area of around $100 million. Furthermore, in November 2015, the Marlins added Don Mattingly as the team’s manager in a four-year deal. As the former manager to the Los Angeles Dodgers, Mattingly led the L.A. baseball team to three consecutive National League West victories, a success rate which the Marlins hope will be imparted to the Miami team. Finally, the team’s payroll, which is normally the lowest in the league, will increase in 2017 to approximately $115 million, a record amount for the franchise, in order to “make the necessary additions or replacements [for] the team to improve its record,” said the team’s president, Dave Samson. Samson has also outlined two highly lucrative sources of revenue for the franchise. Firstly, he has prioritized settling the naming-rights issue of Marlins Park, which is currently owned by Miami-Dade and operated by the Marlins, by the time the All-Star Game takes place in July. To that end, Samson is in talks with three companies and a commitment from any one of them to procure the naming rights to the stadium would net an additional $5 million in revenue for the

SPORTS OVERVIEW

At the end of the 2015 to 2016 season, the HEAT was valued at $1.3 billion.

team. Secondly, a potentially larger source of revenue would be a revised arrangement for their television rights. The teamâ&#x20AC;&#x2122;s current agreement with Fox Sports Florida (FSF) yields about $20 million per year for the franchise and will do so each year through 2020. Even though this constitutes a significant source of revenue for the franchise, the $20 million per year still falls far short of the revenue from television deals struck by other small-market teams, which are sometimes three to four times more than that which the Marlins have with FSF. Reports emerged in the first quarter of 2017 that the team could be up for sale, with a price tag of $1.6 billion, although speculation in April 2017 said that there were, un-named at the time of printing, groups of investors offering closer to $1 billion. The race is on Motor sports have brought Miami-Dade onto the international stage. The Race of Champions, an international race pitting the most accomplished drivers from acclaimed circuits such as Formula One, IndyCar, World Rally Championship and NASCAR against each other in identical vehicles on a winding course, was held at Marlins Park. This marked the first time that the event had been held in the U.S., therefore putting the Miami venue in the international auto racing spotlight.

The race took place January 21 and 22, 2017. The first day, on which the individual drivers competed against one another, witnessed the victory of Juan Pablo Montoya, a Colombian IndyCar driver. The second day of the event hosted the Nations Cup in which a pair of drivers from one country team up to race against a pair of drivers from another country. Germany came out as the Worldâ&#x20AC;&#x2122;s Fastest Nation with Sebastian Vettel, a Formula One driver, at the wheel. In addition to the high-profile racers, a number of high-tech, high-speed vehicles were featured at the event. VUHL, the Mexican sports carmaker, featured its 05 ROC Edition, a roofless two-seater with carbon fiber wheels and a two-liter four-cylinder Ford EcoBoost engine under the hood. Two other cars that were featured in competition for the first time were the RX Super Lite from Swedish manufacturer Olsbergs MSE and a Polaris Slingshot SLR. These cars will be accompanied by those which have already competed in similar high-profile races, such as the Ariel Atom Cup Car, the Radical SR3 RSX, the KTM X-Bow Comp R and the Whelen NASCAR racer. That the race was held in Miami-Dade gave the manufacturers an opportunity to showcase the latest in high-speed, close-quarters auto racing technology in an environment which enjoys international visibility. www.capitalanalyticsassociates.com

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Build it like Beckham When U.K. soccer player David Beckham signed on with Major League Soccer (MLS) as a member of LA Galaxy, he also gained the right to his own franchise at a discounted fee under MLS’s plans to expand from 20 to 24 teams by 2020. Miami Beckham United is an ownership group that consists of Beckham, pop mogul Simon Fuller, CEO of the Sprint Corporation Marcelo Claure and sports executive Tim Leiweke. For the past three years, the group has been in negotiations to build a new soccer stadium in Miami area to house an as-yet unnamed team. The first proposed site, at PortMiami, was dropped following opposition from existing businesses in the area. A site at Museum Park in Downtown Miami was also opposed by local residents. Following another unsuccessful bid at the Marlins site fell through, in 2015 Miami Beckham United started to finalize plans to build a $150-million, 25,000-seat stadium in Overtown. As of February 2017, the group had already paid $19 million for 6 acres of privately owned

land, but are still to close on another 3 acres needed to accommodate the development. It is hoped that the whole deal will be finalized by the end of the year, with a team from Miami-Dade joining the U.S. league as soon as 2017. There has already been considerable interest in real estate development around the proposed site. Stars of the future Miami’s college football team has seen success over the course of the past year, and the area continues to host one of the oldest bowls in college football, the Capital One Orange Bowl, which, in 2015, generated a net economic impact of more than $100 million and brought about 76,000 visitors to the area who booked 128,000 hotel rooms. As such, the event continues to be a yearly economic driver for the city. The University of Miami (UM) Hurricanes, another important element of the city’s economy, have been identified as one of the teams to win the College Football National Championship, albeit by a long shot. According

Miami Beckham United have been in negotiations with the county for three years to build a soccer stadium.

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SPORTS INTERVIEW

Pride of Miami How the Miami Dolphins put the county on the sporting map

Don Shula Former Head Coach — Miami Dolphins What are the main accomplishments in your career that you are most proud of? What do you want to be your legacy for the Miami Dolphins? I’m proud of my two Super Bowl championships, including the 1972 “Perfect Season” Dolphins team, especially since no other team has gone undefeated in the history of the NFL. I’m also proud of winning more games than any coach in the league, because that’s a reflection of the quality of the players and coaches I worked with. The result of that success has made the Dolphins one of the flagship teams in the league, and I’m especially proud that goal was achieved by doing things the right way with hard work, professionalism, and integrity. What role do professional sports play in helping Miami develop into a sophisticated global city? We were the first professional team in South Florida, and I’d like to believe that our success helped bring all the different elements of the region together. For the many people here who rooted for us, regardless of their gender, age, income or any other difference, they all had one thing in common – they were all Dolphins fans. I think that common bond helped the city grow and become major league in so many ways. What are your views on Coach Adam Gase and the current direction of the team? Coach Gase is an outstanding coach and a great person, and it’s no surprise to me that his team did so well in 2016/2017. Coach Gase, his coaches and players were able to build a winning culture that will be a key to their future success. But that turnaround is also as a result of the leadership of the franchise, headed by Steve Ross, Mike Tannenbaum, Chris Grier, Coach Gase and Tom Garfinkel. They are totally unified in their goal of building a long-term winning team in Miami, and I think you saw the initial result of that philosophy

this past season. They’ve been very welcoming every time I’ve been around them, and they’ve made everyone associated with the Dolphins feel like they are all part of the same family. That’s certainly a great foundation to build a successful team. What impact has the current Miami Dolphins team had on Miami’s overall reputation? I think the fact that our initial success came at the same time as the rejuvenation of Miami goes hand-inhand. We helped shine a spotlight on the region, and that exposure helped show many of the great qualities of the city that makes it such an attractive place to work and live. With the Dolphins playing well again and bringing a sense of excitement throughout South Florida, it will add yet another positive characteristic to such a vibrant region. www.capitalanalyticsassociates.com

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Udonis Haslem Team Captain, Miami HEAT

I come from Miami, so I want to make a difference in this area. I have friends and family who have fallen on hard times, either through bad luck or poor decisions, and they deserve support. When I first became successful, I tried to help by just giving out money. However, after a while, I realized this only helped so far and did not help people fully reach their potential. I wanted to find a way that I could have a positive impact on people’s lives without simply handing out money, which is why I started buying franchises. Licensing is a way of bringing more job opportunities to the city. Once people have real employment opportunities, you can see how invested they become in trying to improve their own situations. I refuse to invest money or time into something just to make money. I have to be passionate about it because I want to be involved. My career trajectory has been interesting. I had a great career in college basketball, but I started my professional career in Europe. While I was there, I dedicated myself to self-improvement, learning what it takes to become a real professional. Instead of blaming the NBA for making a mistake and not drafting me straight away, I asked myself “What can I do? How can I better myself? How can I put myself in a good situation to be successful?” Now I want to use what I have learned to help the Miami community. You can’t think about Miami without thinking about the Miami HEAT. There are the different cultures, great foods and excitement in this city, and the HEAT embraces all of that. However, there is also Overtown and the inner city life, which also need consideration. Since I have been a part of the HEAT organization, we have done a tremendous job of impacting the entire city. The HEAT has always been great in the community, and they have supported my children’s foundation as well as the City of Miami. We were a football town when I was growing up, and to be part of this team’s evolution, to contribute to our first, second and third championships, to have the opportunity to be coached by the great Pat Riley and have the Arison family be my bosses has been a dream come true.

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to SportsInsights, a sports information and betting provider who cited odds from the Westgate Las Vegas Superbook, the odds of the Hurricanes winning the 2018 national championship stand at 30-to-1, the 14th best odds to claim the title. The team went 9-4 in the 2016 season and is currently ranked 20th in the 2016 postseason poll. Moreover, though the team will lose their quarterback Brad Kaaya, tight end David Njoku and celebrated defensive back Corn Elder, the team will retain its linemen, receiver Ahmmon Richards and running back Mark Walton who posted 1,117 rushing yards as a sophomore in the 2016 season. In addition to the team’s retention of talent, it will also welcome a number of high-profile high schoolers and potential transfers. Three-star safety Amari Carter from Palm Beach Gardens High had already enrolled early as of mid-January 2017 while another three-star safety, Derrick Smith of Trinity Christian Academy, has stated his intention to enroll at a later date. Furthermore, with the aforementioned loss of a number of defensive backs, the team has set its sights on Jhavonte Dean, a junior college cornerback from Blinn College in Texas, in addition to two Miami-area high school athletes: four-star Christopher Henderson of Miami-Columbus and three-star Brian Edwards of Miramar. Miami Carol City High, of City of Miami Gardens, tasted success at the end of December 2016, when its football team won the class 6A state title. The team last won the title in 2003, and this time it defeated Lakeland Lake Gibson 14 to 6 in a memorable performance. Looking ahead A number of high-profile American and Latin American sporting events are scheduled for the near future. Firstly, because of Miami-Dade’s deeply rooted connection to Latin American culture, the Miami Padel Masters will be held in April 2017. It is the first major tournament in the U.S. for the racket sport, popular in Latin America. The county will also play host to the World Out Games, an event held every four years which serves as the Olympics for the lesbian, gay, bisexual and transgender community. This is the first time the games will be held in the U.S. and it is hoped that the event will attract thousands of foreigners to the county. In July 2017, the Pan-American Weightlifting Championships, the Pan-American Weightlifting Congress and the American Weightlifting Championship come to the city along with the first-ever MLB All-Star Game and Home Run Derby to be held in Miami. Finally, the 2020 Super Bowl will be held in the Hard Rock Stadium and is anticipated to generate an economic impact of $100 million.