Professional Services

Professional

Services:

Professional services, from law and accounting firms to wealth managers, are finding a comfortable home in Palm Beach County. The sector is growing as firms and individuals gravitate to the region for its weather, its friendly tax environment and the availability of elite talent.

Professional insight:

Financial and legal markets are thriving in Palm Beach County

Palm Beach County is home to a thriving financial and legal market, the former being facilitated by the region’s ability to attract investment and firms from traditional financial hubs like New York City and a favorable tax and business climate, and the latter benefiting from the elite talent generated by South Florida’s top-notch law schools and long-standing legal tradition.

The county’s professional services firms are also a solid source of jobs and economic impact for the region. In all, 2,399 financial services companies call Palm Beach County home, employing almost 33,000 people and paying an average annual salary of just about $71,000.

Although the COVID-19 pandemic has changed the landscape for professionals practicing in these industries, they still continue to contribute to the economic strength of Palm Beach County. The pandemic has also opened a window of opportunity as companies, especially smaller businesses, grapple with the eligibility rules surrounding the government’s PPP loan program. Professional services like accounting and legal are seeing a bump in activity as a result. “Our technology consulting teams are helping clients adapt to new or expanded remote workforce environments by ensuring their key business systems are available and secure,” Kerensa Butler, office leader for West Palm Beach and Fort Lauderdale at RSM US, told Invest:. “As clients in the most impacted industries are seeking to reduce their operating costs and increase automation, our finance and accounting outsourcing and managed IT service businesses have seen increased demand. There is a push toward doing things faster and more efficiently with fewer people. We helped our clients upgrade their systems to provide daily and weekly cash flow analyses and budgeting comparisons. We also provided services specifically related to the CARES Act programs using analytics to understand where our clients could get the most benefit from the various programs.”

Financial center Palm Beach County is an established center for professional services that include wealth management, accounting and legal practices. Historically, the county has benefited from its location, which boasts excellent weather, incredible scenery, ( )

Diverse coverage

As society changes and evolves, companies need to adapt to meet the emerging demands of clients

Connor Lynch CEO – Plastridge Insurance Agency

How has need for homeowner insurance evolved over the years? Especially in South Florida, we are seeing diversity both in the types of coverage and in individuals’ assets. Speaking more about homeowners and personal accounts, I would say that there is a lot more to think about than the traditional insurance where there is a home, two cars, three kids and a white picket fence. Now there is a car, they might have a low-speed vehicle, which is like a street-legal golf cart, and those things seem small, but if you miss protecting those assets, it can be hugely detrimental. We are seeing those kinds of unique areas to address and it is ever expanding. Society is changing and evolving all the time. The key is to make sure that we adapt with it and meet the needs of our clients. We are fortunate in Palm Beach County to have a very good foundation, with many entities like the Economic Forum of Palm Beach, the Business Development Board (BDB) and several education councils and organizations.

What about the needs on the commercial side? We are seeing different types of businesses entering the area. Surprisingly for a lot of people, there is more and more manufacturing and distribution happening in Palm Beach County, and a great deal of aerospace. We have definitely been able to attract and retain unique businesses. It is much more diverse than most people think. The key is that when people are just arriving in Florida, they already know they have to purchase hurricane insurance, but the biggest learning curve that we experience is with those people who don’t purchase flood insurance or don’t understand why they should. I really think that is one of the biggest things that we preach and need people to understand in our area.

How friendly is Palm Beach County to new business? I think it’s probably the strongest in the state in that regard, and I think it is competitive nationwide. The BDB does a great job of bringing people here and helping companies grow. We have many organizations to support new businesses, including FAU Tech Runway and South Florida Tech. I’ve been involved on the entrepreneurial side, and I talk to a lot of businesses that are getting started here. I think that we have work to do with our branding, to help other areas realize how good of a job we do in this area. We are strong here as a business community, we are supportive of each other in business, and I think that there are many people willing to give their time, energy and resources to entrepreneurs starting new companies, but I don’t think the whole world knows that. I think the gap is actually in the marketing and public relations side of things.

Robert Sacco Office Managing Partner – Fox Rothschild

Florida has terrific law schools. They prepare students to be good theoretical lawyers and also provide critical insights on the practical aspects of being a lawyer. The clinical programs the law schools offer are particularly important in this regard as they give students a real sense of what it’s like to practice in the real world. Fox Rothschild also provides an extensive internship program, in addition to outreach programs for minority students who have become part of our summer law student curriculum. Our programs are specifically geared toward bringing in young lawyers, giving them national law firm experience and key perspectives on our capacities. As their mentors, we are as invested in their growth as they are. Our opportunities are intended to expose them to as broad a range of subject areas as we can, while also providing practical experience working with attorneys from our wide range of practice groups.

( ) vibrant culture, and a strategic location that offers considerable logistical advantages along the Eastern seaboard, making it a destination for tourists and new permanent residents.

There is also the favorable business environment that rivals the state’s beautiful natural climate. Expedited permitting processes throughout the state allow businesses to spend less time hacking through red tape, which in turn lets them get down to business faster. It is also simply less expensive to do business in Florida than in states with higher costs of living and less favorable tax structures, including traditional financial services hubs. Florida gives firms access to its pristine weather, its robust infrastructure, its tax and regulatory advantages, and does so along with access to less expensive land, labor and other costs that lead to reduced overhead. Finally, Palm Beach County also benefits from the nexus of excellent federal and state tax benefits, such as the lack of state income tax and other incentives that make Florida a preferable alternative over financial hubs like New York City. The pace of financial services firms fleeing Wall Street for Palm Beach picked up after the passage of the Tax Cuts

and Jobs Act (TCJA) in 2017. “Over the last couple of decades, Palm Beach has had a steadily expanding population and business community. The real estate and financial services industries have led the way, and we are now seeing an influx of financial services relocations from the Northeast,” said William Lewis, co-managing partner at Morgan & Morgan Business Trial Group. “We also have a favorable business climate, and the recent changes to the SALT tax should only further encourage migration to the Southeast. This growth in Palm Beach County has led to all sorts of positive developments for the community, and I don’t see that slowing down.”

Professional services Palm Beach County, and the entire South Florida region, has a unique set of financial services needs centering on federal and international tax planning, high-value accounting and corporate financial services. There are several high-profile firms in the area that provide these services and, therefore, manage a tremendous amount of assets. In fact, the Business Development Board (BDB) of Palm Beach County says that an estimated 100 asset management firms, including hedge funds, have opened offices in the county over the past four years. Just in the city of West Palm Beach, there is about 600,000 square feet of Class A office space under construction to cater to the sector’s growing footprint. Further accommodating the industry’s needs is the burgeoning Flagler Financial District, a corporate zone exclusively for business and financial services.

BDB estimates that 100 asset management firms have opened in Palm Beach County over the last four years

In addition to major players like David Tepper, Barry Sternlicht, Lloyd Blankfein, Leon Black and Carl Icahn who relocated or are relocating to South Florida from other financial hubs, the largest Palm Beach County-based financial services and accounting firms include Affiliated Private Investors ($672.6 million in assets managed); Blue Ocean Capital ($514.3 million); Castle Wealth Management ($355.1 million); Global Trust Asset Management, LLC ($333.1 million); and Sea Hunter Capital ($102.6 million).

Raymond James & Associates also has a formidable presence throughout South Florida, and has recently announced that it is placing an industry veteran at the helm. Stephen Sullivan will oversee branches and lead adviser recruitment, retention, and support in Palm Beach, Broward, Dade and Monroe counties. Sullivan, who most recently served as

Gary Lesser Managing Partner – Lesser, Lesser, Landy & Smith

Pre-COVID-19, the firm was performing very strongly, and we were very busy handling personal injury cases without any formal advertising. Our firm was established 93 years ago, and with three fully staffed offices, we have an organic presence regionally and we handle cases all over Florida. We help injured clients and their families who are trying to deal with their injuries and the effect they have on their lives, and that can be significant. Quantitatively, about twothirds or more of our clients come from current and former clients over the years. Qualitatively, more substantial cases are referred from other lawyers locally and from out of state law firms, as well as other professionals in our community.

Palm Beach County’s Parks and Recreation Department manages 104 parks with more than 8,500 acres of land.

managing director and market leader of the Coral Gables international branch of UBS, brings more than 30 years of industry experience to Raymond James’ South Florida enterprise. In addition to Sullivan, Raymond James also picked up a team of four advisers from UBS who managed approximately $990 million in client assets between them.

While there is a great deal of wealth being managed in Palm Beach County, it is important to acknowledge the impact of COVID-19 on the professional services sector. Like other industries, perhaps even more so, the sector was blindsided by the sudden need to have all employees go remote, and by the sudden financial difficulties into which many of their customers were thrown. This has forced the leadership at many firms to bring their businesses into an uncertain and techreliant future, which means adapting to the needs of a virtual firm, cultivating the skills necessary for success in this new environment and streamlining the firm’s offerings to accentuate what it does better than others.

Of course, COVID-19’s impact on professional services firms is heavily driven by the impact on the finances of small businesses and individuals who typically rely on the services from these firms. In an effort to help these people and businesses weather the storm, the federal government approved a $2 trillion stimulus package. In addition to individual stimulus checks, enhanced unemployment benefits, and a moratorium on evictions and foreclosures, the government’s PPP loans program ensured that 30 million businesses across the United States could continue making payroll despite the heavy restrictions and reduced business brought on by the pandemic. Roughly $600 billion of the total $2 trillion has been allocated to the PPP program to date. The disbursement of the funds is being overseen by the U.S. Small Business Administration (SBA).

Legal The legal sector in Palm Beach County, like other industries in cities across the country, has had to quickly adapt to the rapidly changing reality of the post-COVID-19 world. However, rather than fundamentally upending the way lawyers do business, the pandemic has simply accelerated certain changes that have been underway for some time.

Chief among these are changes related to technology. A great deal of most attorneys’ day-today work can be done remotely, and while some firms and companies have been resistant to allowing ( )

Connection

Tax changes a boon for South Florida and for tax and accounting firms with connectivity to the region

Mary Beth Tarter Principal – Frankel, Loughran, Starr & Vallone

What opportunities does South Florida offer for the kind of clients your firm specializes in? We are a tax advisory and accounting firm. Our clients are primarily in the financial services industry, such as hedge funds, venture capital, private equity and distressed debt. We also do a lot of commercial real estate.

Our firm has always had connectivity to South Florida because the ultra-high-net-worth community will have vacation homes here. But it really started in 2017 with the Tax Cuts and Jobs Act, which was the most sweeping tax law change we’ve had since 1986. Hedge funds and private equity funds could stand to lose millions because of the deductions that were not allowed at the individual level, even at the partnership level. It got to the point where some of them looked at it very analytically and recognized that moving to Florida could save them $1 million a year because of the tax situation, and so they moved.

Over the course of 2018 and 2019, I think our firm handled more residency planning for our clients than we did in the previous 24 years. Many of them did it from an analytical standpoint, while for others, it was just the impetus that they needed: they decided that now was the time.

The wonderful part of already having connectivity is that it was seamless for our clients. Now we are here, boots on the ground, and that’s very important for us, and they expect a certain level of service, and we did not want any disruption to that.

People are also starting to recognize that Florida is not just a playground. This is a very serious business area as well. The median age of people moving down here is younger and that speaks tremendously to the local commerce, the lifestyles that people are looking for their families, for their businesses. There are so many companies relocating or expanding down here,

and, of course, taking advantage of the fact that it is, in a lot of cases, tax driven.

Has that recognition created a new environment for investors in Florida? It has. New York is rebalancing its budget because Carl Icahn is moving to Miami. New Jersey is rebalancing its budget because David Tepper left. They are coming to Miami to be part of the hedge fund community there, which is amazing.

We’ve actually just created another division, with a gentleman that has been in the hedge fund community for the last 25 years. He is Latin by birth and is looking to expand and help those startup funds, even those that are coming from Latin America as well. A big part of our clientele also has international connectivity.

Justin Cooper Founder & CEO Layla Capital

What prompted Layla Capital to move its HQ to South Florida?

Layla Capital is a bridge lender focused on small-to middle market debt opportunities across the Eastern United States. Having spent the last decade based in New York City, we relocated to South Florida on Aug. 1, 2020. What drove this move was the tremendous business opportunity to expand our footprint and grow our loan portfolio throughout the Florida markets. Historically, we have done deals in the Northeast, greater East Coast, and the Midwest, but we have always wanted to expand into the South Florida market. This state has so much to offer – it is business friendly, there are so many commercial and residential real estate market opportunities and it is a wonderful place to raise my family.

Which asset classes are performing well during this atypical time?

Industrial has been in incredibly high demand as more consumers shop online. Companies such as Amazon, coupled with shipping and logistics companies, need last-mile locations and the market is reflecting that necessity. There has also been a surge in demand for single-family homes as many people have left major cities for the suburbs, where they can have their own space rather than shared space. Investment properties with one to four residential units have been and are likely to remain among the most sought-after asset classes.

How is Palm Beach poised to meet the real estate needs of businesses and investors?

Local consumption, work and tax base are the three legs of growth. As more people and businesses move here, all types of real estate assets will likely benefit. We are poised to launch a new fund and a strategy separate from our main blueprint, explicitly designed for fix and flip-type strategies. It will work as an ancillary business under the same umbrella, exclusively designed for investors purchasing multifamily, mixed-use and one- to four-unit investment properties. ( ) remote work for attorneys despite its feasibility, the lockdown measures instituted to mitigate the spread of the pandemic have forced their hands. Those firms like Morgan & Morgan Business Trial Group that already had the technology in place were able to transition more smoothly. “We are fortunate to have a huge technology operation based out of our Brooklyn office, and we were able to transition our employees to working remotely very quickly. It was a big advantage having that technology ready to go,” said Morgan & Morgan’s Lewis. As it turns out, many corporate and law firm attorneys have been able to work from home throughout the pandemic with little or no impact on their productivity, and the proliferation of e-filing platforms, eDiscovery and the use of e-signatures for contracts has allowed them to also go paperless.

Another trend that will likely expand throughout 2020 as the economy continues to contract in the wake of the pandemic and spurs greater competition for jobs is that many lawyers may choose to take advantage of the growing market for legal freelancing.

According to Hoovers, there are 1,156 companies in Palm Beach County with an SIC code of 872 for Accounting, Auditing, and Bookkeeping Services.

Once practically unheard of, the explosion of with a beneficial tax environment for residents in freelancing platforms in the gig economy has caused the Sunshine State and a great amount of wealth that more lawyers to provide legal services on a freelance has moved to the state of Florida, we have also seen basis. But let there be no doubt: talent is also going a real increase in the pool of talent here, helping to to the firms that need it. “I strengthen our team.” believe the Business Trial Group has hired an attorney from the I certainly do For now, most lawyers are working from home, and with University of Florida each of the past six or seven years, and I put not think you the reliance on the cloud and other electronic platforms for the talent coming from schools need to go out of document storage and access, like UF and FSU up there with any school in the Southeast. I state to find legal there is also a heightened need for sophisticated cybersecurity. certainly do not think you have to go out of state to find legal talent. Data security is not a new issue for lawyers, who deal regularly talent,” said Lewis. Managing William Lewis in the valuable and confidential Director at The Sylvia Wealth Morgan & Morgan Business Trial Group data of their clients, but it is Management Group at J.P. more important than ever given Morgan Securities Kurt Sylvia agrees the Palm the volume of data that is being accessed by people Beach talent pool is a source of strength. “There from their private networks and computers. Given is a significant and ongoing influx of intellectual the likelihood of a rise in cyberattacks, lawyers and capital that can support our practice from a talent others responsible for legal cybersecurity will need perspective and from a client perspective. Along to be extra vigilant.

William Perry CEO & Managing Shareholder Gunster

How do the culture and practice of law at Gunster help the firm differentiate itself in the Florida market?

We tend to have people come here and stay, and we are proud of that. We are very proud of our culture. We approach the practice of law as a team. Compared to some other law firms, we are less hierarchical because we approach issues in a collaborative way. The firm has received a great deal of recognition from the communities in which we do business and we are the only law firm that consistently ranks among the best places to work in Florida by Florida Trend magazine. We are really proud of that, and we believe that by doing right by our people, we are going to do well as a business enterprise.

What specific challenges do you have attracting young talent to Palm Beach?

I don’t think it is very hard to attract people to Palm Beach County. It is a beautiful place, and a lot of people from across the country are choosing to live here. One of the reasons it is so beautiful is that it is not very dense. It is still a metropolitan area, like Miami, without the density. We are more suburbia. If you look at it from the point of view of scale, Miami has buildings that are 60-plus stories, Fort Lauderdale probably goes to 40 stories, and in Palm Beach, it’s probably 20 to 25 stories.

In addition to being not quite as dense, Palm Beach is also the crossroads between the urban South Florida region, and the agricultural heartland of Florida. The western half of Palm Beach County is as agricultural and as rural as any place in the nation. It is a farming community. You have to balance those two things in your environment, and keep them in harmony if you are to maintain the essence of what Palm Beach County is, and why it is so attractive for people to live here.

Going forward, I think a certain segment of the younger population is going to choose a less metropolitan experience, particularly after COVID-19.

Palm Beach County offers tax exemptions on aircraft parts, modification, maintenance and repair, sale or lease of qualified aircraft.

Other legal technology trends that have their roots in earlier years but will no doubt continue throughout 2020 are the use of data analytics in the practice of law to monitor how lawyers spend their time and use their various devices, all with an eye toward increasing productivity and efficiency; the use of artificial intelligence and machine learning for a wide range of applications, such as technologyassisted document review, legal research, and contracting; the use of teleconferencing technology to bring attorneys and clients together despite the lockdown and the sometimes considerable distance between them; and the use of technology platforms to streamline and automate workflows.

These technological advances, coupled with the world-class legal talent pool produced by South Florida’s exceptional law schools, means that the region’s legal sector is not only poised to survive the COVID-19 pandemic, it will be ready to take advantage of the new opportunities that arise when economic activity ramps up again after the pandemic has passed.

The financial services industry ranked third in 2019 in terms of cyberattacks

Challenges One of the greatest modern challenges of both the legal and financial markets is maintaining adequate cybersecurity to prevent breaches of clients’ highvalue data and other property. Although this is not a new challenge for these industries, cybercrime has risen impressively in recent years, according to a study by Palm Beach County’s Florida Atlantic University. Between 2015 and 2018, there was a $95-million increase in cybercrime throughout the state of Florida alone for a total of $178 million in crimes. These figures only account for the crimes that analysts are able to identify, with a high probability that many go undetected. Along with the increase in the value of the crimes from 2015 to 2018, Florida also saw a rise in the total number of victims, from 20,000 to 24,000, and the total loss per victim as a result of such crimes jumped from $4,750 to $7,400. The types

Larry Alexander Chairman & Shareholder – Jones Foster

The rankings show that our universities, particularly the University of Florida, Florida State and the University of Miami, continue to produce top-class lawyers. It is difficult to be admitted into Florida State or the University of Florida because it is not just about the GPA. Some great candidates do not make the cut simply because of the caliber of candidates that the universities have to choose from. This bodes well for the legal industry in South Florida. Despite the pandemic, we proceeded with our annual Summer Associate program. Although internal and client meetings, trials, and events were held virtually, the Summer Associates remained active participants. We worked hard to make sure that this year’s group got to know the attorneys at the firm, and we got to know them. A lot is gained from casual discussions, and developing the next generation of attorneys is a priority for us.

of cybercrimes targeting Florida residents include innovations that make it possible to keep working in the email scams, confidence fraud that manipulates midst of the pandemic will set up these industries for victims’ emotions, corporate data breaches, real long-term success in Palm Beach County. estate and rental fraud, and credit card fraud. “Florida’s economy used to be based on tourism, retail

The legal and finance sectors are frequent targets of and real estate. It is still heavily dependent on those such scams, with more than 100 law firms across the sectors and any downturn will impact them. But this is country reporting data breaches up to October 2019 a much more diverse economy,” says Adam Marshall, and the financial services industry ranking third managing partner at Marshall Grant. “There are many out of all industries for the number of cyberattacks businesses providing employment in many sectors suffered that year. Targets include firms and outside of those three industries. There is a vibrant tech banks of all sizes, with the trend of attacks against and IT community here, for example. They will be here smaller institutions growing as through the downturn. I think the larger ones become more sophisticated in their defense. I think we there is less speculation now, especially in real estate. More Due to the prevalence and ever-evolving nature of such are in a better people are moving down and they need to live somewhere. There crimes, it is crucial that all law and financial services firms maintain a commitment to position to weather the are fewer people buying multiple properties to try to sell them. I think we are in a better position to their cybersecurity measures and ensure that their and their storm. weather the storm.” There are already signs of customers’ data is safe. Adam Marshall improvement in the professional Marshall Grant services sector, which, according Looking ahead to Michael Daszkal, managing As the COVID-19 pandemic continues to impact partner at accounting firm Daszkal Bolton, is a good people and businesses across the world, its influence sign for the economy overall. “By the end of the second will likely continue to be felt within Palm Beach quarter, and definitely going into the third quarter, County’s professional services sector. This means things started to get really busy. I can say that the third continued reliance on remote work for employees and fourth quarter of this year will be, by far, probably and a considerable body of work related to how the best two quarters we’ve had in 27 years. It has been clients have been impacted by the pandemic, such as robust and everybody’s been working like crazy. We are PPP loans, evictions and foreclosures and bankruptcies. a good barometer of the economy. If we are super-busy, However, the business and the technological it means our clients are doing well.”

Real Estate:

The underlying fundamentals of the Palm Beach County real estate market continue to attract investors and those looking for a better quality of life. Especially given the current pandemic landscape, the industrial segment that was already booming pre-COVID-19 is getting stronger, while affordable housing tips the scale the other way.

Real Estate in numbers:

Median Sale Price

(50% of sales were above and 50% of sales were below)

Economists’ note: Median Sale Price is our preferred summary statistic for price activity because, unlike Average Sale Price, Median Sale Price is not sensitive to high sale prices for small numbers of homes that may not be characteristic of the market area. Keep in mind that median price trends over time are not always solely caused by changes in the general value of local real estate. Median sale price only reflects the values of the homes that sold each month, and the mix of the types of homes that sell can change over time.

Median Sale Price:

$500k 2019

$400K

$300K

$200K

$100K

$0K

S O N D J F

Year

Year-to Date

September 2020

August 2020

July 2020

June 2020

May 2020

April 2020

March 2020

February 2020

January 2020

December 2019

November 2019

October 2019

September 2019

Median Sale Price

$380,000

$400,000

$399,000

$399,000

$376,000

$365,000

$365,000

$370,000

$363,000

$363,000

$364,000

$350,000

$359,000

$355,000

Percent Change Year-over-Year

8.0%

12.7%

12.4%

12.4%

5.3%

0.0%

4.3%

5.7%

6.8%

6.8%

5.6%

0.6%

3.3%

2.9%

2020

M A M J J A S

Closed Sales The number of sales transactions which closed during the month

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

Closed Sales:

2,,500 2019

2,000

1,500

1,000

500

0

S O N D J F

Year

Year-to Date

September 2020

August 2020

July 2020

June 2020

May 2020

April 2020

March 2020

February 2020

January 2020

December 2019

November 2019

October 2019

September 2019

Closed Sales

13,039

1,744

1,814

1,940

1,478

991

1,191

1,554

1,233

1,094

1,420

1,194

1,369

1,356

Percent Change Year-over-Year

-3.0%

28.6%

15.8%

9.3%

-12.6%

-47.0%

-30.5%

2.2%

12.3%

29.3%

15.5%

0.4%

-6.2%

10.5%

2020

M A M J J A S

Fundamentally

strong:

As the pandemic wreaks havoc on certain industries, real estate appears to have gained the upper hand

Palm Beach real estate in 2019 hit a plateau, with the month of June registering fewer closed sales, longer days to contract and a leveling out in inventory supply compared with the same month of 2018. Median house sale prices for single-family homes in June were down on the month to $356,990 compared with $364,900 in May 2018.

But the COVID-19 outbreak that hit the United States in March 2020 and subsequent shelter in place orders forced many to re-evaluate their lifestyles. The pandemic caused a revolution in the market, with the preference for life in urban centers replaced with a need for more space and fresh air, and it seems Palm Beach County was one of the real estate markets to benefit.

By May 2020, in Palm Beach County, the median time of days on market to contract was only 37 days, down from 50 days in June 2019. In May 2020, inventories were down almost 20% compared with one year earlier, with just 5,850 active listings for single-family homes and 6,109 active listings for townhouses and condos.

Median house sale prices also rebounded, with single-family homes going for $365,000 in May 2020, and median condo and townhouse prices reaching $200,000, up from $185,000 in May 2019. The conditions for buying a home improved, aided by federal stimulus. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.31% in April 2020, down from the 4.14% averaged during the same month a year earlier.

Market fundamentals Palm Beach County is a market that has traditionally attracted wealthy second-homeowners, retirees and snowbirds. Median property values in the county are well above the U.S. average of $217,000, according to the U.S. Census Bureau, and above Florida’s average of $214,000. The county is attractive to this demographic for a number of reasons, some of which are the favorable weather and tax structures. Palm Beach County’s sales tax amounts to just 1% and combined with Florida’s 6%, Palm Beach residents pay just 7% in total, beating the 8.8% sales tax applicable in New York City. Corporate ( )

Perfect situation

Sought-after lifestyle to live, work and play and detailed planning are underpinning the real estate market

Dionna Hall CEO – Broward, Palm Beaches & St. Lucie Realtors

What is the landscape for the county’s real estate market? Palm Beach County’s real estate market is perfectly situated to continue to see growth and preserve a sought-after lifestyle to live, work and play in. The county has gone to great lengths to ensure its amenities are well-planned out for residents and visitors. The county also offers a diversified lifestyle with different enclaves that are unique, such as beachside, country club and equestrian communities, downtown, rural and suburban areas.

How is residential faring? Inventory is a bit tight, but Palm Beach County still has land for new development, and we are seeing many of these new communities come online to meet the demand. Buyers are enamored with the smart home features. Coupled with record low interest rates, people see this as a great time to buy specifically in Palm Beach County. Our Realtor® membership size is swelling, and it is partly these contributing factors that make many interested in buying and selling real estate.

What trends are you seeing in terms of population? Palm Beach County has typically been cast as an older demographic community but we have seen a change in the last decade, especially with millennials entering the homebuying market. Some of this is due to more job opportunities becoming available in Palm Beach County but also millennials are more likely to work virtually, which has helped them live the lifestyle they want, where they want. Many millennial homebuyers have also been waiting to buy their first home using the time to save money and not compromise the standards they want in a home.

How important is the muliple listing service (MLS) for you and your clients?

In this day and age, Realtors® understands it is all about serving the consumer. Our Realtor® Association wholly owns our MLS, BeachesMLS. The MLS supplies the property listing information that consumers access when they search for available homes. We go to great lengths to ensure the data is accurate, compliant with our rules and as much information as possible is included. The MLS also offers our Realtors® the technology needed to complete a transaction professionally and in a timely manner. During the pandemic we concentrated on communicating and enacting a suite of products and resources that allowed Realtors® to complete transactions virtually on behalf of their client, ensuring the safety of all parties. These tools will prove useful well into the future.

Dilip Barot President & CEO Creative Choice Group

How have your projects evolved in the last year and how is Palm Beach important strategy-wise?

We have focused on strengthening our company, both nationally and internationally. In Palm Beach County in particular, our goal is to create 1,000 jobs in the near future. We want the community at large to benefit from the wellness programs we are providing so we are looking at ways to bring wellness programs to the community beyond what Amrit will be bringing. Palm Beach County’s profile continues to grow and we are part of that ecosystem. Of course, in 2019, construction costs increased and that impacted us. But there is always some impact from construction prices and this needs to be offset by creative thinking and collaboration between business owners and community leaders.

How has COVID-19 affected your business and what innovations do you see emerging?

We were able to keep our construction site operating despite the pandemic by ensuring we were practicing the guidelines of the WHO and CDC. We did allow our office employees to work from home. We are only now reopening through a structured approach. Within days of the outbreak here, we created a virtual online sales center where customers could interact in real time with our sales professionals and have access to all the marketing collateral including virtual tours. In doing so, we had to consider minute details such as data protection, but we still were able to do this within weeks. We had our best month on record in April in terms of condo and residential sales. We have now implemented a virtual open house system and any in-person showings now have increased hygiene measures in place. We feel our employees are now more engaged at home and productivity is off the chart. We think going forward we will allow a portion of our workforce to work from home, which also builds in an automatic contingency into the business model. We have learned a lot from this experience.

Many Palm Beach County restaurants added additional outdoor dining options in 2020 to survive the brutal COVID-19 challenges facing the restaurant industry.

( ) taxes are just 5.5% in Palm Beach County, with the authorities providing a long list of exemptions and incentives for businesses.

The ACCRA Cost of Living Index measures relative price levels, with a flat rate of 100 as the average for all participating areas. Palm Beach was measured as 115.9 in 2020, meaning the cost of living is above the U.S. average but the cost of living in Palm Beach County is one of the more affordable in the Florida market. The CPI for the county in 2019 came in at 105.18, well below the 269.78 registered in Miami-Fort Lauderdale. “The Northeast migration flows toward Palm Beach can be explained by the ongoing bargain transactions compared to international markets and even a South Florida perspective. It is moving up fast but there is still a prevalent value to what you can buy in terms of waterfront properties compared to Miami. It sometimes sells at half the price. Palm Beach also still has extensive land availability compared to Broward County, and looking westward, there are large communities being developed at affordable prices,” Mike Pappas, president and CEO of Illustrated Properties, told Invest:.

The Palm Beach County Natural Areas program protects and preserves more than 31,000 acres of environmentally sensitive lands and the county has an estimated 526,000 acres of farmlands. With a total area of around 1.5 million acres, this means less than 1 million

acres can be used for development. With a natural sea boundary, like many urban areas on Florida’s east coast, development has carried out to the west of the county but there is still a shortage of available inventory.

Residential The Palm Beach market was always attractive as a second home for residents from Northeastern cities like New York and Philadelphia looking to escape the cold. But as the COVID-19 pandemic showed the world that remote work on a huge, long-term scale is possible, there will be more options for the working class in terms of where they live, which will no longer necessarily be tied to their place of business. Another issue highlighted by the COVID-19 crisis was the lack of space available when living in an urban center. In West Palm Beach, residents can expect to pay around $1,481 per month for a 954-square-foot apartment. A market such as Manhattan demands rents of around $4,200 per month for just 703 square feet.

Coronavirus has simply accelerated existing trends and highlighted the virtues of markets like Palm Beach County in terms of their contribution to a better quality of life. “At the beginning of the pandemic in April, we had a pause while we tried to understand what was happening. Then, as people started to absorb the realities of COVID, they started to look at where they wanted to live in the instance something like this happens again. A huge proportion of people from the Northeast decided they wanted to be in Florida, and we have seen a massive number of transactions in the existing residential market, which has trickled down to the new-build market. People want to live in Florida in a low-density building. Our spaces really deliver on a silver platter all the characteristics these people want for their future,” said Chris Leavitt, executive director of Luxury Sales for Douglas Elliman – LA CLARA residences.

Across the whole of 2019, 123 single-family homes sold in the area, but in 2Q20 alone, 106 single-family homes sold. In the second quarter, closed singlefamily residential volume totaled more than $1.1 billion compared with $1.2 billion in all of 2019. The huge new demand and limited supply are driving up prices, including in the ultra luxury segment. According to a report by Business Insider, Palm Beach mansions with a list price of over $70 million are in high demand as buying requirements change dramatically away from ( )

Palm Beach County Home Value Palm Beach vs US:

Palm Beach County, FL United States

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Jeff Greene Investor

Heading into 2021, I think it will be a rough time for real estate. In our buildings, we are already seeing impacts from the rent collection forgiveness program that continues to be extended. At some point, there will be a flood of evictions, foreclosures and bankruptcies. When people cannot pay rent, this often leads them to move back to the family home, which creates more and more vacancies. In a few months, when PPP programs and other government support ends, we will see a lot of real estate problems. Fixed costs for hotels and restaurants will increase a great deal so business models and day-to-day operations will have to change.

The Palm Beach County real estate market experienced an exceptional spring and summer season despite COVID-19. The sales and volume we have achieved in the luxury space of $2 million and up since the beginning of May is something we have never seen at this time of year. Typically, the bulk of our transactions are between November and April. This new seasonality is the compelling story here. Around 95% of our transactions above $5 milion are purchased in cash. However, there are great opportunities across all market segments due to the record-low interest rates. It is now possible to get a 30-year mortgage for under 3% and buyers at all price points are benefiting from that right now. John Hackett Senior Managing Director, South Florida Corcoran-Palm Beach

Jay Parker CEO Douglas Elliman Florida Brokerage We did just under 3,000 transactions and finished 2019 strong. Going into 2020, we continued to benefit from the same variables that were driving our healthy economy and healthy real estate market from before. There’s an ongoing transition of high-net-worth buyers from the Northeast and California, as more and more people get comfortable with relocating to South Florida. Coming into 2020, we were positioned to exceed our 2019 numbers, and quite frankly I remain cautiously optimistic that we can continue on a positive trajectory as we start to emerge from the shelter-in-place environment.

Prior to COVID-19, South Florida’s real estate sector was very strong, propelled by the demand and low interest rates. I think the commercial office market may see a bit of a correction. So many people are working from home and I imagine that most of them are going to continue to do that the rest of the year. So far, the industrial and residential markets have proven themselves to be the strongest sectors in the real estate industry during the pandemic. I don’t think we’ll see any correction there. At Touchstone Webb Realty Company, we are watching retail and commercial as we move forward. We think it is going to take a good year before we see this sector begin to correct. Susan Thomas President Touchstone Webb Realty Company

( ) urban centers and toward the greener, more open lifestyle markets such as Palm Beach County can offer.

The top deals included a $71.85 million sale of a lakefront 8 South Lake Trail estate belonging to private equity investor Robb Turner. The Palm Beach compound that once belonged to the Kennedys on 1095 North Ocean Boulevard was sold to a trust for $70 million. And in June, a 7.35 acre, seven-bedroom compound hit the market with a price tag of $79.5 million. Most recently, singer Jon Bon Jovi bought a Palm Beach mansion on North Ocean Boulevard for $43 million that was last purchased in 2014 for $23.24 million.

It is not just private sales that are taking place. In July, Miami-based Hyperion Group and New York-based Winter Properties teamed up to buy a 1.39-acre site on South Australian Avenue, which is zoned for 300 multifamily units across 25 stories. And Dallas-based developer Trinsic Residential filed plans for a change of use with the city for its 12-acre mixed industrial and commercial lot in Delray Beach. The developer wants to change the zoning to a “special activities district,” which would allow it to build 292 multifamily units, as well as commercial space. The county commission is also set to vote on an application by Highland Dunes Associates Property for a large-scale change of use amendment for its Arden Park property. The site was originally planned to house 2,000 homes and 50,000 square feet of commercial space but the number of homes has been revised upward to 2,420, impacting 332 acres of the site.

Although the lack of inventory has helped push up house sale prices in Palm Beach County, some raise concerns about the impact of foreclosure freezes when the smoke clears. A study by nonprofit Community Partners showed that Florida was No. 5 on the list of states where homeowners failed to make mortgage payments. The nonprofit says that, when the freeze is lifted, there may be a spike in foreclosures across South Florida. The statewide eviction and foreclosure moratorium was implemented on April 2 and expired on Sept. 30, although a federal order remains in place until Dec. 31, giving Florida families continued protection.

The moratorium did not cancel rent payments, but rather allowed them to accrue while prohibiting evictions and foreclosures. This means that the edicts expire, eviction and foreclosure cases stacked up in the courts can begin to be processed once again, with many landlords, homeowners and tenants pessimistic about the outlook for unemployed residents to pay five months of arrears. Palm Beach homeowners can apply for up to $10,000 in mortgage assistance from the authorities.

Bradley Scherer President & Founder Atlantic Western Realty Companies

What is Atlantic Western’s role in the county’s real estate market?

For over 35 years, Atlantic Western has operated in Palm Beach County as a full service real estate brokerage and asset management firm, focused on sub-performing and non-performing assets, with an emphasis on land. Land as an asset class, and its liquidity solution, is a function of what its potential development and underlying or future highest investment use is. We conduct land assignments for all asset classes, including residential, multifamily, commercial, industrial and unique to Palm Beach County, we also have a strong concentration in the equestrian, agricultural, and recreational land markets. In this regard, Palm Beach County has some unique aspects when it comes to land because few locations have such a diverse market that includes equestrian and high-networth recreational land uses and bonafide agriculture co-existing with conventional development uses.

How would you characterize the regional real estate market?

South Florida’s real estate and land market is one of the most naturally and unnaturally supply-constrained markets in the country. Our region’s extraordinarily high land value starts with our being geographically constrained between the Everglades and the ocean. And when combined with environmental and entitlement based constraints on supply, together with one of the most aggressive absorption rates in the nation, prices react accordingly. During the last two economic cycles, the majority of Palm Beach County’s vacant available land has been absorbed and developed, resulting in ever increasing supply constraint. The majority of previously available and entitled land supply is either underway or completely built out and Palm Beach County is fast approaching full build-out. Because of environmental, geographical and political entitlement constraints, the majority of remaining vacant land in Palm Beach County is not available for any type of development or it’s severely restricted.

Rental market In Palm Beach County, around 44% of households, or 2,112, are renter-occupied, while 55%, or 2,684, are owner-occupied. And according to Mashvisor, West Palm Beach has a higher cap rate for longterm rentals than any other market in Florida, at 8%. Housing economist Brad Hunter predicts demand for rental apartments, whether urban or suburban, will continue to rise in the South Florida markets. Due to high unemployment rates or fears of future economic difficulties, he says many would-be buyers would have trouble being approved for a mortgage, so will choose to rent instead. And rent collections for April were better than expected, at 90%, meaning rental properties could be a better option for some developers than for sale homes.

In the last decade, single-family and large multifamily properties drove rental growth, indicating that families are increasingly choosing to rent houses rather than buy in the Miami-Fort Lauderdale-West Palm metro area. From 2003 to 2008, the number of single-family units on the market grew almost 23% to 250,509, while the number of buildings of 20 or more units grew almost 30% to 327,713. But costs have also increased substantially in that period. For middle income households in the area, the percentage of renters who report they are either severely or moderately cost burdened rose to 61.3% in 2018, up from 58% in 2006. The most severe cost burdens are shouldered by households earning under $30,000.

But the pandemic could be driving a buyer’s market. Online platform Zillow reported in May that rents for multifamily units in Miami-Dade, Broward and Palm Beach counties had decreased. And in some Palm Beach neighborhoods, South Florida Business Journal found that it is actually more beneficial to rent than to buy. For example, in Boca Raton, median monthly mortgage payments are $2,876 compared with median monthly rental prices of $2,732. Similarly, in Delray Beach a mortgage would come in at around $2,850 per month while a rent payment would be around $2,660.

Office As of April, Palm Beach had 950,000 square feet of office space under construction with 683,000 square feet to be delivered in the next two years. Of the office space under construction, 16.3% is pre-leased. According to real estate research firm CBRE, financial services in South Florida gained 500 jobs on the year in April, with Palm Beach adding the bulk at over 300. Employment in office-using industries has held up, according to the firm. ( )

John Weir President Eastwind Development

How can affordable housing be created in a way that makes sense for consumers and developers?

Affordable housing as it is defined in the industry is for households generally up to 60% of area median income (AMI). So, in Palm Beach County, that would be a household income of $40,000-$45,000 and there is a federal tax credit program for that. The constraint is that there are not enough tax credit allocations, which are awarded by the state, to produce very many housing units each year. The area where we have had a strong local focus is on workforce housing, where income would be above 60% to 120% of AMI, generally household income of $50,000-$95,000. This segment cannot access federal programs so the solutions must be on a local basis. One way to do this is through mandatory workforce housing programs whereby developers are given quotas for workforce housing in their projects, which has worked to a degree but has gotten harder as land and construction costs have increased. The more promising approach is an incentive-based structure, which can be done in a number of ways. One form of incentive is to provide a density bonus in return for rent limits on a cerain number of units, and a second would be through fee waivers, such as impact fees. One of the big advances would be the provision of subordinate grant or debt gap financing, which would allow developers to replace expensive equity with subordinate debt at a low interest rate.

What long-term changes are you expecting in the sector as a result of the pandemic?

It’s important to distinguish between what changes are transitory and what may be more enduring. Of course, the conventional wisdom is that there is now a preference for suburban, single-family homes but human beings are social beings. I do not think urban cores are dead and I do not think transit corridors were a wasted investment. I also think multifamily will be affected less than other types of commercial real estate, such as hotels, office and retail.

Stable footprint

Despite growing in size, companies are using the same office space size more efficiently

Angelo Bianco Managing Partner– Crocker Partners

What is your take on the evolution of the office sector in Palm Beach? Palm Beach County’s office market has not changed as much as others. Office users by and large have not changed. Even considering new trends such as coworking spaces, it makes up a small fraction of our portfolio. We have observed tenants in Palm Beach County making an effort to reduce their square footage per employee, parallel with technological advances. The need for law firms to have file storage, for instance, has declined dramatically. Smaller spaces can be used to accomplish more tasks. We still see the desire for private offices and a significant portion of traditional office use. Some companies have switched to open offices, but the pendulum is swinging back. Although technology has changed the need for space, the human condition has not changed. People still appreciate privacy and separation from their co-workers.

What primary factors explain these preferences? Our Palm Beach portfolio consists of 3 million square feet of office space. Most of our tenants have renovated their space over the past 10 years. Even though firms have grown since the 2008 crisis, their footprint has not gotten larger than it used to be because they use the same office space much more efficiently. Shortly before the coronavirus crisis, we reached the point where employment gains fueled by the longest economic expansion in our history backfilled the space lost during that last downturn.

We are on the cusp of a new disruption with the COVID-19 pandemic. The good news for office landlords is that tenants have already reduced their space needs per employee significantly and during this past economic expansion . have not taken additional space for growth. Although some office tenants will be significantly impacted by the pandemic, office tenants and their landlords should be in a good position to weather this storm.

What is your assessment of the Boca Raton market Boca Raton is by far the biggest employment base in the county. It dwarfs any other market. If you took all the office space in West Palm Beach and doubled it, you would still fall short of where Boca Raton is positioned. It has been a business hub for decades and will continue to be an attractive place for companies to headquarter. The quality of life is phenomenal, plus it has an unparalleled access in Palm Beach County to an incredibly well-educated, well-informed workforce. This is part of the reason we have been headquartered there for 35 years.

( ) So far, office real estate has maintained its value in South Florida, even though supply is rising. In the second quarter, leasing activity in Palm Beach County slowed by almost 60% compared with the previous quarter, although vacancy rates dropped to 14% from 15.7% in the same quarter of 2019. Average asking rents rose $38.13 per square foot in the second quarter of 2020. Boca Raton and West Palm Beach led the Palm Beach market with 73% of lease transactions and healthcare systems in the county are expanding at a rapid pace. Baptist Health South Florida is mulling the purchase of land in Jupiter and Cleveland Clinic is looking to build a 50,000-square-foot standalone facility on Okechobee Boulevard. COVID, of course, is the wild card factor. “Office real estate is going to be a mixed bag because of social distancing. Several business owners that we interviewed indicated they plan to set up with a smaller office moving forward,” said Blair Lee, president of Lighthouse Realty Services. “On the other hand, I’ve seen a recent survey that 74% of employees want to go back to work because they miss the interaction with their co-workers. In my opinion, we will not really know the full extent of the office market until sometime in 2021.”

While some believe office real estate across the United States will be one of the greatest casualties of the coronavirus, given how well many businesses have managed to operate through remote working, COVID has also created the need for more space to implement social distancing measures, so many real estate insiders suspect the pandemic may create more need for office space rather than less. While some companies will apply more flexible working practices going forward, many believe the traditional office working space will not become obsolete but will be forced to change dramatically. “People will still need offices to come into,” said Michele Pellico, regional manager of Florida for Property Group Partners. “I think this will be a fresh look at how people do business. I don’t think it will be a long-term detriment to office space. In West Palm Beach, we have some new buildings going up, which will add a little pressure to our area. I think we will be able to absorb the vacancies and things will move on, especially if we continue to have strong interest from outside prospects.”

For the moment, those upgrading to new office space are stuck between a rock and a hard place. West Palmheadquartered law firm Lewis, Longman & Walker signed a lease in the summer of 2019 for 12,400 square feet of space in the Rosemary 360 development, but now is unsure of whether it will be paying for space it does not use. But in the long term, smaller, more suburban

Lay of the Land

David Bateman Managing Director – CBRE Fort Lauderdale and Palm Beach Industrial land prices are rising and spec developments continue to be absorbed. Our research estimates that for every $1 billion in e-commerce activity, you need an additional 1 million to 1.25 million square feet of industrial space to satisfy that demand.

Rob Hamman Managing Partner – SVN Commercial Partners – Jupiter The high-end market is extremely strong so we do not see any dip in business, especially on the commercial side. Any income-producing asset, whether it is multifamily, office or retail, will be strong. It is very difficult to find those kinds of properties right now. Even without income, the industrial market and land is still strong, and builders are still looking to build.

Jason Isaacson President – IP Capital Partners I expect that there will be changes to office design and flexibility in and out of the office. However, the world where a majority of the people are working from home is not really a practical outcome. Moving forward, I think one keyword for office space would be flexibility. So you could have offices that will allow people to move around.

Robert Rollins President – Beacon Group Inc In Florida and specifically our area, there was a nice selection of competitive insurance markets and insurance sales were brisk. With this pandemic, we are now beginning to have significant increases in other areas of insurance such as commercial general liability and directors and officer’s liability insurance. Closure of retail business due to declining sales is beginning to occur at the same time.

Brian Schmier CEO – Schmier Property Group Opportunities exist whether the market is moving up or down, and COVID-19 will certainly increase deal flow of distressed assets. There can be other extenuating reasons why someone is a willing seller or buyer, and sometimes the reasons have little to do with the underlying real estate.

Tom Frankel Founder – Frankel-Ball Realty Group

One factor that Palm Beach County has is the controlled and planned growth in the north part of the county. For many years, there was over 200,000 acres of vacant land in the north part of the county controlled by the McCarthy Foundation and held off the market. The first land parcels that were divested from this portfolio were Admiral’s Cove and Frenchman’s Creek (in 1987). When the rest of the land was put on the market, it was developed in a very controlled way following a thorough master plan, unlike in Broward and Miami-Dade counties. This has helped to make the north county very desirable.

office spaces like those in Palm Beach may present an advantage for many companies in that employees would not rely on public transport in the same way employees based in New York City would. CBRE predicts that most of the long-term impacts of COVID-19 on the office real estate market will be positive, incorporating less density in space, flexible working operations and attracting greater international migration.

Industrial While the future of office real estate is uncertain, one of the unquestioned winners in Palm Beach County is its industrial real estate segment, which now has around a 2% vacancy rate. Already booming pre-COVID because of its plentiful open spaces and proximity to major urban centers, the county had attracted companies such as Niagara Bottling, which has an 115,000-squarefoot facility in Jupiter, MPLT Healthcare, with a 23,000-square-foot facility in Boca Raton, Gulfstream with its 53,245-square-foot facility in West Palm Beach and the 150,000-square-foot Beacon Center for Life Science and Research in Jupiter.

One of the major problems highlighted by the pandemic was the logistics bottlenecks experienced during the crisis and the need to source materials from local supply chains, which bolsters the demand for industrial real estate. Palm Beach County has a privileged logistics position, close to Port Canaveral, a major international port, and Miami International Airport. It is also right on the 671-mile US-98, which runs up from the Florida panhandle.

With its proximity to major markets and relatively large industrial space still available, it is no wonder multinational giants such as Amazon are setting up a base in the county. In October 2019, Amazon Logistics opened a new 96,000-square-foot delivery station near West Palm Beach. And since then, COVID has created a buying frenzy in the county. Industrial developer Dalfen Industrial has also been betting big on Palm Beach, acquiring the Class A, 204,900-square-foot industrial property at 3774 Interstate Park Road North in West Palm Beach in July. This acquisition was hot on the heels of Dalfen’s acquisition of 152,000 square feet at 1177 Blue Heron Boulevard for $18.35 million in June.

Perhaps the growth in industrial real estate can in turn boost office space in Palm Beach. In June, international trading and logistics company International Materials announced plans to move its headquarters to a larger space in Delray Beach, where it plans to double its workforce. As segments overlap, commercial tenants are also crossing into industrial space in the West Palm Warehouse District, the almost 85,000-square-foot retail space that spans three city blocks.

Palm Beach contains a huge amount of green space and industrial property is more and more in demand. It is only logical, therefore, that the county’s Planning Commission is considering plans to modify the 20-yearold rules that govern the 22,000 Agricultural Reserve west of Boca Raton, Delray Beach and Boynton Beach. Three companies are seeking permission to add 1,300 housing units, 400,000 square feet of commercial development and a large industrial park, which would exceed the development cap on the agricultural land.

Commercial Prior to the COVID-19 pandemic, the main commercial real estate trend was a move away from traditional ( )

Mark Pateman Managing Principal Palm Beach County Cushman & Wakefield

The office market has been robust in the suburban market. We have done a lot of expansion of existing tenants in the West Palm suburban markets. The story of the new-to-market financial services firms plays out on a much smaller tenant basis. It is not the story of huge users relocating huge firms from the Northeast. Most of the new-to-market financial services companies use small offices. That has helped the town of Palm Beach and its real estate market recover. The town of Palm Beach has a good inventory of office spaces in a smaller range from 800 to 1,200 square feet. We are seeing a lot of positive absorption on the island of Palm Beach.

PPP loans have been critical in keeping the economy going. As many service and transaction oriented businesses slowed down or came to a halt, the PPP program allowed companies to adjust and maintain staff. Our company benefited from the program as did many of our tenants. When tenants came to us for rent relief in March and April of this year PPP loans were important components in our analysis and helped commercial real estate owners maintain collections. The collection rate on our office portfolio has been approximately 95% and the PPP program has played a significant role. Jordan Paul CEO NAI Merin Hunter Codman/MH Commercial Real Estate Fund

Gopal Rajegowda Senior Vice President Related Companies There are so many lifestyle elements that attract people and technology will continue to evolve creating new resources at our disposal. In-person team collaboration is very important, so I do not believe the future of work is at home. In fact, the office is becoming more important than ever post-COVID as square footage per employee is creeping up again. Buildings, land and experiences are not going away and the smart developers will invest in the experience and technology to be a player in the future world.

Managing the approval process and regulatory side of the equation, in addition to time to completion, are critical challenges that are not a new outcome of COVID-19 but have always been underlying steps to making every real estate deal happen. Now more than ever, the ability to execute is critical. A simple reality describes the typical deal: the longer the project takes, the lower the returns, and the harder it is to achieve capital investment goals.

Mark Troen Senior Vice President Brookwood Group

The percentage of renters who say they are either severly or moderately costburdened rose to 61.3% in 2018 from 58% in 2006

( ) shopping malls toward more experiential, mixeduse developments. According to many developers, the pandemic has simply accelerated this trend. In June, plans to redevelop Downtown Palm Beach Gardens were sped up as the city council unanimously approved plans for the revamp, which will include new murals, landscaping and a new interactive feature wall. This reflects the desires for more walkable, outdoor space, stemming from the restrictions imposed by the shelter in place order.

The shape of commercial real estate in Palm Beach is changing fast to respond to evolving needs. While several large retailers such as Neiman Marcus and J Crew sought chapter 11 protection, others have modified operations to avoid this fate. Grocery chain Publix, which has expanded rapidly in brick-and-mortar storefronts in Palm Beach County in recent years, is now offering free rent deals to tenants. Recently, Publix

Palm Beach County is still largely focused on population and economic growth despite being Florida’s third most populous county.

purchased the Courtyard Shops on Wellington for $52.8 million, the Sea Plum Town Center in Jupiter for $18.7 million and the Shoppes at Ibis in West Palm for $16.25 million. But the Paradise Place shopping center anchored by Publix in West Palm Beach recently sold for $11.65 million — or $156 per square foot — indicating that commercial real estate is still in high demand.

Developers now are looking to modify buildings in construction to reflect the lessons learned from the coronavirus pandemic. Uptown Boca, the 155,000-square-foot mixed-use lifestyle center based on the ever-popular live, work, play trend was plagued with issues that were exacerbated by the pandemic. But the project is still set to open in early 2021, although with some fundamental changes that center around takeout rather than dine-in restaurants. Other developers are changing plans midbuild, with Sundy Village’s openoffice concept being scrapped in favor of enclosed spaces. Open-air centers such as Rosemary Square in West Palm Beach, designed as an open-air district rather than a traditional shopping center, will unquestionably have the competitive advantage.

Opportunity Zones Since the 2017 Tax Cuts and Jobs Act that created qualified Opportunity Zones across the country, there has been a great deal of attention on the federal program but a seeming lack of uptake on the incentives. One of the biggest criticisms of the program was that certain areas were designated Opportunity Zones that were not in need of gentrification, such as a site adjacent to the Rybovich superyacht marina in West Palm Beach. Then-Gov. Rick Scott simultaneously rejected applications for less well-off tracts of the city to be designated Opportunity Zones. In total, 427 such zones exist in Florida, but it is still unclear

COVID-19 Perspectives

Lesley Deutch Principal – John Burns Real Estate Consulting We are following several trends. New construction may have an advantage over existing, as residents will likely equate “new” with “clean and safe.” New construction can incorporate technology such as air purification and touchless lighting which will appeal to future residents. A stronger focus on health and wellness will translate into new housing product.

Charlie Exelbirt President – Mattis Advisors, Inc. I believe the pandemic accelerated the prominence of people who want to start their own businesses. New business owners account for a great many of the transactions I have done lately. For me, I have become more flexible with time. As a real estate brokerage, I need to be available when people need me. Technology is playing a huge role in that.

Brett Forman President & CEO– Trez Capital Historically, we have always argued that residential real estate is the safest bet, and so we have always weighted the bulk of our portfolio accordingly. The rest of our projects are spread out between industrial, office, retail and to a lesser extent hospitality. That is how our portfolio looked pre-COVID-19, and that is how it will look postCOVID-19. We still believe in the residential sector.

Jeff Lichtenstein Founder – Echo Fine Properties The two biggest takeaways from the COVID-19 outbreak are that, on the one hand, we are doing a lot of what we used to do through Zoom. On the other hand, our website is custom-made and we quickly switched its architecture to accommodate 3D virtual tours. There is a giant increase in buyers searching for 3D tours on the web and on their mobile devices.

Ernesto Lopes President & CEO – AHS Residential The next six months are going to be very difficult. Our residents want to pay the rent, but many of them have lost their jobs through no fault of their own. Long term, I believe this is a thriving industry that is becoming more efficient all the time, so I am bullish on our future.

Palm Beach County requires licensed contractors to take a minimum 14 hour re-education course every two years.

whether the program has drawn development to these areas. Many developers refer to the Opportunity Zones as the “cherry on top” of already-attractive development opportunities, meaning the fundamentals of the projects need to make sense first, with the additional incentives from being designated Opportunity Zone simply considered an added bonus.

Affordable housing As Palm Beach County attracted more businesses, it also attracted the workforce that came with it. Palm Beach County’s population has been steadily growing at a rate of over 1% since 2011, reaching 1.5 million in 2020 compared with 1.3 million 10 years earlier. As more and more younger families began moving into the county, the need for single-family homes, especially those in lower price points, became apparent. During the pandemic, luxury real estate in Palm Beach has been in high demand but that also poses the risk of pushing existing residents out of affordability brackets as selling and rental price points rise. The Palm Beach County Housing Authority is taking steps to offer affordable housing in the county. Currently, onebedroom and two-bedroom apartments are available in the Banyan Club development at $650 per month and $925 per month, respectively, with minimum income requirements of $19,500 yearly.

But high demand and long waitlists, as well as a burgeoning business climate that requires human capital, mean more initiatives are needed, including workforce housing initiatives as a requirement for new developments. For example, in December, developer Affiliated Development obtained a $9 million grant to build the 289-unit The Grand with average rents at $1,100 per month, lower than the $1,456 per month average West Palm rent. And as a condition of Trinsic Residential’s permit to create 292 multifamily units and 2,000 feet of commercial space in Delray Beach, the city requires it to install 73 units of workforce housing. Similarly, the city mandates that EC Development add 18 workforce housing units to its 23-unit apartment development in Pine Bay. Other developers are finding new ways of incorporating affordable housing into high-demand areas, including micro housing units. Housing Trust Group taps into state funding programs to bridge the gap between affordability for residents and profitability for developers. It recently submitted plans to the Downtown Action Committee for the 89,451-squarefoot, eight-story Banyan Boulevard project known as Flagler Station. And a redevelopment plan examining neighborhoods off Atlantic Avenue was submitted to city council in June, with the aim of creating opportunities for residents based on racial inequalities.

Looking ahead The Palm Beach real estate market has been a mixed bag during 2020 and this is unlikely to change in the near future, but the longer term outlook appears brigher. “The economy is looking much stronger compared to the housing recession in 2008. Another benefit to

The county’s population has been growing at a rate of over 1% since 2011

the market is that we have better-educated buyers than in previous years, when investors overextended themselves and could not pay off their mortgage,” said Carol Sollak, principal at Engel & Volkers. “People desire to be in Palm Beach and Wellington, and because of that demand, we believe that the outlook for the next year will be strong. OVerall, while industrial real estate flourishes, retail centers are lagging behind, and as interest surges in the luxury residential segment, lower-income households are in danger of being left out. Construction is bound to become more expensive for developers in Palm Beach County unless efficient and effective material supply chains can be developed locally. But priorities have been re-evaluated and the quality of living spaces has become a top priority in a world where people have been confined to their homes. Now, low interest rates and the desire for space post-lockdown are likely to fuel the desire for bigger and better real estate, with the fundamentals of the Palm Beach County market sure to set it up as one of the most desirable markets to live.

Construction & Infrastructure:

The pandemic has changed the game for many players in Palm Beach County. New opportunities in repurposing and reimagining spaces, as well as in the burgeoning residential and industrial construction sectors is tempered by the additional costs and supply chain burdens faced by the industry.

Cost concerns:

The construction industry is facing even higher costs in the pandemic’s wake, but opportunities are also emerging

As the Palm Beach County construction market rounded up 2019, 2020 was set to be a banner year. A red-hot real estate market was among the factors supporting the industry. In November 2019 alone, the county’s construction industry added 1,600 jobs compared with November 2018. But COVID-19 changed everything. As it took hold in Florida at the beginning of the year, pressure was felt on tourism, events and hospitality, weighing on new construction outlooks.

Performance Immediately after the pandemic emerged as a real threat in the United States, construction firms were among the first required to take fast action to modify their way of doing business. Designated an essential business from the outset, construction workers knew continued operations required immediate changes, including increased safety and hygiene requirements and shift rotations. A group of 30 South Florida construction companies immediately issued a joint resolution to protect the public and workers at job sites, with site managers and contractors ensuring that guidelines from the Centers for Disease Control and Prevention (CDC) were followed.

But it is undeniably difficult to socially distance on a job site, adding to increasing costs that were piling up on the construction industry from a shortage of skilled labor and higher prices for materials and land. One of Palm Beach’s biggest casualties was the $250-million, partly built One West Palm complex on Quadrille Boulevard, with developer Jeff Greene shutting down construction entirely during the pandemic. In a reflection of current market conditions, Greene wants to rezone the property to convert the proposed office and hotel tower into apartments, which are still enjoying high demand. In fact, West Palm Beach’s multifamily residential permitting increased by 2,115 in April 2020 compared to April 2019.

Despite increased demand, personnel restrictions and more stringent safety practices on job sites are sure to create long delays in project delivery times, according to ratings agency Moody’s. Even preCOVID-19, 82% of the multifamily projects that broke ground between 2002 and 2019 were completed at least one month behind schedule. Only 15% finished early and 3% finished on time. In May, the Associated General Contractors of America carried out a survey where it found that at least one project canceled ( )

Strong appetite

Multifamily space continues to attract a great deal of activity favoring the suburban surface

Michael Neal CEO – Kast Construction

What are Kast Construction’s most significant milestones? 2019 stood out as one of Kast Construction’s best years to date, with record sales and record revenues. We are no longer a West Palm Beach company, having extended our footprint with an office in Miami and a lot of significant work going on. We are going to continue our journey toward domination over the major markets in the state of Florida, with Jacksonville further down our pipeline. In Miami, we are excited about working in the Wynwood District, an emerging market in Miami-Dade. We are developing a huge mixed-use project called Wynwood Square. It will be delivered in late 2020 or early 2021, and includes commercial offices, coupled with considerable big retail and big multifamily components.

What types of projects are seeing the most demand? It is interesting and to some extent surprising that there continues to be so much activity happening in the multifamily space. There seems to be such an insatiable appetite for it. Most of our customers are focusing less on the big tower projects and more on the suburban surface or eight-story wrapped product because of the lower risk levels and less time to market. We are also looking at a lot of condo projects and a good number of hotels. There is a pretty big pop in the number of office buildings in our pipeline, primarily in Orlando and Tampa.

What emerging trends are you keeping a close eye on? Technology evolves on a close to monthly basis. I can walk into most of my architect’s offices now, put on a set of goggles and do a virtual walkthrough of a building that I am about to start. The paperless collaboration software used by the architect, the owner and the contractor enables everyone to be on the same platform, vastly enhancing communication processes

and dealing with information flows in real time. The University of Miami School of Architecture’s innovation labs are developing robotics technology applications that are poised to revolutionize the industry, as well as laser-printed buildings. One of the top issues for the industry is the lack of skilled labor since the last recession. Developments like those at the School of Architecture have the potential to solve this issue.

What undeveloped areas are you closely monitoring in Miami? The emerging areas in Miami-Dade are the talk of the town. Wynwood is on fire and it is just getting started. In 2010, nobody would touch the Miami River District, but it is the new hot location. Another area is called the Little River District, which may not be on everybody’s radar but there is a lot of interesting ongoing acquisition and assemblage of properties.

Rex Kirby President Verdex Construction

How has the pandemic affected your business in 2020?

2020 has been an interesting year. It seemed like up until about March everything was unstoppable. Despite the pandemic, it has actually been a good year for us. We’re still going to grow this year. We opened another satellite office, this one in Gainesville, to try to capture some of that area, including Jacksonville. Overall, we took a revenue hit based on where we thought we’d be, but we’ll probably grow by another $30 million over last year. We had four projects that were halted due to COVID-19. Mostly it was from the capital side, with some of the big, institutional investors putting them on hold. But the good news is that three of the four are back and we are about to start those.

Another exciting development is that we were part of a public-private partnership for a sizable project in Pompano and our team won. It’s still being negotiated with the master developer but that’ll be a significant $100-million-plus project.

What impact have you seen in warehouse demand from the growth of e-commerce?

Our portfolio includes industrial and warehouse work. In these last months, not only did industrial real estate not slow down, it increased. We have two warehouse buildings we’re finishing up right now, 250,000 square feet in total, and two more about the same size in an upcoming phase. We are also pursuing industrial work in the Miami market. With everybody now ordering online, all these distribution hubs are springing up everywhere so that’s a strong market for us right now.

Of the markets where you work, which do you believe is best poised for growth?

We still see growth in many South Florida counties but we’re seeing a larger increase in Palm Beach. We’re also seeing growth in Tampa, which is why we opened an office there.

The average winter daytime temperature in Palm Beach County is 74 degrees and 89 degrees in the summer.

( ) or delayed for 67% of members, while 3% had to stop work.

The impact from a decrease in new inventory entering the market was an increase in property values. Across Palm Beach, taxable property values increased 5.51% from January 2019 to January 2020 to reach a total of $209.5 billion. But the looming risk of foreclosures and short sales could dilute property values, while at the same time, the city must use 2019 property values to levy property taxes for the 2020 fiscal year.

Yet, despite the pandemic, construction continues. Like many cities on Florida’s east coast, which is confined by the natural border of the Atlantic Ocean, Palm Beach has begun to develop to the west, with its newest addition the city of Westlake, established in 2016 just north of the Loxahatchee Groves. The development of the city is going full steam ahead, with developer Minto planning 4,500 single-family homes and townhouses across three communities. Two outside developers also purchased land to build a further 1,000 homes. Christ Fellowship Church is building a 65,000-square-foot sanctuary and Florida Power and Light is set to build a solar energy center over 400 acres.

Mike Belmont President Minto Communities USA

According to Avison Young, office space construction in West Palm grew in 2019 at a faster rate than the previous four years, adding just under 400,000 square feet. The consultancy expects more office space to be added in 2020, although at a slower pace of around 150,000 square feet. Retail space in 2019 added 400,000 square feet of new inventory but growth for 2020 is expected to be more moderate, at around 200,000 square feet. Industrial space, however, is set for more growth after taking off in 2020, according to Avison Young, buoyed by the rapid uptake of industrial tenants in life sciences, manufacturing and distribution. After a relatively conservative year in 2019 when the city added 450,000 square feet of industrial space, in 2020 this is projected to reach over 1,000 square feet.

Rising costs Among the chief concerns for industry players is the unabating rise in costs for land and materials, pressuring the profit margins of developers and construction companies. In West Palm, the average cost to build a house can range from $150 to $350 per

What factors are driving demand for residential units in Westlake?

Interest rates are playing a part in motivating people to make the decision. About 70% of our sales this year have been to people coming out of rental homes or rental apartment complexes. I think that the low rates and Westlake’s affordably priced and quality built homes have attracted folks who otherwise could not afford a home in Palm Beach County. With our largescale development plan and approvals for over 4,500 homes we have been able to offer a really affordable solution for Palm Beach County. We are priced from the low $300,000s up to over $500,000 for the base home price. Since probably June or July, when people started realizing that they could work from home, about 25% of our business has come from Broward and Dade counties. I do not think people are necessarily changing jobs, but they are finding a more affordable opportunity in Westlake, even though the commute can be a bit difficult. People are thinking that if they are really only going to go back to the office four or five times a month, they can take this commute in exchange for living in a new home in a new community.

How are you developing the nonresidential aspect of the Westlake project?

We have a long-term vision and we are developing a long-term plan to help develop employment areas, local healthcare, commercial/retail services, restaurants, entertainment and an experiential town center. We hope to soon have a major grocer breaking ground for a new store in the community that will be a much more convenient alternative for our residents. I’m not sure how the post-COVID-19 retail sector and future shopping center will evolve, but since we are in the early planning stages we have the flexibility to have Westlake evolve with the sector. Westlake has approximately 270 acres remaining of nonresidential land and close to 2 million square feet of approved mixed-use density.

Dale Hedrick CEO Hedrick Brothers Construction

What are the game-changers for Palm Beach’s construction sector?

The biggest game-changer is in Downtown West Palm Beach, where there are more apartments being built than there are in the entire state of Michigan. There is a tremendous amount of growth and because of tax restructuring, there are many more financial businesses moving into the area. We are starting to see some of the effects through the Space X program, with the growth of Pratt & Whitney and many other aerospace companies.

What opportunities are you seeing in the healthcare sector?

That is an area we are specifically targeting. With the state of Florida changing the certificate of need for beds, we think that will offer opportunities in the healthcare market.

With the influx of people moving to the area, how is the infrastructure positioned to cope?

I think we are well-positioned, but I do think we need to rethink a comprehensive change in our intermodal network. We have not tied airports, rail, highways and shipping together effectively. I think Tri-Rail and Brightline USA are game changers and I don’t think we fully understand the impact of the Virgin service to Orlando. But I think we need to make some bold, aggressive changes to our infrastructure. In Downtown, there are some great opportunities to create a very well-designed mobility program and we need to get it right.

How have Opportunity Zones so far impacted growth in the region?

I am a huge fan of Opportunity Zones but we are at the very early stages of the program. The idea of offsetting the capital gains tax is fantastic but it is still untested, and it remains to be seen whether it attracts new business to the area. square foot, depending on factors such as materials, labor costs, land costs, permitting and level of customization. One potentially significant issue highlighted by the pandemic is the construction industry’s reliance on outside markets such as China for its raw materials. A conservative estimate pinpoints around 30% of U.S. construction procurement coming from China, with some firms dependent on China for up to 80% of their materials, according to Atkins Global. This makes U.S. construction firms particularly vulnerable to supply chain disruption, in turn causing costs to rise and projects to overrun. Atkins predicts that the impact on the U.S. construction market will be amplified, with delays and cost overruns expected in 2021. Axa Reinsurance, meanwhile, has called for a comprehensive, U.S.-wide supply chain audit that will reveal the extent of a company’s exposure.

Palm Beach is largely pro-development and permitting for projects is relatively straightforward. But rising construction costs are largely tied to costs of raw materials and a shortage of skilled labor. Since President Donald Trump began his trade war in 2018, a study by the Federal Reserve suggests this has led to increased costs of steel and aluminum and caused job losses at U.S. companies. During his term, Trump has imposed tariffs of up to 25% on several countries and trade blocs, including the EU. The tariff on Turkish steel imports – largely seen as one of the most competitive steelmaking countries in the world – was increased to 50% in October 2019 but was later ruled unlawful by the U.S. Court of International Trade. Turkey’s steel exports to the United States totaled over 2 million tons in 2016, but this dropped significantly in 2019, to just 132,423 tons.

Another new cost for the industry to consider in the post-COVID-19 landscape is that for health and hygiene equipment, including temperature scanners, face masks and hand sanitizer. As demand worldwide soars for the same equipment, a report by the U.S. Public Interest Research Group found that the prices of the equipment have jumped by 166%. In January, a box of N95 respirator masks sold for $18.20 but in late February, the price had spiked to just under $200. In the same period, a case of 12 8-ounce bottles of Purell hand sanitizer jumped to $160 from $30.

Opportunity Zones Palm Beach County has 26 Opportunity Zone tracts, spread across Belle Glade, Boynton Beach, Delray Beach, Lake Worth Beach, Mangonia Park, Pahokee, Palm Springs, Riviera Beach, South Bay, West Palm and

Rick Gonzalez President – REG Architects

We are continuing to figure out transportation other than single-occupied cars. All three counties will do great. I love the fact that Virgin Trains USA added more stations in places like Boca Raton and Aventura, which are highly automobile-oriented areas. It is great to hop on the train and travel from Palm Beach County through to Miami-Dade County. With the Virgin Trains, South Florida can now compete with other metros like Atlanta, Chicago and Washington, D.C. We have the two train tracks, the Virgin Trains and the Tri-Rail, which go north and south. Now, we have to figure out east and west.

Unincorporated Palm Beach. The zones are designed to incentivize investment in underprivileged areas by deferring capital gains tax and eliminating other taxes on assets held for 10 years.

Although the zones so far have generated little development activity, there is optimism that the postpandemic landscape will drive more migration to South Florida, acting as the catalyst for these zones. But they are not without controversy. In West Palm, designation of an Opportunity Zone at the superyacht marina provoked an outcry, with critics arguing that tax breaks are being given to luxury developments that would have been profitable already, rather than gentrifying underprivileged areas.

Financing One good sign for the industry is the continued interest in financing projects across Palm Beach County. Despite the coronavirus slowing and complicating some construction markets, appetite to invest still seems to be high. Since the beginning of the pandemic, for example, construction financing for $27 million in a Boynton Beach mixed-use project has closed. The development has letters of intent with retailers and restaurants for 85% of its pre-leased units. And private mortgage lender Trez Capital has pinpointed Palm Beach County as one of its key markets alongside Atlanta. In a unique lending model, the firm provides credit based on the “true value” of the real estate and the creditworthiness of the borrower. The company aims to lend more than $1 billion in the Eastern United States.

Residential On a national level, as of March 2020, housing

Palm Beach County has 26 Opportunity Zone tracts

inventories had declined by 15.7% on the year, and in the Miami-Fort Lauderdale-West Palm metro area inventories were down 11.9%. Although this market saw one of the highest days on the market at 86, median listing prices on the year were up by 2.6% to $407,802. As the pandemic worsened across the United States, residential construction in Palm Beach was one of the winners. New Yorkers and those living in large urban centers during the shelter in place order began looking to Florida for more space and safety.

Although there looks to be no danger of an oversupply in residential inventory, builders now need to rethink the way they are building. For example, high-rise condo developments with shared amenities are likely to see a dip in demand, while properties with private balconies situated in planned, walkable communities are likely to see a surge. Through three new projects, builders Kolter Homes, Toll Brothers and 13th Floor Homes will add almost 2,000 new over-55 units to Palm Beach County’s inventory across Westlake, Palm Beach Gardens and Delray Beach. The University of South Florida expects large-scale migration of the 65

Young Song Founder Song & Associates

What has been your experience with civic buildings in Palm Beach County?

Participating in these civic projects certainly requires a greater understanding of the surrounding community, as well as offering insight into neighboring Martin, Broward and Miami-Dade Counties. If you want to attract someone to an area, you need to provide an enhanced lifestyle and this can be done through public buildings and spaces. They represent the values, ideals and aspirations of the communities they serve. It should be a requirement to ensure people feel invited and comfortable in the community in the same way they would in their own living room. .

What kind of infrastructure improvements are needed to accommodate growth?

Transportation and transit infrastructure should be the first consideration as density increases. I think the Palm Beach County authorities are doing a good job in keeping up with this infrastructure. The second consideration with growth is public safety, so we need more facilities such as police stations and fire houses. With the increase of residential it is also necessary to include increased commercial facilities, public space and parks. Good planning is required because there are so many moving parts operating in tandem. This requires strong vision and leadership of government and elected officials to accommodate harmonious growth and develop smart cities.

What is your outlook for the next year for the firm and the Palm Beach County market?

We have built a caring culture that focuses on our clients’ needs. We want to continue providing this excellent service. COVID-19 has presented us with the opportunity to re-evaluate our adaptability and strive for improvement in every situation that arises and may arise. We need to take these lessons and never stop learning so that our designs can best respond to the changing needs of our community. and older population in the state until 2033, further fueling demand.

There has been so much increased multifamily demand amid the pandemic that former Palm Beach County Commissioner Jess Santamaria applied in June to rezone the Village of Royal Palm Beach so it can be used for multifamily development. And two New York developers, Hyperion Group and Winter Properties, teamed up to build 300 multifamily residences across 25 stories on South Australian Avenue. Builders are now looking for land outside the traditional development areas. Eastwind Development, for example, broke ground in December on a 178-unit multifamily building in West Palm Beach’s Warehouse District.

As builders strive to incorporate the most indemand features to accommodate this incoming demand, real estate prices are being pushed up. More than 250,000 Palm Beach County households spend over 30% of their income on rent or mortgage payments, with 135,000 spending over 50%. With average sale prices of $350,000, a homebuyer would need to earn more than $116,000 per year to not exceed the 30% threshold, while a renter would need to earn $58,000 to make average rents of $1,620 per month affordable.

With that in mind, affordable housing is coming to West Palm Beach, with several projects under construction, including the $17.5 million Dr. Alice Moore Apartments in Northwood Shores. “Every community in South Florida is looking for a formula to get housing to be more affordable, whether in the rental or sales space,” said Robert Primeau, president of Florida General Contracting Corporation, in an interview with Invest:. “Instead of driving numbers up, which is easy to do, it is critical to the American way of life that we serve the needs of the community with affordable, median-income housing providing an attractive, safe place for people to live in the communities where they work. It is an undeniable competitive advantage for communities to provide housing for a wide range of residents across the economic spectrum.”

Commercial While residential construction has benefited from the pandemic, commercial construction, including office spaces, hotels and shopping centers has slowed dramatically. Caught during a period of slow commercial growth, when developers were having to work harder to attract people to brick-and-mortar retail outlets, the virus outbreak has placed additional

burdens on builders and developers. Touchless trends who sees troubled times ahead for the space. “In that existed on a minute scale pre-COVID-19 are being commercial space, I believe the market will go south incorporated en masse into grocery stores, including because companies are understanding that office online shopping options, drive-by pickup, robotics space no longer is needed for many people who can and artificial intelligence. This means that companies work from home. Demand for square footage will have seen profit margins shaved by 1-2% because of be lower and all of this built environment is coming these measures — a large chunk of the 2-5% profit down. This rest period has really helped people revisit the industry typically makes. And some stores simply the way they live and work.” cannot afford the outlay. As the state reopened in mid-May, the majority of Palm Beach’s retail stores Looking ahead remained closed, with around 15% of the stores at In the construction sector, the pandemic has changed the Town Center at Boca Raton the game for many players reopening immediately after permission was given to do so. But COVID-19 has also high If a vaccine is found, next year in Palm Beach County. New opportunities in repurposing and reimagining spaces, as well as in lighted the need for space and upto-date facilities, which is why will be a great the burgeoning residential and industrial construction sectors is construction on the Royal Palm year because tempered by the additional costs Beach Village Hall is pressing ahead. The new 16.5-acre site people are hungry and supply chain burdens faced by the industry. The virus is also will house two stories, giving public officials around double to get back. expected to have a lingering effect on the county’s budget, the available space as they had Jeffrey Silberstein especially since the impact on in the previous building. The Silberstein Architects the hospitality and tourism construction contract is to be awarded in the coming industries could cause a devaluation in property months, with building permitting expected to be prices, directly reducing property tax collection rates. completed by October 2021. And some behavioral When the pandemic passes, added Silberstein, changes are expected to last in the medium and long companies should be ready. “I know that 2020 will terms, pushing forward the e-commerce boom and be a lost year,” he said. “It is hard to plan anything bolstering Palm Beach County’s industrial sector. in these times so we need to make things as efficient

Overall, however, there is less optimism on the as possible. It is important to fill this lost time by outlook on commercial real estate, and retail and positioning the company to ramp up when the time office in particular. Jeffrey Silberstein, founder and comes. I think if a vaccine is found, next year will be principal at Silberstein Architecture, is among those a great year because people are hungry to get back.”

Upgrading:

Whether it’s roads or electricity, Palm Beach County is keeping its infrastructure front and center

One of the most prominent infrastructure complaints for Palm Beach County residents is the lack of public transport in the county and the inability of the road system to cope with the burgeoning population. The arrival of the Brightline train to Boca Raton will give residents in Palm Beach County will go a long way to providing residents with greater mobility options.

In December, three new stations on the line between the existing stations at West Palm Beach and Miami were approved at a total cost of $120 million. Palm Beach County also committed to spending $12.1 million for a $13.3 million, 455-space parking garage. When the West Palm-Orlando extension is completed, travelers will be able to go from Orlando to Palm Beach in just two hours.

Until then, authorities are working to upgrade roads to ensure they can keep up with demand. In April this year, Gov. Ron DeSantis urged the Florida Department of Transportation (FDOT) to speed up the $33 million Southern Boulevard widening project, taking advantage of the shelter in place order. The project would widen the highway from four lines to six and DeSantis moved up the deadline by three months as Florida’s roads cleared during the height of the COVID-19 outbreak.

Many of the infrastructure projects slated for the coming years in Palm Beach focus on road widening, including the widening of some sections of the Florida Turnpike to 10 lanes from eight and the construction of Express lanes on I-95. “Palm Beach County is among the most economically diverse communities in the state of Florida, where the highest and lowest per-capita income earners cohabitate. The socioeconomic rainbow spreading from the eastern edge of Palm Beach County to its western edge is quite remarkable. Clearly, our infrastructure development scope needs to cater to all these layers of diverse populations,” said Maziar Keshavarz, president of Keshavarz & Associates.

Electricity Palm Beach County’s electricity and gas needs are served by Florida Power and Light (FPL) and TECO Peoples Gas. Residential electricity rates in the county average out at 10.4 cents per kWh, which is below the Florida average of 11.42 cents per kWh, as well as the national average of 11.88 cents per kWh. Commercial customers pay on average 8.72 cents per kWh for electricity, 9.73% less than the Florida ( )

Adjusting

The pandemic forced the county’s zoning officials to pivot online but they are looking to make it a permanent move

Ramsay Bulkeley Executive Director – Palm Beach County Planning, Zoning & Building

What activities have you seen increase for your department during the pandemic? We are seeing activity related to distribution but much of that was already kind of in play before the pandemic and just got sped up. When you’re talking about big projects, with us it takes a couple of years for them to get through, so the vast majority were already in the works, although we still have new projects popping up. I have noticed, in a few places, that developments were concerned that we would stop inspections, that we were shutting down. We showed them that we were not and they were happy. We’ve got maybe a couple of billion dollars’ worth of active permits, so there’s a lot at stake.

We’ve gone from zero online submittals to doing everything online now. That’s helped people and us, internally, because we can process more and send a project to 20 agencies at the click of a button, as opposed to hauling around a big plan. That’s kept us a little freer.

What do you see as the future of the Palm Beach Agricultural Reserve? It’s hard to say. There is a long history there but at the end of the day it comes down to the will of the county commissioners. I think where we are heading is another meeting of the county commissioners to see the direction in which they want the Ag-Reserve to go. If you have additional development out there, then the objective of the Ag-Reserve isn’t met and will require additional services. There are a lot of pressures and competing interests going on out there; there are bond issues at play, transfer of development rights, planning issues, zoning issues, and at the end of the day if people want to change those regulations to do something different, that’s down to the will of the board.

How are trends and regulations changing to develop golf courses into residential communities?

We have a lot of golf courses that are being converted into residential areas. They’ve become very hot potatoes because what’s happened is that the golf course owner is separate from the residential areas around it. The owner wants to develop his golf course while the residents claim they bought an area around a golf course, at a prime, and now the development wants to take away all the views and open spaces. But the tricky thing is that it was never theirs from the beginning, they never paid the taxes or maintenance, so that becomes very unpleasant as people have the right to develop their property. But when you are talking about removing someone’s view after 30 years, it can get emotional. As far as the county goes, as long as you follow the rules and regulations, if it’s a use that’s been recommended by the board, we’ll give our recommendation.

Dan Pellowitz Executive Director Solid Waste Authority of Palm Beach County

What were the main highlights of 2019 for the Solid Waste Authority?

Our fiscal year ends on Sept. 30 so 2019 for us was an exciting year because we were in the process of rebidding our collection contracts that service half the county. We are responsible for two areas: the county disposal system and the collection of solid waste trash and recycling for the unincorporated part of the county. We signed some major contracts with FCC, WastePro, Advanced Disposal, and The Goode Company. Two of the contracts were signed by incumbents but we changed haulers in more than half of the county, so this was a big challenge. Right now, our system is built out and ready to handle all the waste generated in the county.

What have been some of the challenges with waste collection and disposal during the pandemic?

We are a 100% essential service, so the biggest challenge was doing what we needed to keep our employees safe. Other than that, we saw a significant hit, primarily in April and May. Garbage and trash deliveries declined significantly on the commercial side but there was an increase in residential as people stayed home. Things stabilized a bit in June so that has been a good sign.

What are your top priorities for the next six to 12 months?

Our biggest priority is keeping our employees safe. The virus spreading among our workforce would mean a budgetary hit for us and it would impact our ability to collect and dispose all the material. We sometimes take in as much as 9,000 tons per day, so we have to be here. We have six transfer stations, two maintenance facilities, two household hazardous waste facilities, two plants, a recycling facility and a biosolids processing facility, all of which have to run. We have some significant initiatives coming into next year, most of which involve renovation projects. Right now, we are implementing a new point of sale system for our scale houses which is a $1.5 million upgrade. ( ) average of 9.66 cents per kWh, although it is 13.5% higher than the national average of 6.86 cents per kWh. For industrial customers, rates in Palm Beach County are 6.86 cents per kWh, 14.6% less than the Florida average of 8.04 cents per kWh but 2.85% greater than the U.S. average of 6.67 cents per kWh.

Amid COVID-19 concerns about the ability to pay utility bills, FPL announced in May that it would provide a one-time cut in bills, with 1,000kWh of electricity charged at $74 during the month rather than $96.04. This came after FPL announced that residential customers would see electricity bills shaved by an average of $3.86 starting in January. Low electricity prices are attributed by the utility to returns from investments in solar energy generation and plummeting natural gas prices.

FPL has invested strongly in solar energy projects over the years, operating 18 plants with 10 more under construction, and is now phasing out oil and coal. The company aims to install 30 million solar panels by 2030, for a total solar generation that will power 2.2 million homes, making Florida a global leader in solar energy. Around 100 solar plants are planned, reducing emissions by 67%. Before 2030, nuclear and solar power are expected to generate 20% of FPL’s electricity, with natural gas accounting for 60%.

Florida Power and Light (FPL) has the highest property tax in Palm Beach County.

Jorge Garcia CEO – GarciaStromberg

There are magnificent groups here working with technology, one of them with the IBM campus. They are trying to attract that technology industry, but not for technology’s sake. Also, we need to introduce and understand their culture because those people know how to spend the money they work so hard for, and they are going to be the contributors and the visionaries. We can’t continue to sit back. We need to cater to them because they are going to the theaters and taking up seats. We have got to give them encouragement and that means building communities where they fit, and where they fit well.

Alternative energies Solar energy is undeniably the best form of renewable energy for Floridians. But even though the Sunshine State has significant photovoltaic potential, initial outlays for solar equipment remain high. In Palm Beach County, as of July 2020, the average cost for solar panels was $2.78/W. The cost of the average 5W installation in Florida is around $13,900, falling

to $10,286 when taking advantage of state and local incentives but still out of reach for lower-income households.

The next best thing seems to be wind power, and one company, OceanBased Perpetual Energy, is working with FAU to harness the Gulf Stream to generate electricity. A five-turbine test carried out was a success and now the company is seeking to implement the project on a larger scale, with a $16-billion investment required to produce 5GW of electricity from the Gulf Stream in five years that would be sent to a power distribution station in West Palm Beach.

Renewable energy is not only good for the environment, but also good for the economy. PreCOVID-19, there were nearly 3.4 million clean energy workers across the United States, with clean energy having produced jobs 70% faster than the overall total for the last five years. The U.S. House of Representatives is scheduled to vote on the Moving Forward Act, which includes infrastructure that supports renewable energies, sustainable transport and safe drinking water. West Palm Beach authorities are taking one step in the right direction by commissioning a fleet of five electric-powered school buses, subsidized by FPL.

Water Palm Beach County’s drinking water is drawn from wells located 150 feet underground — a high-quality source of water free of contaminants often found in water from rivers or lakes. Five water treatment plants for the county have the capacity to produce over 100 million gallons per day of drinking water. The Palm Beach County Water Utilities Department (PBCWUD)

currently serves around 600,000 residents with potable water and wastewater services. But the Florida Office of Economic & Demographic Research estimated in 2019 that statewide daily demand for water will increase to more than 7.5 billion gallons in the next 20 years in light of the state’s expanding population.

In 2019, PBCWUD registered a net loss of $2.4 million, compared with a net profit of $23.1 million in 2018, although operating revenues increased to $204.9 million from $197.2 million. In the 2020 fiscal budget, the department expects to spend $196.9 million on major capital improvement projects, including $26.7 million in improvements to the Southern Region Water Reclamation Facility, $24.3 million in lift station rehabilitations and $17.6 million in wellfield expansion and rehabilitation. By 2025, PBCWUD aims to operate at least six regional water plants with an estimated capacity of 130 million gallons per day.

The state is also cracking down on wastewater violations. This June, Gov. DeSantis signed a bill that would increase wastewater discharge fines by 50% to $10,000, with the proceeds going toward his four-year, $2.5 billion environmental water quality plan. The governor’s budget allocates $332 million to Everglades restoration, $20 million to springs restoration, $160 million to water quality projects and $25 million to combat algal blooms.

The water and sewage authority in the county is the public body Seacoast Utility Authority (SUA).

Telecommunications For some, Palm Beach County has been synonymous with being at the forefront of IT since the IBM PC was created in Boca Raton. Today, the county is home to over 1,700 IT, telecoms and support companies with over 20,000 employees earning on average $78,928. It is home to companies such as DSS, Modernizing Medicine, LexisNexis Risk Solutions and SBA Communications. SBA Communications, a Boca Raton-based antenna owner, saw revenues skyrocket to $1.9 billion in 2018. In 2017, Modernizing Medicine announced it would expand its Boca Raton facility, adding 838 jobs by 2022 with an investment of $15 million. The county’s telecom needs are served by AT&T and Comcast.

Looking ahead Palm Beach’s privileged position on the world map also comes with great responsibilities to develop sustainable infrastructure. According to a study, FEMA has underestimated the 100-year flood risk by around 114,000 properties. Palm Beach comes in eighth position in the country for the most properties at risk of flooding. The area is making climate change preparations, including sewer improvements and construction on higher ground. A study by the Center for Climate Integrity said Palm Beach County would have to spend $544.2 million to reinforce sea walls by 2040.

FPL alone has been growing at a rate of 65,000 customers per year as an average of 1,000 people per day move to Florida. Palm Beach County and its utilities face the issue of expanding its utility and infrastructure coverage for a growing population. Perhaps the most urgent requirement is in creating public transport links to alleviate road saturation. But with the addition of the Brightline station in the city of Boca Raton, Palm Beach County will be able to continue its trajectory as one of the most attractive places to move in the country.

Transportation

& Logistics:

Public demand for safer, improved and multimodal transportation has been complicated by the ripple effects of COVID-19. Yet, Palm Beach County has more than one ace up its sleeve to tackle the pressure of planning for a sustainable public transportation system.

Pushing boundaries:

Laying the groundwork for the future of public transportation

When it comes to transportation, Palm Beach County is pushing the boundaries. The county is looking at integrating innovative concepts of multimodal transportation to foster walkability, bikeability, train and bus use, as well as fostering transit-oriented development and considering outside-the-box financing mechanisms.

Technology is also becoming the launchpad for the county’s transportation of tomorrow, providing the trigger for new ideas while helping the region deal with the effects of the COVID-19 pandemic today.

With three main systems — Palm Tran, Tri-Rail and the Brightline commuter rail — and trolleys and shuttles operating as local circulator systems across the region, transportation is crucial to the county’s continued economic development. To that end, both federal funding and private investment continue to pour in to secure seamless mobility options for both residents and visitors and to be ready for a surge once the virus subsides.

Landscape Palm Beach’s Transportation Planning Agency (TPA) remains committed to materializing its vision of a multimodal transit network that is safe, efficient and connected despite the pandemic. The agency’s Long Range Transportation Plan (LRTP), amended in February 2020, is the blueprint for Palm Beach County’s transportation system toward 2045, developed together with Southeast Florida’s Regional Transportation Plan (RTP). According to the LRTP, Palm Beach County totaled 1.43 million residents in 2017, whereas the greater Miami-Fort-LauderdaleWest Palm Beach metropolitan area counted 6.1 million residents, ranking seventh among the largest metropolitan areas in the United States. In 2018 alone, a record 8 million people visited The Palm Beaches, according to Discover The Palm Beaches (DTPB), Palm Beach County’s tourism marketing arm.

The TPA also estimates the county will welcome an additional 222,000 residents and 102,000 jobs by 2030. Growth is expected to total nearly 1.8 million people and 930,000 jobs by 2045. Given these figures, transportation infrastructure improvements will be required to tackle the growth challenge head-on to provide seamless mobility for all.

As per the LRTP’s public input and participation, backed by close to 3,000 survey responses, 41.7% of the people polled cited traffic congestion as their major concern, inadequate public transit came second ( )

Addressing need

A new customs facility is among the amenities helping to prop up demand at Boca Raton Airport

Clara Bennett Executive Director – Boca Raton Airport Authority

What makes Boca Raton Airport attractive for companies looking to relocate? We have had several companies relocate their facilities to the Boca Raton Airport because this is where they wanted to be. That is what drives the decision to use a specific airport. Another major factor is the types of amenities that an airport offers. To stay competitive, the airport authority decided to construct a U.S. customs facility. We recognized this service was lacking in the airport. We had a number of flights that would leave from the Boca Raton Airport for international destinations but when those flights returned, they had to land at other South Florida airports to clear customs. Since the customs facility opened in May 2018, it has been a resounding success, serving flights from over 50 countries, including the Bahamas and the Caribbean, as well as Latin America, Canada and Europe.

What has business demand looked like for the airport? Business demand was higher than it had been in a long time prior to COVID-19. The economy has been booming in Boca Raton, which is home to 60% of corporate headquarters in Palm Beach County, and Boca Raton Airport served the needs of corporate decision-makers who rely on quick, efficient modes of transportation. As a result, we were seeing steady growth in the business and charter flights market. As we start emerging from the immediate effects of the pandemic, we are seeing a rebound of demand for this type of travel.

What industry trends are starting to emerge? We are seeing significant industry consolidation on the service side. Traditionally, fixed business operators, the companies that provide services to the aircrafts while on the ground, have been very

independently run. Now, many of these companies are being acquired by multilocation fixed-business operators.

What challenges are you facing and what steps are you taking to counter these? Macroeconomic factors are a challenge. We are small in scale and scope, but we are dealing with many of the same issues that larger facilities are facing. We believe that technology will help provide many of the answers. For example, our airport security standards exceed the federal- or state-level requirements. We are going for more intelligent security and more technology-based approaches like cameras and other types of intrusion prevention. We are seeing technology playing a greater and greater role.

Manuel Almira Executive Director Port of Palm Beach

What were some of the notable events for the Port of Palm Beach in 2019?

The fiscal year started out strong but this also coincided with Hurricane Dorian, which devastated the Caribbean, our main trading partners. Freeport in the Bahamas was the most impacted by the hurricane, which had a long-term ripple effect across the cruise industry. One of the two ships per day had to be rerouted from Freeport to Nassau because of the drop in passenger numbers, which lasted up until late March. The cruise company then decided to indefinitely dock one of these vessels. Cargo has dropped around 3-5% on the previous year. The cruise industry felt the impact and now the COVID-19 pandemic is compounding these issues.

How have you been able to diversify to combat these issues?

Over the years, the Port of Palm Beach has been able to service the domestic market, namely the agricultural and sugar industries in West Palm Beach. These barges loaded with sugarcane go north to refineries in New York, Maryland and Louisiana. Another way we have diversified is in metal exports. We have a broker that exports scrap metal in bulk carriers to Turkey, where the metal is melted and resold to the United States in the form of steel rebar.

What capital projects are in the pipeline for the near future?

Berth 17 is now finished and operational, which has allowed us to shift smaller vessels to operate in this berth in the southern part of the port. This frees up the larger berths to load and unload materials such as sugar, asphalt and steel rebar. On the land side, we continue my quest to improve the rail connection inside the port. We have our own rail line connected to the FEC north-south railway service. I am convinced the port will have greater prospects by offering an even more efficient rail connection. ( ) at 28.9%, followed closely by safety at 22.1% with high costs a concern for just 7%. The LRTP focuses heavily on extending and bolstering its pedestrian and bicycle networks, enhancing transit corridors and optimizing freight through roadway extensions.

Another ambitious initiative, Palm Beach’s FY21-25 Transportation Improvement Program (TIP), allocates approximately $3.3 billion to over 470 projects across all modes of transportation in Palm Beach County, financed by combined federal, state and local funding. The pipeline of projects focuses on the Strategic Intermodal System (SIS) to support regional mobility, major TPA projects, local initiatives and alternative transportation programs, Florida Department of Transportation (FDOT) and local projects, operation and maintenance (O&M) for roadways and transit, and airport and railroad projects.

Among the county’s key infrastructure projects is the “Complete Streets” program, adopted in 2016. The idea of Complete Streets is for roadways to accommodate not only cars but also to provide safe transit areas for pedestrians, bicyclists and transit riders. The agency has identified 11 corridors that could benefit from increased public transportation services as they provide no more room for automotivecentered lane widening: US-1, FEC Railway, TriRail, Congress Avenue, Military Trail, Okeechobee Boulevard, Forest Hill Boulevard, Lake Worth Road, Boynton Beach Boulevard, Atlantic Avenue and Glades Road.

This change in optic is not without its challenges. From 2011 to 2016, a TPA study revealed 321 pedestrian and bicycle-related crashes were reported on the 42-mile corridor stretching from Boca Raton to Jupiter; 15 of these instances proved fatal. A “Road Diet” project is underway to dedicate one of the four lanes to bike lanes or wider sidewalks. Palm Beach’s Community Redevelopment Agency has greenlit the proposal and is awaiting approval for a traffic study that would determine how to execute the project. Shrinking automotive space to foster multimodal transportation is poised to become the go-to practice going forward. One example is the $84.5-million West Atlantic Avenue widening project from Florida’s turnpike to Jog Road, which launched its first phase in July 2020 and is expected to be completed by 2031.

Initiatives The shutdown resulting from the COVID-19 pandemic provided an opportunity to ramp up the timetable for transportation infrastructure projects due to ( )

Dividends

Steady onslaught of improvements is paying dividends, with higher ridership and improved customer satisfaction

Clinton Forbes Executive Director – Palm Tran

What has been the trajectory for Palm Tran’s operations over the last year? Over the last year, our trajectory within the community has been incredible. When we look at the successes that we have had in terms of our culture of innovation and continuous improvement, it has been really remarkable what we have been able to accomplish. In the eight months prior to the pandemic, we had seen improved ridership, a reduction in customer concerns and satisfaction among our customers on a steady incline after several years of continuous improvement. We were on the precipice of greatness. Now, in dealing with the pandemic, we have had to reimagine how we deliver public transit service, which is not just unique to Palm Tran but really for transit operations nationwide. Even at the height of the pandemic, we never stopped operating. We kept our services going so people could have accessibility to essential products like medical and groceries. This had to be done for those individuals who have no other mobility choice except Palm Tran.

That being said, we saw dramatic ridership losses during the initial phases of the pandemic. In March 2020, Florida became the third state to confirm its first coronavirus case and at that time our ridership across all modes dropped about 17%. In April 2020, when more of the stay at home orders were issued, our ridership dropped another 43%. In May 2020, things were on a trajectory toward reopening and we saw our customers start to come back, which has continued on a slow but steady track.

How is Palm Tran working to change negative stigmas of public transportation and increase ridership? Even before COVID-19, this has been a focus of public transit. How do we get more people to use public transportation as their primary option? In transit,

the most important factor to a “choice” rider is time. Time is the most expensive commodity, and people always ask themselves if they are spending their time wisely. If it takes them substantially longer to travel on public transit, they are probably not going to do so if they have a choice in their mobility options. Our focus at Palm Tran is this concept of using the dollars that we receive wisely to provide a more efficient service. Eighty percent of our ridership right now is what we call our loyal customers, which are the captive customers who use us as their primary form of transportation. However, we are working to grow our customer base and attract riders who may have other modes of transportation available but choose to take the bus because of convenience or other motivations such as helping reduce the carbon footprint.

Nick Uhren Executive Director Palm Beach Transportation Planning Agency

What are Palm Beach Transportation Planning Agency’s priorities in the short term?

Our reach extends beyond transportation to also deal with roads, bike lanes, sidewalks, airport and seaport connections, on-port facilities, infrastructure needs and issues. At the federal level, we are pushing for investment in on-port rail infrastructure at the Port of Palm Beach to grow our ability to move cargo and maximize the efficiency of cargo container handling.

How are you accounting for population growth in infrastructure development?

Dealing with a high-growth area such as Palm Beach County or South Florida requires constant forecast updates as we understand what urban development looks like and how travel demand is evolving. As we are increasingly committed to an urbanizing land-use pattern, we should also be willing to reject the status quo assumptions that every time you build a new apartment, you are going to have seven more car trips a day. We need to recognize that when infrastructure is built, it is promoting the behaviors that this specific infrastructure serves. Bigger, wider roads in our downtowns essentially encourage people to drive to their destination. Investing in other transportation modes, providing great transit services and a walkable, shaded environment conveys a different message.

What are the agency’s long-term goals?

Our interaction with our business community is shifting toward assessing if we are ready to make a major investment in an enhanced, high-capacity transit network. Our long-range plan speaks to the east-west connections and the need for a connected transit system. We have identified five north-south transit corridors that connect our coastal and inland communities and six east-west connections, with which we are trying to bring people from our western communities to those north-south corridors so we can provide a seamless, connected transit system. ( ) lower traffic volumes. Capitalizing on this window of opportunity, FDOT gained at least 650 total contract days for more than 40 additional critical transportation projects.

As a result, Southern Boulevard’s (SR-80) widening in western Palm Beach County gained close to three months in development work. Moreover, the county reported its $5.2-million Silver Beach Road project at Old Dixie Highway in Lake Park has been expedited. Residents can expect to have newly installed utilities, drainage, sidewalk, pavement and turn lanes. Added to that is a $4.4-million paving project on Southwest 3rd Street, located in the Sandalfoot Cove area of suburban Boca Raton, where the contractor was able to work through peak traffic hours and night shifts. Another project benefiting from the crisis is a Seacoast Utilities project, valued at $4.2 million, that has been sped up by adding second and third crews dedicated to water and force mains installations, as well as pavement placement.

The county’s 2021 budget is raising red flags, however, as it projects COVID-19-related shortfalls in a range of $25 million and $45 million for FY20, $30 million in FY21, $13 million in FY22 and $22 million in FY23.

Reinvigorating bus and rail On March 25, 2020, Brightline announced it had suspended its services to contain public exposure to the virus as public health officials reported 169 people in Palm Beach County and more than 2,000 users across South Florida were infected while using the high-speed rail service. The measure caused 250 layoffs. On the bus front, the decline in the number of Palm Tran users to keep COVID-19 cases under control led to a service reduction, as well as a fee waiver during the early part of the pandemic.

On a regional scale, Amtrak’s Silver Star and Silver Meteor rail are expecting a 50 percent decrease in passengers for 2021 after a record 32.5 million passengers in 2019. To counter this steep drop, the CARES Act is injected $1 billion into Amtrak’s operations to keep its trains on the tracks through September 2020. The Tri-Rail, however, continued operating, even as it showcased an 80 percent drop in ridership by May 2020, cutting back to 18 runs a day from the usual 50. It also doubled car and platform sanitation efforts.

Despite the challenging environment posed by the pandemic, Palm Beach’s bet on multimodal transportation has achieved significant landmarks. Brightline, which ended its rebranding relationship with Virgin Trains USA in August, remains set on concluding

phase two of a $2.5 extension project by 2022. The 170mile extension is designed to go eastward to the Space Coast, turning south to cover Treasure Coast counties to finally connect with the existing West Palm Beach station. Once the project reaches completion, users will be able to ride 235 miles to and from Downtown Miami and Orlando International Airport in less than three hours, which undercuts driving time by one hour.

In another development, in early January 2020, Palm Tran held a ribbon-cutting ceremony over the Beach Bus Route 62 1.2-mile extension, a landmark that was a long time coming after the Palm Beach Board of County Commissioners approved its funding back in 2017. The bus service is also experimenting with a Go Glades pilot program. The project’s objective is to provide an alternate app-powered, mobility-on-demand service, such as those used by Uber or Cabify.

Beyond mobility, there is also a strong focus on safety for all users. Case in point: on July 16, 2020, Republican U.S. Representatives Brian Mast and Bill Posey announced the introduction of legislation directed at the Federal Railroad Administration and the Federal Highway Administration to evaluate pedestrian,

motorist and resident safety concerns along the higherspeed rail corridor extending from Brightline’s existing phase one route to West Palm Beach, eventually ending at Orlando International Airport. On a statewide scale, Florida is assigning $60 million to the FDOT, looking to make safety improvements to more than 4,000 rail crossings by 2021.

Looking ahead Pre-COVID-19, Palm Beach County was already tackling a sizable task in terms of providing a reinvigorated, extended, multimodal and modern network of mass public transportation. With the outbreak of the virus, the county’s plans have undergone major redesigns, modifications and budget reallocations. Its well-laid foundations, private investor appetite, along with a push toward improved and safer transportation options are sure to remain long after the pandemic is under control.

With the help of public participation, technology and creative problem-solving approaches that encompass safety and sustainability, Palm Beach County’s transportation is sure to have a bright future ahead of it, despite the looming challenges.

Logistically sound:

Palm Beach County remains the entry door toward Latin America and a viable option to export goods to China

With access to three international airports — Miami International, Fort Lauderdale International and Palm Beach International Airport (PBIA) — and one of the busiest container ports in the country, it is no surprise that Palm Beach County is consolidating itself as a transportation and logistics hub.

Palm Beach County’s Business Development Board (BDB) says that over 15 distribution centers take up close to 4.2 million square feet and the region is home to heavyweights such as ALDI, Walgreens and FedEX. PBIA handled close to 7 million passengers and 3,000 tons of cargo in 2018 alone. The Port of Palm Beach employs 2,800 people and contributes $260 million in business revenue and $12 million in state revenue taxes. At 162 acres, the port processes more than $7 billion worth in commodities — 80 percent of which are exports — and 2.5 million tons of cargo annually.

Global trade The Trump Administration triggered a trade war with China in July 2018 as it announced $34 billion in tariffs on imported Chinese goods. The Asian giant responded with an equivalent tariff on American goods. Amid the tension, COVID-19 only tightened the pressure on an already stressed supply chain. Despite the challenging environment, the Port of Palm Beach was able to maintain a steady 20-foot equivalent unit (TEU) increase of outbound container trade, from 130,909 TEUs in 2016 to 151,421 TEUs in 2019 as per JOC Rankings.

As COVID-19 hit the country, however, the Port of Palm Beach had to suspend Customs and Border Protection operations at all Trusted Traveler enrollment centers, including the Global Entry center as early as March 2020. Both the pandemic and e-commerce’s surge, with a soaring Amazon, are resulting in a serious rethink of the U.S. value chain. E-commerce giant Amazon reported $5.2 billion in net income for April-June 2020 alone, effectively doubling its April-June 2019 earnings. In August, Amazon announced that Palm Beach County would also be home to a new fulfillment center in unincorporated Jupiter that the BDB said would create hundreds of jobs and an economic impact of hundreds of millions of dollars. Amazon already has a last-mile facility and some others in the county but nothing on the scale of a fulfillment center.

While plans for a repatriation of a first-necessity

In 2019, the Port of Palm Beach recorded 449,457 cruise ship passengers, resulting in $100-million plus in revenue.

goods supply chain are taking form with an eye on the long term, supply chain and logistics companies are still navigating through the immediate effects of the pandemic.

Initiatives Palm Beach County is working around the clock to secure the safety of its inhabitants and professionals involved in its supply chain, particularly to continue providing sufficient PPE equipment and materials to fight the pandemic, especially amid talk of a second wave as cases continue to rise in the United States. Companies are also playing their part. Pharmaceutical logistics services provider WDSrx sits on the Logistics and Distribution Task Force of the BDB, where it discusses on a regular basis regional transportation and distribution trends to build up the county’s logistical resilience.

Moreover, recognizing the importance of future talent to build up the capacities of the supply chain of tomorrow, JP Morgan Chase made a $250,000 donation to Palm Beach State College’s Supply Chain programs.

Port of Palm Beach The Port of Palm Beach is a critical cog in the county’s supply, logistics and distribution machine. The county’s BDB reports the Port of Palm Beach supplies 60 percent of everything consumed in the Bahamas and has positioned itself as the essential lifeline to the rest of the Caribbean. According to World City Trade Solutions, the port’s Top 5 trading partners in 2019 were the Bahamas, with $386 million worth of cargo, the Cayman Islands with $81 million, Trinidad and Tobago with $58 million, the United Kingdom with $53 million and Italy with $40 million.

On Dec. 9, 2019, the Port of Palm Beach announced it planned to expand its rail infrastructure by asking for a $1.2 million Consolidated Rail Infrastructure and Safety Improvements grant from the U.S. Department of Transportation. The project is expected to increase its intermodal rail capacity from 44,000 TEUs per year to 95,000 TEUs per year.

Despite the difficulties faced by the port during the pandemic, Director Manuel Almira is confident

Palm Beach International Airport boasts a total yearly output of $5.6 billion

that better times lie ahead for the industries that are integral to the port’s success. “At one point this will be a distant memory. The shipping industry, particularly the cruise industry, will not only survive, it will come out of this even stronger,” he told Invest:. “These kinds of events create challenges but they also create opportunity for those willing to think in the right way.

Palm Beach International Airport The road to recovery for airline travel is anticipated to be long and arduous. Using China as a reference as it has lifted its lockdown restrictions, air travel is slowly recovering but remains primarily national as flights to or from other countries remain constrained. With nearly 50,000 employees, 200 daily nonstop flights pre-COVID and close to 30 destinations in the United States, Canada and the Caribbean, Palm Beach International Airport boasts a total yearly economic output of $5.6 billion. PBIA is such a strategic piece of the Palm Beach County aviation and logistics puzzle that to assist it from the ripple effect the pandemic is having on its activity, it received a $3 million federal grant for a three-decades old terminal makeover. It is but the first step to reinvigorating the airport, with a $40 million to $45 million expansion of Concourse B underway to eliminate seating area crowding. The airport is also looking to remain at the forefront of innovation and sustainability as it announced back in January 2019 a partnership with Florida Power & Light Company (FPL) to add 230 solar panels to PBIA’s infrastructure.

Industrial real estate Even as COVID-19’s impact is stressing Palm Beach County’s value chain, distribution and warehousing assets have lost none of their shine. The market was already booming pre-COVID as industrial real estate sales volume in 2019 reached $283.6 million, a 50.2 percent pop compared to 2018, according to a report by Avison Young. The industrial real estate bonanza across the Sunshine State is expected to continue as the pandemic subsides, as investors will be looking for investment opportunities in less densely populated areas with extended infrastructure deployed.

Florida’s Southeast offer of five deep-water ports, four international airports and a multimodal network of rail and roads connecting them all, making it the location of choice for efficient logistics and access to the Latin American market. Case in point: As early as June 8, 2020, a 150,852-square-foot warehouse in Riviera Beach sold for $18 million by Statewide Capital Group. In 1996, it was traded at $1.55 million. Earlier, in February 2020, Brookfield Property partners acquired a 175,715-square-foot industrial property in Boca Raton for $31.4 million. Only two years prior, in 2017, it was sold for $17 million. Despite the virus raging across the state, industrial assets remain in good health.

The Port of Palm Beach averages 106 cargo vessels per month, and sees over 6.5 billion dollars worth of cargo throughput per year.

Challenges The frenzied ascent of e-commerce on the transportation and logistics landscape is as rich in opportunity as it is in challenges. The Amazon Effect is completely revolutionizing the way in which logistics stakeholders do business and deliver goods, in a game where innovation equals survival. As the e-commerce giant is stepping up its game by developing its own delivery fleet, using smart robots in its fulfilment centers to manage packages and promising virtually immediate deliveries with its Prime service, small e-retailers are seeing their business volume cut down, their talent drained and their customer data retained by Amazon when they shop their articles through Jeff Bezos’ website. Yet, there are technological tools available that can help even the playing field. AI and drones are expected to take on an increasingly relevant role for small packaging deliveries in remote locations.

Looking ahead Come what may, Palm Beach County remains the entry door toward Latin America and a viable option

Industrial real estate sales volume jumped 50.2% in 2019 over the year before

to export goods to China. Its airport and seaport infrastructure is receiving the resources required to further expand and modernize to prepare for the post-COVID-19 landscape. The county is also poised to become a prized market for distribution and lastmile assets, as well as returning supply chains from abroad for first necessity goods. The foundations are solid enough for even such an impacted sector as aviation to make a comeback.

Banking & Finance:

A long history of banking has helped Palm Beach County progress toward its goal of being the “Wall Street of the South,” with financial institutions seeing advantages in the county’s tax landscape and a business-friendly regulatory environment. The disruptive impact from the pandemic is stalling progress, but is unlikely to thwart it.

More than lifestyle:

Palm Beach is attracting financial institutions lured by a healthy tax and regulatory environment

Palm Beach County has a long history as a major banking center, and in the last few years since the Trump Administration’s sweeping tax reform, the county has strived to become the “Wall Street of the South” as banks and financial services companies flee traditional banking hubs like New York City in favor of the tax incentives and sunny skies of South Florida.

Today, Palm Beach County, and in particular the Flagler Financial District in the city of West Palm Beach, is home to 75 banks and 20 credit unions, as well as 233 financial services firms. The top banks in Palm Beach County are Bank of America, Wells Fargo, JPMorgan Chase, PNC, TD Bank, SunTrust Bank, and Citibank. Palm Beach County continues to attract major national banks like these thanks not only to its great weather and tax advantages, but also its friendly and ever-evolving regulatory environment.

However, the COVID-19 pandemic has had a major disruptive impact on Palm Beach’s banking and finance sector, as major banks stuff their reserve funds in anticipation of future losses on consumer loans, major insurance companies drop policies and raise rates, and small businesses and investors feel the pinch of a halted economy and the fear of another Great Recession.

Federal, state, and local governments have stepped in with stimulus packages, forgivable small-business loans and special unemployment benefits, but for many people more is needed. Some larger banks have left their customers holding the bag – denying sorely needed loans in favor of squirreling reserve funds – but smaller community banks and credit unions, like Valley Bank and City National Bank, have stepped in to cover the gap.

PPP loans In an effort to stave off a dire and long-lasting economic crisis in the wake of the pandemic, the federal government approved a $2-trillion-plus stimulus package. As part of this stimulus, the government outlined the Paycheck Protection Program (PPP), which aimed to ensure that 30 million businesses across the United States were able to continue making payroll while quarantine measures were in place that forced these businesses to operate under heavy restrictions or, in some cases, not open at all.

An initial $349 billion of the total stimulus package, with another $250 billion added shortly thereafter, has been allocated to the PPP, with the ( )

Ready to go

Leading bank is preparing clients for a post-COVID-19 landscape that will present opportunities and challenges

Erick Strati Commercial Banking Market Executive South Florida – Wells Fargo

How has Wells Fargo addressed challenges related to growth and diversification, in addition to the COVID-19 pandemic? Due to the growth and diversification of our market, we have seen three major prevalent topics with our businesses that are top of mind for our clients: digital transformation, the trade war with China and hiring and retention. From our standpoint, COVID-19 has in many ways accelerated these three factors. From the digital transformation standpoint, purchasing behaviors have accelerated. Customers want to interact differently from a point-of-sales perspective. We have had to equally accelerate and help our customers move more quickly and be more nimble.

The trade war was on everyone’s minds prepandemic and had tempered as we bunkered up at home. The topic has recently surfaced and has brought about conversations about supply chain and different pieces of our clients’ businesses to ensure they think about how the trade war can again become a frontal impact on their business. Similar to the digital transformation, businesses are implementing changes in order to manage any potential risks resulting from the trade war. The third topic of importance has been attracting and retaining employees, which is why we introduced the financial wellness piece. The logic is to bring value to employees’ paychecks by helping them with their personal budgeting and lowering the stress at home so they can then perform their best in the workplace.

How has the pandemic pushed people to be more aware of the financial soundness of their businesses? The pandemic has had either positive or negative impacts, depending on the nature of the business. For the latter, these companies saw a significant drop in top-line revenues. It was paramount for us to have

conversations on the strategies that could be deployed, while adjusting their costs given their revenue decline. PPP was a great lifeline to many small businesses in our community, giving them the necessary runway to make those business decisions. On the flip side, we’ve also seen some companies grow significantly, especially those with an e-commerce platform.

What is your outlook for the county’s banking and finance industry? We are in a challenging period of time, but we are optimistic given the growth we were seeing prior to COVID-19. We expect to see optimism grow as we move closer to a vaccine. We are excited about Palm Beach County and the growth opportunities it showcases.

Robert Covino Managing Director- South Florida Market Head UBS Financial Services

What are the main challenges in the South Florida market for a wealth management firm like UBS?

The most important challenge at this time is continuing to work at a very high level during the COVID pandemic in South Florida. I’m very proud of how our firm has been able to work during these challenging times. Taking care of and protecting our advisers, support staff and clients are our top priorities. It’s important to note that we remain open for business and have not skipped a beat with most of our employees working remotely. We are in the process of a $500 million new technology upgrade that started three years ago. The changes we’ve made during that time have put us in a position to be able to work almost seamlessly from home.

What opportunities are arising from the inmigration of high-net-worth individuals?

It’s a unique marketplace. We have a convergence of not only Europeans but also Latin Americans, as well as a significant migration from the Northeast United States. The region began as a tourism and real estate-based economy and now because of our business-friendly state government and tax structure, we continue see wealthy families and successful businesses moving to South Florida. Our economic activity is going through the roof. As the world’s largest wealth management firm, UBS is well-positioned to take advantage of this incredible migration to South Florida. Our global footprint helps us deliver intellectual capital and opinions to our clients that are just as globally diverse as they are.

What is your view of the financial services sector in South Florida going forward?

South Florida is definitely the place to be. In my opinion, we are going to experience a boom unlike any other regions in our country, especially as more clients and businesses migrate to our very special part of the world. It’s an exciting time to be in the wealth management industry in South Florida.

The residents of Palm Beach County earned the highest average income in the state of Florida.

( ) program administered by the U.S. Small Business Administration (SBA). As small businesses and banks rushed headlong into applying for and processing loans under the program, there was some concern about potential administrative headaches and even fraud.

The SBA distributed approximately $23 billion throughout all of 2019, whereas the PPP has the administration overseeing about $600 billion distributed nearly all at once under what many financial experts bemoaned as woefully insufficient and unclear guidelines. As a result of these fears, some banks steered clear at first. Chase, for instance, chose not to begin processing applications right away, citing the ever-changing rules for the program, such as a last-minute increase to the interest rate on PPP loans from 0.5% to 1.0%. Eligibility under the program, borrowing limits, and the amount forgiven by the federal government were also murky elements.

But the government was not the sole cause of confusion around the program. Thousands of PPP loans have been processed by the SBA throughout the country, totaling billions of dollars. However, not all applications were approved, with rejection sometimes seeming arbitrary and unfair. Some Bank

of America customers, for instance, complained of their application being declined because they were not the right kinds of customers according to eligibility requirements imposed unilaterally by the bank: a long relationship consisting of checking and savings accounts is irrelevant – a credit relationship with the bank in the form of a mortgage, credit card or other loan was required to qualify. This left some longtime customers feeling abandoned without a way to pay employees while their business was halted by the pandemic. Other big banks, like Wells Fargo, quickly maxed out the amount they were able to lend under the program – $10 billion – and had prioritized businesses with fewer than 50 employees and nonprofits, despite the official guidelines allowing loans to businesses with up to 500 employees.

In all, large lenders in Florida set aside a collective $1.3 billion in reserve funds to compensate for future losses anticipated on consumer loans as people continue to suffer economically in the wake of the virus and struggle to make payments.

Enter community and midsized banks. While megabanks impose their own restrictions on PPP loan applicants, or choose not to open applications under the program at all, smaller banks throughout Florida, including in Palm Beach County, anticipated unprecedented activity under the PPP program and reassigned some of their workers to focus on PPP loans exclusively. This is the case for Valley Bank, a business-lending institution with five offices in Palm Beach County and 12 throughout the state, which has taken an all-hands-on-deck approach to PPP loans. City National Bank, based in Coral Gables, has also stepped in to help business owners who are Wells Fargo customers but had their applications denied, leading to a lot of new business for City National.

But there is a troubling blind spot in the PPP: sole proprietors and independent contractors. Although a second phase of the PPP kicked off on April 10, 2020, that was meant to cover these individuals, many who have applied are being denied because they are not incorporated as an LLC or similar entity, and therefore are not a small business as envisioned by the program. Many of those that are incorporated simply meet with the headaches experienced by larger businesses, as described above. This is more than simply frustrating for sole proprietors and independent contractors, who do not have recourse under other aspects of the federal government’s COVID-19 response. For instance, ( )

New markets

Palm Beach County offers essential conditions as M&T establishes its first commercial presence in the market

Richard Gieseler Florida Regional President – M&T Bank

What motivated the bank to open operations in South Florida and what has been your experience? M&T’s affiliate, Wilmington Trust, has served the Southeast Florida market for over 30 years. Additionally, as M&T Bank grew, we found ourselves following our Northeast customers to this market as they sought to take advantage of Florida’s economic growth fuelled by population and business growth.

In early-2019, M&T Bank made the decision to expand into Florida as part of our Grow New Markets initiative designed to grow our commercial business while expanding the awareness of our M&T Bank brand. Palm Beach County’s economy was strong with low employment, it possessed a stable and growing workforce and supported a favorable business climate that we felt were essential for us to establish our first commercial bank presence in the market.

We decided to co-locate with Wilmington Trust in their North Palm Beach office location to build upon our partnership that has been successful across our community bank regions. We plan to expand at this location as we build the M&T Bank commercial team.

How would you characterize business activity in the region and why is Palm Beach County an attractive area? Palm Beach County’s business activity is strong. The county enjoys strong, consistent population growth that has provided sustained demand for employment. The local municipalities continue to support this growth, which creates a positive environment for future business growth. Beyond the business climate, Palm Beach County is a beautiful place to work, play, and live. Residents enjoy beautiful beaches, fishing, year-round outstanding weather, and ample retail and eating establishments. I’m ecstatic to call Jupiter my new home after moving from Delaware last year.

What is the bank’s approach to helping small businesses find success? M&T Bank is very, very committed to supporting small businesses in the communities where our retail branches and business bankers can directly support local business needs. Every year, M&T Bank consistently ranks as a Top 10 SBA lender nationwide, which we take tremendous amount of pride in preserving.

What is your outlook for the bank’s operations and the South Florida market? I am very hopeful that Palm Beach County can continue to progress through the necessary phases so the market can return to pre-COVID levels but that will admittedly take time, likely into 2021. We plan to continue to expand our commercial team over time while building our brand by being a great community partner.

( ) they are not eligible for unemployment because they were not technically terminated by an employer, so they are not eligible for the extra $600 per week in unemployment benefits being offered by the federal government. This all came as federal restrictions on eviction were set to expire, meaning people who couldn’t make rent payments on their homes or businesses space could be thrown out.

Overall, the PPP also afforded financial institutions an opportunity to bolster their earnings. According to a July 14, 2020 article on news website The Intercept, because the government had no public vehicle in place to dole out the loans, banks were left to take up the reins and the risk. The subsequent fees banks charged to process the loans and cover their costs could result in an $18 billion windfall for the industry.

Sector performance The fees from PPP loans, notwithstanding, the COVID-19 pandemic and subsequent lockdown has had a major impact on the banking sector in Palm Beach County, Florida as a whole, and the entire United States. In fact, the FDIC has reported that in the first quarter of 2020, the 102 banks and thrifts in Florida posted a combined loss of $281 million – one of the poorest showings from the industry since the Great Recession. This is particularly dire when compared to the 1Q19 performance of the region’s banking industry: $560 million in profits, up from $467 million in 1Q18. This clearly shows how COVID-19 has undercut a banking and finance sector that was clearly growing, with record profits in excess of $2 billion in both 2018 and 2019 representing a complete recovery from the Great Recession.

Top banks There are approximately 432 bank branches collectively managing some $54 billion in assets across Palm Beach County. The top dogs in the Palm Beach banking sector are, not surprisingly, instantly recognizable national banks. In 2019, Bank of America overthrew Wells Fargo to become the biggest bank in Palm Beach County, measured by total deposits. Bank of America boasted $10.1 billion in deposits in mid-2019 and 52 branches within the county, Wells Fargo had 60 branches but $9.5 billion in assets; Bank of America’s total assets were up 10% YoY, whereas Wells Fargo’s were down 4%. JPMorgan Chase occupied the third spot with $6 billion in deposits, PNC was next with $4 billion, TD Bank had $2.9 billion, SunTrust Bank had $2.6 billion, and Citibank had $2.2 billion. Other large banks occupying

About 432 bank branches together manage $54 billion in assets across Palm Beach County

leading positions in Palm Beach are BB&T, Bank United, Synovus, and Florida Community Bank.

Palm Beach is also home to more than a few regional and community bank headquarters, particularly the city of West Palm Beach, including those of Harbor Community Bank, IBM Southeast Employees Credit Union, Palm Beach Community Bank and First Choice Credit Union. There are a variety of reasons that Palm Beach County residents might prefer these smaller, local institutions to their national or international megabank counterparts, such as a more personal and intimate banking experience, quicker loan decisions and often no need to compromise on the quality and quantity of services offered. Florida’s community banks are also no less secure than larger institutions, as all of them are insured by the FDIC. “Community banks play an important role in our society, as they typically have stronger roots in the local economy and enjoy greater social capital in the community. Professional Bank, for example, is active in Palm Beach County, Broward and Miami-Dade. Professional Bank’s management team, lives and works in the market it serves so is able to utilize its local knowledge and make informed decisions about credit, deposit products and services,” said Daniel Sheehan, chairman and CEO of Professional Bank.

Regulations Florida has a robust and sophisticated financial services sector, and Palm Beach County is one of the biggest. The task of regulating and overseeing such a major industry falls, in part, to Florida’s Office of Financial Regulation (OFR). The reason that the OFR is only partly responsible for financial oversight is that Florida operates under a dual oversight paradigm, meaning that banks and other financial institutions within the state are regulated by both state and federal agencies. The OFR regularly examines state-chartered

The county’s Office of Small Business Assistance (SBA) maintains a banking consortium with local lenders to make millions of dollars in low-interest loans available for small businesses.

financial institutions to ensure compliance with state and federal requirements. It is responsible for more than 460,000 licensees, a 10% increase in the last five years alone, and is in the midst of an average of 221 active investigations at any given time.

To manage its legion of licensees and heavy caseload, the OFR’s labor is internally divided into the Bureau of Bank Regulation and the Bureau of Credit Union Regulation. This division also allows the OFR to dedicate specialized teams to these different types of financial institutions. Specifically, the Bureau of Bank Regulation regulates and oversees statechartered commercial banks, trust companies, trust departments, and international bank offices operating in Florida. The Bureau of Credit Union Regulation regulates and oversees state-chartered credit unions throughout the state. The OFR also has a dedicated Division of Securities, which administers and enforces licensees’ compliance with the Florida Securities and Investor Protection Act; the Division of Consumer Finance, which licenses and regulates nondepository financial institutions (mortgage lenders, consumer and retail sales, title loan companies, and debt collectors);

and the Bureau of Financial Investigations, the OFR’s criminal justice apparatus that assists federal, state, and local law enforcement with the investigation of financial crimes.

Mortgages Despite all-time low mortgage interest rates, as the COVID-19 pandemic drags on and many people continue to find themselves out of work and struggling to pay their bills or mortgage, lenders are starting to see a rise in mortgage delinquency. Florida is at the center of this crisis, ranking fifth in the country in the number of delinquent mortgages. The problem did not materialize immediately because of fortified unemployment benefits and a moratorium on foreclosures and evictions, but people are starting to feel it. For these individuals, forbearance is one option that would allow them to postpone mortgage payments and instead tack them on to the end of the mortgage. Forbearance can be renewed for successive 90-day intervals for up to 12 months.

Another option is to rely on the Palm Beach County CARES mortgage assistance program launched by

Palm Beach County for the express purpose of helping households that find themselves unable to make their mortgage, property tax, homeowner’s insurance, or other payments that may carry a penalty of foreclosure. The program will be providing this financial assistance on a first-come, first-served basis in the form of an individual grant to any household that meets certain criteria, including income eligibility.

Competitive landscape As mentioned by Seacoast Bank’s Cross, the South Florida banking landscape in the past few years has been marked by a steady flow of consolidations. Seacoast itself has been at the heart of those acquisitions throughout South Florida, even during the pandemic. In March 2020, Seacoast Banking Corporation of Florida completed its acquisition of First Bank of the Palm Beaches. Seacoast paid an aggregate $21.9 million in merger consideration for the acquisition of First Bank. At the time of acquisition, First Bank had $173 million in deposits and $143 million in loans. First Bank operated two branches in Palm Beach County. “Our recent acquisition of First Bank of the Palm Beaches increases our presence in the county from six to eight branches and grows our total deposits to $821 million,” said Cross. “When you consider the strength and overall growth of the economy in Palm Beach County, we see the demand for banking services increasing.”

This latest acquisition further strengthens Seacoast’s presence in the Palm Beach area and comes on the heels of its acquisition of Grand Bankshares, Inc. in 2015 and Palm Beach Community Bank in 2017. Seacoast has also been engaged in a rash of acquisitions in other parts of South Florida, including three recent mergers in the Tampa Bay area.

Growth drivers One major contributor to the growth of Palm Beach County’s banking sector is its breadth of state-level tax advantages, with no state income tax and other incentives that help Florida win out over traditional financial hubs like New York City. The exodus from Wall Street to South Florida ramped up considerably in 2017 with the passage of the Trump administration’s Tax Cuts and Jobs Act (TCJA). Since the passage of the TCJA, traditional banking centers have become less favorable places to operate, and financial services companies have targeted South Florida, including Palm Beach County, as the Wall Street of the South.

This image was promoted to a large extent by the Business Development Board (BDB) of Palm Beach County, which has been actively recruiting hedge funds, private equity firms, and wealth management offices to the county for roughly a decade now. As these companies continue to move into the county, they bring with them more jobs and ever greater economic vitality, which spurs more investment and growth for the banking and finance sector – a virtuous cycle. “As a long-standing member and former chair of the Palm Beach County Business Development Board, I can say that [President and CEO] Kelly Smallridge and her team, as well as several members of the BDB, were heavily instrumental in helping to market to Northeastern financial firms. It has been so successful over the years that West Palm Beach designated part of the Downtown area to be called the Financial District, as a bevy of hedge funds and other financial firms set up shop and continue to move down here. The beauty of it is that it attracts talent, generating several successful clustertypes of businesses in Palm Beach County. Since 2015, it has become a highly sought-after place not only for its tax environment, beaches and lifestyle but also for its resources,” remarked Benjamin Boynton, president and co-founder of Boynton Financial Group Inc. to Invest:.

Diane McNeal Regional Managing Director – Wilmington Trust

I have seen a big shift in the banking world. It is so much easier now to bank digitally by using a smartphone to make deposits and transfers. There is still a role for personal consultations, particularly when making investment decisions, determining liquidity and leverage strategies, and completing estate planning, but our clients appreciate our ability to complement those services with digital solutions. The COVID-19 pandemic will help accelerate the adoption of digital solutions across all corners of society, and the business community will have to be alert and attentive to those changes.

In the four-year period from 2014-2018, The Miami official insurer of last resort, and it may be doing even Downtown Development Authority reported a 95% more business in the coming year thanks to rate hikes increase in the number of investment advisers and private insurance requesting that policies be operating in Downtown Miami, with an additional 50% dropped to compensate for reinsurance costs. Simply increase in interest after the TCJA was passed. Palm put, Citizens is obligated by state law to insure property Beach reports a similar showing, with 70 financial owners whom the private market will not, and whether services companies moving to the county since 2016. the private market will insure someone depends on the Some of the most high profile new players to break into market, which is in turn driven by the recent severity the South Florida financial scene include David Tepper of natural disasters. During years with relatively few and Appaloosa Management LP, Barry Sternlicht and minor disasters, insurance companies are able to and Starwood Capital Management, Lloyd Blankfein profit off of premiums while not having to pay out very of Goldman Sachs, Leon Black much toward claims. During these of Apollo Global Management, Universal Investments LP, and Since 2015, years, they are happy to expand their customer base and collect Carl Icahn, who is moving his hedge fund, Icahn Enterprises, to [Palm Beach more premiums. As the insurer of last resort, Citizens experiences Miami from New York City some County] has “depopulation,” or a decline in the time in 2020. become a highly number of people it covers, during these halcyon years. However, Insurance Unfortunately, Florida residents sought-after when the insurance market is battered by successive severe are no strangers to property damage from hurricanes, and place. hurricane seasons, as it has been for the past few years with disasters the last few hurricane seasons Benjamin Boynton Boynton Financial Group Inc. like Hurricane Irma and Hurricane have been particularly active. As Michael, there is a massive influx a result, there are several high- in new Citizens’ customers. profile insurance companies operating throughout the That is precisely what the market is seeing now – state, each of which does tens of millions of dollars in reinsurers are demanding that private insurance premium business every year, including Universal carriers pay price increases of up to 26% as part of Property and Casualty, Edison Insurance Co., Capitol reinsurance renewals that went into effect on June 1, Preferred Insurance Co., Velocity Risk Underwriters, 2020 in the wake of these historic storms, and carriers Security First and Citizens Property Insurance are seeking to pass the added cost onto consumers. Corporation. Capitol Preferred Insurance, the ninth-largest insurer

Citizens, in particular, does a great deal of business in Florida, dropped 23,000 of its policies and asked since it is operated by the state of Florida as the state’s the state for permission to increase premiums on ( )

Market voices: Challenges, opportunities

Kelley Brown-Murro Fort Lauderdale and West Palm Beach Market Executive Regions Bank

When COVID-19 hit, Regions pivoted very quickly from being a localfacing bank to taking that ability to connect with clients remotely. Some people do not have the ability to work from home so our banks remained open by appointment. Our retail employees worked one-on-one with customers to identify financial needs during the pandemic. Back-office operations remained productive from a remote working standpoint. A lot of those lessons will remain as we transition to the new normal. We have learned to be quite efficient in some new ways so I think those elements will remain.

The banking sector has seen a lot of consolidation in the last 10 years, and I think we will continue to see that. Customers are looking for more ways to bank remotely. As banks compete for customers, it is likely they will increase the number of products and services available in their remote channels. The key for a successful merger and acquisition is to integrate and consolidate well and to win over the hearts of acquired customers by providing the convenient products and services of larger banks, but with the personalized attention of a hometown community bank. Chuck Cross Regional Market President Seacoast Bank

Christine Gagnon Director EisnerAmper Some companies have experienced difficulties in getting supplies in a timely fashion, mostly due to the fact they are manufactured overseas. This could provide domestic opportunities to increase local production of such supplies, with an increased number of facilities to accommodate our needs locally and nationally. Palm Beach County has a few laboratories where the focus is on researching vaccines, among other things. We may see a shift whereby researchers are focusing more on COVID-19-related issues, which could be to the detriment of other research studies, that may be pushed aside throughout the pandemic’ s duration. There will definitely be a need for more laboratory space to accommodate all of the necessary research for different fields.

The main challenge for newcomers is that anyone with wealth oftentimes already has a financial adviser. Generally, we attract new clients because of the level of knowledge, sophistication and expertise that we have. Wealth is created by an event such as retirement, relocation, inheritance, divorce or sale of a business. These investors need planning and advice and Raymond James advisers have expertise and knowledge, sophisticated software, access to intellectual capital and other tools that allow us to perform comprehensively and efficiently. We are available to provide planning focus dealing with the continuing development and transfer of assets through estate planning and proper investment. Daniel Kraus Senior Vice President & Managing Director Raymond James

John D. MacArthur State Park is the only state park in Palm Beach County. It covers over 438 acres.

( ) its remaining policies by 47% to stay in business. The state awarded an average increase of 33.5%. Security First hiked premiums by 12.8% and cut 5,000 policies held by clients along the coast. Edison Insurance was granted a 22% rate increase, Velocity Risk got 28%. These are only a few of the big insurers increasing rates for 2020.

As a result, those whose policies were dropped will likely need to seek refuge with Citizens, while many others languish under the higher rates. All of this coinciding with a disaster of a different kind – the COVID-19 pandemic – has a lot of homeowners understandably worried.

Looking ahead Consolidation will likely continue within Palm Beach County’s banking and finance industry, as larger regional banks like Seacoast continue to acquire local community and regional banks to further increase their foothold in the region. However, the COVID-19 pandemic has potentially disrupted the trend somewhat, at least temporarily, as larger banks post losses for the first quarter of 2020 while some community banks have poached customers and managed to post profits. The insurance industry is also seeing a lot of customer movement, as many people are dropped by their private insurer and are forced to move to the state’s insurer of last resort thanks to brutal hurricane seasons in the last couple of years.

Despite the pandemic and mother nature making for an uncertain economic present and near future, Palm Beach County remains the Wall Street of the South, still boasts excellent state and local tax and regulatory advantages, and continues to attract banks and financial services companies from major financial hubs in other states. Palm Beach County has the necessary foundation to weather these current storms and afterward pick up where it left off on the path to growth. “In my opinion, there will be a new wave of financial firms that desire to move to our area due to the way that COVID-19 spread in the dense city setting in the Northeast and across the country,” added Boynton.

Healthcare:

Palm Beach County’s healthcare sector is a major employer, providing work to more than 50,000 people through over 1,500 related businesses. It is a burgeoning hub for innovation, which helped allow a pivot to telehealth when COVID-19 hit. The pandemic continues to impede growth in the sector but opportunities have also opened up.

Anatomy of a Pandemic:

How the COVID-19 Outbreak Unfolded

The first signs of the COVID-19 pandemic that has engulfed the world emerged in November in China, and from January onward, the deadly virus’ spread accelerated across Europe and then to the United States. As of late October, over 43 million cases had been reported, with the U.S. cases alone totaling nearly 8.6 million. The death toll globally topped 1 million in late September and the official U.S. toll was over 200,000.

Timeline of Key Events: Overview:

Total confirmed cases*:

World:

43,246,598

United States:

8,646,385

Total deaths:

World:

1,151,494

United States: 224,905

*Oct. 27, 2020 (Johns Hopkins)

2019

November 17 Chinese government records suggest 55-yearold suspected of being first COVID-19 case. December 8

A patient in the city of Wuhan sought medical help for pneumonia-like symptoms. December 29

Four cases identified by local hospitals using a surveillance mechanism for “pneumonia of unknown etiology,” all linked to the Huanan

Seafood Wholesale Market. December 31

The WHO China Country

Office is informed of cases of pneumonia of unknown etiology detected in Wuhan City.

China government timeline shows 27 confirmed cases, government tells people to avoid indoor spaces and gatherings.

2020

January 1 Huanan Market closed due to outbreak of “pneumonia outbreak”. January 3 China officially notifies WHO. January 13 Thailand reports first confirmed imported case as outbreak spreads beyond China. January 22 China says virus could mutate. More countries report first cases. WHO holds first meeting to decide whether to declare an international health emergency. January 21 China confirms two additional deaths Hong Kong, Taiwan report first cases. Man in Washington state who traveled to Wuhan area becomes first U.S. case. January 20 China state TV confirms person-to-person transmission; China’s CDC catagorizes the coronavirus a Class B infectious disease but adopts Class A measures to prevent and control the virus. First case confirmed in South Korea. January 17 Second death in Wuhan, second case in Thailand. January 16 Japan reports its first case. January 14 Wuhan city puts restrictions in place at airports and other entry terminals to screen passengers. January 23 WHO decides against health emergency declaration. January 24 Cases rise to 830 in China First cases reported in France US reports second case, this time in Chicago. January 25 First reported death of a medical professional related to treating coronavirus case US confirms third case, in Orange County, California. January 26 US confirms cases in Los Angeles and Arizona. All had traveled to Wuhan.

January 27

Virus spreads to more countries, including Germany. US extends screening to 20 airports.

January 28 The United States and Japan become the first countries to evacuate citizens from Wuhan. US Airlines says it will suspend all flights to China from the US. January 29 More airlines announce suspension of flights to China. February 6 WHO accelerates research into virus with global meeting US citizen in Wuhan is first American to die of coronavirus. February 5 WHO announces $675 million plan to contain spread of outbreak. CDC begins shipping test kits to US labs. Japan quarantines cruise ship with 4,000 passengers aboard for 14 days after outbreak on ship. February 3 G7 countries agree on coordinated approach to outbreak. January 31 Russia, Italy and the UK report first cases Singapore bans on Chinese visitors and anyone who had visited China in the past 14 days. January 30 WHO says the coronavirus outbreak is a Public Health Emergency of International Concern. US issues Level 4 advisory for travel to China.

February 7 President Trump speaks by phone with Chinese President Xi Jinping; US pledges $100 million to help China, others fight coronavirus. February 8-14 Death toll in rises to 908 to surpasses 2002 SARs outbreak WHO names new disease “coronavirus disease 2019,” or COVID-19. Trump administration budget proposal slashes funding to WHO. 15 cases in the US. February 15-21 Number of deaths outside China begin to rise WHO says COVID-19 has potential to become a pandemic. Japan says it had entered new phase of outbreak Global death toll tops 2,000. Japan suspends major public gatherings; Italy closes public spaces in 10 towns. US announces it will evacuate 400 citizens from Diamond Princess cruise ship. In its updated quarterly guidance, Apple warns it will fall short of revenue expectations, cites production disruption in China. 34 cases in US. February 22-28 Germany says it is at the beginning of an epidemic For the first time, there are more cases outside China than within. Global stock markets nosedive as cases outside China rise. DOW Jones posts worst loss in two years President Trump requests $2.5 billion from Congress to fight outbreak. San Francisco declares state of emergency, first in US (Feb 25). CDC says people should prepare for spread of virus to the US. President Trump names VP Mike Pence to lead COVID-19 response. March 9 Italy locks down nationwide. WHO says China recovery rate over 80%. More countries issue travel bans or require 14-day quarantine for arriving visitors.

March 8 France bans large gatherings over 1,000 people. Oregon declares state of emergency. March 7 Kansas, D.C., reports first positive coronavirus case, New York declares state of emergency. March 6 Total global cases: 100,000. Utah, Kentucky declares state of emergency. CDC urges those over 60 years old to stay indoors. SXSW festival becomes first big event in US to cancel due to coronavirus. March 5 Maryland declares state of emergency; first case in New Jersey. March 4 House passes first aid package to fight outbreak, $8.3 billion (Politico). California declares state of emergency. March 2

US reports 4 more deaths.

March 1 Global death toll over 3,000. Florida declares state of emergency; second US death reported. February 29 First US death; Washington state declares state of emergency. March 10 UN in New York, the Vatican close doors to public Rhode Island declares state of emergency. Coachella music festival postponed. States of emergency in Michigan, Vermont, North Carolina, Massachusetts, Colorado. March 11 WHO declares virus outbreak a pandemic. NBA suspends season. March 12 School closures expand globally, UN says 20% of worldwide student population out of school. States of emergency in Montana, New York City, Virginia, Tennessee. Dow, S&P stock indexes suffer word decline since 1987 crash, enter bear market.

March 13

Spain declares state of emergency; WHO says Europe is epicenter of pandemic. Denmark, Poland, Czech Republic close borders. President Trump declares national state of emergency. March 16 More countries close borders, including Spain, France and Germany. CDC says over 4,000 cases in US. Dow has worst decline in history. March 17 EU closes borders except for essential travel. Virus spreads to all US states as West Virginia reports first case. April 2 The number of COVID-19 cases worldwide passes the 1 million mark, with more than 50,000 deaths. Over 90% of Americans are placed under stay at home orders. Weekly US jobless claims climb to 6.6 million in prior week. March 27 President Trump signs CARES Act into law, providing relief to taxpayers impacted by COVID-19, including the Paycheck Protection Program. March 26 A third of global population under restrictions. US death toll hits 1,000, leads world in number of cases. 3.2 million US jobless claims in previous week. New York City becomes epicenter of US outbreak Senate passes $2.2 trillion economic stimulus package dubbed the CARES Act. March 25 Spain has second-highest number of deaths UN unveils $2 billion response plan WHO warns of medical supply shortages. March 24 Japan postpones 2020 Summer Olympics. US activates National Guard in all states. March 23 WHO announces accelerating rate of virus’ spread. March 19 Italy death toll surpasses China US issues Do Not Travel advisory, Level 4. California issue stay at home order.

March 18 US, Canada suspend nonessential travel between two countries. President Trump signs Families First Coronavirus Response Act into law.

Sources: Thinkglobalhealth.org, South China Morning Post, CNN, Associated Press, Reuters, Politico, The Japan Times, WHO, Johns Hopkins, NHK, Apple Press Release, New England Journal of Medicine, NPR, New York Times

Pandemonium:

The COVID-19 pandemic has wreaked havoc on the health system but opportunities have also emerged

Without a doubt, the biggest development for the healthcare sector in 2020 was the emergence of the COVID-19 virus and subsequent global pandemic. The outbreak in the United States in March caused the hospital system to go into emergency triage mode, eliminating revenue-generating elective procedures to care almost exclusively for patients infected with the virus. The initial pivot was almost overwhelming but as the days turned into weeks and months, hospitals and health professionals got their legs under them.

In Palm Beach County, the healthcare industry remained steadfast in the face of the pandemic. It is a major job creator, employing more than 50,000 people, with the county home to over 1,500 healthcare businesses. Some of the most prestigious national health institutions have set up shop in Palm Beach, including Cleveland Clinic, NYU Langone and Joe DiMaggio Children’s Hospital. In July, Boca Raton Regional Hospital became the first in Palm Beach to be certified by internationally-recognized DNV GL as a Comprehensive Stroke Center and prestigious orthopedic hospital Hospital for Special Surgery (HSS) opened an ASC in West Palm Beach, also in July. Coronavirus After first being identified in Wuhan, China, in December, before sweeping across Asia and Europe, the first case of COVID-19 was reported in Florida on March 1. By March 24, there were almost 1,500 cases in Florida, with about half of those reported in Miami-Dade, Broward and Palm Beach counties. This prompted Gov. Ron DeSantis to issue an executive order that required residents of Palm Beach, Miami-Dade, Monroe and Broward counties to stay at home to stem the spread of the pandemic. In those six days, reported cases had increased almost fivefold to 5,704.

By the end of July, Florida’s cumulative COVID-19 cases surpassed New York, initially the hardest hit state, and had a total death toll of over 6,000. By July 23, hospitals reported up to 86% of their ICU capacity was in use and across the county 20% of all hospital beds were being used by COVID-19 patients. Despite desperation across South Florida’s medical centers to find more staff, Palm Beach County’s Health Care District suspended the work of 200 school healthcare staff.

Although South Florida’s healthcare industry saw an overnight rise in demand, the challenges sometimes outweighed the opportunities. In April, Jupiter ( )

Specialty care

Children’s hospital expands capacity to provide state-of -the-art care, cutting-edge treatments

Caitlin Stella CEO – Joe DiMaggio Children’s Hospital

What have been some of the recent highlights for Joe DiMaggio Children’s Hospital? We continue to see a growing need for high-quality children’s specialty care in our community, so we are focused on meeting those needs, both in Palm Beach (Wellington and Boca Raton locations) and throughout Broward County.

Joe DiMaggio Children’s Health Specialty Center in Wellington features an ambulatory surgery center and our patient visits continue to steadily grow. We’re also doubling the size of our main hospital in Hollywood that, once completed, will have additional space for state-ofthe-art cardiac, intensive care, and medical surgical capabilities. It will also increase access to leading-edge treatments, including those for cancer, orthopedics, neurology and neurosurgery, and neonatal patients.

How is the region producing the talent needed to meet growing demand? As a health system, we work closely with institutions that are training the future workforce. We also have our own Graduate Medical Education program for medical residents at Joe DiMaggio Children’s Hospital that has had three classes of residents. In nursing, rehab services, nutrition, social work and other areas, we work closely with the training programs in the community to provide a high-quality environment overseen by our clinical experts that can continue to grow the pipeline of talent.

Care team burnout is a challenge, especially in the face of a global pandemic, but as a health system I am proud to say that we took the necessary steps early on to protect our workers in a variety of ways.

How are you getting involved in COVID testing efforts and what is your outlook for the next six to 12 months for the hospital?

Testing, for us, falls into two categories. One is for children coming in for any type of procedure that requires anaesthesia or sedation and we do that inhouse.

The other is a partnership with the state of Florida and the National Guard at the C.B. Smith Park testing site in Pembroke Pines that is a community testing area for children.

We are fortunate to have served as a resource for the community in this way. It has allowed us to monitor the prevalence of the disease in children, which will allow us to make better decisions as we go. We are still learning a lot about this disease and that is why it’s critical that we remain informed, vigilant, and nimble so we can continue to do what is in the best interest of the health of children.

Andrew Rubin Senior Vice President of Clinical Affairs and Ambulatory Care NYU Langone Health

What have been some of the major highlights for NYU Langone in Palm Beach in the last year?

We have two different businesses in Palm Beach, one of which is our medical business, which has grown nicely through the addition of some new providers. Our office volume in Palm Beach County has steadily expanded throughout the year. As the medical practice grows in volume, we expect to add new services. We remain focused on outpatient care, providing comprehensive healthcare in an office setting. Our patient access center in Boynton Beach continues to grow and we will open the second half of the floor this fall. We also have a lease on the ground floor so soon we will occupy the entire building, and we hope to have 500-600 people working there in the next few years. We always knew the local talent pool was strong, but we have been very impressed by the calibre of the workforce.

How is new technology like Checkmate being deployed at NYU Langone?

The Checkmate technology has been remarkably successful, and we have it installed in 380 sites, but we have added many new technologies as well. Soon we are going to be giving patients the option to check in for their appointments remotely, via their mobile device, so they will not need to approach the reception desk when they arrive.

We relied on virtual health during the COVID-19 pandemic and we expect it to continue to be a great tool. We use our own technology embedded in our own app, which is tied into our electronic record, with no use of third-party software. During the pandemic, we were doing almost 7,000 consultations this way every day. In the month of June, we crossed the milestone of over 100,000 digital appointments. Soon, we’re going to be deploying home monitoring equipment that will allow patients to take their own blood pressure and blood saturation levels, which are then wirelessly uploaded to the patients’ electronic health records. Their doctors can then review this information virtually.

In Palm Beach County, there are a total of 12 primary care health professional shortage areas.

( ) Medical Center announced furloughs and salary reductions. On July 11, Palm Beach hospitalizations were the third highest in the state with 595. By the beginning of July, Baptist Health South Florida announced that 11 of its hospitals in Miami-Dade, Monroe and Palm Beach counties were nearing capacity. It said it would add 100 out-of-state nurses and 96 nursing graduates to its roster.

Florida’s health department allocated $96 million in the state CARES Act for the 12 most impacted counties, including Palm Beach County, to hire critical staff such as epidemiologists, contact tracers and nurses. Still, nurses in Palm Beach complained of mismanagement, short staffing and a shortage of supplies, despite insistence from hospital administrators that the situation was under control. Other emergency responders were also impacted as almost 10% of Palm Beach County Fire Rescue’s first responders were either diagnosed with COVID-19 or were in preventive quarantine as of mid-July.

And although there was a decisive increase in demand, hospitals lost significant revenues from elective surgeries. By the beginning of July, several South Florida healthcare systems had temporarily

suspended elective surgeries, including Jackson Health System, Memorial Healthcare, Boca Regional Hospital and Bethesda Hospital East and West. St Mary’s Medical Center in West Palm instead chose to set up extra screening outside its campus but said it would not cancel elective surgeries.

Reportedly, much of the $175 billion Congress allocated to hospitals is going to large healthcare systems while smaller hospital systems are ill-equipped to deal with the influx, with some having to file for bankruptcy since they are ineligible for small business loans under the CARES Act. The American Hospital Association estimates that hospitals are haemorrhaging $50 billion per month, while other estimates put the number at around $1.2 billion per day.

But as one door closes another opens, and telehealth companies are some of those seeing the greatest benefits from the now-rapid adoption of technology in hospitals across the country. Insurance provider Florida Blue pinpoints COVID-19 as the catalyst for telehealth services to gather steam, with the company now seeing an average of 600 virtual health visits per day — double pre-virus levels. Providers like NYU Langone are also seeing the benefits of snowbirds that simply don’t want to go home for the summer this year. Its recentlyopened clinic in West Palm has not seen the drop in demand it anticipated over the summer months.

Several methods to control the virus and alleviate the pressure on frontline healthcare providers were tabled in Palm Beach, including a county-led effort to test for the virus in low and middle income neighborhoods through a free testing checkpoint in Jupiter. Palm Beach Post found that roughly 25% of Hispanics and 20% of Black people tested positive for COVID-19 in Florida, compared with around 11% of white people, highlighting the increased dangers for marginalized communities. As of mid-July, there were over 70 testing sites across Palm Beach County.

But not all measures were accepted by the public. Medical professionals requested that citizens wear a mask in public, which has ignited national debate regarding the efficacy of the measure that reached all the way up to the White House. President Trump himself refused to wear a mask in public until early July. Equally contentious was the reopening of the U.S. economy, even as the number of coronavirus cases

continued to climb in Florida. Other industries such as tourism reopened in a very different format, with a huge emphasis on health and safety measures.

Performance indicators Pre-COVID-19, Palm Beach County residents and visitors boasted some of the nation’s best healthcare. Some of the major healthcare providers in Palm Beach County include Bethesda Health, Boca Raton Regional Hospital, Delray Medical Center and Jupiter Medical Center. South Florida’s hospitals have registered profits above $1 billion for four of the last five years, according to the 2019 Florida Health Market Review. And at the end of 2019, the healthcare providers were going from strength to strength.

Baptist recently underwent an ambitious expansion program with the acquisition of hospitals across Palm Beach and Broward counties after partnering with Boca Raton Regional Hospital in May 2019. Bethesda Hospital announced in June it will add 156 hospital beds and take its square footage to 349,574 square feet from the current 209,900 square feet. The expansion plans are set to take place over four phases and will also add two medical office buildings and two parking garages. This rapid expansion was made possible by the change in Florida’s laws that overturned the requirement for hospitals to demonstrate economic demand for new beds.

Palm Beach County has a relatively low primary care physician to patient ratio, at 1:1,260, meaning there are more physicians to tend to the needs of the population. There are 1,383 patients to every dentist, one of the lowest ratios among neighboring communities. Palm Beach County is also among the leader in terms of access to exercise opportunities, with 93.9% of the population able to exercise. Prevalence of food insecurity is low in Palm Beach County, at just 14.1% compared with 24.6% in Gadsen County in North Florida.

Prevalence of chronic diseases like diabetes and adult obesity are low in Palm Beach County. Adult smoking prevalence is just 13.4% and there were only 11 motor vehicle crash deaths in 2018. Violent crime in Palm Beach County is 463 per 100,000 people, compared with 650 per 100,000 people in Miami-Dade County.

Health insurance According to the most recent figures, it is estimated that around 13.8% of Palm Beach County residents are uninsured. The majority —or 38.5% — of Palm Beach residents have employer cover, 12.5% have Medicaid, 17.2% Medicare, 16.9% nongroup and 1.18% military or VA cover. According to a study by the University of Florida in Gainesville, 1.5% of Americans — or around 2.3 million adults — buy prescription medication outside the United States to save money.

And in November 2019, Florida voted to reject a federal initiative to expand Medicaid coverage under the 2012 Affordable Care Act (ACA). In 2012, the act mandated that those earning up to 138% of the poverty level would be eligible for Medicaid. This would mean the cut-off for a family of four to access Medicaid would be a total household income of $35,535 rather than $25,750. The government would cover 100% of the patient costs for three years, before dropping to 90%. But a high court ruling meant the decision was left to individual states whether to accept the revision. Florida chose not to. In Palm Beach County, there are a total of 47,133 that fall into the income coverage gap who would benefit from the expansion.

Dr. Amit Rastogi President & CEO Jupiter Medical Center

Palm Beach County has eight populations designated as medically underserved populations.

Despite the attempted dismantling of the Affordable Care Act by the federal government, Florida residents are still taking advantage of the healthcare plans bought through the exchange. By February 2019, there were 1.67 million enrollees in the ACA statewide, which represented a 73,000-person increase on the previous year. In comparison, overall enrollment declined in all other 38 states that use the system. Post-COVID, Palm Beach’s unemployment rate skyrocketed to a record 13.9% in April, representing 91,134 people, in comparison to the April 2019 unemployment rate of 3%. There was likely a huge loss of health insurance coverage among Palm Beach County residents and ACA enrollments skyrocketed to 3.9 million Floridians enrolled as of June.

In addition to the eight existing Obamacare providers, two new insurers — Bright Health Insurance of Florida and Cigna Health and Life Insurance — are seeing approval to sell products via the exchange. And as promised, this year’s rate increases are dropping, with an average 1.2% rise in 2020 premiums compared to an 8.8% rise in 2019 and 17.8% in 2018.

Health insurance companies (HMOs) are not suffering under the ACA, but rather they are flourishing. There was a 12% rise in HMO profits in 2018 according to the 2019 Florida Health Market Review. Plans from the four

How has Jupiter Medical Center adapted to serve the needs of Palm Beach’s diverse demographics?

We embraced a data-driven approach to examine not just the needs within our community today but also thinking about the next three to five years. In 2020, we outpaced Texas as the state with the greatest amount of migration from the rest of the country. About 1,000 people move daily into Florida from all corners of the country. We examined not only the number of people but also their age range, prevalence of disease and how that applies to Palm Beach County. It is part of the reason why we decided to expand our pediatric services. People normally associate Florida with an aging population but our Community Health Needs Assessment revealed a shortage of pediatric services not just in the present but projected out to the coming years.

How would you gauge talent availability to meet the required medical services?

It boils down to attracting talent. We are able to offer a great work culture, built upon patient quality, patient safety and patient satisfaction in a physician friendly environment. It resonates with the physicians that we have the capacity to recruit from all across the country. Florida’s sunshine also helps a lot to attract medical professionals from the Northeast and Midwest.

What are your top priorities for 2021?

Expanding on the cardiac surgery program to add minimally invasive cardiac surgery is a priority. Building a structural heart program is also important as it will enable us to perform additional advanced cardiac procedures. On the oncology side, we are in the midst of building a medical oncology team that will work collaboratively with our radiation and surgical oncologists. As we delve deeper into neurosciences, we have a comprehensive stroke program today and we are thinking further about things such as dementia and movement disorders, launching programs to support that community need as well.

largest providers – Blue Cross Blue Shield, Humana, UnitedHealthcare and WellCare – accounted for 64.2% of the market, up substantially on their 51.5% share two years prior. And increased consolidation creates the risk of a monopolized system, say critics, which does not benefit customers.

Community and public health There are 566 patients to each mental healthcare professional, compared with 1:1,920 in Okeechobee County and 1:2,183 in Hendry County. At 13.9%, Palm Beach County’s suicide rate is lower than the Florida average of 14.5%. According to state officials, almost two-thirds of mental illnesses in Florida go untreated and those with mental illness have a life expectancy 25 years lower than those without. Yet the state ranks 49th in terms of per capita funding for mental health, with an allocation of around $25 per person per year. And despite the spread of COVID-19, easily the worst economic and health crisis in decades, mental health professionals are concerned healthcare funding will be pulled to make up for significant budget shortfalls.

Even before the pandemic, mental health centers were critically underfunded, leading to the closure of the Jerome Golden Center for Behavioral Health in West Palm last October. The 44-bed hospital closed its doors, leaving just one other nonprofit mental health center in Palm Beach County. There are no other standalone psychiatric hospitals. For now, in Palm Beach County, mental healthcare largely falls on the shoulders of associations such as the National Alliance on Mental Illness, American Foundation for Suicide Prevention and Boca Raton’s Promise. The CDC also awarded a $64,000 grant in July to a collaboration of Palm Beach County health organizations to provide peer-to-peer training and counseling to aid the mental health of those with substance abuse disorders.

Palm Beach County was also one of the worst hit during the ongoing opioid crisis. Fentanyl was the leading cause of drug-related deaths in Palm Beach County in 2018, killing 278 people. While several initiatives are taking place at the federal level to limit the flow of Fentanyl imports from China, including the Fentanyl Sanctions Act introduced this April, Palm Beach County is pursuing litigation against opioid manufacturers. Initially, Palm Beach was part of a class action lawsuit with 2,000 others but instead chose to pursue legal action independently. But according to Addiction Center, new synthetic Carfentanil is seeing growing popularity in Palm Beach County, having been involved in 85 deaths.

Florida acknowledged the need for greater mental

The Health Care District works with private and public providers to create a strong healthcare safety net for residents.

health awareness in the wake of the 2018 Marjory Stoneman Douglas high-school shooting that left 17 students and teachers dead. On July 1, Florida House Bill 945 entered into force. The law, sponsored by West Palm Beach State Representative David Silvers, allows for schools to access more support, including mobile response units, for students with mental health issues. The killing of George Floyd this May led to more and more focused debates on the representation of Black people in public policy. In Palm Beach County, the Urban League of Palm Beach County held a town hall with local leaders to address disparities in social care, education and healthcare in Black communities. The latest Palm Beach Local Public Health System Assessment was carried out in 2016 and showed health inequities and disparities between races and ethnicities in the infant and fetal death rates. And the COVID-19 pandemic has exacerbated those racial inequalities, as the CDC found that Black people have nearly three times as many cases and Hispanics have over three times as many cases as the white population. This is

Joseph Sardano CEO Sensus Healthcare

mainly attributed to the over-representation of these demographics in low-income “essential” jobs that could not be performed from home.

Health technology and research Palm Beach County is a healthcare hub. Not only is healthcare a significant employer in the country but research and development are highly prioritized. Orlando-based Progressive Care this month announced its expansion into Palm Beach County and software company Rennova Health announced this June that it would spin off a company focused on telehealth — to be named InnovaQor — based in Palm Beach County. Healthcare billing firm Bendcare, based in Boca Raton, was among the fastest-growing private firms in the country last year.

As COVID-19 accelerated, Palm Beach County’s research and development segment put it in good position to help deal with the influx of emergencyroom patients as well as continuing to serve routine primary healthcare needs. Although the average age

What role does Sensus Healthcare play in Palm Beach’s healthcare sector?

Sensus Healthcare has been in business since 2010 as a medical devices company. We manufacture a device called Superficial Radiation Therapy (SRT). It is a photon radiotherapy-based technology, which is a light radiation that only penetrates 5mm below the skin’s surface. Our FDA clearances cover anything that is nonmelanoma skin cancer, both basal cell and squamous cell. We also treat and have FDA clearance for keloids, large scars that are benign tumors. They are painful and have a tendency to grow if they are not treated properly. Prior to our technology becoming FDA-cleared for it, it was proven through publications that 71% of the treated keloids came back bigger and larger than before. Since we brought our technology into the market, studies and publications have shown that we provide a cure rate of anywhere between 90 and 100%.

What other healthcare innovations are in the pipeline?

We received FDA clearance for a product called Sculptura in 2019. We have installed three systems so far: one at the University of Pennsylvania in Philadelphia, another at Stanford in Palo Alto and the third at Beilinson Hospital in Tel Aviv. It is a unique system that integrates robotics attached to its arm to gauge the breath of a patient while under anesthesia. It can also sculpt the radiation dose. As the radiation goes into the body, it avoids damage to other organs. This system can be used during the course of a surgical procedure to remove a tumor or to eliminate the tumor by using this type of radiation. It does not penetrate the body, only going as far as we need to go, up to 12mm below the surface of whatever we are shooting for. It is a very light radiation that only impacts cancer cells, preserving healthy cells. The procedure takes 10 minutes. Afterward, there is no need for the six to 10 weeks of radiation therapy that costs healthcare systems anywhere between $40,000 and $60,000 and preventing tremendous collateral damage to the patient.

David Fitzpatrick Director – Max Planck Florida Institute

The COVID-19 pandemic has highlighted the critical importance of scientific discovery. We need bright, energetic, creative and determined people involved in science. We have had 246 trainees in the Max Planck Academy since 2012 and we support individuals throughout the training process, from highschool students through to research group leaders. We focus on curiosity-driven discoveries, which is what drives the majority of scientific breakthroughs. We contribute high-quality science to the state of Florida, and it is vital not to undervalue the importance of scientific discovery, which provides the foundations for the battle against disease.

in Palm Beach County is dropping, there is still a large community of elderly residents, who were particularly vulnerable to the threat of COVID-19. Telehealth services, quickly rolled out by hospitals, allowed these patients to consult with doctors while remaining safely at home. Baptist Health released a virtual service called Baptist Health Care On Demand and Cleveland Clinic began drive-through COVID-19 testing as well as rolling out its own Express Care Online technology. However, health officials stress that, although telemedicine is an effective short-term solution, it should never completely replace in-office doctor appointments.

But Palm Beach County did not become a healthcare hub overnight and South Florida’s ongoing research pipeline is one of the reasons it is so strongly positioned. Cleveland Clinic recently established the Florida Research and Innovation Center in Port St. Lucie, to be closely aligned with the Center for Global and Emerging Pathogens Research. The 107,000-squarefoot facility contains laboratory space, biosafety facilities for working with pathogens and office buildings. The University of Miami already has its Life Science and Technology Park. These facilities in turn create incubators for startups to flourish. These include Incubate Miami, Citrix Systems’ Startup Accelerator, with angel investment coming from funds like the Miami Innovation Fund.

Looking ahead The healthcare landscape in Palm Beach, and nationally, will undeniably be transformed by the COVID-19 pandemic. Already, hospitals are changing the way they operate, with Jupiter Medical Center for

The Association of American Medical Colleges forecasts a shortage of 122,000 physicians by 2032

one reopening elective procedures safely by including high-tech facial scanners, temperature screeners and disinfecting robots. The economy also will continue to depend on the efforts of the healthcare sector as the country reopens, as CareerSource Florida emphasizes the need for new talent. This is especially critical in healthcare as the Association of American Medical Colleges estimates a shortage of 122,000 physicians in the United States by 2032. But Palm Beach County’s hospitals are standing on firm ground and patients can feel assured in terms of safety. In 2019, The Leapfrog Group, a national nonprofit focused on quality and safety in the healthcare sector, awarded four county hospitals its top A rating for patient safety: Palm Beach Gardens Medical Center, Jupiter Medical Center, Delray Medical Center and Wellington Regional Medical Center. The status is a bright light for the sector in Palm Beach County.

Education:

The academic year unraveled in March as the pandemic suddenly pushed educational institutions across the board into the digital world, forcing many educators to learn on the fly how to provide their courses online. The kinks are being smoothed out but the landscape will likely not look the same going forward.

Learning experience:

From serious challenges to major achievements, it’s been a roller coaster ride for educators and students alike

The 2019-2020 school year in Palm Beach County has been marked by both serious challenges and major achievements. Obviously, COVID-19 dominated the spring term in every school at every level, with students and teachers doing their best to adapt to mandatory remote instruction at a moment’s notice. Most schools are now trying to balance public health with the need to return to a normal education, and many schools are still not sure whether they will welcome students back to the classroom in the fall or keep them remote.

In addition to taking students out of the classroom, COVID-19 also put a great many people in Palm Beach County out of work, and quite a few of these people have chosen to take online classes at area colleges and universities to acquire skills that can help them get new jobs. Organizations like CareerSource have stepped up to help people bridge this COVID-19-induced employment gap.

There was also good employment news for Florida’s teachers, as they received a massive raise this year, making Florida’s minimum teacher salary the fifthhighest in the country.

Landscape Education plays a major role in Palm Beach County’s economy. The public school system is the area’s biggest employer, and the county and surrounding region boasts 16 institutions of higher learning that offer a breadth of programs, from technical certificates to doctorates. Among the leaders are Florida Atlantic University (FAU), Lynn University, Nova Southeastern University and Palm Beach State College.

On average, tuition and fees for colleges in Florida are below the national average, at $3,898 for in-state and $15,361 for out-of-state in 2019-2020, according to the College Tuition Compare website. That compares with the national average of $6,439 for in-state students and $17,666 for out-of-state students. By comparison, the instate tuition at Palm Beach State College is $2,424 per year, which is 66% below the national average for a ( )

Right track

State college serves as an important launching board for students already in careers or wanting to go to university

Ava Parker President – Palm Beach State College

What are the most popular programs for the college and what makes them attractive? As a state college, 60% of our students come here to earn an Associate in Arts (A.A.) degree and transfer to our bachelor’s programs or to a university bachelor’s program, most frequently in the state. Most of our students want to transfer to Florida Atlantic University or the University of Central Florida. Florida International University and the University of Florida are also top choices. In our A.A. pathway, many students want to go into business. Our entrepreneurship A.A. and bachelor’s degree tracks are popular, as is getting the business foundation needed to transfer to a university’s program.

Another popular area is health sciences. Many of our students are the first in their families to go to college, so for them, they are thinking about where they have seen people succeed and which people have improved their economic condition because of their chosen profession. Many of our students go into health sciences because that is an area where they can always find a job. Our longest waiting list is for nursing.

How does the college help students update skills to transfer to other institutions? Our bachelor’s degree programs are a fast lane. When I shake hands with students who are graduating with our bachelor’s degrees, most of them are in their 30s. They are folks who already have a job, and they found their way to us because they were sitting at work, and there was an HR announcement about a job opportunity that required a bachelor’s degree.

We are ideal for those people because they can continue to work at their jobs, and they can come to us in the evenings or attend online to earn those additional credentials. We also can do that at a reasonable cost.

How is COVID-19 shaping the landscape and how has the college dealt with it? I am concerned every day about students withdrawing. Our spring break was the first week of March and I recall having the first conversation with my leadership team about us preparing for COVID-19. I never would have guessed that a month later most of my staff would be working from home, as well as all of our instruction happening remotely.

The hardest thing has been stressing to our students to remain focused on their academic trajectory. Some of them did not have the devices to actually make the transition, so we had to go and look throughout the college for every laptop available for our students to check out, because it is really difficult to do your homework from your phone.

Patent approach

The number of discoveries patented and the quality of collaboration at FAU Research Park shows no sign of slowing down

Andrew Duffell President – Research Park at Florida Atlantic University®

What were your key highlights from 2019? In 2019, we had over 800 people working at the Florida Research Park among the 32 companies that are based here. The really important metric that we saw emerge last year was the number of discoveries that were patented and the quality of collaborations that are happening between the various companies and FAU, which continues to improve year over year. A number of our companies are progressing through their life cycles from startups to second stage, benefiting from our economic gardening initiatives. We have seen an uptick in the budgets for research and development over the years that we expect to start yielding results this year and next.

In which areas are discoveries concentrated? The majority of the discoveries that were made are in the medical and healthcare space; we have companies working on mental health, medical devices, therapeutics and healthcare IT. We are excited to see a real concentration in the healthcare space, with an emphasis on the interface between healthcare technologies and how healthcare is delivered to patients, which synchronizes well with how we see Florida Atlantic University growing, particularly in the southern Palm Beach County and northern Broward County region. The healthcare industry as a whole is really ripe for innovation, and this is where we are starting to see commercial activity developing, which is very gratifying. While we are affiliated with the university, we are a separate organization: our focus is on economic development and the translation of new technologies into the marketplace.

How do you view workforce development and the talent challenge in Florida? In terms of workforce development, I think Florida is ahead of the pack. We have had a strong workforce development system for a number of years. Research Park at FAU companies and their employees can take advantage of continuing education courses at FAU that are flexible in terms of schedule and pricing: some are for credit, some are for certificates. These have been really valuable. Palm Beach State College also has some fantastic courses in degree and nondegree fields. I think we have held our own in that regard and the employers have seen the value in upgrading the skill set of their employees as a way to retain them. Many employers are investing more in their employees, using flexible work schedules, more work from home, and more team-building activities. is what we are embarking on this year and we are.

( ) public four-year institution, at $7,203, according to the CollegeCalc website. For a top-flight private school, the costs can be higher than the national average. For the 2018/19 academic year, an in-state student paid $35,960 at Lynn University, 26% above the national average for a private non-profit four-year college tuition of $28,471.

At those prices, students and parents want value for money, and COVID-19 put a damper on the ability of educational institutions to deliver. With people forced to stay home to mitigate the spread of COVID-19, some college students’ have expressed doubts about the quality of the mandatory online instruction they received during the spring 2020 semester. Specifically, some students feel the quality of the education they received online was inferior to what universities promised them, as there is no opportunity for in-person lectures, seminars, labs, athletics, or any aspect of the “campus life” that is often a selling point for so many colleges and universities. Consequently, these students are suing their universities for the pro-rated price of their tuition.

Legal experts are split on the viability of such claims, pointing to a handful of strong defences on the side of the universities: a force majeure defence based on the argument that COVID-19 was an intervening event outside of their control that rendered it impossible to provide traditional instruction; the defence that, even though COVID-19 rendered it impossible or at least highly impractical or ill-advised to provide oncampus instruction, they mitigated any damage to students by ensuring the availability of courses online; and the defence that the universities’ expenses have not been greatly defrayed by the switch to remote learning because all faculty salaries are still being paid, buildings must still be maintained, and therefore tuition is still a reasonable cost relative to what it costs the universities to provide their services. So far, more than 100 such cases have been filed across the country, with outcomes pending.

While some educational institutions across the country faced a plethora of challenges during the COVID-19-induced new normal, in particular the sudden pivot to online learning, in Palm Beach County, something interesting is happening as it relates to online classes. Palm Beach State College actually hit record-high course enrollment for its summer 2020 term. Administrators for the college said that while the total number of students is only up a scant 2% from last summer, the students they do have are taking more classes – the number of students with 12 or more credit hours on their schedule is up more than 50%. This, say administrators, seems to indicate that students might

Palm Beach State College hit record-high course enrollment for its summer 2020 term

just be bored as they shelter in place. If you cannot go to work, go to the gym, or go out and have fun, you may as well take another course.

This is not necessarily the whole story, as college enrollment tends to expand alongside poor economic conditions due to laid off workers pursuing job training or additional education to aid in the hunt for new employment. The trend is also not ubiquitous throughout South Florida, with some of the region’s colleges reporting a similar spike in credit hours taken, and others not. Still, it is an interesting little facet of pandemic life.

Remote learning has been a similarly mixed experience at the K-12 level, with many students facing issues related to their computer and internet access, the readiness of teachers to educate remotely, and the ability for students to engage meaningfully with a remote curriculum.

Higher education There are numerous nationally ranked colleges and universities located in Palm Beach County, each with a rich history and modern accomplishments:

Florida Atlantic University Florida Atlantic University has the distinction of being the first public university to open in Southeast Florida. FAU boasts a total enrollment of 30,000 students at its 850-acre campus, where they can pursue one of 170 different degree programs. FAU ranked 281st overall in the 2020 edition of Best Colleges and National Universities. Last year, certain FAU online learning programs landed near the top of US News and World Report’s list of the “2019 Best Online Graduate Programs” in the country, including 23rd best online graduate nursing program, 51st best online MBA program, 43rd best online business programs – nonMBA, and 77th best online education program. This last program in particular showed vast improvement, advancing from 83rd in 2018 and 193rd in 2017).

Lynn University Lynn University is another prominent institution in Palm Beach County that plans to grow even more through 2025. In February 2019, the university opened a new state-of-the-art Christine E. Lynn University Center, a massive architectural achievement and a quality of life boost for students and faculty that serves as a clear benchmark for the university’s growth path. It was also announced in July 2020 that Lynn plans to construct an additional dormitory to accommodate the need for more student housing.

In terms of the school’s accolades, Lynn’s Donald E. and Helen L. Ross College of Education was included in the US News and World Report’s list of best graduate schools in 2019, marking the first time any Lynn University school or program received this distinction. Lynn was also recognized for having the most international students of any school in the South. The success has continued into 2020, with Lynn’s online bachelor’s degree program climbing 44 spots in the U.S. News and World Report rankings and clinching the rank of 106 out of 345 programs, and Lynn’s online MBA and graduate education offerings earning 229 of 321 and 215 of 298, respectively. Nova Southeastern University Nova Southeastern University is an interesting school sitting on a 314-acre campus and currently enrolling approximately 5,000 students on a trimester academic calendar. Nova ranked 246th in the 2020 edition of Best Colleges and National Universities for its 140 degree programs in top fields like oncology, dentistry, business, and many more. Sixty of these programs are fully online, including programs in child protection, sports science, information assurance, and cybersecurity, among others.

Palm Beach State College In recognition of its success and with the goal of continuing its growth, Palm Beach State College (PBSC) was recently awarded the Florida Job Growth Grant Fund to establish a new Center for Excellence in Engineering Technology. When complete, the new center will allow PBSC to instruct students in a more collaborative and multidisciplinary way, to better prepare them for careers in the aerospace, manufacturing, clean technology, and defense industries. This expanded engineering program includes a new concentration in advanced manufacturing under the school’s

36% of Palm Beach County residents hold a bachelor’s degree or higher.

engineering technology associate in science degree; three additional college credit certificates in industrial technician, automation, and lean manufacturing; and budget allocation to hire five new employees. PBSC will also deepen its relationship with FAU and 15 Southeast Florida companies to help students transition into bachelor programs and, eventually, the workforce. The expanded program is expected to lead to the enrollment of an additional 2,000 students at PBSC by 2023.

K-12 Palm Beach County is home to approximately 179 K-12 schools, which serve about 176,000 students and employ 23,000 people (including 12,900 teachers). Palm Beach County’s total education budget for 2019 was $3.1 billion, and it was the fifth-largest school district in Florida and the 10th-largest nationwide.

Despite being the region’s top employer and enjoying such a substantial budget, Palm Beach County has experienced its own taste of the nationwide teacher shortage in recent years. On the first day of the 2018-2019 academic year, Palm Beach County reported 242 vacant teaching positions and by the middle of the school year, 157 of those positions remained unfilled. Numerous factors are to blame for this historic dearth of teachers, but Florida’s traditionally low teacher salaries and an under-enrollment in degree programs in the wake of the Great Recession have exacerbated the issue.

Fortunately, this may be the dawn of a new era, as Palm Beach County teachers already working in the district received an approximately 3% pay increase in 2019 for a job well done in 2018, pushing the maximum teacher salary in the region to $84,246. Then, in 2020, Gov. Rick DeSantis announced an increase in the minimum starting salary for new teachers in Florida from $41,000 to a little over $47,000, which makes Florida fifth in the nation for starting pay for teachers.

Workforce preparation Workforce preparation has taken on a whole new importance in the post-COVID-19 world. Organizations and institutions such as the Business Development Board of Palm Beach County (BDB), CareerSource, and schools from K-12 through college have regularly partnered with businesses, workers and students to ensure that people had the skills necessary to get jobs and do them well. However, COVID-19 has ushered in record-high unemployment in Palm Beach County, and with so many people furloughed or completely let go and so many different industries reeling, it is more important than ever to ensure that people have precisely the skills they need to find work.

Recognizing this need, CareerSource, Palm Beach County’s state-chartered, nonprofit workforce development arm, has launched its “Help Is Here” web portal to provide desperately needed assistance to people who are seeking new employment in these difficult times. This extraordinary measure is in addition to CareerSource’s other menu of services that are geared to getting people the training they need and helping them find jobs.

Another measure to help ensure that workers receive essential training to succeed in a post-COVID-19 world was the grant of $1.1 million to Palm Beach State College (PBSC) from the U.S. Department of Labor for jobs skills training and employment counseling for Job Corps-eligible youth and adults from 16 to 24 years old. The grant is part of the Job Corps Scholars Program, which combines job training, classroom education and employment counseling in an effort to ensure that atrisk youth are able to reach their full potential. PBSC will select 80 low-income students for the program throughout Palm Beach County, and provide training in certificate programs such as HVAC, welding, computer science, network support technician and others that

Palm Beach County School District will distribute 82,000 laptops to students , enhance Wi-Fi

can be completed in as little as one year. Youth will also receive personalized career and academic counseling. This program shows that a traditional education is not the only or even the best path for everyone – particularly in the world after the pandemic – and that many more students will begin to benefit from a solid education and training program in a lucrative trade.

Remote learning As the number of COVID-19 cases began to spike in South Florida, concern quickly grew over the risk being borne by having students attend on-campus classes. In March, much like their counterparts in other parts of the country and the world, the Palm Beach County School District, the state university system, and private colleges in the area all suspended classes and told students to stay home. This left teachers with mere days to prepare for virtual teaching, resulting in a somewhat rocky transition.

Adding to the complication was the fact that many students lacked ready access to computers or internet access needed to attend their classes virtually. After finishing out the last school year against the backdrop of the new normal and breaking for the summer, teachers, students, and parents in the Palm Beach County School District are looking toward a tentative August start date for the upcoming 2020-2021 academic year. The Florida Department of Education (DOE) issued an executive order that public school districts throughout Florida must open brick and mortar schools to students for at least five days per week during the 2020-2021 academic year, but the Palm Beach County School District administration has clarified that the district has sufficient flexibility to operate under recommendations from public health experts when choosing whether to comply with this order. If COVID-19 is still spiking in Palm Beach County, the district is free to continue with distance learning without fear of funding cuts by the DOE.

Due to the likelihood that it will not be medically advisable for students to return to the classroom, and with the emphatic support of the Palm Beach County Teachers Union, the district is preparing to launch distance learning 2.0 for the new school year. Teachers will be receiving professional development training in the weeks leading up to the first day of school to ensure that they are equipped with all of the skills and aptitudes required to teach effectively in a virtual environment. The school district will also be distributing an additional 82,000 laptops to students and enhancing Wi-Fi throughout the district to ensure that all children will be able to virtually attend their classes. If it is not safe to send students back to school, they will stay home, and the school district will be ready to teach them.

Students at the college level had a similar experience. Students at institutions such as Palm Beach State College and Florida Atlantic University were told not to return after spring break, which they were on as COVID-19 cases reached pandemic levels, and the state university system told professors to immediately prepare for the transition to remote learning. The initial plan was for all classes to remain remote through April 5, 2020. By late August, Palm Beach State College, like many other colleges, was considering whether to remain onlineonly when classes do eventually begin in the fall.

Looking ahead COVD-19 may have upended how students receive an education throughout Palm Beach County, but that does not mean the year was without its good news. The Palm Beach County School District is tentatively planning to keep students at home when the fall semester begins, but it learned from the struggles in the spring and is prepared to provide a better remote learning experience by better training teachers for this style of instruction and by improving students’ access to the necessary technology.

There was also a major increase to the minimum salary for teachers continuing to ensure that students are learning during the pandemic. Not everyone received a raise during the pandemic; unfortunately, many people have been furloughed or lost their jobs entirely, but organizations and institutions throughout the county have stepped up to provide workforce training for people who have been put out of work by COVID-19.

While the future still remains uncertain, schools throughout Palm Beach County are committed to providing a quality education and bettering the community of which they are a part.

Tourism, Arts

& Culture:

Palm Beach County has all the hallmarks of a tourism, arts and culture dynamo. It has a sunny climate year-round, pristine beaches and plenty of activities to attract both domestic and international travelers. How the post-COVID-19 recovery plays out is anybody’s guess but most observers agree, you can’t keep Palm Beach County down.

Rough road:

Tourism has been hard hit by COVID-19 but Palm Beach County is pushing back

Palm Beach County is one of Florida’s biggest tourism hotspots, and the industry is the county’s secondlargest after agriculture. In 2019, the sector generated an estimated $7.7 billion toward the local economy, including $700 million in lodgings income annually. The county has its own airport — Palm Beach International (PBI) — that has three runways and 28 gates servicing 200 daily flights to 30 destinations. For 2019, total passenger traffic at the airport totaled almost 6.9 million, a 5.9% increase on the year. 2019 was a record-breaker for Palm Beach County tourism and 2020 looked like it would be equally strong. In February, Miami hosted Super Bowl LIV, one of the biggest sporting events in the United States annually. The economic impact of the previous event held in South Florida was estimated at around $234 million, with $12 million being pumped directly into the Palm Beach economy. Delray Beach, one example of the county’s hotspots, was booming by the end of 2019, with a reputation as a top tourist location. Home to hotels such as Aloft and Courtyard by Marriott, as well as boutique hotels such as The Ray and Opal Grand Oceanfront Resort and Spa, the city is now a far cry from “Dull-ray,” as it used to be known. And in December, Palm Beach County agreed on a $108 million deal to upgrade the Roger Dean Chevrolet Stadium in the town of Jupiter using tourism tax dollars.

But as the coronavirus began to spread through the world, the tourism industry globally was one of the biggest casualties. As the economy began to reopen in May, business owners were determined to do all they could to inspire confidence among customers, whether local or international, given the unprecedented damage. They drafted the Palm Beaches Pledge in acknowledgement of the importance of implementing enhanced safety and hygiene protocols by local businesses. More than 100 tourism and hospitality businesses signed the pledge to implement changes based on advice from health officials, including wearing masks, social distancing and regularly hand sanitizing.

The county also quickly began to provide some virtual activities to keep eyes on Palm Beach. Discover the Palm Beaches is a virtual experience that allows residents to participate in activities such as a Virtual Coastal Classroom hosted by the Outdoor Sea Turtle Hospital. The Flagler Museum offers digital tours of the Gilded Age national landmark and Hilton West

Palm is providing online yoga classes. Boca Ballet Theater is offering dance classes over Zoom, Palm Beach Zoo uploads regular videos of the animals and the Solid Waste Authority of Palm Beach launched virtual education programs and a recycling challenge.

COVID-19 When all close contact activity was prohibited as the COVID-19 pandemic raged, tourism was one of the first and biggest casualties. By May, it was estimated that the county had lost $20 million in revenue. In June, passenger traffic at PBI dropped more than 75% on the year to just 116,603 for the month. April bed tax collection was down 81% compared with April 2019. Many in the industry expect that getting back to the tourist numbers of 2019 will be a long haul. By July, more than 1,900 businesses from West Palm to Miami had been permanently closed, with small businesses doing all they could to attract customers.

Closely linked to tourism, the arts was another industry to face immediate closure as the pandemic hit the United States. The Cultural Council for Palm Beach County estimated that the virus had an $8.4 billion economic impact on the arts nationwide, with a 67% unemployment rate among artists. Event cancellations were extended into 2021 as uncertainty over the ability to contain the virus prevailed. The Kravis Center for the Performing Arts in West Palm Beach alone estimated a $2-3 million impact in lost revenues as large gatherings were indefinitely taken off the table.

The Paycheck Protection Program allocated at least $25 billion to Florida businesses to help retain 3.2 million jobs. This was a lifeline to the tourism and entertainment sectors, but some IRS requirements complicated the program for many business owners. For example, the IRS stated that if a company took a PPP loan, it would not be allowed to deduct normally deductible expenses such as payroll, mortgage or rent payments or utilities. As well as the PPP program, the community rallied around the arts, with the Cultural Council of Palm Beach County creating an Artist Relief Fund, which raised more than $45,000 by midJune. The council then awarded grants to individuals working in the arts. As well as offering refunds for canceled events, The Kravis Center and the Palm Beach Opera provided the option to instead donate the value of the ticket instead.

As a direct result of the virus, there was a decided focus on domestic vacations rather than international travel over the summer, which benefited Florida and Palm Beach. Local businesses in Palm Beach offered deals and discounts to tempt Americans to make the trip to Florida. The Cultural Council provided a variety of summer camp options, both in person and online. The Boca Raton Museum of Art offered free admission until Sept. 30, the Bulk Candy Store in West Palm offered a 20% discount on its Candy Tour and Purely Palm Beach Private Tour gave $10 discounts on its private tours through August to promote local tourism.

Cruising The Port of Palm Beach is home to the Bahamas Paradise Cruise Line, with the Grand Classica and Grand Celebration ship berthing at Palm Beach. In Florida, the cruise industry accounts for $8.5 billion in revenues per year and provides 14,646 direct, indirect and induced jobs. One of the first red flags for the tourism industry regarding the seriousness of the coronavirus was when the cruise industry was hit. Cruise ships off the Florida coast were forbidden from docking due to the risk of sick passengers on board, leaving some confined in their cabins for weeks. Of the 121 cruise ships that entered U.S. waters after March 1, only 15 had no cases of COVID-19 on board.

There is some debate over whether cruise lines should be bailed out by the U.S. government for two reasons. Firstly, the three biggest cruise lines are not registered in the United States, but in Panama and the Netherlands, meaning they pay no U.S. corporation tax. Others objected to bailing out the industry because, despite clear evidence of the spread of the pandemic by early March, some cruise ships continued to sail. This included the Zaandam, a Holland America vessel owned by cruise giant

By the Numbers:

$7.5 billion Economic impact $42 million Bed-tax revenue $623 million

Lodging sales

66,000 Jobs

47 miles Beaches and open spaces

1982 First tourist tax enacted

COVID-19 Impact (April 2020):

81% 96.6%

Drop in bed tax revenue in April 2020 Drop in passengers at PBI

Source: Discover the Palm Beaches Florida, Palm Beach International Airport

Phil Purcell President & CEO Marine Industries Association of South Florida

How is the association fostering job creation and retention in the marine industry?

We helped Broward College launch its marine engineering management program, which still has a waiting list. We also helped start the first-ever apprenticeship program in the state of Florida at Atlanta Technical College, called the yacht service technician apprenticeship program. Our industry in Broward County is worth $9 billion. It grows to $12 billion at the regional level. Our show brings in tech entrepreneurs like Elon Musk and Bill Gates. We already have the relationship capital in our community, now it’s up to us to showcase how South Florida is a highly investable, great place to live and work. We’ve partnered with our universities and created the Marine Research Hub of South Florida to do just that. Our oceans provide solutions for a lot of things, such as cancer treatment, Alzheimer’s and Parkinson’s, and we need to get the next generations working in industries that are long-term and can solve some of our health-related problems.

What main areas of research is the Marine Industries Association promoting?

The Marine Research Hub is a consortium of four South Florida universities that have oceanographic institutes, three economic development organizations, and MIASF, designed to promote collaboration among the universities and assist with commercialization of the research being conducted. Some areas of interest include predictive modeling of hurricanes in a controlled, laboratory environment, killing pancreatic cancer cells using a deep-water sponge, and harnessing energy with underwater turbines in the Gulf Stream, and growing corals onland to replant on our reef because a healthy reef is critical for maintaining our shoreline. We also moved Ocean Exchange here. It’s a 10-yearold event previously based in Savannah, Georgia. The move was made to attract outside-the-box thinkers and entrepreneurs with sustainability and innovation as a primary driver. Carnival Corp. The ship departed from Buenos Aires on March 7 and was rejected berthing in Argentina and Chile before traveling through the Panama Canal to reach Port Everglades on April 2. On March 15 passengers had begun to report flu-like symptoms and by the time the ship was given permission to disembark in Florida two weeks later, 14 passengers needed critical care and ultimately five people died.

The CDC issued a no sail order on March 14, which was extended until September. Despite the order, by May, cruise ship liners that were haemorrhaging up to $1 billion a month announced plans to start sailing again. As COVID-19 also impacted construction and supply chains, Carnival Cruise Line announced it would delay the launch of the 1,130-foot Mardi Gras because of pandemic-related construction delays. And $200 million in upgrades to the Carnival Radiance vessel were also pushed back for the same reason.

Events and festivals One of the biggest draws to Palm Beach County is its packed events schedule. When the annual Palm Beach International Boat Show, which pulls in millions of dollars in boat sales each edition, was turned into a digital event, the impact of the virus really hit home for Palm Beachers. The 2018 boat show attracted over 50,000 visitors and average expenditure was $202 per day by out of town visitors. Direct annual impact was pegged at $1.35 billion, a huge loss for the local economy.

The Kravis Center registered losses of $4.2 million in ticket refunds for shows scheduled from March 13 to June 30, and the cancellations were later extended until November. Festivals were very quickly canceled or rescheduled given the impossibility of implementing social distancing measures. Annual not-to-be-missed events such as Rocktoberfest, Winterfest and the seafood festival are unlikely to take place in 2020. Luckily, some Palm Beach festivals that were scheduled for early in 2020, such as the 30th Palm Beach Jewish Film Festival, were able to go ahead.

Despite the cancellations in scheduled programming, the arts community realized how essential their services are to communities, especially given the shelter in place orders, which took a significant mental toll on much of the population. Delray Beach resident Ricky Bolufe organized The Social Distance Festival that would livestream performances in exchange for virtual tips for musicians. And West Palm Beach artist Sarah LaPierre also hosted an auction of her Eat Local art series on Instagram Live. ( )

Outperforming

Decison to stay open during the pandemic proves a right choice

Scott Webb President – Kolter Hospitality

How did the company react to the pandemic and what were the results? Kolter Hospitality develops, acquires, and manages its own hotels. We have also launched a third-party management company offering our services to hotel operators looking for an operating partner that shares its vision of customer service and performance. We are proud to say, in the post-COVID-19 environment, our portfolio has outperformed competitive hotel sets.

When the pandemic first hit, we had to evaluate closing versus staying open. When we did the math it was clear: by staying open, even in our full-service operations, what cash flow we did get went to offset our fixed-cost expenses so it made economic sense to keep our hotels open and operating. The second consideration was what would it take to ramp back up if we closed. Our calculations indicated it would take four to six weeks to get people rehired and trained and we would miss some big swings in occupancy by then. This proved to be true when the state of Florida started to lift restrictions and there was a pent-up demand for normalcy and locals started booking rooms. Another critical factor was keeping as many of our employees as we could during this pandemic. The decision to open appears to have been the right choice for us.

What opportunities have you identified in the hotel sector throughout this economic cycle? The reality is not much is trading right now. Year over year transactions are down substantially in the hospitality world. The challenge is determining what is the real value of an asset post COVID-19. It really depends on how long you anticipate this economic impact will last and how long it will take to get back to 2019 performance numbers. There is a large spread in the bid-ask for any asset right now. The second challenge is there really is not any debt available for new hospitality deals.

What is your outlook for the rest of the year and when do you anticipate a return in travel? For us to return to a more normal booking pattern, first we need air travel to return to normal levels. Right now, air travel is about 15% of normal. Once this opens up, we will see normal transient travel return as there is a real pent-up demand for vacations. Business travel will then start to return as business relationships are personal and people need to get out to see their clients and network to expand their businesses. Next will be group business like corporate meetings, weddings, and finally, convention business. This will be the slowest part of the guest mix to return and we will not see this happening until there really is no need for social distancing.

Tourism in Palm Beach County generates an annual economic impact of about $7.5 billion.

( ) Hotel performance Hotels have been among the hardest-hit businesses since the pandemic emerged. Palm Beach County has approximately 170 hotels with more than 16,000 rooms and the industry supports 60,000 jobs. The Palm Beach County Commission placed a ban on guest check-ins by the general public until May 15, so in the meantime some hotels stayed afloat by accepting government tenders to house COVID-19 patients. But some hotels shied away from the measure, citing a stigma attached to hotels used to house sick people. And as hurricane season approached, the state recommended the use of nearly-empty hotels to house emergency teams.

In the week beginning March 22, occupancy rates in Palm Beach County were 21.2% and throughout April and May, dropped as low as 15%, while unemployment across the tourism industry was estimated at 3040%. Normally a roaring weekend for trade, the 4th of July was disappointing for the tourism industry as Florida’s COVID-19 cases surged to more than 1,000 per day and other states implemented 14day quarantine periods for travelers returning from Florida. In July, many local hotels were about 30% occupied, with beachfront properties registering a slightly higher rate of 40%. Some estimates say it will take as much as seven years for hotel occupancy rates to completely recover.

Despite this, Florida was the most popular destination for travelers from April to July with a 121% click rate on holiday website Trivago, far ahead of California, which was second with 9%. This pent-up demand has caused investors to press ahead with new investment in facilities in spite of a flat industry. The opening of the 122-room Residence Inn by Marriott on Design Center Drive went ahead in July and Hilton’s 150-room Canopy hotel opened in Downtown West Palm in May. And in June, Palm Beach investor Jeff Greene paid $19 million for a Courtyard by Marriott in Boynton Beach.

Looking ahead Socializing and close proximity is inextricably linked with tourism, culture and the arts. As a mounting number of companies go out of business every day, pressure is on the authorities to broaden the reopening of the economy, but this can only be done in a way that keeps everyone safe, especially as Florida’s COVID-19 infection numbers continue to climb. For example, in the same week that Gov. DeSantis declared theme parks safe in July, Florida logged a further 67,000 infections, bringing the state total to over 200,000.

In the post-COVID-19 landscape, tourism-related industries will have to change drastically to adapt and some, like cruise lines, may never recover from the damage. The hotel industry is already embracing increased cleanliness standards and no-touch interactions.

Flexible bookings and cancellation policies are also the new normal and travel is becoming more regional rather than international. Ecotourism activities such as kayaking, canoeing, cycling and visiting animal sanctuaries are growing in popularity. For Palm Beach County, fast adaptation could be the make or break for many companies. Luckily for the county, it has exactly the kind of profile people are now looking for in a holiday destination.