WEEK OF THURSDAY, JANUARY 22, 2015
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Absentee investors own most condos in Miami-Dade, pg. 13 ALL ABOARD FLORIDA: A committee of City of Miami and Miami-Dade County staffers is to give a final verdict today (1/22) on All Aboard Florida’s proposed downtown Miami station. All Aboard Florida, a subsidiary of Coral Gables-based Florida East Coast Industries, is a planned express passenger train that’s to connect Miami and Orlando with stops in Fort Lauderdale and West Palm Beach. The county commission signed off on the plans for the downtown station months ago. But the developer still faced an administrative approval whereby city and county staffers reviewed details of the station’s site plan. County records indicate that the staff committee approves the developer moving on to the permitting process as long as the company sticks to the site plan and to conditions the committee outlined.
83-story tower in Brickell to be above ground by March, pg. 14
THE ACHIEVER
BY LIDIA DINKOVA
MAJOR LEAGUE SOCCER AT FIU: The Miami-Dade County Commission wants to send a message that it’s still interested in a Major League Soccer (MLS) franchise. A commission committee tentatively approved an order to county staff to negotiate with the necessary entities to have an MLS franchise play at the Florida International University stadium on the Modesto A. Maidique Campus, 11200 SW Eighth St. The legislation isn’t final until the full commission signs off. FIU representatives have said they’re “open to the idea,” said Commissioner Juan Zapata, who sponsored the legislation. David Beckham, a British former soccer player, last year wanted to open an MLS franchise on Miami bayfront property but his group couldn’t get a location. When questioned by the elected officials at the recent committee meeting, county staff didn’t provide updates on negotiations for a permanent stadium. BUSINESS INCENTIVES: A global outdoor furniture manufacturer is considering setting up its international headquarters in Northeast Miami-Dade County, where the company already has a facility. The Beacon Council, a public-private organization charged with the county’s economic development, applied on behalf of the company for state and county incentives. The company, which isn’t named in county records, wants $126,000 over six years, 80% of which is to come from the state and 20% from the county. If approved, the county’s share would be $25,200 from the general fund over six years. The county would provide the funds only after the state determined the company had created the promised 21 full-time jobs. County records say the company is also considering Georgia and the Carolinas for its headquarters. The county commission was to vote on the proposal Wednesday.
Photo by Marlene Quaroni
Bruce Orosz
Adding focal points to visitor industry’s marketing The profile is on Page 4
Deadline looms to wrap up county incentives BY LIDIA DINKOVA
River Landing may get county green space, pg. 12; Streetscape committee forms, pg. 12
After the Miami-Dade Commission voted to tentatively award $60 million to various developers, it has now set a deadline to complete the deals. Over several months and amid rising contention, the commission approved allocations for varied projects, including $9 million for a 1,000-foot observation tower on Biscayne Bay. Now, staff is to negotiate deals with the developers that outline the number of jobs the projects must create. Developers will only get the funds when they meet the agreed-upon criteria and create the jobs outlined in the agreements. In that way, the funds are like a reimbursement to developers. The Economic Development & PortMiami Committee last week approved legislation to set a July 21 deadline for all contracts between the county and the developers to become final. The administration is to then report to the commission at its following meeting on which allocations were successfully or unsuccessfully negotiated. It’s “so that we as a body know where we stand with these funds and they are not
left open-ended endlessly,” said Commissioner Daniella Levine Cava, who proposed the deadline. The allocations under negotiation right now come from a $75 million pot that’s part of the larger voter-approved $2.9 billion Building Better Communities bond program. The $75 million in bond debt funding that taxpayers must repay is specifically designated for infrastructure. After the commission tentatively OK’d the $60 million, $15 million remains in the pot. While Ms. Levine Cava sought a moratorium on allocating that remainder until the county wraps up agreements with the existing applicants, her proposal met resistance. “There’s already people in the pipeline looking for these monies,” said Commissioner Jose “Pepe” Diaz. “It’s not fair for the companies already in the pipeline because they’re going to be treated differently than the companies ahead.” Three entities have applied since the last round of allocations. Coral Gables wants $19.3 million for its Miracle Mile and Giralda Avenue reconstruction, River Landing Development wants $38.5 million for its mixed-use
AGENDA
Leveraging partnership advantages
project off the Miami River, and Rosal Westview wants $14 million for a business park in Northeast Miami-Dade. Two of these applicants, however, seek more than the $15 million left in the pot. “So effectively speaking, Commissioner Cava, you have a moratorium because I don’t have the money,” said Leland Salomon, director of the Real Estate Development Division at the county’s Internal Services Department. The committee agreed the county should consider these three fund applications since they’re already in the pipeline. “What would end up happening is this board would approve these items,” said Commissioner Barbara Jordan, “and they would be the first ones on the list for recapture.” “Recapture” is money the county might reclaim if negotiations with some developers already approved for taxpayer funding don’t succeed. The committee’s vote was preliminary. The full commission was to give the item final consideration Wednesday.
A citizens’ advisory group might start brainstorming how Miami-Dade County could best leverage public-private partnerships to its advantage. The Economic Development & PortMiami Committee last week tentatively OK’d forming a Public Private Partnership Task Force to advise elected officials and staff on best practices when it comes to public-private partnerships. That includes proposing changes to ordinances and resolutions to pave the way for beneficial public-private partnerships. The task force is to also identify potential projects suitable for a public-private partnership. Most notably in Miami-Dade, the PortMiami Tunnel connecting the MacArthur Causeway to Dodge Island was created using a partnership among the Florida Department of Transportation (FDOT), the county, the City of Miami and MAT Concessionaire at a cost of $667 million to design and build. FDOT is to pay MAT the cost over time; the county and city bore a share of the cost too. MAT is to operate the tunnel until 2044, when FDOT is to take over. Miami-Dade officials have talked about financing a proposed light-rail linking downtown Miami and Miami Beach through such a partnership. The project, known as BayLink, could cost about $532 million. State law for years has allowed public-private partnerships, often referred to as P3s. In 2013 Gov. Rick Scott signed a law that boosted P3s by allowing local governments, including counties and school boards, to create these partnerships for projects that the public uses. The county’s task force is to have seven to 14 members, all professionals in various industries, including engineering and law. The committee’s approval was preliminary. The full county commission must sign off for the task force to form.
BOAT SHOW MUST BUILD, THEN REMOVE, DOCK ON KEY ...
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WYNWOOD BARRIER FROM OVERTOWN COMING DOWN ...
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MIAMI WORLDCENTER JOB CREATION IMPACT DEBATED ...
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NEW DORAL GROUP TARGETS BROWNFIELDS CLEANUP ...
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VIEWPOINT: WEAK INCENTIVES GOALS ACHIEVE LITTLE ...
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OWNERS WHO RENT CONDOS HAVE GROWING MARKET ...
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MIAMI FREE ZONE CALLED INTERNATIONAL TRADE HUB ...
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FIU LOOKING AT MULTIPLE MACAU UNIVERSITY LINKS ...
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TODAY’S NEWS
WEEK OF THURSDAY, JANUARY 22, 2015
MIAMI TODAY
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Actual job-creation impact in Miami Worldcenter debated BY CATHERINE LACKNER
Bloomingdale’s and Macy’s are cited as anchors of Miami Worldcenter.
jobs to neighborhood residents, he added, they would have arranged with leaseholder anchor stores to begin training the workers now in other stores so that they would be ready when Worldcenter opens, he added. And, if the developers do not meet their goals, “the penalties are insignificant” in comparison to the tax breaks, Dr. Schnidman said. “So there is no
training and no enforcement.” The CRA would better serve the community if it focused on its stated purpose, which is to fight slum and blight, as well as to provide affordable housing, rather than dabbling in job creation, he added. “The CRA, under Florida law, is not an economic development agency. If it continues giving away money, people will continue living in slums.”
cans must be hired, only that a certain percentage of workers must be minorities and that some skilled and unskilled labor must come from the redevelopment area, he said. “Overtown doesn’t have an exclusive.” If the developer takes “a nod, nod, wink, wink,” approach to job creation, Mr. Gilmore said, “now it’s up to the Miami City Commission,” which sits as the CRA’s board of directors. “It comes down to the question of how much will power the commission has, versus the owner.” Miami Worldcenter is a significant deal for Mr. Hardemon as CRA chair, and Mr. Gilmore said he believes the commissioner will use all of the power available to him to make sure developers do what they have pledged. “It’s a reason I am somewhat confident,” he said. “We will see how forceful Keon Hardemon is going to be if those jobs aren’t popping out in the foundation stage.”
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The Miami Worldcenter project, set to begin this year, is the beneficiary of tax breaks forecast to be as high as $6.889 million per year through 2030. Detractors say the multi-use facility would have built anyway, without public funds. Advocates argue that it will transform Park West, a blighted area, and create local jobs for residents. But can the developers be held to their job creation promises? “The incentive package assures local hiring and an increase in wages for residents in the historic Overtown area and residents living in high poverty zip codes throughout the city,” says a Jan. 5 release by the Southeast/Overtown Park West Community Redevelopment Agency (CRA). “The agreement, which was negotiated by board chair Commissioner Keon Hardemon, guarantees a direct pipeline to thousands of jobs and opportunities for small businesses that will be made available through the Miami Worldcenter mixed use project; imposing strict financial penalties for non-compliance if developers don’t make good on those commitments.” The CRA document says that unskilled construction workers will earn $12.83 and electrical journeymen $30.11 per hour, and that residents who have committed minor crimes will not be disqualified solely because of their records. The developers have promised to hire neighborhood residents for 30% of unskilled and 10% of skilled jobs. If no qualified residents can be found, they next must hire from low-income ZIP codes, then Miami-Dade County at large. “This could create 30,000 construction jobs and 13,000 permanent jobs,” said Stephen Beatus, Beacon Council executive vice president for economic development, at a Dec. 29 CRA meeting. “It’s a landmark project.” The permanent jobs would come from the retail, restaurant and hotel components of the mega-project. “This is driven by specialinterest groups,” said Carlos Carillo, Associated Builders and Contractors regional vice president for Miami-Dade County. “These workers will be the first to be let go. It’s ridiculous.” The emphasis should be on training, to ensure that qualified workers are available when the project begins, he said. “Then you could get folks to work.” “There are a number of organizations helping the poor with job training,” said Frank Schnidman, professor of urban and regional planning at Florida Atlantic University and executive director of its Center for Urban and Environmental Solutions. “They have huge payrolls and overheads, but they have not had success. If they had, the people in the programs would all have jobs. Why is Worldcenter supposed to fix this?” If the developers were sincere about giving permanent
The job creation question all rests on whether the developers will honor their agreements and whether CRA leadership will hold feet to the fire, said Samuel Gilmore, president of Overnight Success Inc. “It’s a matter of good faith,” said Mr. Gilmore, who left a career as a pilot for Pan American World Airways to become one of Miami’s few African American general contractors. There is no practical way to force the developer to fulfill the quotas rather than pay the penalty, he said. “It really depends on the owners and the intent and fortitude that they give to the general contractors.” General and sub-contractors are often directed to hire minorities and neighborhood residents for jobs, especially if public money or subsidies is involved. “Some abide by it religiously, and some won’t,” Mr. Gilmore said. None of the Worldcenter documents say that African Ameri-
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MIAMI TODAY
WEEK OF THURSDAY, JANUARY 22, 2015
Miami Free Zone takes new position, becoming international trade hub BY SUSAN DANSEYAR
Entering its 36th year, the Miami Free Zone continues to promote itself as a wholesale marketplace and international business center. Moreover, in contrast to more typical foreign trade zones in the US, it’s important for businesses to know the Miami Free Zone specializes in providing a turnkey FTZ solution where everything is set up – security controls, inhouse expertise on compliance and documentation, to name a few services –, said Jorge Suarez, leasing and marketing manager. “We’ve re-branded ourselves from a trade zone to an international trade facility,” he told Miami Today. At the zone, Mr. Suarez said, The about 100 companies on the Miami Free Zone’s 100 acres work in trade and in support capacities. clients have access to trade re-
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sources and service providers as well as year-round international trade events. Currently, the about 100 companies on the Miami Free Zone’s 47 acres at 2305 NW 107th Ave. are not only in the import/export business but also offer support services for the industry, including consultants and chambers of commerce. In 2014, Mr. Suarez said, there were 60 leasing transactions for new companies, renewals and expansions. He described three expansions: Lennox International, the top cooling and heating company in the US and the largest tenant at the Miami Free Zone, renewed a long-term lease and expanded its footprint by 20%; a global cooling and heating company that Mr. Suarez said he wasn’t at liberty to name renewed a threeyear lease and expanded by 30%; and Diamonds International, the largest duty-free retailer in the Caribbean, renewed a long-term lease and almost tripled its space. In 2014, Mr. Suarez said, an estimated $1 billion in trade passed through Miami Free Zone. On average, 250 trucks pass through a day, plus 150 visitors. The top 10 trading partners, taken from the top, were the US, Switzerland, China, Colombia, Japan, France, Germany, Panama, Peru and the Dominican Republic. Established in 1979, Miami Free Zone was the second foreign trade zone in Florida and the first in Miami-Dade. A number of companies have been tenants for the entire 35 years, Mr. Suarez said. The purpose of a foreign trade zone is to lower the cost of doing business for US-based companies engaged in international trade. The federal government controls federal trade zones, which are based near sea and airports and allow merchandise to enter the country or to be held without paying Customs duties or other ad valorem taxes, offering US businesses a level playing field in competing with businesses abroad. The US Foreign Trade Zones program was created during the Great Depression by the Foreign-Trade Zones Act of 1934 to expedite and encourage foreign commerce in the country. The original act was amended in 1950 to open foreign trade zones to manufacturing. In 1980, Congress amended the act again so that products manufactured in the zones wouldn’t be assessed on US valueadded (the net output after adding up all outputs and subtracting intermediate inputs), ensuring that the only tariffs a producer inside the zone selling to US customers would pay would be on the raw materials imported into the zone. The first foreign trade zone opened in New York City in February 1937. Today, over 230 foreign trade zones operate across the country. Details: Jorge Suarez, jorge.suarez@miamifreezone.com
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MIAMI TODAY
TODAY’S NEWS
WEEK OF THURSDAY, JANUARY 22, 2015
County’s river parking may be green space at development BY JOHN CHARLES ROBBINS
Faded and oil-stained concrete county parking on the Miami River may one day be a landscaped public green space accentuating a mixed-use development known as River Landing Shops and Residences. Miami-Dade commissioners meeting last week as the Land Use & Development Committee recommended the parking lot be handed over to River Landing Conservation Foundation for the creation and maintenance of green space, seawall, landscaping, lighting and a riverwalk open to the public. The foundation is a non-profit affiliated with River Landing Development LLC. As part of the proposed deal with the county, the foundation agrees to spend at least $3,974,223 to improve the triangular site at 1280 NW 11th St. The resolution’s prime sponsor is Commissioner Bruno A. Barreiro. The committee forwarded the resolution to the full county commission with a favorable recommendation. The commission is expected to review the resolution next month. Pre-construction site work on the $300 million River Landing
Photo by Maxine Usdan
County parking is in the foreground with the site of the former Mahi Shrine Auditorium in the background.
Shops and Residences is to start in February and foundation work in April, the developer said recently. River Landing is at 1480 NW North River Drive near the city’s Health District. It will rise on the site of former Mahi Shrine Auditorium, demolished in 2014.
The 8.14-acre development will include 426,000 square feet of retail and restaurant space, 475 market-rate apartments in two towers, more than 2,200 parking spaces and a riverfront park. Andrew Hellinger, manager of River Landing Development, said it will be a catalyst for
urban renewal for the Health District. If the county approves the land transfer, the riverwalk at River Landing would increase to 1,500 lineal feet, as the county’s parcel extends eastward under an elevated highway. The foundation would be re-
quired to improve the triangular site within three years, with potential extensions up to three additional years for construction of the seawall if minimum conditions to be determined by the mayor’s office are met. The resolution also says, “…the Foundation will also be permitted to use the Property for incidental public shows and fairs, for a total period of thirty (30) days per year, which shall be open to the public and serve the community interest and welfare.” The proposal includes a reverter clause if conditions aren’t met, in order “to ensure compliance with the intent of this Board,” the resolution states. River Landing Development has applied to the county’s Economic Development Fund seeking public money to assist with the cost of the project’s $38 million public infrastructure work, including new roads, pathways, parking, lighting, walkways, sewer system and other public utilities. That application might also be considered in February. Completion of the retail component is anticipated for summer 2017, said the developer, and the residential units in spring 2018.
Committee begins steering Gables streetscaping process BY SUSAN DANSEYAR
Coral Gables has taken a step to turn the longstanding vision of an upgraded, vibrant downtown core into a concrete reality with the organization of a steering committee. The committee – comprised
of property owners, merchants, residents, and city, Coral Gables Chamber of Commerce and Coral Gables Business Improvement District representatives – will guide the process for the Miracle Mile and Giralda Avenue Streetscape. The group will seek input to
“come to a consensus on key components of the project,” said Glenn Kephart, public works director and a commitee member. “If we’re going to get it right, it has to be done with the cooperation of the community.” The committee will work alongside New York firm Coo-
per, Robertson and Partners, which will be in charge of the streetscape design. The committee will then recommend key components of the project to the city commission, including the width of sidewalks and proposed street furniture and landscaping. Committee members include Carmen Olazabal, assistant city manager; Mr. Kephart; architect Jorge S. Kuperman of the Business Improvement District and member of the Historic and Environmental Preservation Board for the City of Miami; Stephen Bittel of the Business Improvement District and chairman of Terranova Corp.; and Charles C. Bohl, associate professor and director of University of Miami’s masters in real estate development and urbanism program. Other members include Carlos R. Rossi of the Business Improvement District and owner of Angelique Euro Café; Wayne Cameron Eldred, chairman elect of the Coral Gables Chamber of Commerce and owner of Tarpon Bend Raw Bar & Grill; Marina S. Foglia, Business Im-
provement District executive director; resident Michael Sotelo, member of Coral Gables Board of Adjustment; and Toby Richards, Business Improvement District member and owner of 76-78 Miracle Mile. The committee has held a preliminary meeting and will next meet Feb. 4. For seven years, streetscaping has been the district’s top priority, Ms. Foglia told Miami Today last year. Business owners and the city are to split the estimated $18.8 million cost – $15.3 million for Miracle Mile and $3.5 million for Giralda Avenue. The change will bring wider sidewalks, public art displays and open plazas along Miracle Mile to create a pedestrian-friendly area and build foot traffic. At certain times, bollards along Giralda will be raised to make it a pedestrian-only zone. The streets are to feature improved lighting, tree grates, benches, kiosks, better signage for businesses and parking garages, more welcoming connections to garages and alleyways and permanent valet stations.
Rendering shows how Miracle Mile might look after streetscaping.
WEEK OF THURSDAY, JANUARY 22, 2015
MIAMI TODAY
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Absentee investors own most Miami-Dade condominiums BY L IDIA DINKOVA
Miami-Dade County is home to a growing number of condominiums, most of which are held by absentee owners. Based on county data that show the number of homestead exemptions claimed on residences, more than half of the condominium units in the county aren’t occupied by the owner. Florida law allows for homeowners to claim a homestead exemption, essentially a tax exemption, of up to $50,000 on a single-family house or a condo unit – but only when the owner uses this house or unit as a primary residence. The owner, for example, can’t claim the homestead exemption on a condo unit that’s leased and occupied by a renter. Of the nearly 352,000 condominium units in the county, 37%, or 130,000, had a homestead exemption, according to the Miami-Dade Property Appraiser’s 2014 preliminary tax rolls released mid-year. “It’s a low number because more than 50% of the buyers of those condos are foreigners who cannot file homestead exemptions,” said Christopher Zoller, a realtor with EWM Realty International in Coral Gables. “It’s really that we do have a large, large number of foreign and out-of-state and outof-the-county investors who are buying these properties for investment purposes and for a second home.” The Property Appraiser’s data includes all condo units that were bought up to Dec. 31, 2013, Mr. Zoller said. While investors could earn a return regardless of the area in
Photo by Maxine Usdan
More than half of condo buyers are foreigners who can’t get homestead exemptions: Christopher Zoller.
the county in which they choose to invest, the majority are lured to the urban core, including neighborhoods like Brickell, downtown, Midtown and Edgewater. “The sex appeal of being on Brickell Avenue and in Miami Beach, that’s a location idea an investor wants to have,” Mr. Zoller said. These areas have a low number of homesteaded condo units, according to the property appraiser. In Miami-Dade’s commission district 5, which spans downtown and South Beach, out of the 58,944 condo units, only 21.5% had a homestead exemption. Northeast Miami-Dade
County, another popular condominium market that includes municipalities like Aventura and Sunny Isles Beach, has 74,368 condominiums, and about 32% of those had a homestead exemption. Investors, however, are also present in markets west of I95, where, Mr. Zoller said, they could still earn a good return, especially in employment centers. “There’s a huge opportunity in Doral because Doral represents a giant employment center,” he said. County commission district 12, which includes the City of Doral, has 34,402 condominiums, with 46.5% of them homesteaded, according to the prop-
erty appraiser. In recent years conditions have aligned to grow the investment in Greater Miami’s condominium rental market. The high demand to live here is matched by the high demand to invest in the local condominium rental market. While the demand to live in the county, particularly in the urban core, is growing, potential residents are often not ready to buy a condo unit. “Rental real estate is hot because a lot of people want to live here and they can’t afford to buy, now that the banks have gone to 20% or 25% down payment requirements,” said Mr. Zoller, president of the Residential Board of Governors at
the Miami Association of Realtors. “So you don’t have enough set aside for a down payment. But you got to have a place to live, so you are renting.” At the same time, foreigners from Latin America and Europe are increasingly investing in the area – partly because it’s a better alternative than just putting the money in a bank and partly because the local condo rental market should bring decent returns, experts said. “A condo is effectively a big lock box in the sky. That’s really what they are,” said Peter Zalewski, principal of real estate consultancy CraneSpotters, which focuses on the tri-county market east of I-95 as well as on the market in Coral Gables and Coconut Grove. “If I am from Latin America and I bring $100,000 and put it in a lock box,” Mr. Zalewski said, “I am not making anything. I’m actually losing because of inflation. So instead of taking money [to the bank], these Latin American investors are saying, ‘I could just put it in a condo, make a very small return and hope that once I put this money out and re-sell, I make money.’.” On the other hand, said Mr. Zoller, the realtor with EWM, investing in the condo rental market could be very profitable. “Our rental market is so hot right now, it’s sizzling,” Mr. Zoller said. “In fact, in many ways, some condos and singlefamily homes are returning a higher percent of return than stocks and bonds. Some people, they can get a 5%, 6% and even a 7% return per year per investment. You can’t get that in the bond market right now.”
Investors who rent their condos find growing market, rates BY SUSAN D ANSEYAR
By all accounts, Miami’s rental market is hot right now, with high occupancies and rates. According to ISG World’s most recent report for South Florida’s real estate market written by principals Craig Studnicky and Philip Spiegelman, Miami’s rental vacancy rates are still the third lowest in the country and have been steadily falling. Quoting from MLS, they state occupancy rates for new condos in Brickell were 82% in 2006, 91% in 2010 and 99% in 2014; for the beaches, 80% in 2006, 86% in 2010; and 98% in 2014; for Biscayne Boulevard, 87% in 2006, 90% in 2010 and 97% in 2014; and for Aventura, 99% from 2006-2014. The rental market is going so well that it sometimes seems “out of control,” according to
Javier Gonzalez, broker with Re/Max Advance Realty. “Rates are up about 25%,” he said. “If you hit all the right notes [whatever is trending, which now is contemporary, on the beach, with parking, a view of the water], you can get top dollar.” It’s becoming more and more popular to rent, Mr. Gonzalez said, because people are asking themselves if it’s worth it to buy. Of course, he said, it depends on the person and price range, but he says he meets people who can’t qualify for a loan or have short sales on their homes and need to find a rental where they will live. “When you look at putting 20% down plus paying taxes, insurance, maintenance, it seems better to just let the landlord carry those costs,” Mr. Gonzalez said. “The one appeal of buying now is the rates are so low.”
Philip Spiegelman: vacancy falls.
Occupancy and rental rates depend on where one is living or looking in the county, said Cecilia Samaja, broker/agent for One Sotheby’s International Realty. In communities such as Coral Gables and Coconut Grove, for example, Ms. Samaja said occupancy and rental prices are high because there’s not an overabundance of supply. In
comparison, she said all along the Brickell Avenue corridor there are numerous high-rises and many more are expected to come online as well as in Sunny Isles and downtown. With so many new condos being built, Ms. Samaja says she believes there will be an influx of rentals in Brickell, Sunny Isles and downtown. “A lot of people will buy them as investment and then rent them out,” she said. Rents are certainly going up, in some cases at the rate of 1% a month for the past few years, said Ron Shuffield, president and CEO of EWM Realty International. “There’s pressure on the market because a lot of people don’t have the down payments and borrowing is stringent,” he said. “We’re averaging 800 new residents a day in Florida and these people who are looking at job transfers, from
other countries and just here for a few months or are not sure how long they’ll be staying, so they need to get settled in a rental first.” So demand is high, Mr. Shuffield said. On average, rentals are on the market 68 days, but some go in hours. During the last quarter of 2014, Mr. Shuffield said, EWM International Realty agents sold 2,495 single-family homes and condos in comparison with renting, on average, 2,588 singlefamily homes and condos a month. That was a 3% increase over the year before, he said, when the company averaged 2,511 rentals a month. At the end of 2014, Mr. Shuffield said, 6,393 units were available for rent. He said that’s only two-and-a-half months of supply compared with a healthy market, which is about six months of supply.
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RESIDENTIAL REAL ESTATE
MIAMI TODAY
WEEK OF THURSDAY, JANUARY 22, 2015
83-story tower, 821 rental units to rise above ground soon BY JOHN CHARLES ROBBINS
To be the tallest residential building on the East Coast this side of New York, Panorama Tower is to rise 83 stories in the heart of Brickell. It is a source of pride for developer Tibor Hollo and his Florida East Coast Realty. On a clear night, those living in the upper levels of Panorama will be able to see the lights of Bimini, according to Dean Warhaft, vice president/development coordinator for the company. Foundation work began in June 2014. The project is to bring a mix of hotel rooms, luxury apartments, office space and restaurants to Brickell Avenue. “It’s actually a little bit ahead of schedule now and we’re going to keep pushing to stay ahead of schedule,” Mr. Warhaft told Miami Today this week. “We will be complete with the foundation and out of the ground late February, early March,” he said. The steel goes skyward at that point. “What we’ll do, once the foundation is poured, is go immediately to the second and third floor,” he said, noting that it is typical for the first floor to remain open for access while top floors are built and finished. This assists in the location of connections and utilities, he said. The company anticipates completion around the third quarter of 2017, he said. “That keeps us three months ahead of the schedule that the city has for the project,” said Mr. Warhaft. Panorama Tower is expected to cost more than $800 million. The project has the distinction of being the first accepted by the City of Miami EB-5 Regional Center to take advantage of the foreign investment program. The building’s 19-story pedestal is to include more than 100,000 square feet of medically oriented office space with a teaching facility. Underneath the medical facility is to be a 2,000-car parking garage. Lining the garage to the east on
Dean Warhaft: ahead of schedule.
Rendering shows the base of Panorama Tower, where work is now in progress at 1101 Brickell Ave.
Brickell Bay Drive is to be a 208-room hotel. Asked what hotel will make its home at Panorama, Mr. Warhaft said he couldn’t reveal the name just yet.
“We are in the final steps of negotiating the lease. It’s gone back and forth and we’re just about ready to have them sign on the dotted line,” he said. Both the ground floor and
second level of the pedestal are to include more than 50,000 square feet of high-end retail outlets and restaurant space. Directly atop the pedestal will be the recreation deck, which is
to offer two social rooms, a cardio room with more than 100 exercise machines, weight room and fitness area, spa and steam room, spinning/training studio, and a serenity pool, recreational pool and lap pool. The pedestal is also to offer interactive water features, sundeck areas and a pool deck restaurant. Under the recreation deck, the pedestal is also to have a children’s playroom, home theater with seating for 80 people, two interactive cyber rooms, music room, billiard room, wine cellar and a kennel featuring both daycare services and overnight boarding for pets. Above the pedestal is planned the residential tower, consisting of 64 stories and 821 luxury rental apartments. The 48th level of the tower is to serve as an intermediate mechanical level in the center portion, while the ends of that floor will be home to one of the most well-known Latin American restaurants/clubs, the company said. A name for this restaurant has not yet been chosen, said Mr. Warhaft, but he said the food will be Peruvian cuisine. Having the tallest building in the city is a bragging point, Mr. Warhaft admitted. And while there are other proposed projects shooting for 1,000 feet or higher, “until they break ground, we’ll be the tallest in the skyline,” he said. The original plan for the tower was a skyscraper reaching 849 feet, he said. The current Federal Aviation Administration approval is for 830 feet, Mr. Warhaft said, “[but] we plan to go back to get the 19 feet back.” The better to see Bimini with.
Investment in condos might not bring bonanza Foreign investors don’t benefit from residents’ tax cap, expert notes BY LIDIA DINKOVA
Investing in residential real estate, particularly in condominium units, might not be as profitable as widely thought, experts say. As property values in Miami-Dade County, especially east of the I-95, continue to increase, property taxes are also getting pushed up. At the same time, while rents for condo units are widely expected to increase, the new supply of more condominiums in the urban core might keep rental rates leveled, said Peter Zalewski, principal of CraneSpotters, a residential real estate advisory. Foreign investors buying condo units in Miami-Dade and then renting them out could be particularly hard hit by an increase in taxes. “If you buy a property and declare it as your [primary] residence, you are going to
have an ability to lock in a certain privilege that restricts how much your taxes go up annually,” Mr. Zalewski said. But that’s not the case with condominium investors. Their taxes generally go up as property values increase. So if the property values skyrocket year-over-year, so would the investor’s tax bill. “Then your taxes go up as the value of the home goes up,” Mr. Zalewski said. Thus, higher annual taxes and leveled rental rates could start to squeeze investors’ profits in a couple of years, Mr. Zalewski said. Yet more than half of Miami-Dade condominium units are owned by investors, based on data provided by the Miami-Dade Property Appraiser. Why? One, Greater Miami is a good place to park their money while waiting for the economies in their home countries to stabilize and, two, most investors are hoping to
make the big profit once they sell their condo unit, realtors say. “When they make their money is when they resell it at big numbers,” Mr. Zalewski said. “They are parking their cash, they are subsidizing renters, and in the meantime the money is not in a bank and that’s their perspective.” In the end of the day, this equation is good news for Miami-Dade County residents. “It’s a net positive for the area because it means more tax dollars and more choices for locals to turn around and rent,” Mr. Zalewski said. Since foreign investors don’t have the same cap on property taxes as condo owners who use their units as primary residences, foreigners are paying much higher taxes than locals. Added Mr. Zalewski: “The out-of-town owner is basically funding our schools, our streets and everything else.”
Photo by Maxine Usdan
Condo rises at 1300 S Miami Ave.
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MIAMI TODAY
RESIDENTIAL REAL ESTATE
WEEK OF THURSDAY, JANUARY 22, 2015
No sweat to fill 30,000 condos in two years, experts say BY SUSAN DANSEYAR
with cultural offerings that one couldn’t find in a comparable When some 30,000 new concity such as New York. dos are built in a county within If there’s a shortage of protwo years, it begs the question spective buyers, investment if there are enough people to firms will probably purchase buy them. But residential agents some of the condos and turn and industry watchers say they them into rentals, said Javier have confidence the supply will Gonzalez, broker with Re/Max eventually be absorbed. Advance Realty. He anticipates Build and they will come, said buyers coming from petrol Leon Bell, vice president for countries in trouble but, with One Sotheby’s International the pound, euro and ruble dropRealty. For years, he said, he ping, said a number of people watched new condo buildings who already own condos might go up and worried there want to sell their properties bewouldn’t be enough people to cause they need the money. buy them but “was wrong evA large number of people ery time.” continue to move to Miami, said Miami is not just selling real Cecilia Samaja, broker/agent for estate but also a “top-of-theOne Sotheby’s International line lifestyle,” Mr. Bell said. Realty. “All my colleagues re“The immigration rate is high mark on how many Venezuand we live in a shifting era elans and Brazilians are spendwhere a lot of people are coming their money here at a rapid Photo by Maxine Usdan ing here from the northern part pace,” she said. “For the past of the US and other countries. Under construction in Coconut Grove are the Grove at Grand Bay Towers. Newcomers keep filling units. five or six months, the market The prices are lower here with anywhere else.” clientele, Mr. Bell said. He points ticular, which offers inexpen- has been crazy and contracts living conditions better than Each market generates its own to the downtown area, in par- sive luxury residences along are coming in at a rapid pace.” However, Ms. Samaja said, no one can be sure whether all the condos coming online at once will sell quickly and well. “The real estate market is affected by whatever happens in the world,” she said, adding there are any number of events we can’t predict such as war, impact of severe weather disturbances or economic catastrophes. In Coral Gables, where she lives, Ms. Samaja said there won’t be any problems because there’s very little new inventory in the residential market. Business readers need to be “Everything depends on loon top of rapid changes in the cation,” she said. “You may see some problems where there’s a local banking and financial lot of new product coming, like in Miami Beach, Brickell, downworlds. They’ll find the latest town and Sunny Isles – the trends spelled out in this section. areas that are all being flooded at the same time.” With so many choices, Ms. Samaja said, some of the new Capitalize on an audience of more condos in those areas might be than 75,000 executives active in vacant for five or six months. About 800 people move to multinational and foreign companies Florida every day and Miamias well as investors who do business Dade gets a fourth of that migration, said Ron Shuffield, abroad, travel abroad and have president and CEO of EWM Realty International. If one takes major roles in business deals. 200 and multiplies it by 365, that’s 73,000 people arriving in the county annually. Be part of a publication rated highest “We’re definitely growing people,” he said. “We may, howamong local publications in quality, ever, need a few months to 77%, and credibility, 83%, of business news. catch up with the delivery of the new inventory.” In his business, Mr. Shuffield said, he’s constantly looking at For ad space reservation inventory in terms of the months call our advertising department of supply. A healthy market is six to nine months of inventory, at 305-358-1008 he said. “When inventory is up, residences will sell but it will take a Deadline is Tuesday, February 3 at Noon. little longer,” Mr. Shuffield said. Brickell, for example, has higher numbers for months of supply so Mr. Shuffield is To put your message before this premium audience watching that carefully. He said contact our advertisi ng department at 305-358-1008 ZIP codes 33129, 33130 and 33131 have 1,632 apartments, condos and townhouses on the market right now. Mr. Shuffield predicted “valA singular voice in an evolving city ues will level off until we catch up with the delivery of new units.”
financialtrends February 5
MIAMI TODAY
WEEK OF THURSDAY, JANUARY 22, 2015
TODAY’S NEWS
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FIU looks at multiple Macau universities for collaboration BY MARILYN BOWDEN
Ongoing efforts within Florida International University’s Chaplin School of Hospitality & Tourism Management to collaborate with universities in Macau, one of the world’s foremost gaming and tourism destinations, took another step forward with the return of one of its professors from a six-month sabbatical there. Dr. Jinlin Zhao, Chaplin’s director of graduate programs and director of Asia & Pacific Development Tourism Management at Chaplin, spent June 31Dec. 31 in Macau, where he taught three classes to PhD students at City University of Macau and collected information for further collaborative opportunities. FIU and City University of Macau signed a memorandum of understanding in 2011, but Dr. Mike Hampton, Chaplin’s dean, said the FIU’s hospitality school has been concentrating
Xu Jing, director for Asia and the Pacific of the United Nations World Tourism Organization, third from left, with Jinlin Zhao, Florida International University Chaplin School director of graduate programs, with Ph.D. students from City University of Macau at the Global Tourism Economy Forum in Macau last year.
more broadly on Macau and Asia in general for some time now. The university already had a hospitality program in Tianjin. “There are many universities
in Macau,” he said. “The University of Macau is the major institution in the area. They do a lot of research. Macau University of Science and Technology
does a lot of food science, and we have major initiatives in that field now. So we are not looking exclusively at one institution.”
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Dr. Zhao’s trip demonstrates the viability of faculty exchanges between FIU and hospitality programs in Macau, Dr. Hampton said, as one type of collaboration. The success of internships for FIU hospitality students in Macau in 2013 is another. “This coming summer we will send another round of students over,” he said. Internships may last six weeks or 12 weeks, but “the longer we can get them there, the better the immersion. “The volume of people coming into Macau from all over the world is tremendous. The largest Sheraton in the world, with more than 5,000 rooms, is there. We like our students to be exposed to that scale.” At some point, exchange students from Macau might also do internships here, Dr. Zhao said, “if we can find good opportunities for them, perhaps with cruise lines or Disney. We need to have further dialogue to see how we can develop cooperative programs between our universities.” Another possibility, Dr. Hampton said, would be studyabroad programs “where our students go over there with one of our instructors to teach them. Students from Macau could do the same here. “But there are regulations on both sides, so we need to be careful.” Specifically, he said, “the concern of their government is educating Macau residents, while our focus is global. Macau’s population is less than half a million people, so that is a finite market, and while we would want to address them, at the same time our mission is to assess the global education of the marketplace.” Macau’s casinos are required by law to hire a certain percentage of local residents, Dr. Hampton said, but because of the scale of operations they’re forced to bring in many outsiders as well. Dr. Zhao’s observations show that the mandate to hire locals has resulted in a shortage of native skilled labor. “Most of the dealers are locals,” he said. “The precondition is that they must be a citizen, and the pay is pretty good, so high-school students are not interested in going to college. But since they don’t have a college education, they can’t advance to a managerial position, so all the managers are outsiders.” As a result, Dr. Hampton said, the government is mandating more education for local employees so that they can learn analytical skills. The Chinese government’s interest in diversification may also open up possibilities for FIU. Currently, casinos dominate Macau’s tourism industry, Dr .Zhao said, but “because of a decline in gaming, the central government of China wants to develop all kinds of tourism-related industries, such as meetings & conventions and heritage tourism. And we teach all kinds of tourismrelated industries here.”