WEEK OF THURSDAY, DECEMBER 17, 2015
A Singular Voice in an Evolving City
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All-cash realty deals tumble 10 percentage points, pg. 13 PORT SIBLINGS: Miami now has a sister port agreement with Hamburg’s historic port that was established in 1189 by Frederick the First. Manny Gonzalez of the Office of Economic Development and International Trade told the county’s Trade and Tourism Committee last week this will be a profitable relationship, as Germany is the 16th largest tourism market in the world and our fourth largest market for visitors to Miami-Dade. Commissioners expressed pleasure and congratulations to Mr. Gonzalez and Port Director Juan Kuryla for establishing the relationship. Moving forward, Commissioner Xavier Suarez warned officials involved with international trade to be careful if dealing with systems like China and Cuba, which have lately convinced international economic organizations to go to Purchasing Power Parity as an alternative quantification, which exaggerates their Gross Domestic Product, Mr. Suarez said, possibly by a factor of 5% in the case of Cuba.
Miami’s Federal Reserve team citing economic uptick, pg. 15
THE ACHIEVER
BY SUSAN DANSEYAR
THE LAST CHECK: Miami city commissioners have approved the city’s final payment for the massive PortMiami tunnel. The commission approved a final interest payment of $1,512,189.20 to the State of Florida Department of Transportation for the tunnel project, completed and opened in 2014. Two one-way tunnels stretch under a section of Biscayne Bay from the MacArthur Causeway on Watson Island to PortMiami on Dodge Island. One tunnel enters the port and a separate tunnel exits the port via the same route. The $1 billion-plus project was built by a public-private partnership between the state, Miami-Dade County, City of Miami and the private MAT Concessionaire LLC. MORE STORM SEWERS $$$: Miami city commissioners have approved adding $2 million to a two-year contract to repair storm sewers. The request came from the Public Works Department. The contract will now pay JVA Engineering Contractor Inc. no more than $4 million for the duration of the contract. The legislation says this will give the Public Works Department “greater flexibility in expeditiously constructing the backlog of drainage improvement projects.” The work consists of installing and repairing the storm sewer system around the city. The projects are to alleviate severe flooding locations throughout the city with the installation of French drains, cross pipes, manhole structures, catch basins, deep drainage well structures, flap valves, rock drains, regrading of the swale areas and incidental surface restoration including sidewalk, driveway, curb, and asphalt pavement.
Franklin Sirmans
Photo by Marlene Quaroni
Expanding the mission of Pérez Art Museum Miami The profile is on Page 4
State-led Honduras trip yields $11 million sales BY CARLA VIANNA
More than half the businesses that flew to Honduras this month on an export sales mission led by Enterprise Florida secured new trade ties. The 14 firms alone are projecting $11,335,000 in export sales within two years as a direct result of the trip. In what Enterprise Florida – the state’s economic development agency – called a matchmaking mission, 33 persons from about 20 Florida companies and institutions flew to Tegucigalpa, Honduras, on Dec. 1 for three days and were matched with potential business partners. Among delegates were executives from PortMiami, Port Everglades and Port Manatee as well as the University of Miami, said Manny Mencia, Coral Gables-based senior VP of the International Trade & Business Development division of Enterprise Florida. The businesses included small to midsize manufacturers, small to midsize technology firms and value-added service providers. “One of our primary missions is to help Florida companies penetrate new markets,”
AGENDA
Stalled rail site project put on track
Mr. Mencia said, adding that most participating companies were entering the Honduras market for the first time. Immediately after the mission, a group of Taiwanese investors met with Honduran trade officials in Coral Gables to expand trade between their nations. Although Honduras is a small market, Mr. Mencia said, its impact in Florida reaches beyond its size. Honduras is Florida’s ninth largest merchandise trading partner. Last year, Florida accounted for 42% of all US trade with Honduras, and the state’s total merchandise trade with Honduras is up 10% through the first six months of 2015, Enterprise says. “With the commodities downturn, some of our more traditional markets in South America have been a little bit on the slow side,” Mr. Mencia said. “But the reason we think Central America and Mexico will perform much better – and are performing much better – is because their economies are much more intertwined with the US.” Last year, bilateral trade between Florida and Honduras reached $4.5 billion. This year, Mr. Mencia said, trade is expected to near $5 billion.
Miami-Dade commissioners revived a long-stalled plan for development at the Coconut Grove Metrorail Station by voting Tuesday to sign a lease with GRP Grove Metro Station LLC, an affiliate of Grass River Property. The 90-year lease for five acres at 2780 SW 27th Ave. where the development firm will build a $196 million commercial complex and improve the station comes in the wake of Grass River Holdings negotiating a settlement over litigation tied to a failed project on the site. The county had an agreement with Coconut Grove Station Development in 2000 to build a similar complex but the developer didn’t continue the project and First Citizens Bank sued Miami-Dade for $6.5 million over a loan it advanced to the developer. Grass River bought the loan and won the development deal as part of the settlement. The complex is to include a hotel, retail, apartments and offices on the bordering parking lot. Grass River is to pay MiamiDade $500,000 upfront, then $450,000 a year or 3% of revenues. The agreement also requires the developer to spend $5 million to upgrade the Metrorail station with improved escalators and elevators and a new bus terminal and reserve 204 parking spaces for transit users. Commissioner Daniella Levine Cava mentioned Tuesday that workforce housing is a key issue and pointed out it was part of the settlement but not a requirement. She asked about providing incentives to the developers but officials who could address her questions weren’t present. Attorney Al Dotson, representing the developer, said Grass River aims to exceed county workforce housing requirements and will strive to provide 25% workforce units. Commissioner Xavier Suarez amended the resolution to include those goals.
Honduras is also a top cargo market for both Port Everglades and PortMiami, Mr. Mencia said. “We not only go there to match-make but also to expand Florida ties with leading business organizations,” he said, ticking off a list of organizations the group met with, including the Honduran equivalent of a national seaport association and the National Industrial Association of Honduras (ANDI), among others. Enterprise Florida conducts 25 to 30 international events yearly, Mr. Mencia said. In fiscal 2014-15, the organization hosted 29 major international trade shows and missions, generating more than $750 million in total projected export sales for Florida businesses. Plans for 2016 are already underway. A similar matchmaking mission to Korea and Taiwan is scheduled for April 1523, Mr. Mencia said. An even larger trip – as many as 50 companies are welcome to participate – will embark to Mexico May 23-26. There are current talks of a trip to Argentina next fall. Enterprise Florida is Traffic gridlock shifting transitnow recruiting participants for all three oriented projects into gear, pg. 3 missions.
TRAFFIC SHIFTS TRANSIT-ORIENTED PROJECTS INTO GEAR ... 3
OFFICIALS ASK WHEN AIRPORT WILL REBUILD TERMINAL ...
VIEWPOINT: BEST CHRISTMAS GIFT A COMMISSION RAISE ... 6
MANUFACTURING TALENT GAP A PERCEPTION QUESTION ... 10
DIAZ QUESTIONS EMPOWERING TRANSPORTATION TRUST ... 7
TWO KEY LINKS MISSING TO BRING TRI-RAIL DOWNTOWN ... 11
292 NEW APARTMENTS WILL AFFECT HISTORIC DISTRICT ...
COUNTY HEARS FRUSTRATION WITH RISING TOLLS COSTS ... 23
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VIEWPOINT
MIAMI TODAY
WEEK OF THURSDAY, DECEMBER 17, 2015
MIAMITODAY Miami Today is an independent voice of the community, published weekly at 2000 S. Dixie Highway, Suite 100, Miami, Florida 33133. Telephone (305) 358-2663
$90,000 county commission raise would be a gift to us all What could be a better Christmas gift for the people of MiamiDade than increasing our county commissioners’ pay 16 times over? That’s right – it would be a gift to the people, not the Michael Lewis commissioners. And, no, this is no joke – it’s dead serious. It’s not that commissioners are so great that they merit big rewards. Some do well, some not so well. Their collective report card would rate a charitable C, with a note that work is slowly improving. That’s no rave review – it certainly wouldn’t support multiplying pay by 16. But remember, a pay hike is a gift to taxpayers, not commissioners. Those taxpayers would be far better served if we paid commissioners at least 16 times what they now get. Miami-Dade County spends nearly $7 billion yearly to serve more than 2.6 million of us. Yet we pay commissioners the same $6,000 a year part-time salary that was set in 1957 for what has become a full-time job of governing a vastly larger metropolis. In fact, we’re darn lucky to have the
L ETTERS
TO THE
E DITOR
Uber wins, taxi industry lost the battle at Art Basel Didn’t know breaking the law could feel so good. Took Uber everywhere during Art Basel. The drivers were friendly, the cars were clean and pretty new, as if by magic they were always only minutes away – and I knew how long it would be before they reached me because my device showed the ETA. And I knew who the driver was and the car he or she was driving. I could count the number of stars he or she had earned from other passengers. I could watch a little icon of their car getting closer and closer. I didn’t need to keep money in my pocket or whip out a credit card because my credit card was already on record. And every transaction was waiting for me on my device within minutes for recordkeeping and fare checking. I took Uber everywhere, on the Beach and on the mainland. It was… FUN. Who knew, right, that taking a “cab” could be fun? Let them extend the age of the taxis here. It will only drive people away from using them. The cab industry cannot win this one. By the way, some of our rides were shared by others. We got to meet people from NYC and Germany. Fun conversations. Pretty cool. DC Copeland
quality of commission we have for a total for all 13 of $78,000. To do their jobs right takes more than 40 hours a week. Just reading and analyzing legislation and reports that they vote on could take longer. No wonder commissioners sometimes miss key points. By vastly underpaying, we limit those who can hold the post to four groups: the well-to-do, those who get paid for noshow jobs elsewhere, those with real outside jobs who can’t pay full attention to county duties, and those who leverage elected roles to pocket a very nice outside living with no other job at all. That’s not the best grouping from which to pluck candidates. It excludes professionals and average citizens who’d like to serve the community but couldn’t exist in honest service for $6,000 a year. It’s not fair to them, and it’s not fair to us. Low pay also means that commissioners often can’t pay enough attention: After voting to spend $3 billion including interest to build a stadium for the Marlins and handing the team all the income, some commissioners said they had no idea what was going on. Because for years commissioners paid no attention to sewer and water problems, they’ve stuck us with spending more than $13 billion just to get back to where we could have been then. The county paid little heed to a vast transportation gap until a flood of complains got commissioners to ask why
$7,200 they get more than our county commissioners. We’re so pennywise and pound foolish that we’re hurting ourselves. We’re lucky that we have 13 commissioners who try to do the right thing. Heck, at $6,000 we’re lucky that we have 13 who are unindicted. Allocating $7 billion with almost no pay for full-time work would, after all, tempt even the most honest among us. Still, we’re cheating ourselves out of potential great candidates for office who couldn’t live on $6,000. And we’re cheating those of our present 13 commissioners who have to work another job to survive out of the time that doing their commission job properly requires. True, being a commissioner is a public service that demands a sacrifice. But everywhere else in Florida, even on city councils, the sacrifice is not anywhere near as great. Present commissioners won’t ask voters for a raise. They’ve figured ways to get by. The results are worth a grade of C. If voters seek better than C outcomes in a Class A metropolis, the push for a public vote for a raise needs to come from civic and business groups that realize C is nowhere good enough and don’t want more baseball, water-and-sewer and transportation fiascos. That campaign for proper pay would make a great Christmas present for Miamians.
Life in the Magic City
Finding safe space despite TV and Internet
Everywhere I look these days I see an article about college students demanding “safe spaces.” Evidently the Snowflake Generation is having a really tough time out there. What none of these articles have described – and what I can’t Susan Kahn seem to find out – is what exactly a “safe space” is. I am assuming it is something physical, as in a real place with four walls where you can go if Tom Sawyer or Lady Macbeth says something offensive. I picture it as a room with padded walls, rounded furniture (no sharp corners!), piped-in Muzak, and of course, no television sets. One glimpse of “Law and Order” could scar you for life, and as everyone knows, there is no way to own a television without being exposed to “Law and Order.” And by definition, this safe space would rule out any access to the Internet. One tweet from Donald Trump and even the rounded tables wouldn’t help. All in all, it sounds like a really boring place. I guess you just sit around in it and discuss the weather – as long as you don’t mention any extreme manifestations like floods or blizzards, which could veer into a global warming discussion, as that could Maybe the county commissioners will be upsetting. Maybe you should just stick to what you underwrite collision insurance for 3ate for lunch, so long as it was made from year-old taxis. No one else will. Chris Hogan locally sourced, organic produce. No sense
Will taxis get insurance?
nobody had been paying attention – when they were the ones who should have been acting. Averting any of these fiascos would have repaid many times over a pay hike to get full-time commissioners with full attention. Yet voters have rejected a raise over and over, making a bad situation worse. It’s not that Miami-Dade pays commissioners on par with other counties. Florida law governs what the other 66 pay, based on population with annual raises built in. The biggest counties pay $95,888 this year. We’re the only county with the right to set our own pay scale – which as the county with 13.4% of the state’s people should be highest. Yet we’re lowest. We pay less than one-fourth of what the smallest county, Liberty, pays commissioners. Liberty’s population of 8,365 is three tenths of one percent of ours, yet Liberty pays commissioners $24,719, fully 263% of what it paid three decades ago. We still pay the same $6,000. Next door, Broward pays $95,888, 234% of the $40,918 that commissioners got 30 years ago. Ours still get $6,000. Every single Florida county pays commissioners more than 200% as much as it did in 1984-85. We still pay $6,000, unchanged from 1957. Just last week, in fact, the city of Boca Raton, population 84,392, considered a ballot measure to raise city council salaries from $7,200 to $29,697. Even at
disturbing the vegans. But this movement keeps on growing, from coast to coast. Example: at my husband’s alma mater, a small liberal arts college in New England, they want to get rid of the school mascot – a British soldier best known for his bravery in fighting Indians. This, as you can imagine, is not quite as celebrated an attribute as it once was. Rumor has had it for years that amidst the warfare he supposedly gave the Indians blankets infected with smallpox – which, it has been inconveniently pointed out, would make him the original bioterrorist. Whether or not this is true, it all happened 250 years ago, and the tribe has long since vanished. (I don’t know what happened, but I’m guessing smallpox.) To complicate matters, not only the college but the town itself is named for this soldier, making any renaming project a major hurdle. This has not deterred the students, however, who have gone on to demand that the (newly arrived) college president apologize not only for 250-year-old blankets, but also an entire laundry list of things ending in “ism.” A couple of these “isms” I had never even heard of, one of which is “cis-ism.” According to Google, “cis” describes “related types of gender identity perceptions, where individuals’ experiences of their own gender agree with the sex they were assigned at birth.” Huh? I guess that means that if you are a male and are happy to be one, you should keep it to yourself, as it would be insensi-
tive to say so. Or maybe the opposite – maybe it means you shouldn’t discriminate against someone who is a male and happy to be one. I am really lost here. I’m just glad that in Miami universities have politically correct mascots, a loveable white bird (UM) and an animal on the protected species list (FIU). And hopefully, the presidents of UM and FIU won’t feel the need to start apologizing for all the things that have happened in Miami over the years. That could make a really embarrassing list. Yes, we certainly don’t want any “isms” around here. Although I must admit I have heard some “Jets-ism” (saying mean things about the Jets) around our house lately. But it’s football season, so what can I say?
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MIAMI TODAY
TODAY’S NEWS
WEEK OF THURSDAY, DECEMBER 17, 2015
292 new apartments near river will affect historic district BY JOHN CHARLES ROBBINS
A developer’s plan to build nearly 300 market-rate apartments in a neighborhood near the Miami River and the Northwest 12th Avenue Bridge has gained the support of the Miami River Commission. The multi-family development planned by Mill Creek Residential Trust is to include one-, two- and three-bedroom units and will impact the historic Spring Garden neighborhood on the north side of the river. The commission recently voted unanimously for a resolution recommending approval of Modera River House, with conditions. The proposed development consists of: „1170 NW 11th St. – 233 residential rental units, 8 stories, 383 parking spaces. Currently zoned T-6-8. „1080 NW 11th Court – 30 residential rental units, 5 stories, 45 parking spaces, and restoration of an existing home to be used as a library that the Spring Garden Civic Association may use for meetings. Currently zoned T-5. „1180 NW 11th St. – 29 residential rental units, 5 stories, 44 parking spaces. Currently zoned T-5. The development is planned for three adjacent parcels along Northwest 11th Street. The largest parcel abuts Northwest 12th Avenue and the bridge and isn’t within the Spring Garden Historic District. The other two parcels are in the district and are separated by Northwest 11th Avenue. The two parcels contain surface parking lots and the west lot also contains a contributing single-family home. Because of this, the developer
The largest of the three buildings, 1170 NW 11th St., is to have 233 rental units and 383 parking spaces.
sought and won permission to rehabilitate the home and construct two new residential buildings within the Spring Garden Historic District. The approval came from the city’s Historic and Environmental Preservation Board. Two homeowners in the district then appealed the board’s decision. The plans were revised and then presented to the full river commission Dec. 7. Attorney Ryan Bailine, representing the developer, said they’d worked out an agreement with the two property owners to satisfy their concerns and anticipated the appeal would be withdrawn. The residents confirmed that at the Dec. 7 meeting. The agreement includes a redesign of traffic routes and circulation to prevent vehicle travel
through the historic district. “It’s important that they’re careful to direct traffic away from the neighborhood,â€? said Kathi Gibson, one of the appealing property owners. A staff analysis of the project that the preservation board reviewed said the two buildings proposed for inside the historic district “will have a variety of sizes ranging from 647 SF to 2,423 SF. The buildings will be finished with textured stucco and a continuous [half-inch] wide x [quarter-inch] depth stucco score line and 6-inch spaced painted in a contrasting color. The buildings will have aluminum picket railings and a combination of hipped flat cement tile and flat roofs.â€? It continued, “The development faces out‌ and will not have a significant visual impact on the
neighborhood. The overall massing was well articulated, minimizing the visual scale, and the materials used are compatible with the district characteristics. The single-family house [built in 1940] is currently vacant and will be restored to accommodate a library and business center for the new complex and neighborhood. The applicant is also requesting waivers for reduction of the driveway aisle from 23 feet to 22 feet and 10% parking reduction,� according to the analysis. The river commission’s Urban Infill Committee reviewed the overall Modera River House plan in November. The development team told the committee it plans to improve and maintain the public pedestrian and bicycle pathway between the bridge and the proposed 8-story building. Ms. Gibson and Gioia DeCarlo, Spring Garden residents, stated their main desire is for the largest parking garage entrance and exit to be moved off of North River Drive, where traffic would cross the on-road Miami River Greenway and proceed through the historically designated Spring Garden neighborhood as presented. They recommended the parking entrance and exit be on Northwest 11th Street or Northwest 11th Court with means to chan-
nel the traffic toward Northwest 11th Street and away from North River Drive, the Miami River Greenway and the historic neighborhood. The initial plans removed an existing vehicle lane on Northwest 11th Street, and the residents recommend keeping it. Committee Chairman Jim Murley recommended approval of the proposed development, finding it consistent with the Miami River Corridor Urban Infill Plan and the Miami River Greenway Action Plan, subject to several conditions. Those conditions, made part of the river commission’s Dec. 7 vote, included: „Minimize vehicular entrance and exit to the parking structure from North River Drive and relocate them to Northwest 11th Street and 11th Court, channeling the cars toward Northwest 11th Street as much as possible, without blocking Northwest 11th Court, in order for cars to avoid the Miami River Greenway and the historic Spring Garden Neighborhood. „Leave all existing vehicular lanes operational on Northwest 11th Street and create a coordinated transportation plan for the area. „Place more attractive screening on the west side of the garage that is part of the largest building, which faces Northwest 12th Avenue and the bridge. Commission members want the garage façade to be something other than the “Metal Grille Detailâ€? in the original plans. „More intensive planning of improvements and maintenance of the existing public pathway along the northeast side of the Northwest 12th Avenue Bridge, which connects pedestrians and bicycles from Northwest 11th Street to North River Drive and the Miami River Greenway. As for the area alongside the bridge, Mr. Murley said, “We want that to be a very enhanced greenway.â€? “We’ll do that,â€? responded Mr. Bailine. The architect for the Modera River House, Albert Cordoves of Corwil Architects Inc. in Coral Gables, said the developer hopes to start construction in the second or third week of January.
Ross Report on Real Estate by Audrey Ross High Net Worth Real Estate According to a recent Wealth X report, real estate represents 10% of the net worth for the ultra-wealthy. Among high net worth individuals approximately 79% own second homes, and 53% own three or more. There are over 200,000 individuals worldwide with more than $30 million or more in net assets. As of 2014, 7% of high net worth individuals acquired their wealth through real estate. These individuals hold nearly three trillion in owner-occupied real estate, DQG OX[XU\ UHDO HVWDWH GHĂ€QHV the core of these assets. For these individuals owning real estate represents an opportunity. Purchase decisions are made mostly based on what
opportunities will open up by purchasing real estate in certain areas within the US, Canada, and Europe as well as certain island countries. High net worth individuals are not solely purchasing real estate for the traditional reason of wealth building. They are snapping up properties in strategic geographic areas around the world and becoming global citizens. Many of these individuals are seeking an avenue for second citizenships in other countries, with 25% seeking citizenship in the US. This segment of buyers are seeking WKH VWDELOLW\ DQG GLYHUVLĂ€FDWLRQ EHQHĂ€WV RI UHDO HVWDWH DV well as the advantages of cit-
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izenship of certain countries. Countries that offer a higher standard of living, educational opportunities for children, WD[ EHQHĂ€WV DQG JUHDWHU VHcurity are most attractive. As summarized by the Wealth X report this trend toward global citizenship, is making the country of residence just as important as the neighborhood you reside in. For professional advice on all aspects of buying or selling real estate, please contact me at aross@miamirealestate.com or 305-960-2575, or come by WKH RIĂ€FH DW $OKDPEUD Circle, 9th Floor, in Coral Gables.
TODAY’S NEWS
WEEK OF THURSDAY, DECEMBER 17, 2015
MIAMI TODAY
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Officials probe when airport will rebuild central terminal BY SUSAN D ANSEYAR
Members of the county’s Trade and Tourism Committee say the public should have a clear sense of where long-anticipated plans stand for a refurbished central terminal at Miami International Airport and have asked aviation officials to return Jan. 14 with a full-scale presentation on all current and future upgrades at the airport. After hearing a short presentation last week, primarily concerning active concessions operating in the central terminal, the committee’s discussion switched to when work will start and be completed on that part of the airport. Commissioner Xavier Suarez called attention to a recent report from the aviation department that stated some systems serving the central terminal have reached their intended useful life. “Is this part of the reason we’re expecting to get involved in a major refurbishment of the central terminal?” the commissioner asked. It’s the oldest part of the airport where aviation department officials have started some work, said Carlos Jose, assistant director for facilities maintenance and engineering. However, the wooden concourse on the second floor would have to be taken down, Mr. Jose said, and any kind of modification would require a complete tear-down. That’s precisely the point, Mr. Suarez said. “When are we going to start this?” he asked. “When I [became a county commissioner in May 2011], I asked when we’re going to start work on the central terminal. Four years later, I’m still wondering.” The master plan for redevelopment of the central terminal is scheduled to begin in 2025, said Gregory Owens, assistant director of business retention and development for the aviation department. That’s 10 years from now, a few committee members said, not even taking into account when the work will be completed. Committee Chairman Jose “Pepe” Diaz said he understands the concourse is wooden and knows the dilemmas and financial constraints the aviation de-
‘I asked when we’re going to start work on the central terminal. Four years later, I’m still wondering.’ Xavier Suarez
Photo by Maxine Usdan
County commissioners want to know how and when the central terminal of the airport will be revamped.
partment faces in a refurbishing of the central terminal. However, Mr. Diaz pointed out, the committee was formed to improve and expedite anything that is of value to Miami-Dade citizens. “We have done leaps and bounds to our airport and seaport,” he said. “We’ve seen what can be done with the central terminal, so the problem is the time.” Mr. Diaz assured aviation officials he doesn’t want to see businesses in the terminal suffer in any way from the reconstruction. “People are nervous, either way, about the future,’ he said. “The extent to delay that future has us all asking questions.” Aviation Director Emilio González said he didn’t want committee members leaving the Dec. 10 meeting thinking nothing is going to happen at the airport between now and 2025. He said an interim department program called Terminal Optimization “buys us additional shelf life because of the amount of growth we’re experiencing.” With $1.3 billion, Mr. González said, a number of projects are underway and planned for other
airport upgrades that will allow temporary moves while other work is taking place. “When we talk about 2025, that’s when things come down,”
he said. “Before that, we have a number of projects planned.” The aviation department is moving ahead carefully and deliberately, he said, studying
which development model would best fit Miami International Airport’s needs for the central terminal. There’s been a lot of conversation about the central terminal, Mr. Diaz said, and the process of where things go from here on should be completely transparent. He asked that the aviation department return to the committee’s Jan. 14 meeting and give a “more intense” report on target dates for work that needs to be done and what it involves at each phase.
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‘When we talk about 2025, that’s when things come down. Before that, we have a number of projects planned.’ Emilio González
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WEEK OF THURSDAY, DECEMBER 17, 2015
TODAY’S NEWS
MIAMI TODAY
11
Two links missing to bring Tri-Rail into downtown Miami BY CATHERINE LACKNER
Though for the past few months Tri-Rail’s planned link into downtown Miami has sat on a side track waiting for $17 million from the Florida Department of Transportation to come through, transportation officials are confident the project will reach fruition. There are actually two missing links, said Jack Stephens, executive director of the South Florida Regional Transportation Authority, which operates the commuter line. One is the state’s payment of the capital it has pledged to fund the link from Little River into downtown Miami. “There’s been no movement in regards to this. It’s not a yes and it’s not a no,” Mr. Stephens said. The other is the state’s agreement to indemnify All Aboard Florida, a unit of Florida East Coast Industries, which will operate passenger train service from Miami to Orlando. All Aboard Florida will own the station in downtown Miami that will be Tri-Rail’s southern terminus, though the public will own the Tri-Rail portion of the station. The Florida Legislature, along with the governor, must approve a change to legislation that will pave the way for All Aboard Florida to obtain insurance, Mr. Stephens explained.
Photo by Maxine Usdan
“There’s been no movement in” the state funding, said Jack Stephens. “It’s not a yes and it’s not a no.”
“According to the interpretation of the state’s legal team, [present law] does not cover or allowed to be covered a private inter-city commuter rail line. The language would have to be added. We built a tower of insurance coverage totaling $200 million, but the state would have to agree they would allow All Aboard Florida to be covered. Those are the last two significant pieces that have to be in place for the whole thing to fall together.” Florida East Coast Railway, which owns 351 miles of tracks from Jacksonville to the Florida Keys and runs freight trains on
them, is indemnified but is a sister company of Florida East Coast Industries, he explained. Both are owned by Fortress Investment Group. Together, the railway and real estate companies “are integral to the economic health of the state and very involved” in seeing that both the passenger and commuter train services run. “A number of people see tremendous value in this, but All Aboard Florida is having to take the lead,” Mr. Stephens said. “They are the more significant player in the economies of Florida and South Florida. We’re good,
HEALTH
UPDATE
but we are a small government agency. They’ve got a few more horses than we have.” Once the insurance issue is untangled, the state transportation department will probably release its contribution, he said. ”I think both of them have to happen together.” “The state transportation department has always been supportive of these types of investments,” said Charles Scurr, executive director of the Citizens’ Independent Transportation Trust, which administers the People’s Transportation Plan funded by the half-penny sales tax approved by
voters in 2004. “This is a tremendous project that will transform the whole South Florida corridor, for a very minor investment on the part of FDOT.” All of the local funding commitments for the $70 million project are in place. According to a term sheet regional transportation authority directors approved last week, the Southeast Overtown/Park West Community Redevelopment Agency has pledged $17.6 million, Miami-Dade County $13.9 million (part of which will come from the transportation trust), the City of Miami $8 million, the regional transportation authority $5.4 million, a discretionary fund of the state transportation department $3.1 million (in addition to the $17 million), the Omni/Midtown Community Redevelopment Agency $3.8 million, Miami’s Downtown Development Authority $1.3 million, and the Bayfront Park Management Trust $250,000. The term sheet is not binding now and is out for the agencies’ review. If no or only minor changes are made and the state transportation department approves, it will become binding, which Mr. Stephens said he hopes will happen in the first quarter of 2016. If all goes as planned, he added, Tri-Rail trains could begin pulling into Miami Central Station sometime in 2017.
Healthcare reform issues and the impact on healthcare options continue to be burning issues. Miami Today will update readers in this special section on the economics of health issues here and the link between medicine and our community. If you are a healthcare institution, provider, offer healthcare insurance options, then your message should be here.
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All-cash realty deals fall 10 percentage points in two years BY CARLA VIANNA
The percentage of cash transactions in the Miami residential realty market has trickled down over the past three years. Within two years, the percentage of local cash deals dropped 10 percentage points, according to data provided by Ron Shuffield, president & CEO of EWM Realtors. Through November, 52% of closed deals were paid in cash. During that same period in 2014, cash deals represented 58% of all transactions, and in 2013 they represented 62%. A haven for international buyers, the percentage of cash transactions seen in the Miami market is still more than double the national average, which was 24% in October. About 52% of Miami’s closed sales were paid full in cash that same month – a 4% drop from October of last year, according to the Miami Associations of Realtors. The months prior show a similar decline. Perhaps investors are becoming more cautious buyers. Or the strength of the US dollar has weighed down the purchasing power of international buyers, which last year represented 25% of all sales in Miami-Dade County through November – a 5% decrease from 2014, Mr. Shuffield said. Also, he said, the decline confirms that mortgage financing
Developer Carlos Melo says some buyers who have all cash prefer to take loan and use cash elsewhere.
Through November, 52% of deals were in cash, said Ron Shuffield.
has become more accessible to local buyers, who are now actively purchasing condos and single-family homes.
Miami Beach, which Ben Moss considers a more internationally driven market than Miami, is still seeing a significantly higher percentage of cash deals than its neighbor across the bay. About 71% of Miami Beach transactions under $1 million were paid in cash during the past six months, said Mr. Moss, a broker with ONE Sotheby’s International Realty. And a majority of single-family home sales above the $1 million threshold were also paid in cash in Miami Beach during the same period. But, Mr. Moss warned, when it comes to the number of fi-
Majority who pay cash will later refinance, suggested Ben Moss.
nanced homes, there’s more than meets the eye. Luxury buyers often choose to pay cash to receive the most
favorable price tag. “Sellers will always prefer cash,” Mr. Moss said. However, after putting down the cash, buyers will often wait six months and then go after a loan. “I would bet that a great majority of people are paying cash but going ahead and refinancing after the purchase,” Mr. Moss continued. A majority of his clients are doing so, he said. In the new condo market, buyers are doing something similar. Although the 50% deposit structure requires cash up front, many buyers will finance the remainder of the deal, said Carlos Melo, principal of the Melo Group. “Sometimes they have the money to pay cash, but at the end of the day they prefer to take a loan and buy something else,” he said. Mr. Melo reported strong presales at Aria on the Bay, a Melo Group residential project in the downtown Arts & Entertainment district expected to go vertical soon. With 65% of its units under contract, he said, the condo has attracted buyers from 33 countries. Although fewer units were sold last month than the months prior, Mr. Melo didn’t seem too worried about the slight decline. When countries like Brazil and Venezuela face economic downturns, he said, investors venture out.
US-backed small business loans climb 38% from year ago BY SUSAN D ANSEYAR
National media reports indicate large banks are cutting back on small business lending because it’s not profitable, but local industry leaders say that doesn’t seem to be the case here in South Florida. Small businesses often say they can’t get lending, said Althea A. Harris, acting public affairs officer for the US Small Business Administration’s South Florida District office. “However, the upward trend in our portfolio suggests there is lending activity from banks,” she said. “When we look at the numbers so far in October and November, the first two months of fiscal 2015-2016, we are up 33% over the same time period last year.” For Miami-Dade, the increase has been 38%. For fiscal 2014-2015, a large chunk of the Small Business Administration loans were in Miami-Dade (532) compared with 366 in Broward County and 286 in Palm Beach County. Just in the first two months of this fiscal year, the South Florida District office – which
A Small Business Administration 38% loan gain, said Althea Harris.
services counties all the way up to Orlando – has granted 445 loans totaling $182,918,800. For fiscal 2014-2015, the South Florida District office loaned $1.2 billion, a 44% increase over the previous fiscal year. Often, Ms. Harris says, small businesses don’t distinguish between small and large banks when stating they can’t get loans. “That’s why we’re in the marketplace,” she said. “We’re not a direct lender [but, rather] provide a guarantee to banks when they have deals they’re not completely happy with or have a challenge making a loan
under federal regulations.” According to the Small Business Administration, 99% of businesses in the US are small, defined with specific standards for each industry. Large banks come to the administration and are the top lenders in South Florida, Ms. Harris said. Of the 2,417 loans totaling $1,197,433 granted in fiscal 2014-2015, 768 – about onethird – came from big banks, Ms. Harris said. The two top local Small Business Admionistration lenders for fiscal 2014-2015 were Wells Fargo (536 loans) and JP Morgan Chase (232). The other largest lenders in the South Florida district include SunTrust (third), TD Bank (fourth) and Celtic Bank (fifth). “Large banks are lending,” Ms. Harris said. “They can’t make money unless they loan.” City National Bank President and CEO Jorge Gonzalez says it’s not so much a profitability issue for large banks when considering loans to small businesses but, rather, institutions are so large that they have to
Large banks use a cookie-cutter loans approach: Jorge Gonzalez.
bank is getting ready to add a significant number of people who know how to work with small businesses, such as online banking capability, to assist these customers better. The biggest complaint he hears from those who make a decision to grow their business is they can’t talk to anyone directly. Additionally, Mr. Gonzalez said, he hears the customers want to have a high level of service and a relationship with a banker. “We know the important drivers and demographics of South Florida,” he said. Another important component of the bank’s commitment to small-business lending, both short- and long-term, he said, is having the right level of lending parameters for what small business owners most need: working capital, equipment and real estate. “Large banks are approaching lending in a centralized way,” Mr. Gonzalez said. “The client experience is important to us.”
apply a cookie-cutter approach to all types of business in order to maintain oversight and manage risk. “Large banks have such large infrastructure,” he said. “They get an unfair allocation of costs.” City Bank does not have the same infrastructure costs and, with $6.4 billion in assets, can afford to be more entrepreneurial, Mr. Gonzalez said. “Our business is based on these types of [small business] customers,” he said. “They have always been a significant focus Details: www.sba.gov/ for us.” offices/district/fl/miami Now, Mr. Gonzalez said, the
WEEK OF THURSDAY, DECEMBER 17, 2015
FINANCIAL TRENDS
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Photo by Marlene Quaroni
Regional executive Karen Gilmore points to a possible condo slowdown and South American difficulties.
Local Federal Reserve team reports economic uptick as rate hike looms BY CARLA VIANNA
Miami Dade College Provost of Operations Rolando Montoya was recently appointed board chairman of the Federal Reserve Bank of Atlanta’s Miami branch, but his role there remains fairly unchanged. He’s the voice of South Florida’s education community. A member of the local reserve bank board since January 2014, Dr. Montoya has been reporting his observations on the local education sector to the Fed since then. Alongside representatives from other major industries, including agriculture, banking, employment, healthcare and technology, Dr. Montoya tells the Federal Reserve and its economists what he sees happening in the South Florida economy. “We try to help them match the statistical analysis that they do with anecdotal and qualitative information that we as people that are in the trenches observe,” Dr. Montoya said. “We help them to make sense of this statistical information that they are getting.” If Federal Reserve officers are reporting an increase in hourly wages, the members who make up the local board of directors are asked to observe whether salaries are increasing in South Florida region. “We are a source of information about the economic reality of our region,” he said. The Federal Reserve has 12 banks, each representing a different region, and 24 branches spread throughout the US. The information is collected in similar ways nationwide, Dr. Montoya said. It’s the how the Fed connects to the real world. Dr. Montoya has had a say in the nation’s economy since 2010, when he served on an advisory committee in Atlanta. He then became a member of the Miami branch in 2014. “Each of the branches of the Federal Reserve has a board of directors, and in the Atlanta district we choose our board members based on their connection to the community and their busi-
ness segment,” said Karen Gilmore, vice president and regional executive at the Miami branch of the Federal Reserve Bank of Atlanta. The Atlanta bank represents the Sixth Federal Reserve District, which is comprised of Alabama, Florida, Georgia, parts of Louisiana, Mississippi, Tennessee, Puerto Rico and the US Virgin Islands. Dr. Montoya’s appointment comes at a pivotal time in the nation’s economy. The Fed was meeting Dec. 15 and 16 and was expected raise its benchmark interest rate for the first time in nearly a decade. “Although not all regions of the US are progressing exactly in the same way, the overall economic outlook today is a lot better than what it was in the recent past,” Dr. Montoya said in advance in regard to the possibility of a rate hike arriving this week. The good news from Dr. Montoya is that unemployment rates continue to decline, economic activity is being spurred, inflation is under control and the local tourism industry is booming. Ms. Gilmore added to the list the local residential real estate market, which she said is growing steadily. But areas of concern remain. A talent gap lingers in South Florida, especially in industry sectors that include information technology. “We observe a scarcity of candidates for certain specialized jobs,” Dr. Montoya said. Ms. Gilmore pointed to a possible slowdown in the Miami condominium market, as well as the economic situations in South American countries that historically cushion Miami’s foreign trade and tourism sectors. Another possible hiccup: the local retail sector. Dr. Montoya said retailers are reporting softer holiday sales than originally forecast, and it’s up to him and his board members to figure out why that might be. He ran through a list of questions that will be brought to the table this holiday season. Could this be a cultural change? Could it be just a tem-
porary situation? As we approach Christmas, will people buy everything? Could it be the strong dollar? “It used to be measured on the Friday after Thanksgiving,” Ms. Gilmore said. “Now it’s a much more prolonged period. It’s also more complicated. It’s no longer just a brick-and-morPhoto by Maxine Usdan Branch board Chairman Rolando Montoya sees outlook “a lot better.” tar shopping experience.”
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More physicians leaving private practice for hospital jobs Healthcare’s administrative and regulatory headaches are working against the private doctor’s office. More physicians are choosing to ditch their independent practices for hospital employment as managing a private office becomes more complex in today’s regulatory healthcare environment, local experts say. “It’s very difficult for a physician to be able to manage all the complexities of operating a practice and still be able to practice medicine,” said Steven Sonenreich, president and CEO of Mount Sinai Medical Center. Administrative duties today involve complying with patient privacy laws and the Affordable Care Act, keeping up with electronic health records, and switching over to a new, more detailed diagnostic coding system – the 10th revision of the International Classification of Diseases (ICD10). Such responsibilities are burdening private doctors, removing them from the actual practice of medicine. While some physicians are choosing to sell their practice and retire, others become employees of the hospital system. “Preparation is key” when completing a sale, which physicians can receive a good amount of money for, said Whitney Schiffer, an accountant with Berkowitz Pollack Brant. Ms. Schiffer assists physicians preparing to sell or leave their practices behind. She advises them to have the practice’s financial records in order, to review account balances, to tighten internal controls and to make sure proper policies and procedures are in place before considering a sale to a hospital network. A practice will be evaluated based on its financial operations as well as its overall performance before it’s given a price tag, she said. Offices are suggested to compile data comparing the number of patient visits the practice handles per year and its insurer reimbursements to similar practices in the same market. While the situation might be a win-win for doctors, who are relieved from management duties and given a hospital salary, the practice’s former staff and patients may not reap the same benefits. When sold, an office may hang a new sign at its door notifying patients the practice is now run by a hospital, said Linda Quick, president of the South Florida Hospital & Healthcare Association. “The hospital may charge more than a doctor used to charge for the visit because a piece of the revenue goes back to the parent organization to support its overall overhead [costs],” Ms. Quick said. This means a patient who paid “x” amount for a certain procedure may have to pay “y” amount on their next visit for the same procedure once the practice is under hospital ownership. Today, Ms. Quick said, hospitals aren’t as interested in buying and managing a private practice. Instead they’re encourag-
ing physicians to give up the practice altogether and become hospital employees. In this case, the staff may follow the physician to the hospital, if negotiations allow. But in other cases, employees responsible for services such as processing claims and scheduling appointments at the private office may lose their jobs to the hospital, Ms. Quick said. On a positive note, she did point to a benefit of the shift from private practice to hospital network: the integration between the institutions’ objectives and financial interests. “If the hospital’s goal is to prevent readmissions, so is the doctor’s goal,” she said. Although the number of private practices continues slipping, the doctor’s office won’t disappear entirely, said Mount Sinai’s Mr. Sonenreich. There are specialties like cosmetic surgery, for example, that lend themselves better to an independent Photo by Maxine Usdan It’s difficult for a physician to manage the practice and still practice medicine, said Steven Sonenreich. office.
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