WEEK OF THURSDAY, JUNE 25, 2015
A Singular Voice in an Evolving City DOWNTOWN & BRICKELL
6% fewer units in construction as condo launches slow, pg. 13 SPANISH FIRM PICKS MIAMI: VIMAC USA, a Spain-based engineering company specializing in railroad construction, electromechanical, civil and hydraulic projects, has opened its US headquarters in Miami, according to the Beacon Council, which assisted VIMAC. The company was referred to the Beacon Council by Enterprise Florida. VIMAC, which has offices in Colombia, Romania and Saudi Arabia, will add 12 above-average-paying jobs and $1 million in capital investment within three years, according to the Beacon Council. Beacon President and CEO Larry Williams said the influx of Spanish-based companies entering the American market through Miami has made Spain the top direct investment market here. “As a major hub for shipping and merchandise distribution, Miami is the optimal choice for our entrance into the US market,” said VIMAC USA General Manager Carlos Garzon. “We’re confident in the business and growth opportunities that this thriving region will bring to our company.”
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Port tunnel reduces trucks in downtown 80%, pg. 16
THE ACHIEVER
BY CATHERINE LACKNER
ISRAELI ENTREPRENEURIAL PACT: Miami Dade College and Tel Aviv University plan to sign an agreement to promote cooperation between entrepreneurs in Miami and Israel. The ceremonial agreement is to initially provide for Israeli tech gurus and start-ups to travel to Miami for a conference this winter to build relationships with local investors, designers, and digital marketing firms. Tel Aviv University faculty also are to travel to Miami to serve as visiting professors. Leandro Finol, executive director of The Idea Center at Miami Dade College, said the agreement leaves the door open for future collaboration between the two entrepreneurial communities. The signing ceremony, originally scheduled for today (6/25), was postponed until the Israeli delegation can travel to Miami. The US State Department was recovering Tuesday from a technical issue and had stopped issuing travel visas, according to its website. MIA BAGGAGE SECURITY: Kansas City-based Burns & McDonnell has been selected to lead the design and engineering for the $160 million baggage screening upgrade at Miami International Airport. The project will include a 70,000-square-foot baggage security and screening facility for the central and south passenger terminals, as well as upgrade and replace baggage handling equipment in the existing terminals to more efficiently manage and operate the new screening facility. The project’s design work is underway. Construction is expected to begin within 12 months and be completed in the third quarter of 2018.
Brian Siegal
Photo by Marlene Quaroni
Guiding the region’s American Jewish Committees The profile is on Page 4
Financial sector jobs hit all-time high in county BY SUSAN D ANSEYAR
Financial sector jobs in Miami-Dade hit an all-time high last month at 78,500, up 800 from April and 500 above the December 2006 record – figures economists say are positive but not necessarily a trend. Three months is the minimum to determine a trend, said Tony Villamil, principal of the Washington Economics Group. However, he said it wouldn’t surprise him if this positive development continues through the third quarter. All drivers point toward financial sector job growth, he said, including increasing construction for which banks are hiring mortgage lenders, credit analysts, those with real-estate experience and compliance officers to address new regulations; the inflow of high-wealth persons who need wealth management services; and the pickup in the overall county economy. “Financial services usually follow economic activity,” Mr. Villamil said. “Financial services are there to provide what’s needed for a growing economy.” According to the US Bureau of Labor Statistics, Miami-Dade gained 3,500 jobs in
AGENDA
Flaw stalls revamping on Flagler
finance from May 2014 to May 2015, up 4.7%. Financial jobs had fallen from their 2006 peak of 78,000 to 64,800 by January 2010. Now, the sector has rebounded. Mr. Villamil said he expects financial jobs to keep growing even if interest rates rise by the expected .25%. That’s a very mild step up from what is essentially zero now, he said, and won’t derail expansion. Although he hasn’t yet scrutinized these recent numbers, Jaap Donath, Beacon Council senior vice president for research and strategic planning, said year-over-year analysis is a much better indicator of job growth than one month, which could be good for many reasons but be followed by less success. In his monthly reports for the Beacon Council, Dr. Donath said, he focuses on the bigger picture, looking at overall payroll jobs in all industries. Many are interconnected, he said, and tied in with the domestic and international economy. “The overall financial sector, which was hurting after the recession, has been steadily picking up steam,” Dr. Donath said. “We look at all subsets and see job growth in
insurance, banking, financial services.” Take care in viewing data from just one month, cautioned Manuel Lasaga, president of StratInfo and a faculty member in finance Florida International University’s Business School. Financial sector job expansion has been positive compared with recent years, he said, but not as strong as in other expansion cycles. “The expansion trend has been uneven but generally positive,” he said. “It’s gathering momentum, with the main growth in the insurance sector and brokerage houses.” Financial sector jobs are probably growing in real estate services too, he said, but that’s not a separate data entry for MiamiDade as it is for the state. Banks downsized staff after the recession, Dr. Lasaga noted, but financial opportunities are growing with the economy. Lending grew 13% in the first quarter at Miami-Dade banks compared with 11% statewide, he said. “But the job number for banks has not changed that much, which means they’re expanding their business but keeping their costs down.”
A flaw in design drawings has sidetracked a long-awaited rebirth of Flagler Street from Biscayne Boulevard to the Dade County Courthouse as a pedestrian-friendly promenade. Told of the snafu, Downtown Development Authority directors vowed to push forward. “Our biggest concern is that this doesn’t drag out,” Vice Chair Neisen Kasdin told the group Friday. “The task force will have weekly reports on this. We don’t want to fall behind.” The plan aims to make Flagler a pedestrian magnet like Ocean Drive and Lincoln Road in Miami Beach or Miracle Mile in Coral Gables. It’s fueled by $6 million each from the city and county and $1 million from Flagler businesses. But plans allowed too little drainage, forcing a change order, authority sources said. As many entities are involved, the sources said, they don’t know who made the error or who discovered it. One bright spot is that MiamiDade’s $6 million is approved and will be funded, said Eric Riel Jr., authority team leader. The design’s railroad theme highlights Henry M. Flagler’s achievement in pushing the Florida East Coast Railway into Miami in 1896, connecting the fledgling city with the world. Movable gates like those at rail crossings would close the street for special events. Shade trees and bike racks would flank cafes serving on widened sidewalks. The revamp has been years coming – the authority spurred the current version in 2011, but downtowners long have complained about patchwork remakes that left uneven sidewalks and streets. The city in 2014 OK’d a 4,205linear-foot assessment district at $237.81 per foot for the upgrade. The work was estimated to take up to 18 months, and in April FHP Techtonics won the construction contract with a bid that with a contingency could hit $9.7 million.
COUNTY WILL ADD SEWERS IN 28 COMMERCIAL AREAS ...
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SALE OF GROVE GARAGE TO DEVELOPER ALMOST DONE ...
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PORTMIAMI CHARTS COURSE TO ADD CRUISE CAPACITY ...
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JOB GROWTH, TOURISM PULL RETAIL SECTOR FORWARD ...
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VIEWPOINT: GO-SLOW GOVERNMENTS BUILD HURDLES ...
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LATIN AMERICAN MAYORS GET OUR GOVERNANCE TIPS ...
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TARGETING JOBLESS, SHRINKING CONSTRUCTION POOL ...
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GROWING MIMO AREA TARGET OF NEW PARKING STUDY ... 18
WEEK OF THURSDAY, JUNE 25, 2015
TODAY’S NEWS
MIAMI TODAY
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Homestead to negotiate power buy from county BY CARLA VIANNA
The City of Homestead is pursuing negotiations with the topthree ranked energy vendors that responded to the city’s request for proposals for energy supply, in which Miami-Dade County was a candidate. At a June 17 council meeting, staff recommended that Homestead Mayor Jeff Porter and the city council authorize the city manager to enter into contract negotiations with Florida Power & Light Co., Miami-Dade County Public Works and Waste Management Department and Seminole Electric Cooperative Inc. The council approved the recommendation. Paul Mauriello, deputy director for waste operations at the county’s Public Works and Waste Management Department, said the county has received a letter from Homestead in pursuit of negotiations. This is good news for Miami-Dade, which has not been able to secure a contract since its power purchase agreement with Duke Energy expired in November 2013, resulting in a $10 million revenue decline. “We have a pending contract,” Mr. Mauriello said. “If we can get that negotiation, and I see no reason why that shouldn’t happen, we should be selling power to Homestead in 2020.” Homestead requested proposals to explore its options in the energy market. Mayor Porter told Miami Today that the city is growing and the equipment at its generation plant is fairly old. “We do need additional power made available for our community,” Mayor Porter said. “We are trying to position ourselves to take care of our utility system for the future.” Homestead documents stated that the city has both short- and
long-term needs for energy supply. From 2015 to 2020, the city needs 30 megawatts of firm intermediate/peaking power and 15 megawatts of reserve power. Long-term needs are for a minimum of 43 additional megawatts of firm intermediate/peaking power, an additional two to five megawatts of reserve power and at least 22 megawatts of base power, according to documents. The city received 16 proposals from seven entities. On April 22, the top three were chosen. The contract with Miami-Dade County from its Resources Recovery Facility, a waste-to-energy plant at 6990 NW 97th Ave. in Doral, would be negotiated to begin in 2020 and continue through 2029. Miami-Dade would replace the Duke Energy contract set to expire Dec. 31, 2019. The resources facility’s potential energy output is 40 megawatts, Mr. Mauriello said. Homestead is looking to purchase 15. The proposed rate was about a $50 per megawatt hour rate, compared to the $35 rate at which the county is currently selling. Were this proposal to be approved, it would result in a $1.8 million increase in annual revenue, Mr. Mauriello said, which would be split equally between and the county and Covanta, the company that operates the plant. The remainder of the energy would continue to be sold through Rainbow Energy Marketing Corp. This would stabilize the county’s rate in the long term for almost 40% of its power generation (37.5%), Mr. Mauriello said. “We will continue to pursue other opportunities to sell the remainder at stable, long-term rates above the $35 average we are receiving now through Rainbow,” he said.
Photo by Maxine Usdan
Cruise ships, including a Disney liner, head out to sea from PortMiami, which is planning more growth.
PortMiami charts course to expand capacity for more cruise ships, lines BY CARLA VIANNA
PortMiami, well aware of its attractive location, has plans to accommodate more ships – and cruise lines. In 2013, Disney Cruise Line sailed to Miami, bringing 148,000 passengers with it. By 2015, that number had risen to 205,000, according to a port spokesperson. Virgin Cruises, which announced Tuesday that PortMiami will be the homeport for its first cruise ship in 2020, is but one of the cruise lines with eyes set on Miami. The ship will bring an additional 300,000 passengers through the port, said Kevin Lynskey, deputy port director. The community can expect to hear more announcements in the future, as negotiations with two or three cruise lines are already underway, said Jack Osterholt, deputy mayor of Miami-Dade County.
Four years ago the county commission adopted the port’s 2035 Master Plan, which included plans for two additional berths and passenger terminals. Conceptually, the commission has embraced the idea, Mr. Lynskey said. Once plans solidify, the port would have to bring back legislation for the commission to put the expansion into effect. Port Miami sees a total of 4.8 million passengers a year – counted on departure and again on their return to Miami – in one of its 36 ships belonging to 17 cruise lines. Eight of those ships are here year-round. It will probably require new construction on the port’s behalf to increase the number of passengers significantly, Mr. Lynskey said. “Given the patterns that exist in this industry, which have a high preference for seasonal and weekend [sailings], we are more or less at capacity,” Mr. Lynskey said.
The master plan indicates that the port has capacity to build two additional berths and passenger terminals. When that will happen depends on securing contracts with interested cruise lines. “We want to bring as many ships as we can manage into the port because it provides the opportunity for our customers and our visitors to take cruises to different places,” Mr. Osterholt said. As of now, the port doesn’t have a budget for the expansion, as it remains in the conceptual phase. But Mr. Lynskey said it can cost up to $60 million to build one large passenger terminal. Disney Cruise Line generated $3 million of revenue last this year, according to a port spokesperson. Virgin should generate about $2.9 million in fiscal 201920, according to a county memorandum. That’s expected to increase to $3.6 million in fiscal 2023-24.
TODAY’S NEWS
WEEK OF THURSDAY, JUNE 25, 2015
MIAMI TODAY
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Program targets joblessness, shrinking construction pool BY CARLA VIANNA
Specifically targeting construction training, the Employ Miami-Dade program is tackling two problems within the county at once: unemployment and a shrinking pool of construction workers. The program has helped 147 individuals from the Liberty City and Brownsville areas secure jobs within the past six months. Although unemployment rates for the county remain low at about 6%, some areas of the community hit double digits. There are individuals in their 20s and 30s registering for the program who have never had a job, said Miami-Dade Deputy Mayor Russell Benford. Employ Miami-Dade connects individuals with employers and prepares them to enter the workforce. So far, almost 1,000 residents have registered for the program. Of those, 228 have enrolled in one of the training sessions and 304 have been directly referred to employers. Registration is free, and
participants are paid $250 every two weeks as long as they don’t miss a class. A new cycle of class schedules begins July 1, said Rick Beasley, executive director at CareerSource South Florida. Created via a countywide partnership among Mayor Carlos Gimenez, CareerSource South Florida, Neighbors and Neighbors Association and other local entities, such as Associated Builders and Contractors, the program now offers six-week con- Rick Beasley struction training and four-week work-readiness training. OneUnited Bank has also helped with funding, and the state attorney’s office has assisted in working with participants to have their offense records expunged, Mr. Beasley said. Although a few months might not be long enough to measure a program’s reach, Mr. Beasley sees success in the county
coming together to push the program forward. The program is also answering a growing need in Miami-Dade: it is delivering new construction workers to an industry whose labor pool is shrinking, developers say. “There [are] a lot of really large projects coming through the pipelines,” Mr. Benford said. “We want to make sure we have a labor pool to meet the needs.” The work-readiness portion involves education and leadership training, career and social development, resume writing and mock interviews. Mr. Benford said emphasis is placed on preparing individuals both mentally and physically to go to work. The program creates an open space for participants to work through the issues that have kept them out of the workforce. As it expands, the program is expected to target more industries, specifically those outlined in the One Community One Goal economic growth initiative: aviation; creative design; hospitality; information tech-
nology; international banking and finance; life science and healthcare; and trade and logistics. Although construction is not included on the target list, the mayor has observed a need in that area. Miami-Dade County had contributed $42,000 at the program’s launch, and now the office of the mayor is funding the bi-weekly stipends. Neighbors and Neighbors is providing work readiness training and ABC is providing construction training. CareerSource South Florida has contributed about $200,000, Mr. Beasley said. Mr. Beasley said he plans on expanding the program south to the Homestead, Redland and Leisure City areas. “Oftentimes, programs are launched in the northern part of the county,” Mr. Beasley said. “Oftentimes, we forget that there are other folks who live down south [who] we need to engage with as well. Economic development for the county is not just in the north. It’s utilizing talent countywide.”
“Unitas Development Group could build 300 residences on the land but plan instead for 84 luxury units.
8-story Biscayne Boulevard condos on triangular site average 2,300 feet BY JOHN CHARLES ROBBINS
A developer plans to construct a mid-rise luxury condominium on busy Biscayne Boulevard with large residential units and a sweeping, curvy façade. Boulevard 57 is an eight-story mixed-used development planned for a triangular parcel at 5700 Biscayne Blvd. in the MiMo District. The city’s Urban Development Review Board recommended approval of the project June 17 after praising the design. Developer representatives said it is a “by right” development under current zoning – the only reason it had to go before the review board is that it tops 200,000 square feet. Unitas Development Group could build about 300 residential units under the zoning, but instead chose to build 84. The firm wanted to offer larger living spaces in the market, said architect Charles Sieger of Sieger Suarez Architects. The project will include about 36,000 square feet of ground floor retail and the developer hopes to attract a fresh market grocer and a restaurant to the venture. Mr. Sieger said the property
is “surrounded by quasi MiMo buildings in a semi urban area in transition.” Immediately to the north is Northeast 58th Street, and to the west is Northeast Fourth Court. A pool deck and common area with cabanas sits over the retail, and the overall structure is designed to push away from Biscayne Boulevard, said Mr. Sieger. The ends of the building are rounded sweeping corners. The penthouses are to have their own rooftop pools. The residential units will range from 1,100 to 4,800 square feet, and will average 2,300. Before meeting with the design board, planning staff had directed the developer to submit a mechanical parking plan and a traffic study, and to work with the Florida Department of Transportation on the type of trees it plans along Biscayne Boulevard. “It’s a good project – a good approach,” said board member Jesus A. Permuy. The expansive, boomerangshaped structure would have a landscaped curtain of living material draped around the lower levels. The vegetation is to hang from panels of wire, making a
green wall, and be fed with a drip irrigation system. The green wall design is a concern for board member Gerald C. Marston. That type of green wall, with living material, requires a long-term commitment to maintenance and can be costly, he said. Mr. Marston expressed a worry that the landscaped wall would be green on the outside but eventually turn brown on the interior with no direct sunlight. “It is living material,” he said. Mr. Marston suggested if it became a problem, plastic green material could be employed. Mr. Sieger said the green walls will be associated with and frame much of the retail, thereby increasing the incentive to maintain the vegetation and keep it looking as nice as possible. “It looks great,” board Chairman Robert Behar said of the overall project. Board member Dean B. Lewis was equally impressed. “Congratulations on a good project, on a challenging site,” he said. “I look forward to seeing it built.” Board members Fidel Perez and Anthony E. Tzamtzis both called the project “beautiful.”
CITY OF MIAMI, FLORIDA NOTICE OF PUBLIC HEARING
The Miami City Commission will hold a Public Hearing on July 9, 2015 at 9:00 A.M. to consider the award of contracts to the for-profit organizations listed below through pass-through funds from The Children’s Trust, for the 2015-2016 contract period. Families First Parenting Program is designed to incorporate literacy skills, parent-child activities, strengthen oral language development, give parents a venue to share concerns, learn new behavior strategies, and connect parents to a variety of support services and other such activities in conjunction with the following grant from The Children’s Trust to the City, and to consider the City Manager’s recommendations and finding that competitive negotiation methods are not practicable or advantageous regarding these issues: • “Families First Parenting Program”, various childcare centers throughout the City, — Exceptional Consulting for Educational Leaders, Inc., and Conee, Inc. Inquiries regarding this notice may be addressed to Esther Balsera, Education Initiatives Coordinator, City of Miami Office of Grants Administration, at (305) 4161532. This action is being considered pursuant to Section 18-85 (A) of the Code of the City of Miami, Florida as amended (the “Code”). The recommendations and findings to be considered in this matter are set forth in the proposed resolution and in Code Section 18-85 (A), which are deemed to be incorporated by reference herein and are available as with the regularly scheduled City Commission meeting of July 9, 2015 at Miami City Hall, 3500 Pan American Drive, Miami, Florida. All interested individuals are invited to attend this hearing and may comment on the proposed issue. Should any person desire to appeal any decision of the City Commission with respect to any matter considered at this meeting, that personal shall ensure that a verbatim record of the proceedings is made including all testimony and evidence upon which an appeal may be based (F.S.286.0105). In accordance with the American with Disabilities Act of 1990, persons needing special accommodations to participate in this proceeding may contact the Office of the City Clerk at (305) 250-5361 (Voice) no later than two (2) business days prior to the proceeding or at (305) 250-5472 (TTY) no later than three (3) business days prior to the proceeding.
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Todd B. Hannon City Clerk
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TODAY’S NEWS
MIAMI TODAY
WEEK OF THURSDAY, JUNE 25, 2015
City sale of Grove garage to developer almost done BY JOHN CHARLES ROBBINS
Ground floor retail will remain a fixture at the municipal parking garage on Oak Avenue in Coconut Grove after developer Terra takes ownership this summer. In fact, Terra says the move will attract new retailers and amenities to the Grove. The Oak Grove Garage, a public parking facility, is being sold to the private developer for $16 million. The Miami Parking Authority built and owns the Oak Avenue Garage. In April, the city’s OffStreet Parking Board voted to sell the garage to Terra World Investments LLC. There are no immediate plans for redevelopment, and the building will remain open as a parking facility, according to David Martin, Terra Group president and owner.
Terra, based in Coconut Grove, made the initial unsolicited proposal to buy the garage, which led to the sale. “Terra is working with the City of Miami Parking Authority to finalize the sale and purchase of the Oak Avenue Garage in Coconut Grove,” Mr. Martin said in April. “Our plan is to hold the property for the long term, with the public garage remaining fully operational and a repositioned retail component on street level.” Businesses in the ground floor spaces include The Workout Spot, OXXO Care Cleaners, Jaguar Therapy and Tiano Salon & Spa. A City of Miami Neighborhood Enhancement Team office is in the building, too. “This project will bring new retailers and amenities to the neighborhood,” said Mr. Martin. Since the April vote to sell the
Photo by Maxine Usdan
Terra Group says ground floor retail will remain once it buys the garage from the Miami Parking Authority.
garage to Terra, parking authority staff have been working out final details in the purchase agreement. In May, authority CEO Art Noriega mentioned a few items that would be spelled out in the final documents with Terra, including an upfront payment of $100,000.
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At its meeting this month, Mr. Noriega told the board that all changes were made in the paperwork, “they [Terra] had no pushback” and the authority is simply “waiting for signatures.” The parking agency built the multi-level, 388-space garage at 2860 Oak Ave. on about 85
hundredths of an acre. It has four levels of parking, including the roof. The building, bordered by Mary and Rice streets, is near the Shoppes at Mayfair. After receiving an unsolicited offer from Terra to buy the garage, the board agreed in February to advertise for other purchase proposals. It received three. Terra World Investments LLC offered $16 million, Mast Capital offered $16.1 million and Crystal Clear Holdings LLC offered $16.3 million, according to the authority. Terra offered the largest deposit, $800,000. Mr. Noriega told the board that Terra has the strongest financials and it made the first pitch to buy the building. In February, Mr. Noriega encouraged the board to consider the sale, saying it was a way to leverage the authority’s public assets and give the agency an opportunity to build more in Coconut Grove. He reiterated that in subsequent meetings, acknowledging that the Oak Avenue Garage never performed the way the authority had hoped. With the sale proceeds, he said, the authority can reinvest in the Grove. “We can use the proceeds to build a new garage in Coconut Grove,” he said. The agency is looking at a couple of Grove locations for new parking facilities, including near City Hall and at the Coconut Grove Playhouse, Mr. Noriega said. The authority has a contract with the city to manage the surface lot next to the idled theater, which is being redeveloped as part of a county initiative. Also, part of a major redevelopment of the waterfront north and east of City Hall and Pan American Drive calls for the authority to build and manage a new garage with ground floor retail. That project has been stalled by litigation but might see movement this summer. The Oak Avenue Garage is near a 6-acre site that Terra Group and The Related Group are developing as Park Grove, three residential towers bringing nearly 300 units to the neighborhood. A groundbreaking on Park Grove was held June 11. Not far from Park Grove is another high-profile development from Terra, Grove at Grand Bay, two twisty luxury condo towers.
WEEK OF THURSDAY, JUNE 25, 2015
MIAMI TODAY
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Condo launches slowing, 6% fewer units in construction BY CARLA VIANNA
The downtown and Brickell condo market has seen more new units ready to occupy this year than it did this far into in 2014, but the number of units entering the pipeline has slowed, hinting at continued but steadier future growth. “Fewer units are going to go through the construction pipeline in 2015,” said Anthony M. Graziano, senior managing director of IRR’s Miami and Palm Beach office. “It’s a function of the increase in construction costs, higher land costs and the market position.” IRR conducts market research for the Miami Downtown Development Authority. The report for this past quarter showed two significant events that have set precedents for the future of the downtown and Brickell condo market. First, Ion at Edgewater became the first cancelled project, taking about 330 units off the market. Second, Brickell City Centre announced a 15 percentage point reduction in the required deposit from buyers. Most condo developments now require high deposits from buyers, up to 50% up front, and don’t break ground until they have about 70% to 80% of their units sold. “I see some jobs not moving forward,” said Carlos Rosso, The Related Group condo development president. “Other
Photo by Maxine Usdan
Brickell’s skyline is dotted with condominium towers under construction, but fewer will begin this year.
projects [will be] thinking twice before they launch because they realize it’s a tough competing market.” Susie Glass, executive VP of sales and marketing at Douglas Elliman Real Estate, also sees more proposed projects being halted in the future due to extremely high construction costs. Mr. Graziano said this is how the market will balance itself out. “They’re all positive, healthy signs that the market is reacting in a logical way to not over-
build,” he said. Brickell, which remains the most active locale, has opened four condo projects during this cycle: My Brickell and Brickell House in 2014, and 1100 Millicento and Nine at Mary Brickell in 2015, which increased the Brickell market by a total of 1,317 units, according to the report. Another 3,614 units are under construction, with more than 5,000 units in the potential pipeline – potential meaning that 4,757 of those remain in
the proposed stage, or the initial, conceptual phase of development. Overall, the downtown and Brickell market is currently being expanded by about 9,700 units, according to IRR’s report. The total potential pipeline for greater downtown – an area that in IRR’s report includes also Edgewater, Midtown and Wynwood – is at 24,850 units. Whether those units come to fruition will depend on presale prices and whether projects will be able to substantially sell their
condos upfront to secure financing to break ground. The number of units under construction has declined by 6% as projects have been delivered this past quarter. Mr. Rosso said this market is different than the previous cycle because it is supplemented by everything else happening in Miami. Brickell City Centre, All Aboard Florida, the Patricia and Phillip Frost Museum of Science – they’re all pieces to the puzzle that’s boosting real estate in Miami, he said. Absorption rates are high in terms of new condos put on the market, said Alicia Cervera, managing partner of Cervera Real Estate. The projects represented by Cervera, such as Brickell House, are seeing 90% of their units sold, Ms. Cervera said. The only building that is not substantially sold out is Aria on the Bay in Edgewater, which has about 50% of its units unsold, she said. “I think we’ll have introduction of new inventory as we get closer to season,” Ms. Cervera said, pointing to an expected increase in activity during July and August, and then in the winter. The market may be heading in a more luxurious direction, she said. The downtown and Brickell areas have room for higher level luxury options. Ms. Glass, with Douglas Elliman, agrees, citing plans to bring more luxury buyers to that area.
Condo resale price gains disappear with $430 per foot sales unchanged BY CARLA VIANNA
Condo resale prices in the downtown market have been on a vertical hike since 2009, but experts say prices are finally starting to level off. According to reports created by IRR, a research agency that conducts quarterly residential market studies for the Miami Downtown Development Authority, resale prices inclined steeply between 2011 and 2013. Prices continued to increase into 2014, but at a lower percentage rate. In 2011, the average price per square foot was $240. In 2012, it rose to $305 (27%) and in 2013 it hit $372 (22%), according to IRR’s report for the second quarter of 2015. With a decline of resale transactions in 2014, prices rose to $430 (a 16% increase), indicating an initial slowdown in price appreciation. As predicted by IRR, the average resale price per square foot remained stable in the first and second quarters of 2015. Year-to-date, the current price is $430, the report
says, which is the same as the end of last year. “Resale [existing] condo pricing did not increase from January to May of this year. Pricing has slowed as the market begins to realize top-level pricing,” the report stated. A 3% to 5% increase is still expected this year, said Anthony M. Graziano, senior managing director of IRR’s Miami and Palm Beach office. Three back-to-back years of double-digit appreciation within the resale condo market is pushing buyers toward new product as an alternative, Mr. Graziano said, which results in fewer buyers in the resale market. The new product being delivered will continue to compete with the demand for existing resale condos, he added. Although Christopher Zoller, an associate with Esslinger Wooten Maxwell Realtors, pointed to two issues affecting the resale market – restrictive lenders and a shrinking pool of cash buyers – he predicted a “very rosy future for condo
resales.” Mr. Zoller, who is also residential president of the Miami Association of Realtors, said buyers will continue to seek opportunities in the condo resale market for two reasons: location and price value. As the millennial generation grows older, they too will want to settle down. Mr. Zoller said that generation might consequently turn to the resale market. Mr. Graziano said there’s no build-up of inventory of new, unsold condos. For those buying new condos with the intention of flipping, Mr. Zoller advises them not to. He said buyers might not be as successful as they would’ve been a decade ago. “If you’re a developer, rather than flipping it, it’s wise to put it on the rental market,” Mr. Zoller said. According to the IRR report, a new and large pipeline of conventional rental inventory is now under construction. Denise Sicuso, managing broker at EWM’s Brickell office,
Photo by Maxine Usdan
A 3% to 5% price rise is expected this year, said Anthony Graziano.
said resale inventory has decreased. With summer approaching, less inventory is coming into the market, since the condo market is known to peak during winter. As months of inventory increase, prices decrease, Ms. Sicuso said. It becomes a buyer’s market. As inventory decreases, the market stabilizes. However, if the inventory gets too low, it becomes a seller’s’ market, and prices rise again. Mr. Zoller said there is still a
15-month inventory in the Brickell and downtown market area. “That’s high,” he said. “It very much favors the buyer.” The asking price for resale condos has been running 8% to 10% higher than the selling price, Mr. Zoller said. “There’s a 10% opportunity for negotiation,” he said. “Historically, that’s a very good thing. Nobody is asking for way too much money. Nobody is offering way too little money.”
WEEK OF THURSDAY, JUNE 25, 2015
DOWNTOWN & BRICKELL
MIAMI TODAY
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Museum, with $34 million to raise, sprints to opening day BY CATHERINE LACKNER
With $101 million raised toward a fundraising goal of $135 million and most of the exterior construction completed on the four-building complex, the $300 million Patricia and Phillip Frost Museum of Science is sprinting toward an on-time summer 2016 opening. In addition to an original gift of $35 million, the Frosts donated $10 million in March to name the museum’s planetarium, a striking white dome that is visible on the north side of the complex. The exterior the dome was recently completed and work is moving forward on the interior. “We’re making rapid progress,” said Gillian Thomas, president and CEO of the museum that is sometimes referred to as MiaSci. An opening date has not yet been announced, but work is proceeding according to schedule, she added. Two firms, one American and the other European, have been selected to design the first two The Patricia and Phillip Frost Museum of Science dome is finished, and work on the interior goes on. exhibits, Ms. Thomas said. “We
will make the announcement soon. These are international- quality design firms.” Last December, crews worked more than 24 hours nonstop to pour 120 truckloads of concrete onto a form to create a coneshaped aquarium, an open-air structure that will hold 500,000 gallons of water. It is, according to the museum’s website, “one of the most complex projects currently being undertaken in the United States.” At the bottom of the tank, a 30foot circular window hovers over event space, allowing patrons to gaze up at sharks and other sea life. The 250,000-square-foot museum complex will also feature a planetarium, multiple exhibits and indoor and landscaped outdoor event and exhibit space. The buildings will powered by sun, wind and water in addition to conventional resources, and has been designed for sustainability, according to the museum’s website. “We have made tremendous progress, and I’m very pleased,” Ms. Thomas said last week. “Full speed ahead.”
Partners spend to add visitors BY CATHERINE LACKNER
Miami’s Downtown Development Authority plans to amplify its advertising dollars by partnering with the Greater Miami Convention & Visitors Bureau and downtown hotels in a cooperative program that leverages Miami Spa and Miami Spice months to drive visitor traffic to the city. The downtown authority authorized a $50,000 expenditure from its advertising budget; the visitors bureau will spend $50,000 and 10 hotel partners will contribute $3,000 each, authority documents said. Six hotels have already signed up, and more are anticipated, said downtown authority board member Nitin Motwani, who is managing principal of Miami World Center and managing director of the Encore Housing Opportunities Fund. He chairs the group’s economic development, technology/ marketing and communications committees. Miami Spa, which runs through the end of July, and Miami Spice, held in August and September, are consumer promotions that offer special deals on spas and restaurants respectively. The advertising effort, which will be conducted through Aug. 30, will spend 75% of its budget to target drive-from markets within 150 miles of Miami, and 25% on secondary markets including Atlanta, Boston, Chicago, New York, Philadelphia and Washington, DC. The focus is on affluent travelers who have an affinity toward dining, arts and culture, and upscale experiences, a marketing document explained. The joint venture will employ social media sites like Facebook, search engines including Yahoo, and travel-planning sites like Priceline, Fodor’s, Sojern and RGM Travel. The goal is to have 37 million media impressions by the end of the campaign.
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A Singular Voice in an Evolving City
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MIAMI TODAY
DOWNTOWN & BRICKELL
WEEK OF THURSDAY, JUNE 25, 2015
First Brickell mixed-income residential tower 77% done BY JOHN CHARLES ROBBINS
One of the first mixed-income residential developments in the City of Miami has topped off and is on schedule to accept tenants beginning next year. And if its pricing doesn’t spur interest, its Brickell location should. Brickell View Terrace is considered the very first mixedincome residential tower to rise since the city commission approved new zoning in 2014 to encourage much-needed affordable housing. The residential tower is more than three-quarters done and on its way to a 2016 opening, according to Mitchell Friedman, a partner with developer Pinnacle Housing Group. “The garage is 100% complete and the tower is 77% complete at this time,” Mr. Friedman told Miami Today on Tuesday. The site is beside the Brickell Metrorail Station, just west of Mary Brickell Village, on Southwest First Avenue between Southwest Ninth and 10th streets. This is a mixed-income and mixed-use development, offering 176 rental apartments and about 7,300 square feet of ground floor retail in the 23story tower. The new companion garage is 13 stories. “The garage was completed Photo by Maxine Usdan in March 2015. The tower is on Pinnacle’s residential tower is scheduled for an opening next year. scheduled to be completed by
the end of December 2015,” said Mr. Friedman. Prospective tenants looking to make Brickell View Terrace their home can begin that quest this fall. “We will be starting our marketing and leasing program by September 2015,” he said. Of the residential units, 100 will be affordable housing, serving those who earn 60% or less of the area’s median income. The remaining 76 will be rented at market rate. The higher-priced units will be on the top floors, and the 15th floor will have recreational amenities for the top floors. The second floor will have recreational amenities for the bottom units, according to the developer. Brickell View Terrace will complete a block that is home to an existing residential building, Casa Grande. A site plan shows a curved and landscaped walkway between the garage and two residential buildings, with awnings for shade. The parking garage adjacent to Brickell View Terrace is not only done but it’s already in use, said Mr. Friedman. “The garage is currently providing parking to the residents of the adjacent Casa Grande condominium, additionally, the garage is providing parking for approximately 250 cars leased on a monthly basis,” he said.
To encourage the construction of new affordable housing, Miami city leaders amended the zoning code – Miami 21 – to make it easier to develop mixedincome buildings. Pinnacle positioned itself to be first in line to take advantage of the new zoning rules in early 2014. Pinnacle won permission to relax the setback on the north, south and east for Brickell View Terrace by one foot, to a 9-foot setback. Also, the entire block would have allowed 420,000 square feet of floor area, and Pinnacle was given an additional 104,778 square feet for the entire site, or 524,778. The city’s Urban Development Review Board recommended approval of the project in 2014 tied to a few conditions, including that the developer screen 50% of the openings on the north and east sides of the garage, with the screening material to be approved by city planners. The board also asked the developer to incorporate public art into the site. The city’s new language allows for a relaxation of standards for a residential development that is a mixed-income building providing at least 40% of the units as affordable housing serving residents at or below 60% of area median income, or providing at least 20% of the units as affordable housing serving residents at or below 50%.
Port tunnel cuts trucks in downtown by 80% BY CATHERINE LACKNER
Open not quite a year, PortMiami Tunnel has met expectations and has exceeded some of them, said Chris Hodgkins, CEO of MAT Concessionaire LLC, its operator. The goal was to divert 16,000 vehicles per day – 28% of them trucks – from the streets of downtown Miami to the twin tunnels, and then to speed them to their destinations. It easily met that projection; on a recent peak day, a traffic report showed that 22,000 vehicles used the system. “More than 80% of all cargo trucks are out of downtown,” said a memo from Mr. Hodgkins. “All truck trips in an out of the port have been cut by almost an hour. The tunnel reduces vehicle idle time as well as cutting the amount of vehicle emissions in downtown streets.” The tunnels are monitored around the clock through 91 closed-circuit television monitors and a video wall that feed realtime images to a staffed control room. Forty-two emergency phones allow drivers to call for help, sensors check air quality, and 44 powerful fans supply ventilation. In the case of a category 3 or greater storm, massive flood gates are to lock into place to keep the system from taking on water. A live messaging system broadcasts alerts to drivers, and can detect when a vehicle is too tall for the tunnel.
“This is the world’s newest tunnel, and it’s an accumulation of best practices in tunnel engineering,” Mr. Hodgkins said. The Florida Department of Transportation funds the toll-free tunnel at $2.9 million per month; roughly $800,000 goes for operating costs and to employ a staff of 30, and $2 million toward repaying the construction loan. Operations have mostly been smooth, but there have been about 250 mishaps since the first vehicles rolled through. One included an 18-wheel truck that broke down inside the tunnel Photos by Maxine Usdan during a Presidents’ Day weekA container truck that took the tunnel arrives at PortMiami. On a peak day, 22,000 vehicles used the tunnel. end when the Miami International Boat Show and the Coconut Grove Arts were both in full swing. “Incident response was crisply executed with great efficiency,” Mr. Hodgkins’ memo said, “and when all was said and done, the tunnel was closed for only 18 minutes.” Rescue crews arrive in six minutes on average, and the concessionaire maintains a fleet of tow trucks that can push or pull a vehicle out, as well as flatbed trucks that can accommodate exotic cars, he added. Mr. Hodgkins, who lives downtown, said he has noticed an improvement in vehicle traffic when he walks his dog in the morning. “It’s all about quality of life, and since last August it has definitely gotten better,” he said. “We’re very happy with the sucTruck trips in and out of the port have been cut almost an hour, said Chris Hodgkins, seen in control room. cess of the tunnel.”
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WEEK OF THURSDAY, JUNE 25, 2015
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