Miami Today: Week of Thursday, April 20, 2017

WEEK OF THURSDAY, APRIL 20, 2017

A Singular Voice in an Evolving City

WWW.MIAMITODAYNEWS.COM $4.00

FINANCIAL TRENDS

Revenues hit ‘on all cylinders,’ so city bonds upgraded, pg. 13 ELECTRIC COST ADVANTAGE NARROWS: Miami-area households paid an average of 11.9 cents per kilowatt hour for electricity in March, up from 11.3 cents in March 2016, the US Bureau of Labor Statistics reported last week. That increase still left the area paying an average of 11.2% less for electricity than residents of the nation as a whole, though the gap decreased markedly from the 15.7% advantage that Miami area customers had enjoyed over the rest of the nation a year earlier. Still, the federal agency reported, the cost of electricity in Miami has been at least 10% below the US average for each of the past five years.

All-cash realty sales fewer, for multiple reasons, pg. 14

The Achiever

By Susan Danseyar

FRUSTRATED WITH FLAGLER: After hearing from a parade of unhappy property and business owners about delays in the Flagler Street beautification and reconstruction project, City of Miami commissioners last week approved a memorandum of understanding with the Downtown Development Authority that calls for more authority involvement in the project and additional oversight and management. The resolution says, “…the DDA and the city believe that the timeliness of the project, the minimization of disruption to Flagler Street property and business owners, and communication with the stakeholders will be enhanced through greater participation by the DDA, including participation in meetings and contacts with contractors, field visits, and constant public informational outreach.” Commissioners also approved waiving sidewalk café permit fees assessed as part of the project, “until the substantial completion of the project,” for downtown Miami sidewalk cafés on or near Flagler Street.

RESTRICTING PLASTIC BAGS: Miami city commissioners have taken the first step toward restrictions on disposable plastic shopping bags. Commissioners approved a resolution urging Gov. Rick Scott and the Legislature to repeal part of a state statute intended to prohibit local governments from regulating plastic bags. It would clear the way for cities to regulate the use of the ubiquitous bags. Miami’s move comes a month after Coral Gables commissioners on first reading voted to prohibit carry-out plastic bags from stores within the Gables and by anyone holding a city special events permit. Coral Gables has also passed an ordinance to regulate the use of polystyrene. Miami’s resolution says that replacing disposable plastic shopping bags with reusable bags is considered a quick and easy way to reduce waste and litter, protect wildlife and conserve resources.

Martin Pinilla II

Photo by Cristina Sullivan

Realty investor gives urban neighborhoods some love The profile is on Page 4

Gambling giant wins county joint development

By Susan Danseyar

Miami-Dade’s County Commission on Tuesday unanimously approved joint development at the Omni bus terminal with access to the Adrienne Arsht Center Metromover station for Resorts World Miami LLC, which is planning a 300-room hotel over the bus terminal.

This will include air rights over the property for the Department of Transportation and Public Works.

Attorney Albert E. Dotson Jr., representing the developer, said Tuesday this is an atypical deal. “Your staff (including the county attorney’s office, Leland Salomon in the Regulatory and Economic Resources Department and Transit chief Alice Bravo) has been very clear with us,” he told commissioners. “The county will not bear risk in any improvements my client has agreed to (including) fair-market rental for the 90-year term and present it all up front with $16 million into a new county-owned infrastructure.”

In addition, Mr. Dotson said that Miami-Dade will have a 5,000-square-foot retail space and that county staff predicts Miami-Dade will receive the vast majority of the development in a four-year period.

Aerospace firm seeks a HQ here

According to a memo from Deputy Mayor Alina Hudak, the project includes a revenuegenerating mixed-use development that promotes maximum use of the transit system, provides functional and aesthetic integration of the Arsht Center station and Omni bus terminal into the overall project, upgrades or redesigns the Metromover station including replacement of stairs, elevators, escalators, surveillance systems and flooring while enhancing the ability to see and pedestrian access.

The Omni bus terminal and Arsht Center Metromover Station, the development site, consists of seven contiguous parcels totaling just under an acre. The negotiated agreements for the development site with Resorts World – owned by Genting, the Malaysian casinos operator that owns the Omni across the street and the old Miami Herald site to the east where it had sought to build a vast gambling resort – consist of a development and lease agreement as well as an easement.

Resorts World is also to make numerous upgrades to the existing transit infrastructure valued at about $22 million. Under the development agreement, Resorts World is to submit all design and construction plans to the Transportation and Public Works Department

for review and approval before starting work.

In addition to increasing density around the Metromover station, the proposed development provides substantial long-term revenue for Miami-Dade over the 90-year initial term of the lease with the developer paying $100,000 in minimum rent per year through the construction period. Thereafter, Ms. Hudak wrote, the developer is to make a one-time $10 million payment to the county and then either 50% of gross revenues from the retail portion or $300,000 per year, whichever is greater.

The proposed development while under construction is forecasted to create 1,871 jobs and, once completed, 171 direct jobs and stimulate creation of 100 added indirect jobs and provide significant revenue to the county and City of Miami in the form of taxes and impact fees, Ms. Hudak wrote.

No county or other government funding is required as the developer will finance the project, Ms. Hudak said. The 90-year lease will generate an estimated $54.85 million with a net present value of $26,862,569, documents say, and all revenues will accrue to Transportation and Public Works for the transit system, which includes the Strategic Miami Area Rapid Transit plan.

Miami-Dade could lure a global engineering company specializing in aerospace maintenance promising to create 54 new jobs within two years and seeking to establish its US after-market headquarters in the county.

California is also in the running.

County commissioners Tuesday were asked to approve incentives for the project under the state’s Qualified Target Industry Tax Refund program.

Labeled Confidential Project Mystic, the British company wants to lease and renovate a 47,000-square-foot facility to expand its national headquarters with local support of $32,400 from county funds.

The project would be in two phases: first, the company would lease and renovate the facility; then, its aerospace maintenance, repair and overhaul technical capabilities would be implemented.

The application from the Beacon Council, Miami-Dade’s economic development organization, said the project will generate $446,781 over five years in real estate taxes.

A memo from Deputy Mayor Jack Osterholt told commissioners the company has applied for $162,000 in tax refund program incentives, of which the state would pay 80% ($129,600).

Miami-Dade’s contribution is 20% ($32,400) beginning in fiscal 2018-2019.

The projected capital investment in real property is $3,853,000, Mr. Osterholt wrote, and the project will generate $18,183,318 in direct and indirect wages through 2018-2022.

The application states the new jobs will pay an average salary of $61,375, with employee benefits of $10,900.

The program requires creation of at least 10 full-time jobs at salaries at least equal to 115% of the state annual average wage, or $41,516.

Miami-Dade’s matching funds will be distributed if the applicant creates the 54 new jobs and 16 indirect ones indicated in the application and complies with all conditions of the incentive program, including a 20% local residency requirement for new hires.

PORTMIAMI’S ASIAN SERVICE AND ITS VOLUME RISE 11% ...

2

WYNWOOD LEADERS SET A BROAD LIST OF AREA GOALS ...

9

CHAMBER TARGETS EMERGING AREAS NEAR DOWNTOWN ...

3

COUNTY OKS REPORT ON BUILDING NEW COURTHOUSE ...

12

VIEWPOINT: BUSINESSES NEED CONFIDENCE TO GROW ...

6

CITY GIVES 22ND AVENUE A GO-SLOW PLAN FOR FUTURE ...

12

PHARMA FIRM PROMISES 120 JOBS AT A NEW LOCATION ...

8

MIAMI SLAPS 240-DAY MORATORIUM ON LEGIONS WEST ...

23

2

MIAMI TODAY

TODAY’S NEWS

WEEK OF THURSDAY, APRIL 20, 2017

The Insider SISTER ZOOS: County commissioners Tuesday directed the administration to establish a Sister Zoos program and report on any pairings of Zoo Miami with other facilities. The resolution, sponsored by Dennis Moss, states MiamiDade has established the Sister Cities program which has led to partnerships with 25 cities in South America, Central America, the Caribbean, Europe, Africa and Asia. Creating a Sister Zoos program would be good for Zoo Miami and the community, his legislation said, by “fostering cultural and informational exchanges.”

Dennis Moss

MORE LIBRARY IMPROVEMENTS: New sewer pipes will be added to improvements to the historic Dorsey Memorial Library at 100 NW 17th St. after recent Miami City Commission action. It approved an agreement with Miami-Dade Water and Sewer Department to provide water and sanitary sewer services for the library building. In March, the city rezoned the property to clear the way for needed repair and renovation of the library. The building is a Photo by Marlene Quaroni historically designated structure built in 1941 and named after Dana A. Dorsey, a prominent African-American businessman who donated the land. PortMiami shipped its four new Super Post-Panamax gantry cranes from China to handle larger vessels.

The library was a key place for Overtown residents to access educational resources. The county is requiring that the existing clay pipe sewer lateral be replaced with a PVC pipe.

ROAD CARE: County commissioners on Tuesday unanimously approved legislation reducing restrictions on roadway impact fee use for capacity improvements on local roads.

An impact fee is imposed by a local government on a new or proposed development project to pay all or a portion of costs providing public services to a new development. According to the ordinance, sponsored

by Rebeca Sosa, increased traffic is one of the most significant issues facing Miami-Dade residents and the county’s current impact fee legislation limits the use of impact fees to improve local roads, which provide Rebeca Sosa a significant source of funding for improvements to the roadway network.

MORE ROOMS AT THE INNS: Statewide hotel room supply is expected to rise 2.2% this year as some of 13,400 rooms under construction in Florida will come online, Marcus & Millichap forecast last week. The firm expects occupancy throughout the state to fall by a half percentage point and average daily room rates to rise 2.9%. Separately, AC Hotel Miami Aventura

by Marriott, with 233 rooms, announced it’s opening at 20805 Biscayne Blvd. on May 17. The new hotel is managed by the Pyramid Hotel Group.

GLOBAL FIRM GOES LOCAL: IBT Group, a global construction consortium based at 1200 Brickell Ave. in Miami, says it is moving into public works projects under the name IBT Construction LLC, seeking work with the Florida Department of Transportation, expressway authorities, county governments and other agencies seeking to build infrastructure. The company says it has done public works projects in Europe, Africa and South America. Managing Director and COO Daniel Toledano said, “What we have done is expand our existing IBT services into Florida to provide our knowledge and skills gained from developing large infrastructure projects throughout the world over the past 30 years.”

FINANCE FORUM SCHOLARS: FIU management and international business Professor Jerry Haar has committed $10,000 to launch a scholarship fund in the memory of two former chairmen of the Miami Finance Forum who recently died. The Carlos J. Deupi/Raul Valdes-Fauli Jr. Scholarship Fund is to support student scholarships, practice-oriented research or education-focused Miami Finance Forum activity.

Port Asian service, volume rise 11% with $1.3 billion capital investment

By Camila Cepero

PortMiami, which was dredged to 50 feet last year in anticipation of a widened Panama Canal, can now welcome up to six Post-Panamax vessels a week, which has translated into an uptick in the port’s cargo business side of operations.

Asian service and volumes rose 11% in 2016 alone, said Assistant Port Director Kevin Lynskey.

The composition of Asian cargo represents higher value and the commodities include electronics, furniture and apparel, which are typically consumed in Florida, according to a PortMiami-commissioned study released this week.

The growth in the cargo side of the business comes as a result of $1.3 billion in capital infrastructure investments made to handle larger Post-Panamax ships, according to the port.

The recently completed development project included construction of the PortMiami tunnel that provides direct access between the marine terminals and the US Interstate highway system, the modernizing of the on-dock intermodal rail and the acquisition of four new Super Post-Panamax

MIAMI GARDENS UPGRADE: More than $50 million in Miami Gardens debt has received an upgrade from Fitch Jerry Haar Ratings, which told investors this month that it had raised its assessment of the city’s participation in federally taxable Build America Bonds to A+ from A and at the same time rated the city’s outlook for repayment as stable. The bondholders have additional security in the leasehold interests of the city for the lease-purchase assets that the bonds help finance, which include the city hall and police headquarters buildings. “The upgrade reflects the strength of the city’s revenue framework and solid financial resilience, evidenced by high reserves and revenue-raising authority relative to potential revenue declines in a moderate economic downturn,” Fitch’s analysts reported.

Miami Gardens, incorporated in 2003, is one of the county’s larger cities with

By Susan Danseyar a population of 113,187 in 2015, up 5.6% from 2010.

Gantry Cranes that can handle larger cargo ships.

The project’s most notable facet was the deepening of the shipping channel to 50 feet in anticipation of the opening of a widened Panama Canal, which doubled the canal’s capacity by adding a new lane of traffic allowing for a larger number of ships.

“Just before the canal opened we had an uptick at the port that was mostly related to West Coast labor problems,” said Mr. Lynskey.

“When the West Coast labor problems happened, importers took the opportunity to start sending products to the East Coast,” he said. Then, after the new canal locks opened, “importers decided [to] keep sending more stuff through the canal,” keeping East Coast activity strong.

As a result, he said, PortMiami “picked up traffic just before and just after the canal opened.”

In 2016, $36 billion of economic output in Florida was related to cargo activity at PortMiami.

The most important thing to note, Mr. Lynskey said, is that had the port shipping channel not been dredged, the port would now be getting very little Asian trade as a result of not being able to accom-

County refuses to oppose legal ad placement option

PHARMACEUTICALS BOOM: Pharmaceutical freight surged 48% last year at Miami International Airport to $4.4 billion in value, according to new US Department of Commerce data. The airport joined Brussels Airport last October to create PharmaAero, to become a collaborative group of airports, pharmaceuticals shippers and cargo communities focused on improve pharma handling.

Airports in Singapore and Mumbai and a number of large firms have joined as members since then. “The World Health Organization projects that the global pharma industry will rise in value from $300 billion to Emilio Gonzalez $400 billion within the next three years, and we want to position MIA the center of that growth trend,” said Emilio Gonzalez, county aviation director. Since having pharma shipments of $1.8 billion in 2010, Miami International’s pharmaceuticals trade has grown by 140%.

FLYING GOLDMINE: Freight handled at Miami International Airport jumped 8% last year to $578.3 billion, the US Commerce Department reports. The airport remained the busiest in the US and the Western Hemisphere for international freight, handling 83% of all air imports and 79% or all air exports between the US and Latin America and the Caribbean. The airport also handled 89.2% of all US flower air imports, 66.7% of all fruit and vegetable air imports, and 49.8% of all fish air imports. The airport handled 92% of all of Florida’s international air trade value.

Miami-Dade County commissioners on Tuesday voted against opposing state bills that would allow local governments to publish legally required notices and advertisements on their official websites instead of in newspapers.

Commissioner Joe Martinez said the state legislation authorizes governments to choose whether they’ll advertise on websites or in newspapers. “Whenever Tallahassee gives us a choice, grab it,” he said. Jose “Pepe” Diaz agreed.

According to the resolution, sponsored by Rebeca Sosa, the state’s constitution requires public notice be given for meetings where official acts are to be taken or where public business will be conducted. Under current law,

the notice can be given through publication in a newspaper of general circulation. However, a Senate and House bill have been filed for consideration during the Florida Legislature’s 2017 session that would authorize any county or municipality in the state to publish the notices on an official local government website.

Although the state bills may decrease expenses for local governments, they could create additional costs and administrative burdens for local governments and create the impression that government is becoming less transparent, according to the resolution.

Ms. Sosa said Tuesday she sponsored the legislation because “we’re not yet there where everyone has an I-pad or computer. Some still depend on newspapers.”

modate larger ships.

Asian trade currently accounts for 35% of the cargo at the port, he said.

PortMiami is now receiving about six super-post Panamax vessels a week, which denotes ships larger than Panamax size that do not fit in the original Panama Canal locks, such as supertankers and the largest modern container and passenger ships.

“The trick is not to focus on the number of vessels, but the number of containers coming off the ships,” Mr. Lysnkey said.

However, it’s all artificially limited by bridge height, he said.

“Almost every vessel that calls us calls New York,” Mr. Lynskey said.

However, the problem with shipping to New York is the lower bridge heights.

Bridge reconstruction in New York could mean that PortMiami will receive fewer vessel calls once that project is completed.

Nonetheless, Mr. Lynskey stressed, that even if PortMiami sees fewer incoming vessels, it can still receive ships carrying more cargo containers, which is important in keeping the port’s cargo business strong.

We want to hear from YOU! Phone: (305) 358-2663 Staff Writers: Camila Cepero ccepero@miamitodaynews.com Susan Danseyar sdanseyar@miamitodaynews.com John Charles Robbins jrobbins@miamitodaynews.com Letters to Editor editor@miamitodaynews.com People Column people@miamitodaynews.com Michael Lewis mlewis@miamitodaynews.com

Like us: Miami Today Follow us: @MiamiTodayNews

6

MIAMI TODAY

VIEWPOINT

WEEK OF THURSDAY, APRIL 20, 2017

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

Businesses need confidence, coordination to boost growth

“Are we in a recession?”

A prominent banker asked me that question last week. It got my attention, because it hadn’t been on my radar.

The reply is that locally we aren’t in recession and aren’t Michael Lewis likely to be, barring major global or national changes.

National, state and local economies are still expanding.

On the other hand, Miami-Dade faces a confidence gap – and timidity acts like an anchor on growth.

Further, we have at hand in Miami-Dade a remedy for slow growth – outreach to other states and nations for direct investment, which now arrives for multiple reasons and can be markedly increased through strategic, coordinated work, raising our economy by our own efforts.

As for now, the Washington Economics Group in Coral Gables, a respected consulting firm, reported Friday that Florida is well above the national average in employment and population growth and led all populous states in earnings growth last year at 6.2%. Personal income in the state rose 4.9%, well above the 3.6% national average.

On the other hand, while the state as a whole is booming, South Florida seems to be growing far more slowly.

The report shows that while the key indicator of taxable sales throughout Florida grew 5.2% last year, the three South Florida metro areas all were below state average, with West Palm Beach growing

3.3%, Fort Lauderdale 2.9% and Miami lowest at 2.5% – less than half Florida’s average growth.

Employment gains showed the same disturbing trend. The state grew jobs by 3% last year, but Fort Lauderdale grew only 2.5%, West Palm Beach 2.2% and Miami was lowest at 1.9%. Yes, unemployment has tumbled, but we haven’t added many jobs.

Other economic factors seem to be working against rapid South Florida growth, based on a Friday report from the US Bureau of Labor Statistics. While US consumer prices fell 0.3% in March, easing burdens on households, and those national prices fell 2.4% over the prior 12 months, prices in South Florida in February – the most recent local figure – soared 4% from February 2016.

Another Friday report from the Bureau of Labor Statistics showed real hourly earnings for US employees rose 0.5% from February to March, heavily weighted by the dip in the Consumer Price Index together with a 0.2% rise in hourly earnings. Those figures have yet to be reported by region.

Another vital indicator of both economic health and business confidence is construction starts. As we reported two weeks ago, the value of South Florida starts fell 20% in February from February 2016. Fewer dollars spent on construction that begins now means far fewer construction jobs ahead.

That 20% cumulative construction drop masks two distinct streams. Residential starts fell 43% in February and for the first two months of the year 40%, while nonresidential starts rose 31% in February and 49% for the first two months.

Those figures indicate the end of another condo boom cycle but a shift of building toward other industries. Commercial construction could well produce more

jobs per million dollars spent than would condo growth. Time will tell.

The pivotal factor might be business confidence. Will business leaders hunt opportunities or continue hoarding money in a cost-cutting wave that is already self-fulfilling the prophecy of tighter economic days?

Optimism breeds marketing and sales efforts that, smartly targeted, expand growth. Timidity and concern lead to cuts focused on marketing and sales that slow growth through inaction. In Miami, corporate belts have been tightened even during growth. If you spend less expecting a slowdown, you get one.

Granted, there’s much to be unsure of, globally, nationally and locally. War and peace, Brexit, rapid presidential flip-flops, China’s aims, Russian intentions, Latin America’s regimes, sea levels, Zika – the list is endless.

But uncertainty is a constant. New technology simply puts more of it in our face every day and then hypes it. Yet businesses can grow in the worst of times – and these times, while turbulent, are mostly good rather than bad.

So, where did our confidence go?

Many business folks here have scaled back efforts for global business, though we have long relied on the rest of the globe and our global brand gives us a huge advantage.

Globally, businesses and the wealthy are cognizant of the uncertainties but know that they have to reach out or shift resources elsewhere for multiple reasons, including those very uncertainties.

Where better than Miami, where they can base a US headquarters? We reported two weeks ago that a Spanish producer of surfaces for architecture and design is bringing its US headquarters to Coral Gables this summer, creating more than 85 jobs. They aren’t going to be the only one.

We can also reach out nationally. Any business that can be based here should be looking, if only to avoid the taxes of the Northeast, Illinois or California. The saving can be 10% to 15% just by escaping state and local income taxes.

Business moves should be for business.

But it’s hard to beat the human reasons to live in Miami: weather, nature, culture, a global population, entertainment, sports and far more.

Luring businesses here seems so easy.

Of course it’s not, but advantages for investment here are many.

Add now a new reason: Miami-Dade is opening huge opportunities to develop infrastructure in public-private partnerships that can be highly profitable while making Miami more livable. Start with six legs of transit, add a courthouse downtown – the list will grow. County hall is busy hanging out an “open for business” sign.

But to make sure the business community fires on all cylinders at once, we need to coordinate recruitment that brings investment. That means that when we target a region or nation, we send a united mission of business and government agencies rather than each group going on its own, which dilutes impact and confuses foreign partners.

Much of this challenge is going to fall to Michael Finney, who’s heading from running economic development for hardhit rust belt Michigan to what should be an easier sell as CEO of our Beacon Council. With questions being asked about our economic health, he’ll have to hit the ground running – if only to quell doubts and help restore confidence that we shouldn’t lack.

Miami has economic growth. But it needs more united effort and a strong dose of self-confidence to maximize the advantages that already are ours.

Weaving an educational safety net to empower our students In Miami-Dade County, there is an overwhelming need for children to have access to the resources that are critical to a successful transition into adulthood. I believe the best way to prevent our children from falling through Xavier Suarez the cracks is to fill the cracks with support in the form of internet access, safe afterschool programs and vocational training options.

I recently convened a meeting with members of the Miami-Dade County School Board, The Children’s Trust and other local governments to identify ways to improve youths’ access to better technology tools, affordable or free wi-fi, and vocational career guidance, at which four fundamental issues were addressed: ■The need for all students to have access to computer devices for class and homework at school and at home.

■Wi-fi accessibility in and around all government-owned facilities such as parks.

■Envelopes of Safety, an afterschool activities and tutoring program to be made available to all students especially in elementary and middle schools. Pilot programs have been successfully

The Writer

Xavier Suarez is a Miami-Dade County commissioner. launched at Frances Tucker Elementary and Ponce de Leon Middle School.

■Pre-apprenticeship programs to be made available to all secondary-school students, providing them with job skills training similar to the days of home economics, shop, and driver’s education with certifications upon completion.

It is an absolute necessity that our youth have access to the internet and portable technology. Through General Obligation Fund, Miami-Dade County Schools has funded as many as 150,000 devices, most of which can be taken home by high school students. Additional devices are on the way, enabling schools to provide one tablet (or other portable device) for every two students.

In an effort to provide accessible and affordable wi-fi to students who are unable to purchase or access wi-fi in their homes, Comcast representative Marta Casas-Celaya explained that students who are eligible for their school’s free lunch program also qualify for Comcast’s $10 per month wi-fi plan.

I am particularly concerned for our middle and high school youth, whose

academic success is hinged upon accessing the internet, and I have asked the county and City of Miami to explore installing free internet connectivity in public places, beginning with parks.

Although computer technology is critical to youth success, there is also a dire need for our youth to have enriching, engaging afterschool programs. The Children’s Trust has provided resources and locations for as many as 25,000 students. However, there is still a great need for improvement in availability of afterschool programs.

Further, the trust is at the forefront of the envelopes of safety initiative, which I designed to provide youth with safe and structured environments that occupy the “out-of-school time” of school-age children during both the summer months and the afterschool hours. Our government must provide children with safe, engaging community activities that are not contingent on the financial means or geography of their parents nor limited by geography.

We currently have bills in the state House and Senate to get the initiative replicated statewide and have received great support from both state and local officials.

In addition to the Envelopes of Safety program, I am championing implementation of apprenticeship programs in all Miami-Dade County secondary schools. I believe that implementing and maintain-

ing public-private partnerships involving employers, industry organizations, state and local workforce development systems, post-secondary institutions and non-profit agencies will address the critical need for skilled and demographically diverse workers in high-demand industries, such as construction and technology.

State Rep. Robert Asencio shares my enthusiasm about apprenticeship programs and is currently seeking $750,000 from the state legislature to fund a pilot apprenticeship program in his district.

miamitodaynews.com FOUNDED JUNE 2, 1983 VOLUME XXXIV No. 47 ENTIRE CONTENTS © 2017

To contact us: News

Advertising Classifieds Subscriptions Reprints

(305) 358-2663 (305) 358-1008 (305) 358-1008 (305) 358-2663 (305) 358-2663

Editor and Publisher / Michael Lewis Vice President / Carmen Betancourt-Lewis

MIAMI TODAY (ISSN: 0889-2296) is published weekly for $145 per year; airmail: to Europe $190 per year, the Americas $145 per year. Published by Today Enterprises Inc., 2000 S. Dixie Highway, Suite 100, Miami, Florida 33133, USA. Periodicals postage paid at Miami, FL. POSTMASTER: Send address changes to MIAMI TODAY, 2000 S. DIXIE HIGHWAY, SUITE 100, MIAMI, FLORIDA 33133.

8

MIAMI TODAY

TODAY’S NEWS

WEEK OF THURSDAY, APRIL 20, 2017

County airs Walmart plan and endangered species concerns

By Susan Danseyar

County commissioners heard from the environmental community Tuesday that they should not allow a major Walmart and apartments on property that contains an endangered species restriction.

The county has a responsibility that this project along Southwest 152nd Street in south Miami-Dade less than a mile from the Florida Turnpike proceed with caution, several said. For future quality of life, several said the pine rocklands should not be paved over for what they described as a destructive development. It’s the largest pine rocklands parcel outside of Everglades National Park.

Commissioners were given a report, which they accepted, with an update on federal agency actions related to the Endangered Species Act that could impact Miami-Dade or its properties, and the US Fish and Wildlife Service has announced a proposed habitat conservation plan for the Coral Reef Commons mixed-use development project.

The Coral Reef Commons site is where a Walmart-anchored shopping center and

apartments are proposed near Zoo Miami.

The road offers direct access to the turnpike and is a major east/west thoroughfare.

According to Lee Hefty, assistant director for the county’s division of environmental resources management in the department of regulatory and economic resources, the US Fish and Wildlife Service is seeking public comment for 60 days ending May 22 on the proposed issuance of an incidental take permit and habitat conservation plan submitted by Coral Reef Retail LLC, Coral Reef Residential Phase I LLC, Ramdev LLC and the University of Miami.

On Tuesday, Mr. Hefty told commissioners the plan was released by the federal government and anyone with concerns should contact the US Fish and Wildlife Service.

“Our understanding is that the service is not looking for complaints but critical analysis of what’s in the plan.”

According to the service, the habitat conservation area is a 137.9-acre tract of which 86.49 acres are proposed for development and will include 3.88 acres within the development that are landscaped with native pine rockland species. The remaining 51.41

acres are proposed for on-site preservation in addition to a separate 50.96-acre tract proposed for on-site preservation in addition to a separate 50.96-acre tract proposed for off-site mitigation for a total of 106.25 acres of mitigation. These tracts lie in an area known as the Richmond Pine Rocklands.

Mr. Hefty said the service reports that construction of the project would impact 86.49 acres of pine rockland habitat. If issued, the federal permit would authorize take of these three federally listed species (one federal candidate and two state-listed) at the site as a result of the project.

The requested duration of the permit is 30 years, according to the service. Once the comment period ends, the service will evaluate the permit application for incidental take including the habitat conservation plan as well as any comments received, Mr. Hefty wrote in a report to commissioners.

“The service advises that if a determination is made that the requirements of the Endangered Species Act are met, then a permit for incidental take will be issued,” he wrote.

In his Nov. 6, 2014 memo, to the commission about the property, Mr. Hefty said that

on Oct. 13, 2013, the Community Zoning Appeals board had approved legislation for a proposed multi-family residential and retail development at the site, the service listed new endangered species and designated critical habitat for them in areas that included the property. “The developer subsequently agreed not to proceed with work under the issued county approvals until such time as the developer obtained requisite approval for the work from the appropriate federal agency under the Endangered Species Act.” Pending the outcome of the service’s action and if it approves the habitat conservation plan and incidental take permit, Mr. Hefty wrote, the developer would then be authorized to proceed under existing county approvals. Any additional authorizations for development would require review and approval for conformance with county code requirements and consistent with the provisions of the habitat conservation plan and incidental take permit.

Details: http://www.miamidade. gov/govaction/legistarfiles/Matters/ Y2017/170848.pdf

An inspection of the greenhouse at left found that moisture wasn’t being circulated well enough to dry the biosolids. Next step is to install a power supply and the drying fans.

Homestead expects composting plant to reopen in summer

By Camila Cepero

The City of Homestead’s composting facility, which turns the city’s bio-solid waste into super-strength fertilizer, is expected to come back online within the next four months after a year-long pause in operations to sort out operational issues.

In April 2016, after the discovery of odor issues and improper procedures, the

facility was shut down until city officials could convene to discuss how to move forward. This, in turn, stalled production of Homestead Organix, the city’s brand of bio-fertilizer.

The South Dade Soil & Water Conservation District, which operates the facility, brought in worldwide composting expert Parkson Co. After a greenhouse inspection and a review of composting procedures, Parkson

Co. noted that, among other issues, moisture was not being circulated well enough within the greenhouse to dry the bio-solids.

The city purchased nine specialized fans to use in the drying process, in accordance with Parkson Co.’s findings.

The fans, which were ordered to fit the district’s specifications, arrived as expected. The installation was completed and signed off on March 31. The next step now is to provide a power supply to the fans.

In its review of the greenhouse, Parkson Co. also found that the scrubbers were dry but should be kept moist to work effectively and prevent odor.

The city is moving forward with installing specialized scrubbers so that the air leaving the facility will not have any odor.

City officials expect the project to be completed in three to four months, after which point, production of the Homestead Organix bio-fertilizer can resume.

Generic pharmaceuticals firm promises 120 jobs at new site ceutical company specializing in manufacturing oral solid dosage Miami-Dade commissioners and trans-dermal patches promiswere asked Tuesday to approve ing to create 120 new jobs under incentives for a generic pharma- the state’s Qualified Target Industry (QTI) Tax Refund program.

Get Your Master’s For an Labeled Confidential Project Accelerated Career Boost Refill, the company, which already operates in the county, wants to build a new 160,000-square-foot manufacturing facility and begin construction this spring.

The application says the comSTU.EDU/CareerBoost pany is also considering locating the manufacturing site in Missouri, New Jersey, Pennsylvania or Mumbai, India.

According to the application

By Susan Danseyar

submitted by the Beacon Council, Miami-Dade’s economic development agency, if it’s built here the project will pay the new workers an average salary of $58,000 and generate $44,689,613 in direct and indirect wages over the six-year period it is eligible for the award.

Deputy Mayor Jack Osterholt wrote a memo to commissioners saying the confidential project has applied for $360,000 in QTI tax refund program incentives, of which the state would pay 80% ($288,600). The local contribution

by Miami-Dade is 20% ($72,000), to be paid beginning in fiscal year 2018-2019.

Based on the projected capital investment of $7.2 million in new real property, the project will generate $158,578 in real estate taxes and have a positive fiscal impact of $86,578, Mr. Osterholt wrote.

The state’s Qualified Target Industry Tax Refund program permits tax refunds to companies that create high-wage jobs in targeted high value-added industries and may provide the company with a tax refund of up to $3,000 per new job created, with the state providing 80% of the refund. The program requires the creation of at least 10 new full-time jobs at salaries at least equal to 115% of

the state annual average wage, or $41,516.

Miami-Dade’s matching funds will be distributed if the applicant creates the 120 new jobs indicated in the application and complies with all conditions of the incentive program, including the 20% local residency requirement for new hires.

Confidential Project Refill’s stated salary for the new workers is at least 115% of the average annual wage in the state, Mr. Osterholt wrote. The value of employee benefits is not a requirement of the tax refund agreement with the state or the county’s local match.

MIAMI TODAY

WEEK OF THURSDAY, APRIL 20, 2017

13

Financial Trends Despite uncertainties, trade financing expected to improve

By Camila Cepero

Even as international and domestic markets adjust to major global changes – like Brexit, a new US administration, a high foreign exchange, and a rise in US interest rates – trade financing is expected to stay strong and even improve in the coming years, according to an industry expert.

“The big issues have been Brexit and the new Trump administration,” said James Varnadoe, managing director of SGT Trade Finance Fund and Advisory Board chairman of the Miami Finance Forum.

“There’s quite a bit of uncertainty in terms of trade. You’ve seen foreign exchange fluctuations in Latin America, especially Mexico... That relationship with Mexico has really been brought into the question with new administration.”

Today, more than in the past, trade is being financed by way of asset-based lending, he said.

“In the past we did inventory as collateral. Now we’re much more focused on receivables as collateral,” he said.

Asset-based lending, or ABL, provides businesses with immediate funds and ongoing cash flow based on a percentage of the value of a company’s assets, such as commercial accounts receivable

and inventory.

The loan is then combined with insurance from a credit insurance company, which insures the receivables.

SGT Fund no longer uses the Export-Import Bank, the official export credit agency of the United States, which has historically been the primary avenue to insure transactions involving crossborder deals.

The bank suffered a lapse in authorization that lasted the latter part of 2015. In December 2015 James Varnadoe: “there’s quite a lawmakers revived its congres- bit of uncertainty in terms of trade.” sional authority that had lapsed in July of that year. It has been back operate at full throttle – since then. up and running – though unable to SGT Fund now uses private

credit insurance companies, like Euler Hermes and others.

“The [Export-Import Bank] just wasn’t a reliable source for insurance anymore,” Mr. Varnadoe said. “It is prohibitively expensive and private insurance companies offer better rates.”

Issues like a rise in the foreign exchange have been detrimental to trade financing, he said.

Only recently, in the heat of US elections, 21 Mexican pesos translated to only one US dollar.

The post-election Trump effect on the dollar has unwound, however. As of last week, 18.5 Mexican Pesos scored a US dollar.

Another sign of positive modi-

fications, Mr. Varnadoe said, is the slight decrease in oil prices.

Oil prices are expected to stabilize – a good sign, as unstable oil prices create volatility in the market.

Banks continue to be burdened by regulatory restrictions, he said, adding that they “cause friction in transactions and definitely inhibit trade financing.” Regulations aren’t expected to change notably under the new administration.

Then there’s the general climate of protectionism right now, mostly as a result of Brexit and a new administration. Protectionism refers to government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition.

“You think that would hurt the international sale of goods, but my belief is that it will continue to grow even under the national politics,” Mr. Varnadoe said.

“Miami is unique,” he said.

“People don’t realize that if you go to Middle America and talk to a bank, they don’t know what trade financing is. Miami is an international city and trade is a big part of its economy. A lot of banks have trade financing here – that’s not true in the rest of the country.”

With revenues ‘hitting on all cylinders,’ city bonds upgraded Multiple groups of bonds issued by the City of Miami and their risks have been upgraded

by Fitch Ratings and several other bond issues had their ratings affirmed. In all cases, the city was given a stable rating outlook.

While the ratings upgrades are geared to inform bond buyers of the risks they face, a secondary effect is to make future borrowing less costly to the city, which commissions Fitch to rate its bond issues.

Upgraded by Fitch were: nGeneral obligation refunding bonds issues in 2002, which were upgraded to AA- from A+.

These bonds are backed by the city’s full faith and credit. nThe issuer default rating was upgraded to AA- from A+. nStreets and sidewalks improvement program special obligation bonds issued in 2007 and 2009 were upgraded to AA- from A+. These bonds are backed by a lien on part of the city’s share of the countywide transportation surtax. Of countywide receipts, 20% are shared among municipalities that have been included in the program. The bonds are also payable by the city’s share of the county’s sixth-cent and thirdcent local option gasoline tax

A lien on convention development tax receipts helps secure buyers of bonds that funded Marlins parking.

and part of some city parking surcharges. nVarious bonds backed by non-ad valorem revenues but not property taxes were upgraded to A+ from A. Besides the upgrades, Fitch affirmed at A- the ratings for limited ad valorem bonds issued in 2007 and 2009.

Fitch touches on the special obligation parking revenue

bonds of about $100 million that the city issued to build four parking garages and a surface parking lot at Marlins Park, noting that they are payable from a lien on the city’s portion of the county’s 3% convention development tax on transient rental accommodations and then the parking charges at Marlins Park.

By contract, the city is paid something more than $10 per

parking space on a slowly rising scale by the Marlins, who then resell those spaces at their own price to the public.

Fitch does not touch on the other revenue stream from those garages, more than 53,000 square feet of rental retail space in three of those garages that has never been fully leased, though the stadium is in its sixth operating season. Rental

revenues had been intended to help repay the bonds.

Fitch explains that its ratings improvements in the city bonds it listed reflect “the strong growth characteristics of the city’s revenue base, a moderate burden on resident income from debt and retiree liabilities, and adequate expenditure flexibility with some pressure related to employee wage and pension costs.”

On the other hand, according to Fitch, “Miami’s employment and income metrics are not particularly robust in part due to large number[s] of workers in the lower-wage hospitality sector.”

After years of rapid turnover in the city’s top financial jobs, Fitch says that “The city’s budget management practices and financial results are improved but the operating environment in Miami remains dynamic and prone to management turnover and various outside risks over time.”

As for revenues, Fitch analysts write, “General fund revenues are currently hitting on all cylinders with growth of almost $150 million or 33% from fiscal 2010-2015 absent meaningful policy action. The general fund budget for fiscal 2017 represents a two-year increase of about $70 million or 12%.”

14

FINANCIAL TRENDS

MIAMI TODAY

WEEK OF THURSDAY, APRIL 20, 2017

Local 5-star banks increase their share of the market’s pie

By Camila Cepero

Deposits are flowing into bank branches in South Florida, according to the most recent FDIC data as analyzed by BauerFinancial. However, these deposits are not necessarily going into banks based in South Florida.

The banks with the largest market share of deposits in Miami-Dade and Broward counties are big banks. As of June 30, 2016, data, the most recent available, Bank of America has the largest market share in the South Florida counties with 16.15%, followed by Wells Fargo with 15.32%.

The Federal Deposit Insurance Corp.

(FDIC) only releases this information once a year, with June data.

In the entire Miami-Fort LauderdaleWest Palm Beach metropolitan statistical area (MSA) there are 101 federally and state chartered institutions.

Within that area, Wells Fargo is first, followed by Bank of America, CitiBank and JPMorgan Chase, in order.

Miami-Dade County leads all of Florida with 23.09% of the total state market share, 650 offices of all FDIC-Insured institutions and $124,821,471,000 in deposits.

Duval, Broward, Palm Beach and Pinellas counties round out the top five counties with largest market shares in the state with

9.63%, 9.60%, 9.09%, and 7.03% of the market share, respectively.

According to BauerFinancial, several local banks in Miami-Dade and Broward counties are increasing their pieces of the pie: ■Miami Lakes-based 5-Star rated BankUnited increased its market share from 5.57% on June 30, 2015, to 6.24% on June 30, 2016.

■Coral Gables-based 5-Star rated Mercantil CommerceBank lost 3.76% of share but is still higher than most at 3.40%.

■Miami-based 5-Star rated City National Bank had 2.60% market share on June 30, 2016, slightly down from 2.67%

a year earlier.

■Miami-based 5-Star rated Sabadell United Bank increased its market share from 1.72% to 1.77% from June 30, 2015, to June 30, 2016.

■Weston-based 5-Star rated Florida Community Bank went from 1.04% share to 1.39% during the year.

The only other local banks with more than 1% deposit share in Miami-Dade and Broward counties are: ■Miami-based 5-Star rated Ocean Bank at 1.64%, down from 1.70%.

■Miami-based 5-Star rated TotalBank, which had 1.18% as of last June 30, down from 1.20%.

All-cash real estate deals become fewer for multiple reasons

By Catherine Lackner

All-cash real estate deals are on the decline, and observers cite various reasons.

“We’ve moved beyond being an REO market,” said Michael Pappas, president of The Keyes Co., referring to a market dominated by investors shopping for foreclosures and short sales.

“We now have real buyers and real sellers. Three years ago, 35% of the single-family market was distressed, and now that number is in the single digits. We’ve filled that gap,” he said.

Though most REO investors paid cash, real buyers usually need bank financing, which has become easier to get, he said.

“Three years later, the regulations have loosened up. With Dodd Frank, we got the best loans ever produced,” he said, referring to a federal law that requires more scrutiny of buyers and also gives consumers more information about their mortgages.

“Banks were diligent about where the cash is from, and that’s created a stable environment,” Mr. Pappas said.

Even the Federal Housing Administration and Federal Home Loan Mortgage Corp. are backing conventional loans with a high loan-to-value ratio, he said.

“There’s a whole misconception about the availability of money.

If you have a job and have had a job in the past, you can get a mortgage. There are checks and balances in place,” but they are not an impediment to financing for qualified buyers.

That has boosted the market, especially for homes priced at $500,000 or less, he said. “There

‘I believe [the cash deals decline] has more to do with the fact that financing is more available in recent years and prices have increased.’

Edgardo Defortuna

‘Three years ago, 35% of the single-family market was distressed, and now that number is in the single digits. We’ve filled that gap.’

Michael Pappas is only a 30-day supply; it’s the tightest it’s ever been. We’re constantly seeing increasing demand in the single-family market.”

Only the condominium market is still seeing steady cash purchases because not only the purchaser, but also the building, has to pass muster.

“Some of these regulations should be eliminated, because it’s a dilemma for first-time buyers,” who tend to be millennials, Mr. Pappas said. About 35% of buyers in the market are first-time purchasers, he said, and 70% to 80% of them are millennials.

But in general, “We’ve seen an

increasing economy for almost 10 years, coupled with low interest rates,” he said. “All of this lending capacity is good for consumers, and it bodes well for 2017, which I think will be a record-setting year.”

The decrease in cash deals is because ”the exchange rate has gone against foreign buyers,” said Edgardo Defortuna, president, CEO and founder of Fortune International Group.

“We’re still requiring a 50% cash deposit pre-construction, and a lot of buyers intended to complete their purchases in cash, but they found out they needed to finance. Some only finance as a bridge loan, but fewer people close in cash.”

Cash deals have declined from about 80% to 40%, he said. Be-

cause of currency devaluations, “things are a little tight, and unless they have a private source of funding, they are getting a mortgage.”

Economic forces on foreign buyers mean the cash 50% preconstruction deposit is here to stay, or at least for the foreseeable future, Mr. Defortuna said. “It might slow down sales, because there are not that many people capable of doing that, but it is much safer for the developer.”

The decline in cash deals “I believe has more to do with the fact that financing is more available in recent years and prices have increased” than the federal geographical targeting of cash buyers in Miami, said Joseph Hernandez , a member of the Weiss Serota Helfman Cole & Bierman law firm, via email.

County cuts delinquent accounts, but many are uncollectable Miami-Dade County has reduced its delinquent accounts other than taxes that are owed to the county, a report issued Friday by Mayor Carlos Gimenez reveals.

The county was due just under $41.2 million in those overdue accounts of more than $2,500 each as of Sept. 30, last week’s report said. By contrast, a report issued by the mayor in January had listed more than $43 million in accounts other than taxes past due more than 90 days as of last June 30.

The explanations for the delinquencies indicate that the county has little to no chance to collect many of the past due millions.

The quarterly reports were ordered by county commissioners in 2012. There was no explanation for the reduction in past due accounts nor was there an explanation for

why the reports cover periods more than six months past.

While the delinquencies were reduced slightly, they still are far above past delinquency totals. In January 2016, Mr. Gimenez reported delinquencies of above $36 million. In April of 2016 he reported delinquencies of $37.3 million.

The largest delinquency total came from the Water and Sewer Department, just under $12.8 million – essentially the same as reported in January 2016 but down from $13.6 million reported in January 2017.

That total now makes up about 30% of all delinquencies over $2,500.

The mayor has noted that the money is due from retail water and sewer customers, wholesale customers and other

governments.

The second largest delinquencies group is money owed to public housing and community development, just over $11 million, or almost 27% of the delinquency total.

That total was $10.8 million three months earlier and $8.1 million in the January 2016 report. The mayor has noted that these receivables contain a large amount awaiting write-off because they are either second mortgage assistance loans where the first lender foreclosed, entities that received economic development loans and no longer exist, or participants in the federal Section 8 housing rental program who cannot be located.

The third largest group of delinquent accounts is the nearly $7.8 million owed

to the Aviation Department, a total making up almost 19% of all delinquent accounts of more than $2,500 apiece. That total has been cut by more than $2 million from the January report and is down nearly $3 million in total from the January 2016 report. The money owed includes bankruptcy proceedings, payment plans and pending write-off approvals, the mayor’s report says.

The fourth largest category is from Fire and Rescue, more than $4.2 million, up from $3.9 million three months earlier.

Those are charges for transportation, special events and life-saving inspections.

None of the other nine categories of funds owed is as much as $1.5 million, the report shows.

16

FINANCIAL TRENDS

MIAMI TODAY

WEEK OF THURSDAY, APRIL 20, 2017

Community banks aggressively pursue deposits, CEO says

By Camila Cepero

Community banks are definitely holding their own, even in the face of a current slowdown in loan demand, one industry expert says, and they’re ramping up their business development efforts as well in order to stay competitive in an aggressive market.

“Overall, banks are being pretty competitive in pursuing deposits,” said Eddy Arriola, CEO and chairman of Apollo Bank. “So although it looks like there’s more of a slowdown on the loan demands, with customers pulling back on the demand side, banks in this town are still aggressively trying to grow.”

The current “movement in the market” is positive, he said, with bank acquisitions – such as

IBERIABANK Corp.’s March announcement regarding its intended acquisition of Sabadell United Bank for $1.025 billion – being a good sign.

It means that “there are a lot of banks not operating in this market that want to be here,” Mr. Arriola said.

There isn’t an all-out “rate war,” he said, where banks are pursuing deposits to boost their rating.

Instead, they’re directing their attention to business development, including customer acquisitions and building relationships.

Generally speaking, he said, clients are very loyal to community banks once they become customers and tend to stay with a bank for a long time. The hard part comes in getting a customer to switch banks.

Banks competitive: Eddy Arriola.

Community banks are launching incentive programs to spur business development and freeing up employees’ schedules in branches so they can spend more time with clients. They’re also offering special

rates and marketing their technology options.

The slowdown in loan demand can be attributed to a number of factors, Mr. Arriola said, including the parallel “slowing down” – but not devaluation – of the local real estate market.

“We’re a real estate driven town,” he said. “The real estate market is less active, not for any fundamental reason, but there was a lot of action and now people are digesting.”

Additionally, he said, “the new administration talked about less regulation and tax reform, but that doesn’t look like it’s happening,” so people are waiting to see what that means for their businesses.

All in all, the main pro of a community bank is that it’s focused on its local community.

“Miami’s different than the rest of the country,” Mr. Arriola said.

“There’s been a lot more growth here, and we’re going to have a lot more growth for at least the next 10 years. It’s more of a hotbed for economic activity and investment.”

While community banks aren’t for everybody, he said, there’s still a core market, like small business owners and entrepreneurs who want to deal with a “more boutique-type service,” and bankers that they know on a first-name basis.

“The ownership and management [of community banks] have a longer-term view of the relationships,” he said, “and they have a better, more reactive outlook on the local market that out-of-market banks won’t be interested in or just don’t understand.”

Washington will determine future of stocks’ Trump bump

By Catherine Lackner

In what’s being called the “Trump bump,” the stock market has been on a run since the Nov. 8 election. In January, the Dow Jones industrial average surpassed 20,000 points for the first time; it was the second-fastest gain since the dot-com bubble of 1999.

But will it continue, and will it attract investors who have been out of the stock market?

That all depends on what happens next, said Alan Lips, a partner in the Gerson Preston accounting firm.

“The issue is whether President Trump can work with Congress on issues like immigration, health care and tax reform. Whatever happens will change how the market reacts. The market is based on expectations, and not much has been accomplished so far.”

Mr. Lips said he expects that the new administration will effect changes that will bring more money into the US, but “whatever happens, positive or negative, will drive the market.”

Is it a good time for those who have been sitting on the sidelines to jump into the market?

“Obviously, investors should be looking at the situation, but with a knowledge of their own risk tolerance,” said Neil Sosler, partner and

On the New York Stock Exchange floor, the Dow Jones Industrials surpassed 20,000 points this year.

senior advisor of Singer Xenos.

“We’ve had an eight-year bull run on the market – the second-longest without a pull-back – and if people think it will continue forever, they will be very disappointed.

“It doesn’t mean you can’t make money,” he said. “The jump happened very quickly and people are excited. But it’s already baked into the cake, as they say. Markets are

trading fairly high,” so there are few bargains to be had.

There may be another bump at the end of summer, he said, when Congress and the president start discussing the federal budget in earnest. “Look, there are always surprises out there,” Mr. Sosler said. “This is the first time in many years that the same party has been in control” of the House, the Senate

and the presidency.

But investing in anticipation of that bump “is not something I’d advise my clients to do,” he said.

He instead recommends a five-year time horizon. “That way, if we go into a bear market, you have years to recover until you need the money.”

One more caution: “There’s an old saying: when the pendulum

swings, it swings too far, in both ways.”

“It was a straight line up, from the election until February, so enthusiasm and curiosity are prevalent,” said Mason Williams, managing director and chief investment officer at Coral Gables Trust.

“People see how quick it was, and are saying, ‘It’s got Mason Williams my attention, but what do I do now?’ You want to be cautious about it.”

Some investors regret not taking part in the bull market of the past few years, he said. Now that the market is even higher, some are “caught between a rock and a hard place if they sat in cash or in safer instruments.”

His advice: be patient and have a plan. “Some people look for instant gratification, but you’ve got to be committed for a while.”

Some are happy with their investment vehicles and won’t be swayed, no matter what the market does, Mr. Williams said.

“Amazingly, in South Florida a lot of people still find comfort in real estate, even though most took a hit in 2008. And 2008 is still very fresh in their minds.”

Hialeah bonds upgraded, with warning on rate hike attached Hialeah’s water and sewer system revenue bonds have just received a reaffirmed A+ rating and stable outlook from Fitch Ratings, but that plus is coupled with warnings that the city’s customers are about to be hit with high rate increases that will force the system’s services above affordability.

The $46.2 million in revenue bonds were issued in 2011 through the Florida Municipal Loan Council and are based for repayment solely on water and sewer system revenue.

“There is no debt service reserve fund securing the bonds,” Fitch’s analysts reported.

While water and sewer cost per Hialeah customer now is at about the threshold of 2% of median household income that Fitch considers the ceiling for water and service costs, those costs are expected to rise steeply next year.

“Rates are forecast to rise by 12.1% for water and 9.1% for sewer in fiscal 2018, then both by 2.1% [the anticipated rate of inflation] each year thereafter,” Fitch wrote.

“Already elevated rates and below-average

wealth and income levels may lead to affordability concerns.”

The rate increases are driven by MiamiDade County’s capital improvement needs.

In its 10-year plan are $1.6 billion to fund a consent decree with the Florida Department of Environmental Protection and another $3.3 billion related to state ocean outflow legislation. The consent decree requires sewer system treatment and collection system repairs. The ocean outfall legislation requires the county to end its use of ocean outfall for sewer effluent disposal by 2025, which will require major redesign and reinvestment, Fitch notes.

And all of those county expenditures flow through to buyers around the county. Hialeah is the county’s second-largest wholesale buyer of water and sewer services, accounting for 26% of wholesale flows and revenues. As the county is forced into more capital spending, its customers will pay more, so Hialeah’s added costs will be pumped through to its business

and household customers, Fitch notes.

Fitch also cautions that “while the Hialeah system’s capital debt per customer was only $438 in fiscal 2015, which is well below the average of $2,875 for Fitch-rated water and sewer systems that receive its ‘A’category rating, “significantly higher debt could require even higher rate increases that could further pressure the system’s already constrained rate-raising flexibility.”

The Hialeah economy, Fitch notes, “is heavily dependent on the economically sensitive service industry.” While the city’s unemployment has been declining with the rest of the region, Fitch reports that 29.2% of the city lived at or below the poverty line in 2015. “Income levels are persistently low, equating to only 67% of the county, 60% of the state and 51% of the nation.”

Abright light that Fitch notes is the planned development of “what would be the nation’s largest indoor mall, called ‘Dream America,’ ” in three square miles of annexed land

northwest of the city. “Current projections show the mall could create between 75,000 and 200,000 jobs.”

Required to serve that mall was a reverse osmosis water treatment plant that Hialeah and the county jointly financed. The plant converts raw brackish water from the Floridian Aquifer into potable water, reducing draws on the ecologically sensitive Biscayne Aquifer.

That new plant currently processes 7.5 million gallons of potable water daily and is expected to begin producing 10 million gallons daily within a year. It can be expanded to up to 17.5 million gallons.

Today, 5 million gallons of the plant’s output is available for current Hialeah customers and the annexed 3 square miles where Dream America is to rise. “The availability of the [reverse osmosis] plant helps to reduce the city’s wholesale water purchases,” Fitch’s analysts wrote, “but the plant’s operational costs largely neutralize material cost savings.”

WEEK OF THURSDAY, APRIL 20, 2017

TODAY’S NEWS

MIAMI TODAY

17

Marine Council official cites 11 Brickell Bridge pathways

By Catherine Lackner

Frustrated by what it says are illegal openings of the Brickell Bridge that paralyze downtown, Miami’s Downtown Development Authority has petitioned the Florida Department of Transportation and the US Coast Guard to extend the hours during which the bridge is locked down.

But before extending the hours is even contemplated, 11 recommendations by the Miami River Commission (MRC) should be considered, said Phil Everingham, past president and current director or the Marine Council and its representative on the MRC. The bridge is supposed to be locked down (except for vessel emergencies or ships being towed) between 7:35 and 8:59 a.m., 12:05 and 12:59 p.m., and 4:35 and 5:59 p.m. weekdays. The proposed rules would extend the morning and evening lockdowns until 9:30 a.m. and 6:30 p.m. respectively. During all other times, the bridge is to open only on the hour and the half-hour, and then only in response to a vessel request.

While he acknowledges that the often-discussed tunnel beneath the river is the best solution, “it’s quite a way off, at least five to 10 years,” Mr. Everingham said Monday.

“Obviously, funding is going to be critical. Meanwhile, we need to deal with the issue.”

The transportation department has produced a study on the Brickell Bridge and related traffic congestion, and the US Coast Guard (with the University of Miami) is conducted a study, which should be done in the next 30 days, he said. Here

Pedestrians who skirt the gates and cross the bridge after an opening signal are cited as a concern.

are the MRC’s suggestions, some of which observers say could be done quickly and cost-effectively: nEnforce existing federal bridge opening restrictions. nInstall pedestrian traffic gates. nRestore vehicular traffic lanes, which the state transportation department recently eliminated on the Brickell Bridge. nDo not allow hotels on the north side of the Brickell Bridge to illegally block traffic for their valet or loading operations. nSynchronize traffic-signal timing with Brickell Bridge operations. nInstall “smart signage” that

warns drivers of upcoming bridge openings before they are in bumperto-bumper traffic. nProvide the final permit for the What Up Bridge app, which provides bridge opening notices via text or email. nRequire electronic automation of bridge-tender logs to insure accuracy, and post bridge-tender logs on a website or mobile app. nResearch the placement of marine river traffic circulation signals to advise vessels of permitted and prohibited passage times. nInstall bridge signage along the river and on the land side with

closure hours, including the halfhour intervals.

“It wouldn’t surprise me if there were enforcement issues,” Mr. Everingham said. “If there are, they need to be addressed, no question about that.”

But, as has been pointed out by industry representatives, the traffic tie-ups on Brickell are not all related to the passage of ships.

Pedestrians who skirt the gates and cross the bridge after being given the signal that the bridge is opening are a problem, he said.

Also, the state transportation department in 2013 closed one lane

of traffic, forcing northbound motorists to merge from three lanes to two at the south foot of the bridge.

“We, as well as the condo associations and the hotels, adamantly opposed this, but our opposition seemed to fall on deaf ears,” Mr. Everingham said. Northbound traffic also is held up by delivery trucks that are double-parked and valet services that get backed up onto Biscayne Boulevard Way, he said.

The transportation department gave the What Up Bridge app (a product of a 2011 Downtown Development Authority Hackathon) a temporary permit several years ago, and it was wildly successful with drivers and residents timing their trips. But the department hasn’t finalized its permit, Mr. Everingham said.

The marine industry and casual boaters can help, too, he said. “It’s a two-way street. If boats would lower their outriggers and antennas, as they are supposed to do when approaching a bridge, that would reduce the number of times the bridge has to open.”

Some smaller boats “sneak through” in the wake of a larger vessel being towed, he added. “If that’s the case, they should be identified and fined.”

The MRC wants all of the stakeholders to gather at the same table, and for the industry’s concerns to be taken into consideration, he said.

This will probably happen only when the Coast Guard and University of Miami finish their study and the transportation department has a chance to review it, observers say.

“We want a discussion,” Mr. Everingham said, “not to be told, ‘It’s our way or the highway.’ ”

Miami moves to label West Grove a redevelopment area

By John Charles Robbins

Miami city commissioners have taken the first step toward designating the impoverished neighborhood of West Grove a Community Redevelopment Area, which could lead to special funding to revive the area within the city’s southwestern reach.

Commissioners unanimously approved a resolution last week directing the city manager to identify funding for a finding of necessity study under the state’s Community RedevelopmentAct for the creation of a Community Redevelopment Area for the West Grove.

The resolution directs City Manager Daniel Alfonso to hire consultants to prepare the study for up to $25,000.

The legislation is sponsored by Commissioner Ken Russell, in whose district West Grove sits.

“This is a study to see if the West Grove would qualify as a CRA,” Mr. Russell told fellow commissioners.

He said he’s studied ways to improve the neighborhood and met with community members to get their input.

“This has gained some traction,” Mr. Russell said of a Community Redevelopment Area.

A CRA’s main mission is to enhance the quality of life and improve the public health, safety, morals and welfare of the residents and stakeholders.

The City of Miami has three

CRAs, and the five elected city commissioners serve as CRAboard members and make all policy and budgeting decisions.

Mr. Russell said if the study shows the West Grove is eligible to be a Community Redevelopment Area, it would be an extension of the existing Omni CRA. The West Grove was the focus of recent efforts to encourage new affordable housing, and the city manager was earlier directed to study the area for properties that might be open for such development.

Commissioner Frank Carollo commended Mr. Russell for bringing new ways to the commission to encourage affordable housing and expressed conditional support for the study.

“This study is a good first step,” he said, but he doesn’t want to “saturate” the city with CRAs, because they draw money away from the general fund, which is relied on for city-wide critical issues.

Mr. Carollo also reminded fellow commissioners that a similar study from the county was to be launched in 2015 to consider a CRA designation for Little Havana, with a goal of capturing tax money for new affordable housing, development and infrastructure needs.

Mr. Carollo asked the city manager’s representatives at the meeting about the fate of that study and was told no such study had been delivered to the city.

Mr. Carollo then directed the city

Ken Russell initiated city action.

manager’s staff to investigate and report to the commission.

Mr. Russell’s resolution details the history of the neighborhood.

The West Grove is a historically Bahamian, approximately 65-block, half-square-mile section of Coconut Grove, with an eclectic and rich history known for culture, architecture, arts and festivals.

But in recent years the West Grove has been “plagued by crime, drugs, decay, and lack of affordable housing, which has resulted in the displacement of many longtime residents,” the resolution says.

The city commission desires to revitalize the West Grove through possible creation of a Community Redevelopment Area, the resolution says, which requires a finding of necessity study under state law.

The statute delegates local governments authority to establish CRAs to carry out community redevelopment in specific areas

determined to be slum and blight.

Mr. Russell said there is some apprehension among West Grove residents and others about CRAs, with some worried a CRA “encourages development in the wrong way.”

Mr. Russell said it is his hope that CRAs can be used to “steer” development in a good and beneficial way.

A CRA agency is funded through a financing tool called tax increment financing, which earmarks a specific portion of property tax dollars collected by the city and county.

In turn, the CRA board reinvests these funds back into the redevelopment area by funding projects that enhance the quality of life of residents.

Such activities include infrastructure upgrades, façade improvements, economic development incentive programs to attract new businesses, the promotion and support of jobcreating initiatives and more.

“It takes courage to be creative,” said Commissioner Francis Suarez, who also commended Mr. Russell on the initiative.

“We have to keep pushing the envelope,” he said.

Mr. Suarez voiced concern about proposed legislation in the state Legislature that might weaken the Community Redevelopment Area option.

Mr. Russell said he believes all commissioners favor retaining the tools made available through the Community Redevelopment Act.

“We should be vocal advocates for CRAs,” he said.

Neil Shiver addressed the commission and said he’s a life-long resident of Coconut Grove.

He spoke in favor of the study and commended Mr. Russell for leadership in bringing the matter forward.

“My community is dying,” he said, echoing the need for affordable housing.

Mr. Shiver is an attorney who is identified on the city’s website as assistant director of the Southeast Overtown/Park West Community Redevelopment Agency.

“If we were in a court of law, Mr. Chairman, I’d ask you to designate me an expert, not only of the black community of Coconut Grove, but of CRAs as well,” said Mr. Shiver.

“When I get to speak to other CRAs across the state on the successes of the Overtown CRA, I speak about two things: leadership – that’s you – and location,” he said.

“Support Mr. Russell in this,” Mr. Shiver said.

“It’s a bit late. It’s about two decades late. But a late meal is better than no meal at all,” said resident Williams Armbrister Sr. “All the evidence is currently available to have a CRA in West Grove,” he said, and could help to “bring back the magic” to the community.

Mr. Armbrister was one of nine candidates for the District Two commission seat that Mr. Russell won in 2015.

24

WEEK OF THURSDAY, APRIL 20, 2017

MIAMI TODAY

DON’T LEAVE HOME WITHOUT US Subscribe to our E-paper only $60 a year • Easy to read and navigate • Unlimited access to 11 years of searchable archives • New issues available before print edition

Go to www.miamitodayepaper.com for a free demo

Wherever you are, Miami Today can be

MiaMiToday A Singular Voice in an Evolving City