August 28, 2014

Southeast Region

Mike Vogel | 4/1/2001
Miami: A Bid for Credibility

Later this year, Miami voters will choose a new mayor, providing an opportunity to restore much-needed credibility to Miami-Dade's largest city, which suffered a series of black eyes recently. But despite Miami's tattered image, the next mayor will inherit a city on the mend: In December, bond ratings were raised to investment status for the first time in four years. A slew of new development is under way. Ethnic tensions are minimal.

Mayor Joe Carollo has already said he will seek re-election. The other contenders are ghosts of Miami past: Former Mayor and County Commissioner Maurice Ferre, former Mayor Xavier Suarez (who was removed from office following massive voting irregularities), former City Manager Jose Garcia-Pedrosa and Miami City Commissioner Willy Gort. The only newcomer -- whom some call the front-runner -- is Manny Diaz, a local attorney who endeared himself to Miami Cubans as a member of Elian Gonzalez's legal team.

Whoever inherits the post will have to deal with a high unemployment rate, poor city services and businesses reluctant to expand or relocate to Miami. Some citizen groups have mockingly tagged the city a "banana republic."

Mayor Carollo's arrest on domestic battery charges in February is the latest in a string of black eyes for the city. A year ago, Miami's image took a beating during the Elian crisis as scenes of flag-burning protesters -- spurred on by Carollo's open defiance of federal officials -- flashed across the globe. In September, former City Manager Donald Warshaw was charged with embezzling from a pension fund and youth charity. In January, a former city finance director was indicted on a kickback scheme. Meanwhile, the city is still struggling to overcome a fiscal crisis that nearly drove it to bankruptcy. Leadership has been weak: Gov. Jeb Bush has refused requests by Carollo to disband a financial oversight board appointed
in 1996 to inspect all city finances.

Tucker Gibbs, a Miami attorney and civic activist, remains cautious about Miami's future: "Just when you think Miami is on its way back, something awful happens. We need a leader who is not bogged down in the past. Someone who can break out of this pattern of divisiveness."

People to Watch
The key player in the campaign to bring a retractable-roof stadium to downtown Miami for baseball's Florida Marlins may be Miami Commissioner Johnny Winton. Marlins officials say the only feasible site is on bayfront land within Bicentennial Park. Winton opposes the use of public green space, leaving him with the task of negotiating for an alternate site.

It wasn't too long ago that scandal and controversy rocked the Port of Miami. But under the stewardship of port Director Charles Towsley, cargo tonnage has increased 13% in 2000; revenues were up 12%. But with competition fierce and room for expansion limited, Towsley must figure out how to maintain that kind of growth.

Businesses to Watch
Few companies are more bullish on downtown Miami than The Related Group of Florida. After completing much of its work last year on West Palm Beach's $550-million CityPlace, the company, with 2000 revenues near $500 million, will turn its attention to a slew of projects in Miami-Dade, including twin towers near the mouth of the Miami River.

The apparel industry was once a key segment of Miami-Dade's economy, but cheap offshore labor prices sent many manufacturers packing. Miami-based Perry Ellis International (Nasdaq-PERY), which designs, imports and markets high-quality men's sportswear, is sparking a rebirth of the industry.

Key Statistic
Four years ago, Miami's unemployment topped 11%. Today that figure has fallen to around 6%, still among the highest in the state.
Miami Beach: The Price of Success

Few cities have changed more in the past 20 years than Miami Beach. In the early 1980s, Miami Beach was a fading tourist Mecca, home to low-income Latin immigrants and fixed-income Jewish retirees. Today the city of 97,000 is again one of the world's most recognizable tourist destinations. Wealthy Europeans and Latin Americans swell its population during the winter months; a vibrant community of young professionals -- many working in the film, fashion, recording, television and dot-com industries -- lives there year-round.

This transformation has caused the city's total property assessments to increase from $3.2 billion to $8.4 billion over the past 12 years. That figure has increased 36% in the past five years alone. Much of that is because of a visitor-industry building boom still under way. Scheduled to open this year are a 385-room Ritz-Carlton, the 424-room Royal Palm Crowne Plaza and the 320-room Shore Club.

But Miami Beach Mayor Neisen Kasdin says the increased property values are a double-edged sword. While higher tax revenues have allowed the city to embark on a $500-million upgrade of its water and sewer system and other infrastructure, the skyrocketing housing costs are driving many longtime residents out. The fashionable South Beach area now boasts one of the priciest housing markets in Miami-Dade. Two-bedroom apartments rent for an average of $1,600 a month, compared to a countywide average of about $900. Housing prices in the North Beach and Central Beach areas also are headed up.

Kasdin, a life-long Miami Beach resident, says affordability has become one of the city's greatest challenges. One city program already in place subsidizes developers who rehab apartments and set aside 51% of their units for lower-income housing. "Our city has been very successful," says Kasdin. "But now we must manage that success. Growth alone is not enough."

People to Watch
Developer Craig Robbins made his mark renovating art deco properties on South Beach. He later moved mainland to help revitalize the Miami Design District. His latest venture, Aqua, is a kind of new urbanism for only the wealthy: A gated, low-rise residential development on the site of the old St. Francis Hospital.

With his own music studio, recording label and restaurant chain, musician Emilio Estefan (Gloria's husband and business partner) is front and center of Miami Beach's booming entertainment industry. His latest venture is a Spanish-language edition of Ocean Drive, the glossy chronicle of South Beach fashion and night life.

Businesses to Watch
Latin internet companies are suffering these days, but that isn't stopping Latin media giant Cisneros Television Group from acquiring Latin portal El Sitio. The combined companies will be called Claxson Interactive Group. CTG, one of Miami Beach's largest private employers, is banking on synergies that nobody has quite fingered.

Miami Beach likes to bill itself as the epicenter of the Silicon Coast, attracting dot-com startups from around the Americas. The most visible of the bunch has been Yupi Internet, which slashed about half its staff in December. Its doom could signal further fallout in the fledgling Latin internet industry.

Key Statistic
Tourism rules in Miami Beach. Nearly 28,000 of the 60,000 people employed in the city work in the hotel, food and beverage industries.
Fort Lauderdale: Where the Yachts Are

When the blue-hulled Limitless ties up at the Fort Lauderdale Marina Marriott on 17th Street, even people in the yacht business are agog. Owned by Leslie Wexner, who heads The Limited, Victoria's Secret and Bath & Body Works, the Limitless measures a whopping 315 feet. It's bigger, points out longtime Fort Lauderdale marina executive Dick Graves, than a ship he served on in the Navy.

With years of economic growth and the end of the luxury tax, the building of megayachts -- those more than 80 feet -- has boomed. And Fort Lauderdale, with its yards and provisioners, has become the megayacht fleet's home port. South Florida, according to the Marine Industries Association of South Florida, hosts more than 900 megayachts a year that pour $784 million into the local economy.

Aside from the nightly docking fee -- at $3.50 per foot, a megayacht owner can easily drop $350 a night at a marina -- megayacht owners shell out for repairs, maintenance and even fresh-cut flowers. The average boatyard tab: $236,000. Owners also drop money for dockside amenities like clubs, spas and tennis courts. And more are coming. As yacht builders around the world report more demand, megayacht captains can find themselves on a waiting list to tie up in Fort Lauderdale. "The sad fact is the yachting capital of the world is rapidly running out of dock space for big boats," says marine association Executive Director Frank Herhold.

The Bahia Mar Resort and Yachting Center is talking about a major expansion that would include more megayacht dockage. "Every boat I turn away is 80 feet and up," says Kevin Quirk, general manager of the Bahia Mar, where the world's largest boat show, the Fort Lauderdale International Boat Show, is headquartered each year. "The demand keeps growing."

Developer Terry Stiles last month opened a new luxury rental project, Sunrise Harbor, with a marina that can accommodate 22 megayachts. Sunrise Harbor marina manager Graves remembers that years ago Fort Lauderdale was known for spring break and yachts. "Thank God we lost spring break," Graves says, "but the yachting is still the yachting."

People to Watch
Michael Egan, chairman and CEO of ANC Rental Corp., unloaded former CEO Michael Karsner last year after the newly public spinoff from AutoNation began to stumble. Egan, 60, sold privately held Alamo to AutoNation in 1996 and then dabbled in e-commerce, the arts and the beverage industry ["Forgetting the Alamo," December 1997]. Unlike his first go-round in rental cars, Egan now has multiple brands -- National Car Rental and Alamo Rent A Car -- and public shareholders to deal with.

R. Donahue Peebles Jr. set a March deadline for Broward County to agree to let him operate a planned convention center hotel. Peebles and the county have been going around on the $70-million, 500-room public/private project for four years. ["From D.C. to SoBe," February 1998]. Peebles' 424-room, $76-million Royal Palm Crowne Plaza Resort, a partnership with Miami Beach, opens in July. Meanwhile, Peebles' Diamond on the Beach, a 20-story hotel project with the city of Hollywood, is in limbo following the February murder of Peebles' partner in the deal, Gus Boulis, the founder of Miami Subs and gambling cruise-to-nowhere impresario.

Businesses to Watch
Sunrise Cinemas has been bucking the trend of theater-chain failures by buying older facilities and repositioning them as houses showing the "best of Hollywood" along with art and foreign and independent films. The company's fifth theater opened in Boca Raton in January.

Now that AutoNation shed its distracting -- and failed -- used-car superstore concept and spun off rentals, it can focus on its new-car dealerships. Problem is, the H. Wayne Huizenga company is steering into a slowing economy.

Key Statistic
Fort Lauderdale's downtown office vacancy rate is at 6.4%, one of the lowest in the county's history. More than 500,000 square feet of office space is under construction. Another 500,000 square feet is being proposed.
West Palm Beach: Spreading the Wealth

A few businesspeople and city leaders aren't waiting for the Invisible Hand to spread the economic seed from West Palm Beach's two new downtown islands of commerce -- Clematis Street, the hopping saloon-shopping venue, and CityPlace, the monumental, $550-million retail-apartment project that opened in October with headliners like Macy's and FAO Schwarz.

First-term Mayor Joel T. Daves wants Banyan Street, a block north of Clematis and little more than a through-street, reborn. He plans to move the City Hall farther west to open waterfront land for private development. He wants a new library. He also plans for an old hotel and an underutilized First Union property to be turned into something grand. His vision of a vibrant office and residential district would extend Clematis Street's liveliness north and west to the city's long-neglected minority Northwest neighborhood.

North of downtown, the Northwood community development district is improving streets and zoning to encourage neighborhood businesses like dry cleaners and delis in the blighted area. Already, Spanish-style homes dating to the 1920s that were selling for $85,000 are going, renovated, for $300,000, says Jim Exline, the area's city commissioner. "People want to live where there are amenities," says Exline, who recalls having to carry a gun when he left work late from his downtown office in the early 1990s. "There was no one downtown."

In February, the city commission approved a residential incentive program to encourage more housing downtown. Eleven targeted sites could yield 1,400 homes, Exline says.

People to Watch
Lowell W. "Bud" Paxson, chairman of Paxson Communications, looks for a big payday from wireless companies that may bid to take over his chain's part of the spectrum for their services. NBC, which owns a third of Paxson, continues to spread its influence over his 2-year-old Pax TV network.

John C. Textor, 35, chairman and chief executive of Jester Digital in downtown West Palm Beach, looks to raise $10 million to $15 million to expand his cutting-edge, 3-D and virtual reality web design company.

Businesses to Watch
The most important private-sector real estate project downtown, The Strand, a 15-story luxury rental and retail development overlooking the Intracoastal Waterway, will signal the depth of the downtown residential market. The developer is the American Land Housing Group of Miami, headed by Granvil Tracy, 46, who is developing the New River Village rental project in downtown Fort Lauderdale. Construction of The Strand will be completed in 2002.

Publicly traded Fidelity Bankshares (Nasdaq-FFFL), parent of 36-branch Fidelity Federal Bank & Trust, plans to sell 7 million shares in May to raise upward of $70 million to fund the bank's continued expansion and broadening into commercial and consumer lending, trust and insurance services. Fidelity Federal has $1.9 billion in assets.

Key Statistic
West Palm Beach has had $360 million in public and private investment projects in the past 10 years. Another $700 million is under way.
Boca Raton: Flying High

On an October day, corporate jets landed every three minutes at tiny Boca Raton Airport as CEOs of the nation's top companies descended on the Boca Raton Resort and Club for a two-day economic summit. The one-runway airport has become a flash point for locals who worry that tony Boca Raton has become a victim of its own success. The city's population is approximately 70,000. Traffic gridlock on Glades Road and other thoroughfares has become so common that a city consultant recommends mandated four-day workweeks at large employers to cut down on traffic. Fines, usually found in much bigger places -- such as Seattle -- would be levied on businesses that don't comply.

The Boca Raton Airport, the center of so much growing-pain ire, dates to the 1940s, when it was a military base. It became the subject of criticism only in recent years as increased use led to complaints about noise. The anger isn't confined to homeowners. Deerfield Beach, on Boca Raton's southern border, last year sent a delegation to Washington to complain to the Federal Aviation Administration about noise and flight patterns at the Boca airport. In June, a Learjet and an aerobatics plane collided southwest of the airport, killing the aerobatics pilot and the three crew members on the Lear. The airport is "getting too big," says lawyer Keith Kanouse, whose yard was hit by debris from the collision. "It benefits a handful of people at the expense of everyone else."

People to Watch
Per-Olof Loof, 49, chief executive officer of anti-theft company Sensormatic Electronics (NYSE-SRM), has posted six consecutive quarters of improved results since taking over in 1999. In the company's first six months of its current year, profits are up 50%. Analysts expected more until a strong dollar and some product weakness dampened growth. Loof is looking for a bounce from Sensormatic's sponsorship of the 2002 Winter Olympic Games.

German citizen Eduard Will, chief executive officer of Inprimis Inc. (Nasdaq-INPM), was at last report awaiting his immigration papers so he could take up the reins of the formerly named Boca Research. After posting losses for years, the one-time modem-making company will try, under former investment banker Will, to succeed as a supplier of engineering services to other companies making consumer products like devices to connect DVD players to the internet.

Businesses to Watch
The fortunes of Cenetec, the Boca Raton-based technology business accelerator, will tell a lot about the vibrancy of technology and internet businesses on the Internet Coast. The first companies to join its six-month program, Esemde Wireless Messaging, OmniCluster Technologies and APA Wireless Technologies, are due out soon.

Software development firm Daleen Technologies (Nasdaq-DALN) laid off 135 employees -- 27% of its workforce -- in January. Its stock trades at less than $2, down from a high of $35.25. The company's branching out of the telecom sector, where a slowdown has hit its revenues.

Key Statistic
By 2007, Boca Raton's population is projected to jump by about 6,000, becoming home to more than 76,000 residents.
Homestead: Still in Recovery

Over the past few years, Homestead has spruced up its urban core -- a quarter-mile stretch of South Krome Avenue -- creating a walkable historic district replete with cafes, antique shops and a small public park. But behind the main street facade is a more sobering portrait. The south Miami-Dade municipality of 27,000 has one of the county's highest unemployment rates, coupled with one of its lowest household income levels. Welfare rolls are high, and many business leaders decry the poor quality of public schools.

This dichotomy of perception and reality is the legacy of 1992's Hurricane Andrew. State and federal governments have pumped aid into the community, but business startups, expansions and relocations are few. What have arrived are many low-income residents, attracted by subsidized housing (including much of the surplus military housing) and the seasonal labor market for the agricultural industry.

Most city leaders attribute the economic woes to the closing of Homestead Air Force Base. When the military pulled out after the hurricane, so did much of the off-base support industry. Many military pensioners whose homes were damaged never returned. That, in turn, precipitated a migration that gutted much of Homestead's middle class. Officials hoped that a proposed commercial airport at the old air base would help reverse that trend by creating tens of thousands of high-paying jobs. But in January, the Air Force rejected the plan, sending economic development officials back to square one.

Bill Losner, a Homestead native and president of the First National Bank of Homestead, says officials should turn their efforts away from the air base development and other "savior" projects and begin courting smaller employers. "That's our challenge for the next few years," says Losner, whose family moved to Homestead in 1920. "We've got to think about rebuilding our economy one business at
a time."

People to Watch
When Miami-Dade County Mayor Alex Penelas tapped Homestead Mayor Steve Shiver as his next county manager, many observers saw it as an opportunity to win favor among Anglo voters in south Miami-Dade. Now, residents are waiting for the payoff. Will the county steer jobs and resources to Homestead?

Miami-Dade Commissioner Jimmy Morales is coordinating a bid by the county and the city to retrofit the Homestead Motorsports Complex into the National Training Center for the U.S. Soccer Federation. The $20-million project would be a year-round residence and training facility for the men's and women's Olympic and World Cup teams and could be leased to professional teams from around the world.

Businesses to Watch
Federal officials have grounded plans for a commercial airport at the old Homestead Air Force Base, but the politically connected Homestead Air Base Developers Inc. (HABDI), which received a no-bid contract from Miami-Dade officials to build and operate the airport, is unlikely to go away quietly. Whatever goes on the site, HABDI will demand a piece of the action.

Situated miles outside of town, the 5-year-old Homestead Motorsports Complex has not been the economic catalyst that backers had promised. Events are few, and neighboring development non-existent. Can Homestead, which chipped in about half of the $65-million construction cost, parlay this resource into more full-time jobs for the region?

Key Statistic
At an average age of 31, residents of the Homestead/Naranja area are the youngest in Miami-Dade County. But these aren't young professionals looking for clean air and large building lots: The region's agricultural industry attracts many low-skilled workers with large families.
Pembroke Pines, Miramar, Plantation
U.S. 441, a seedy strip of pawn shops and used-car lots, speaks the ugly little truth about west Broward boom towns like Miramar and Pembroke Pines. For all their rapidly filling, upwardly mobile developments and new office buildings along Interstate 75, they have struggling old eastern cores. To address that, cities are making plans.

Plantation, for example, will use $17 million in federal grants and local taxes to improve U.S. 441's lighting, add palm trees and upgrade the area. Changes in zoning laws will nudge out pawn shops, check-cashing stores and used-car dealerships.

Miramar, meanwhile, after three years of planning, this year passed a watered-down revitalization plan. Some business owners fear it will force them out. Change is needed to restore a neighborhood feel -- and economic vitality -- designers say. Eighty-five percent of new development is in the city's western area. "The decision point is now," says Miramar City Manager Bill Estabrook.
Monroe
In a city whose lifeblood is tourism, there is little consensus on how to manage the flow in Key West. Last December, in a heated 4-3 vote, city commissioners agreed to restrict the size of tour buses operating on city streets. Few people were happy. Merchants say their businesses will suffer from a reduction in day-trippers from Miami and Fort Lauderdale. Others argued the buses should be banned altogether. A proposal to regulate cruise-ship traffic spawned an equally vituperative debate three years ago. The current battle is over a proposal to widen a stretch of U.S. 1 in the northern Keys, which would encourage additional day-trip traffic.

Business to Watch
Ven-A-Care may be one of the most unusual success stories in America. The Key West company was founded in 1987 as a pharmacy catering to the island's population of HIV patients. But after exposing a heath-care fraud scheme (and collecting millions under a federal whistleblower act), the company has become a full-time medical investigator, searching the nation for similar abuses.
Regional statistics, including population, income and labor information, are included in the print edition only. To order a print copy of the April issue, call (727) 821-5800. To subscribe to Florida Trend online, click here.

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