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Southeast: By Sea And By Air
In Dade, last year's best economic news was the announced relocation of the U.S. Southern Command, the military's headquarters for strategic affairs in all Latin America and the Caribbean region, from Panama City, Panama, to Dade. Relocation of the command, which employs about 750 persons, will be completed late next year. The Beacon Council, an economic development agency, estimates that the command indirectly will add another 750 jobs over the next three years in Dade.
Dade's neighbor to the north, Broward County, has an employment base that's growing faster. Estimates from the Florida Department of Labor show that total non-agricultural employment grew 3.4% in Broward last year but only 2.4% in Dade.
This pattern could continue. From 1995 to 2000, projections by BEBR show job growth of 13.8% in Broward but just 8.2% in Dade. The employment base for all of Southeast Florida -- Dade, Broward and Monroe counties -- is projected to grow at 10.4%, well below the 13.7% growth expected statewide.
What does 1996 hold for the regional economy? "I see more moderate growth, but a fairly good year," says Tom Fullerton, a senior economist with BEBR. "The job market is operating at near full employment, with a lot of high-paying jobs in service, accounting, finance and health care."
According to Jorge Salazar, an economist at Florida International University, overall economic growth will be relatively sluggish, particularly in Dade, and a high inventory of homes built after Hurricane Andrew in 1992 will flatten growth in construction employment.
Moreover, a continuing shakeout in banking and other white-collar industries has middle managers and professionals nervous about their jobs. Growing consumer debt could also prolong the jitters in the retail field, where a host of store closings and consolidations in 1995 have set the stage for even more casualties this year.
Any retail sales growth is expected to be modest in 1996, analysts say, and uncertainty rules in South Florida's marketplace. Record consumer debt, along with a nervous climate, will keep many retail chains from major expansion this year, predicts Herbert A. Leeds, a Miami consultant.
But in recent months, Leeds notes, brand-name department stores such as Burdines and Sears have done well at the expense of discounters. "It's the reliability factor," says Leeds. "Shoppers, with less discretionary income, are going with the stores they know best." As for chains such as Target, Best Buy and Marshalls, Leeds says: "I see them prospering but not achieving extraordinary increases. They'll be very protective, maintaining their positions."
The Trade Factor
Trade remains a big reason for continued employment growth in Southeast Florida. Exports and imports through air and seaports in Dade and Broward counties -- which drive the economy in southeast Florida -- are booming. In 1994, the value of goods and services imported and exported from the Miami U.S. Customs District (which extends to Fort Pierce) exceeded $31 billion. The estimate for 1995 is $36 billion, and that value is projected to hit $40 billion this year, according to a forecast by Customs and the Broward Economic Development Council.
"Brazil is our number one trading partner, and the economy there looks good," says John Cordrey, research director for the Beacon Council, Dade County's chief economic development agency. Ditto, he says, for Argentina, Chile and Peru.
The bustling trade climate attracts international firms looking to relocate. Hellmann International Forwarders has announced it will relocate its North American headquarters to Miami from Long Beach, Calif. And two Asian giants, Korea's Samsung Electronics and Japan's NEC America, have opened Latin American headquarters in Dade. The total number of local jobs to be created by Samsung and NEC over the next three years is at least 350.
Manny Mencia, the Beacon Council's vice president for world marketing, predicts that more Asian multinationals will follow Samsung and NEC America to Southeast Florida as their Latin American markets broaden. "As Latin America recovers from the 'tequila effect' -- the collapse of the Mexican peso -- we are going to see more and more of this," he says.
To keep Dade's name in front of business leaders around the world, the Beacon Council has been pressing its Americas Campaign, which has sent delegations of area business execs to 64 cities in 35 countries over the past two years.
Like Dade, Broward has also been active south of the U.S. border, several times a year sending dozens of business leaders on trade missions to Latin America and producing the kind of results that have turned Florida's most populous counties into a two-headed monster in foreign trade.
And those firms prospering are not just large ones such as McArthur Dairy, a subsidiary of Dean Foods. According to the company's ice cream sales manager, Howard Hengstler, McArthur plans to market some new Broward-produced ice cream flavors in Argentina and Brazil as a result of recent trips to those countries.
Indeed, the majority of firms which take advantage of trade missions are companies of 100 employees or fewer, which can't afford to mount foreign market explorations on their own. Take, for example, Huron Machine Products, a mid-sized Fort Lauderdale machine tool manufacturer with annual sales of $10 million and a South Florida payroll of 95. In the past two years, Huron Senior Vice President Stan Seibert has traveled to Mexico, Argentina and Brazil with trade missions on which the council ballyhoos Broward as the hub of South Florida, a mid-point convenient to three international airports and seaports.
It worked for Seibert. Huron now has a joint venture in warehousing and distribution in Mexico City and prospects for a similar deal in Brazil. "Up to 10% of our current sales are international, and our goal is to up that to 25% to 30%," says Seibert. "We believe that even for a company our size, if you are not involved internationally, you're out of business and you just don't know it yet."
The Tourism Industry
Whether more tourists come to Southeast Florida this year than last remains to be seen. The number of overnight visitors to the three-county region is expected to hold steady at about 17.5 million.
In Dade, tourism officials proclaimed victory over the funk of the early 1990s, when a series of murders sullied Miami's reputation, especially among Europeans. Last year 9 million-plus tourists -- more than half from outside the U.S. -- stayed overnight in Dade and spent $8.3 billion, according to the Greater Miami Convention & Visitors Bureau. That represented an increase of 7.1% in the number of visitors and a sizable 21% increase in spending, compared with 1994.
Dade tourism officials expected merely to hold onto those gains this year. Advance bookings from Germany and the United Kingdom are strong, as are those from the domestic market, in particular the Northeastern U.S. This year, for the first time, Miami will air ads nationally on cable television in such cities as Atlanta and Chicago.
In February, when Dutch tourist Tosca Dieperink was slain in Liberty City while seeking directions, the horizon suddenly darkened. Until then, "we had enormous momentum," says convention bureau spokesman Mayco Villafaña. Nonetheless, he says, "indications are that despite this tragic incident, the market is holding."
In Broward, it appears that cold winter weather up north contributed to a sizzling winter tourism season. "Put your sunglasses on because it's looking very bright here," bubbles Nicki E. Grossman, president of the Greater Fort Lauderdale Convention & Visitors Bureau. Last year, 5.4 million visitors spent at least one night in Broward, an increase of 3.8% over the previous year. Grossman looks for a 5% increase in visitors to Broward in 1996.
To keep momentum, Fort Lauderdale's convention bureau is using part of its $2 million budget to buy airtime on two cable channels, Arts & Entertainment and the Weather Channel, for a 30-second spot that piggy-backs off State of Florida promotions broadcast nationally.
Fort Lauderdale no longer promotes itself to the college crowd; Spring Break is pretty much history there. In 1986, some 350,000 college kids showed up during March and April, and city officials decided to gradually de-emphasize the event. This year, only about 10,000 young scholars are expected to drop in.
While Fort Lauderdale's beachfront has been made more accommodating to families on vacation, other parts of the city are preparing for new attractions. Under development are Brickell Station, a 250,000-square-foot retail and entertainment complex downtown, and the New World Aquarium, projected to attract 1.3 million visitors and have an economic impact of $60 million a year. Both will open next year.
This year's winter tourism season also got off to a good start in Monroe, where visitors are virtually the only industry keeping the Florida Keys above water. Monroe County tourism official Andy Newman says hoteliers reported 90% occupancy during the winter season, and spring bookings were strong.
The opening in January of the 178-room Key West Hilton Resort And Marina pushed the total number of hotel rooms in the Keys to more than 9000, and that expansion has resulted in an estimated 250 new jobs. A projected net population gain in Monroe County of about 1,800, many of them retirees, translated into an increasing demand for health care and service sector employment, says University of Florida economist David Lenze.
Retention And Relocation
Keeping health-care providers and other well-paying professions is an important element of economic development in Southeast Florida. For example, COO and acting President Thad Adams says the Beacon Council has helped to retain or create 17,000 Dade jobs over the past three years. Among other successes, after a major Beacon Council lobbying effort, Barnett Bank voted to keep its operations center, and 600 jobs, in Dade, expanding its operations in the northwest corner of the county. Barnett's senior vice president for public relations, Sandra Gonzalez-Levy, says the number of jobs could double within five years.
To the north, the Broward Economic Development Council has been aggressively pushing county commissioners to broaden a tax-abatement incentive program that was used to convince electronics giant Motorola to expand its Plantation facility. According to the development council's chief, Jim Garver, Motorola would reap a $5 million tax refund over the next 10 years after committing to a 400,000-square-foot, $100 million-plus expansion at its cellular telephone and digital pager manufacturing operation. The company has the capability of adding 1,000 jobs over the next three years, says Garver.
Business relocation also is a vibrant source of new employment. Economist Bradley F. Hunter of the Powers-Hunter Group in Fort Lauderdale looks for more firms in the northeastern U.S. to shift to Dade and Broward, "particularly those with back-office operations which don't need the [high-profile] exposure. They can save on rent; their employees enjoy the climate; and they have access to Latin America."
Space is available. According to Cushman & Wakefield, a Fort Lauderdale-based real estate brokerage firm, the vacancy rate for industrial space in Dade stood at 7.4% at the end of 1995, a slight rise over the previous year. The corresponding rate in Broward was 13.7%. But company analysts expect the industrial markets in both counties to remain healthy as more and more multinational firms move into the region.
Long term, however, growth management could become a growing problem in Southeast Florida.
As the population of Dade and Broward counties grows, and housing tracts impinge on wetlands all the way to the Everglades' eastern boundaries, look for commercial projects to enter what Garver calls the "redevelopment phase."
"Each year there is less land available," says Garver, "so now we have to talk about the best and highest use of our resources. The challenge is to identify those business sectors which can reuse buildings and existing infrastructure while we work to increase capacity of highways, the airport and seaport."
Where The Bucks Are
Since 1938, ground zero on Fort Lauderdale beach has been the corner of A1A and Las Olas Boulevard, home of the storied Elbow Room bar. Through almost three decades of Spring Break madness, the entire sun-and-suds crowd from America's colleges seemed to congregate right there.
While the Elbow Room survives, raucous Spring Break does not, and the focus of activity on Fort Lauderdale beach is about to shift two blocks north, to the site of Beach Place. A $50 million entertainment and retail complex expected to be the ultimate expression of the city's new upscale image, Beach Place is scheduled to open in October. "We are thrilled to be moving forward," says Richard E. Mooney, managing director of the Beach Place project.
Beach Place will have a mix of trendy stores (The Gap, Banana Republic), restaurants (Hooters, among others) and late-night spots such as Howl at the Moon. The development also includes an 18-story, 208-suite Marriott timeshare resort with views of the Atlantic Ocean and the Intracoastal Waterway.
Beach Place is destined to be the centerpiece of a sweeping revitalization of the beachfront that includes a refurbished Swimming Hall of Fame plus landscaping, street improvements and removal of rundown properties -- all financed by a municipal bond issue, says Mike Frey, economic development manager for the city of Fort Lauderdale.
Still wanted: A four-star hotel to occupy the corner across Las Olas Boulevard from the Elbow Room.
"Over the next 10 years, we'll see both a hotel go up and residential projects on seven acres along the Intracoastal," Frey says. "We're on a roll."
