April 15, 2024

Miami's billion-dollar real estate boom

Billions of dollars from foreign investors may propel Miami into the ranks of the world's elite cities.

Mike Vogel | 12/5/2011
Miami Herald Property
Genting purchased the Miami Herald property on Biscayne Bay

Lim's late father, Lim Goh Tong, a native of China, emigrated to Malaysia in the 1930s. The elder Lim owned the only casino in Malaysia and built a conglomerate from the proceeds. His son first came to Miami 40 years ago, "literally backpacking," while on break from studying civil engineering at the University of London. He went on to Orlando — "I only wish I had bought real estate. I should have followed Walt Disney." And he enjoyed a grandstand seat for an Apollo night launch. "I felt the earth shake and the heat. It was one of the incredible experiences."

Lim joined his father in business and took Genting international with casino resorts and Genting Hong Kong, the world's third-largest cruise line. "K.T. Lim is a brilliant man, a visionary, a strategic thinker," says Walter Revell, a former Florida Secretary of Transportation who has known Lim for 12 years through serving on the board of Norwegian Cruise Line, of which Genting now owns 50%. Lim broke the cruising mold at Norwegian with the introduction of freestyle cruising.

Genting's "crowning achievement," according to a six-minute promotional video it plays for community leaders, will be Resorts World Miami. "Approach from any direction and prepare to be awed," a narrator intones. A seven-story terraced base will hold 50 restaurants and bars. Atop that will sit a four-acre pool stretching from Biscayne Boulevard to Biscayne Bay. Rising above that will be towers with the hotel rooms and condos. "A $3-billion investment in Florida, an engine for more than 15,000 direct and indirect construction jobs and another 30,000 jobs for the years to come," the narration concludes. "A vacation hot spot, an economic catalyst, an architectural icon, the heart of the city of Miami, a source of pride for all Floridians. This is Resorts World Miami."

World Resort Miami
Genting's project will include a seven-story terraced base that will hold 50 restaurants and bars. Atop that will be towers with hotel rooms and condos. [rendering: Resort World Miami]

Florida Destinations for Foreign Investment
(Commercial real estate 2011 in millions)
Market Investment
Miami $471.54
Palm Beach 142.00
(Fort Lauderdale MSA)
S.W. Florida
(Naples-Fort Myers-Sarasota)
Tampa 32.55
Central Florida
Orlando 12.75
Daytona Beach 6.00
All other Florida markets $76.80
Not to mention — which the video doesn't — a casino, perhaps the largest in the world. Genting says that if Florida rejects casino gambling, it still will build its resort, but over the course of up to 15 years rather than in three to five years after groundbreaking. Genting U.S. principal Colin Au told a Greater Miami Chamber of Commerce audience in October that the Genting tide will lift all ships. In contrast with local "racinos" that attract local customer bases with a mix of horse or dog racing and slot machines, Genting's casino aims to attract gamers from outside the state and country. "Gaming cannot be parasited on the local economy around it because it is never sustainable. In Asia, we have what we call an export mentality. We want to get people from far away from us, as far as possible."

Namely, Latin America and its 560 million people. "Miami is our proxy for Latin America," Au said. Between Latin America and the northeast U.S., he says, Miami will draw 5 million more tourists a year, with windfalls for airport concessions, local attractions, venues and hotels, shops and tax coffers.

Investment in Florida by Country
(Commercial real estate 2011 in millions)
Country Investment
Malaysia $252.25
Canada 235.00
Germany 172.04
Israel 89.21
United Kingdom 77.00
Mexico 49.95
Switzerland 48.50
Argentina 14.10
Hong Kong 13.10
Total foreign investment $951.15
Source: Real Capital Analytics
Note: Figures reflect direct commercialreal estate investment only.
Plenty of other gambling industry players, however, don't want Genting to be the only game in town. Potential competitors include Fortune 500 casino company Las Vegas Sands, Wynn Resorts and others.

More than a few in Miami worry that the city could end up as Vegas on the bay. In their view, Miami is doing just fine, thank you, as an international city without gambling. Already, nearly eight of 10 city residents speak a language other than English at home. Approximately 1,000 multinational companies and 41 international banks have a Miami-Dade County presence as well as 71 foreign consulates and 20 trade offices. Two of the 10 largest Florida-based banks, City National Bank and Sabadell United, both based in Miami, are owned by Spanish banks.

Some of the most concerned about casinos are business people historically eager for economic development. "God forbid we be like Las Vegas," says Miami businessman and developer Armando Codina.

Codina, who led an anti-gambling effort in the past, plans no role in the latest contest but hasn't changed his personal views that gambling is a regressive tax, "like the lottery," a magnet for social ills and a siphon from local business. "Traditionally, casinos are very selfish businesses," Codina says. "They encourage you to spend all your money inside their establishment. As a result, very little tends to grow in the shadow of a casino. I will be happy and pleased should Genting break with that pattern if they come to Miami."

Tags: Miami-Dade, Housing/Construction

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