Big investments: Florida Governor Rick Scott discusses Miami-Dade’s economic significance and the impact large public investments will have on the county

Big investments: Florida Governor Rick Scott discusses Miami-Dade’s economic significance and the impact large public investments will have on the county

Invest: Miami speaks to Florida State Governor, Rick Scott


How do the public and private sectors work together to advance growth in counties like Miami-Dade?
In Florida, government is always doing business with the private sector. We have Enterprise Florida, an organization that promotes economic development in the state and that is funded by both public and private dollars. Some of the major infrastructure projects in Miami-Dade, like the PortMiami Tunnel or the Deep Dredge Project, are conducted through public-private partnerships (PPPs). The private sector undertakes considerable risk to complete these projects on time and on price, which has led to better outcomes. Moreover, the Florida State Legislature passed a bill in 2013, which streamlines the procedures and expands the opportunities for PPPs to other areas, such as higher education.
What is the state’s strategy to ensure that transportation infrastructure keeps pace with rapid growth, especially in Miami-Dade? 
Today we have the largest transportation budget in the state’s history – over $10 billion. We are investing where we are seeing growth. For instance, we are putting massive dollars into our ports and PortMiami is the biggest beneficiary of that. Moving forward we must continue investing in airports and seaports because that is how people first enter our state. We are already the number-two state in the U.S. for trade infrastructure.
Given Miami-Dade’s cultural and geographical proximity to Cuba, do you foresee increased economic opportunities in light of the recent thaw in the U.S.-Cuba relations?I think it would be a mistake right now to stop the embargo. I am optimistic that someday the Castro brothers will not be in power and we will see freedom and democracy there, and at that point, we will see opportunities evolve for Floridians to do business in Cuba, and vice versa. Until then, I don’t think much will happen until we have a regime that believes in freedom and democracy.
What is your medium-term outlook for Miami-Dade?
Miami-Dade is doing really well in a number of areas, for instance, trade, education and professional services. In the last 12 months, the county added 42,000 jobs and brought unemployment down to 5.8 percent. Miami is also an important destination for tourism, which is still our largest industry in Florida. Tourism generates tens of thousands of jobs and contributes 24 percent to our sales tax.
I am very optimistic about the future of Miami-Dade. It is a very exciting economy. People from around the world want to live there, to visit there and do business there.  Miami speaks a lot of languages and it is clearly one of the best melting pots in the world. These factors will help Miami to continue its growth.

Bringing benefits of Short Term Rentals to the communities

Bringing benefits of Short Term Rentals to the communities

Invest: Miami speaks with Tom Martinelli, Public Policy Director, Florida, Airbnb

 

Interview

To what extent does Airbnb produce economic benefits to communities in which you operate?

We look at it from two angles: from the host perspective and from the guest perspective. From the guest perspective, this is an incredible benefit to them because they are able to have choices. At the end of the day, they put the value on the product. From the host perspective it is even better, because now they are able to optimize their asset. There are other companies that optimize services and time, but we optimize what is often one’s greatest assets: their home. A specific segment of the population that benefits from Airbnb are empty nesters, senior citizens sand those on fixed income. As it relates to our Seniors, they are not only staying active, which is important considering what we know about the effects of isolation, but they are also gaining a revenue stream. Airbnb not only produces an economic impact, but also a societal one. We are very proud of this.

 

Miami ranks in Airbnb’s top five markets in the U.S., behind New York, Los Angeles, San Francisco and Boston. What has been the company’s strategy to achieve such an impressive growth? What are the main differences in terms of market performance between Miami-Dade and the other top markets?

I don’t think it has as much to do with what Airbnb has done, rather it is a testament to the great community and destination that is Miami. According to the last census, we have 800 people a day moving into Florida, in net terms. Those are the ones moving in permanently. We are breaking tourism records every single quarter. And as much as I would love to take credit for that, the credit goes to South Florida and, in particular, the Greater Miami Conventions and Visitors Bureau (GMCVB), which ensures national and international visibility through their marketing efforts. We have amazing weather, the best beaches in the world and great food. There is no reason not to come to Florida 12 months of the year.  We are the Gateway to the Americas.  If you’re flying in from Europe, Africa, South America, North America, or anywhere else, you’re going to stop in Miami. And we have options for everyone’s tastes and purpose – whether you’re traveling for business and need wifi and a printer, or you are in need of medical assistance and must be close to your hospital, we offer all the options. With such affordable rooms offered on Airbnb, who is not going to want to stay an extra couple of days?

 

Some cities across the U.S. have embraced the short-term rental service, while others have fought Airbnb head on. How is Airbnb finding Miami-Dade to do business when it comes to regulation?

Miami-Dade has 34 municipalities. When you look across the county, there are some cities that are excited about it, while other cities that simply don’t know about us. When we came to Florida, we came to educate, advocate and make sure that the communities came out benefiting from Airbnb. There is a lot of educating to do. Airbnb is part of the new economy, and as the communities learn about home sharing, I am confident they will be more comfortable with it. That is why we are not rushing. We want to do the right thing, which is paying our taxes, and have common sense regulations that ensure our host are operating safely, legally and fairly. We have had very important meetings with municipal authorities across the county because we want them to look at us as a partner.

 

How has Airbnb impacted an already competitive hotel market in Miami-Dade?

The GMCVB produces a report where they describe the state of the market. And their numbers are growing. This supports our position that we are not taking a piece of their pie. Instead, we are making the pie bigger.

 

What can be done to avoid speculation in Airbnb? What has been the impact of this speculation on gentrification effects?

We have to look at it in a case-by-case base scenario. Every city has its regulations. However, it is also true that the studies show that short-term rentals have very little impact to the affordability of housing. Even so, in the cases where there has been speculation, we need to work with the authorities and the communities so this doesn’t become an issue. However, when we think about Florida, we know that second homes are part of the fabric and tradition of our State since the days of Henry Flagler.

 

 

Strong fundamentals fueling growth in Miami’s financial industry

Strong fundamentals fueling growth in Miami’s financial industry

Invest: Miami speaks with Abel Iglesias, President and CEO, Professional Bank

 

How has Professional Bank evolved since its opening in 2008?

Professional Bank opened in 2008, right in the middle of the financial crisis. Despite the economic downturn, the timing was actually advantageous for us. As financial institutions were inward-looking, spending time and money cleaning their balance sheets, we were one of the few banks that were able to increase our activity by taking an outward-looking approach. We did not take on any bad loans or take on any toxic assets, but rather grew strong accounts enabling us to be highly rated by Bauer.

We began our journey as a full service commercial banking institution that caters to the professional community. However, we have evolved to also include residential lending, construction and commercial real estate financing, commercial business financing and SBA lending. Today, we are at roughly $400 million in assets with a diversified portfolio of assets. Technology, an area that we heavily invest in, has played an important role in leveraging our bank and has enabled us to cater to a growing number of clients with fewer offices. That said, we are planning to open a Palm Beach branch by summer 2017 and are actively looking at other markets in South Florida.

Which business lines are expected to rise faster in South Florida in the upcoming years?

Despite a strong dollar and the headwinds we are currently facing in Latin America, Miami continues to offer a strong business environment with expectations of growth in 2017. Our main growth driver in South Florida, commercial real estate, will continue to be a part of every community bank’s product set in Miami.  One area in this space that will continue to grow and do well will be construction loans for the middle market homes. We see a lot of opportunity in areas like West and South Miami-Dade. On the other hand, high rise condominium construction that you see predominantly in Downtown and Brickell is starting to see some saturation, and, therefore, we will start to see some pull back on lending activity in those markets.

As Miami businesses continue to grow and expand, we see great opportunity in commercial lending. SBA lending is at an all-time high and we anticipate this will continue to grow in 2017.

Lastly, we just recently opened our insurance agency and are quite excited and optimistic about growing this business in 2017.

What are the expectations of the performance of the mortgage lending segment in Miami-Dade County and South Florida for 2017?

Mortgage lending is an area where Professional Bank has done exceptionally well. Even so, I like to say that we are cautiously optimistic as the rates are increasing. While homes priced under a million dollars are doing very well and are expected to continue to do so, rising rates, higher inventories and a stronger dollar have caused a slowdown in the upper end of the market.

We are carefully watching the bond market, observing capital flow out of the bond market and into equities, which forces interest rates upwards. This is important as we don’t know how much higher rates will grow. This ultimately affects how many people will be able to afford mortgages. However, by historical standards, rates continue to be very low, and if people are in the position to purchase a home, this is still the right time to do so.

We are very bullish on bank profits as they are poised to do well with the anticipated Fed increases. Banks may see an increase in their profit margins, which would be good news for the sector.  This might cause an increase in M&A activity, as investors will be willing to pay greater multipliers now that banks’ profits are expected to rise.

What is the impact and challenges of the current regulatory framework on South Florida’s banking industry?

One item the banking industry anticipates is the possibility of some regulatory relief in the near future. Modifying the Dodd-Frank Act would be very welcomed by the banking sector as a whole, and by smaller- and medium-sized institutions in particular. Dodd-Frank has some good aspects, but it has also been very onerous on the residential lending front. We would like to see some common-sense modifications to diminish the difficulties associated with compliance. Unintended consequences and costs occur because of these difficulties, such as the distortion in the burden of compliance between big banks and small banks. The former has armies of people working on compliance, the latter does not.

In 2015, Florida banks grew loans at more than twice the average percentage growth of other U.S. financial institutions. What are the main differences in such growth for the different type of institutions?

With over 1,000 people coming to our state a day, Florida is one of the fastest growing states in the country. This fuels our economy. This has benefited the banking industry because, as the economy expands, so does the banking sector. In South Florida in particular, the resurgence of real estate values has fueled a lot of our growth. International banks have seen a slowdown due to currency devaluations, a strengthening dollar, regulations and socio-political issues they are currently facing in areas like Latin America.

Domestically, the banking industry overall has cleaned up their balance sheets, building strong reserves, allowing them to be more aggressive in business. However, in general terms, the current banking growth has not been accompanied by an increase in nonperforming loan thus far, so it is safe to say that what we are seeing is healthy growth.

Taking into account that the banking industry is quickly embracing technological advances, what are the main challenges and opportunities regarding security?

Cyber security is one of the main subjects that concern every bank. We can never be ‘too safe’ because there are always new ways of experiencing attacks and new threats. This is why investment in software security is a top priority not only for us but also for every bank. Small- and medium-sized banks have an advantage over big banks because security issues are handled by third party, specialized professionals that produce state-of-the-art security systems designed specifically for the bank. Larger banks struggle with this because of their size. Another challenge is the possibility of a high-tech game changer in the banking industry, like Uber has been to the transportation business. That being said, it is also important to underline the fact that technological advances have allowed us to grow exponentially with a smaller footprint. To be able to operate in Miami with only two branches is something that I find remarkable.

For more information on Professional Bank, visit their website at: www.professionalbankfl.com

Brickell’s Expanding Luxury Hospitality Offerings

Brickell’s Expanding Luxury Hospitality Offerings

Invest: Miami speaks with Thomas Medding, Senior Vice President, sbe and SLS Brickell

December 2016

What were the main factors behind the decision of investing in Brickell?

Firstly, this project helped us partner with The Related Group, which is extremely important here in Miami and are amazing partners to have. Second, Brickell itself is an amazing location. It has been very intriguing to us all because we could just see the potential ad up-and-coming investments. Across the country, sbe is known for is investments in revitalization of locations. Where other people have backed off, we have always pioneered. Lastly, this is a project that allows us to move into the residential segment.

 

The first time the company does a residential project is in Miami, What were the main factors behind this decision?

The space of the residences and the workplace is usually too far away from where everything else happens. We wanted to bring the luxury boutique filed to the residence and, this way, allow the condos to share all the wonderful amenities of the hotels. We can delivery 360-degree services to the residence. For example, we offer preferred reservations to all our hotels’ restaurants, full access to the beach and special tickets to events.

What is the uniqueness of Miami as an investment destination in comparison to the other markets you are present in? What are its main opportunities and challenges?

The main opportunity in Miami is its proximity to other countries and the fact that is growing very fast. If you look back 12 years, for example, you would see that if the inventory grew, the demand for such inventory also grew, although with a lag of a few months. Also, in the past four years, Miami has become not only a secondary city but rather it has gained the potential to become a primary city on its own very soon, if it is not already one. The main challenge is the scarcity of qualified personnel. However, if you invest carefully and continuously on human capital, as well as put effort on choosing and retaining the right people, this can be solved.

 

With more and more hotels opening up in Miami and Airbnb becoming more widespread, how is competition affecting the market?

I think Airbnb fulfills a need. And while there is a market for it, it is not for everybody. Unfortunately, there are no numbers to rely on.,however, it is evident that they have taken a significant chunk out of the hotel market. The way we address it is through our offerings. Airbnb rentals don’t have access to the amenities we can offer. Also, there is a safety aspect, although this last issue could be solved with proper regulation. Speaking of competition amongst hotels in general, is has been very standard. We all compete against each other and it has never been a problem as long as there are no price wars because, at the end of the day, no one wins when that sort of competition is unleashed. In a highly competitive market such as this one is where you can see the advantages of having full integrated services in hotels such as ours, because it has a much more competitive structure.

 

 

To find out more:

http://slshotels.com/brickell/?utm_source=bing&utm_medium=cpc&utm_campaign=brand

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