Lasting Legacy

 

 

April 2018 — From the Dolphins’ “perfect season” and back-to-back Super Bowl wins in the 1970s to the Heat’s back-to-back NBA championships in the 2010s, Miami has consistently been known for its talented sports teams. The city’s teams have been home to many of the best players in every major sport, including Dan Marino, Giancarlo Stanton and the powerhouse “Big Three”: Dwayne Wade, LeBron James and Chris Bosh. To continue Miami’s legacy of sports domination, 2017 brought many highlights to this wonderful city.

The Miami Hurricanes football team landed a near-perfect season, finishing 10-3 after appearing in the Orange Bowl for the first time in over a decade. Many were calling it “the return of the U,” referring to the iconic era of Hurricane domination in the 1980s.

Another huge return happened in Miami recently. This past February, Dwayne Wade, a member of the “Big Three” and a key contributor to Miami’s consecutive championship titles in 2012-13, re-signed with the NBA’s Heat after playing two years on other teams. Miami fans could not be more thrilled about his return and are looking forward to seeing the tremendous talent he brings to the court.

Additionally, Miami is in the midst of welcoming its newest sport: Major League Soccer. David Beckham has been working tirelessly for the past four years to make his dream a reality. In January, he made the announcement that a Miami MLS team has officially been created.  Although the team does not yet have a name, Miami residents and soccer fans are already enthusiastic about what the new team has to offer.

Invest: Miami spoke with a number of leaders in the city’s sports industry to gain insight into  how Miami sports teams create a community bond and the ways these exciting highlights will impact their fan base. Here’s what they said:

Kim Stone, Executive Vice President & General Manager, The Heat Group

“We’re in the middle of a more than 350-game streak of sellouts that dates back to 2010, when the Big Three of Lebron James, Chris Bosh and Dwyane Wade first came together. The impressive thing is that we have been able to sustain this after the Big Three departed. We have seen our community and fan base grow from being fans of individual players to fans of the Miami Heat. This year, we are thrilled that Dwyane Wade has returned. From a business standpoint, he is the Miami Heat, so he drives increased interest in terms of tickets, viewership on TV, merchandise sales and enthusiasm for our team. Still, to our fans, it doesn’t matter what name is on the back of the jersey; the name on the front, Miami, is what matters.”

Don Shula, Owner, Miami Dolphins

I think the fact that our initial success came at the same time as the rejuvenation of Miami goes hand-in-hand. We helped shine a spotlight on the region, and that exposure helped show many of the great qualities of the city that makes it such an attractive place to work and live. With the Dolphins playing well again and bringing a sense of excitement throughout South Florida, it will add yet another positive characteristic to such a vibrant region.”

Udonis Haslem, Captain, Miami Heat

We’ve built a tradition over the past 14 years, winning three world championships, which is unheard of in this sport. You can’t think about Miami without thinking about the Heat. You think about the standards, the city, the flash, the glitz, the glitter, the food and the different cultures, and the Miami Heat embraces all of that. You also think about Overtown and the inner city.  Since I have been a part of the Heat organization, we have done a tremendous job of impacting the entire city. Even those who can’t afford tickets are able to come to the games.”

To find out more about Miami’s sports teams, visit their websites at:

Miami Heat: http://www.nba.com/heat/
Miami Dolphins: http://www.miamidolphins.com/
Miami Hurricanes: https://hurricanesports.com/

Innovative Infrastructure

 

 

April 2018 — The Miami metro area is booming. As of 2016, the city was ranked the 8th largest for population and the 6th largest for employment growth among big U.S. cities. People are flocking to Miami to take advantage of everything it has to offer: warm weather, rich culture and unique business opportunities. It truly is one of a kind.

However, with an increasing population comes increasing challenges. With limited space to expand, the city continues to look for innovative ways to update its infrastructure in order to accommodate the growing number of residents and employees. Companies are experimenting with new technologies in order to improve safety and efficiency in the most cost-effective way.

Invest: Miami spoke with a number of leaders in the city’s infrastructure industry to gain insight into how Miami plans to successfully increase its capacity limit in the most economical, sustainable and feasible manner. Here’s what they said:

Humberto Alonso, Senior Regional Business Development Director, Atkins North America

“One of the challenges in South Florida is that solutions for transportation that work elsewhere involve building more miles of road or widening streets. We’re past that point here, particularly in Miami-Dade County. There’s no more room to build, so we need to look for other solutions. Technology will be a part of it, but there has to be an infrastructure investment as well. People have to change the way they think about going from one place to another.”

Eric Silagy, President & CEO, Florida Power and Light Company

“In Miami-Dade in particular, it’s critical that we continue to support growth in the region in a comprehensive and forward-thinking manner. The construction boom in Miami over the last few years has been enormous, but it can be challenging from an infrastructure perspective. A lot of planning needs to be done in advance to be able to meet the needs of the new developments. We’ve made great strides in working with regional stakeholders to understand what is coming and the timeframe for these investments so that we can properly plan and execute projects on our end to be ready to support these developments. It’s important to work together to provide opportunities for continued growth while minimizing the impact to those who already live and work in the area. And of course, we must continue to improve and enhance our storm preparation and response planning so that we are able to get the lights back on as quickly as possible after a major storm — particularly in an economic hub like Miami.”

Melsie Ordonez, Director of Operations & Senior Mechanical Engineer, Ross & Baruzzini

“The great thing about working with Miami International Airport is that they are at the forefront of innovation and offer opportunities to explore outside the box. One of the nuances in that environment is the need to tie into the existing infrastructure. We’re doing a small renovation in Concourse G, which is one of the original concourses. There are systems there that need to keep running to keep planes moving even while they are being worked on and added to. Tech is moving fast, and we need to marry the old and the new.”

Eddy Smith, Senior Vice President of Client Services, SCS Engineers

“We use some different approaches that might be more economical. Instead of putting two feet of soil on top of contamination, we’re challenging the old standards and saying, ‘Why can’t we use less than two feet and put in a synthetic barrier?’ We’ve gotten traction and save our clients a whole lot of money by doing that.”

To find out more about our interviewees above, visit their websites at:

Atkins North America: http://www.atkinsglobal.com/en-gb/north-america
Florida Power and Light Company: https://www.fpl.com
Ross & Baruzzini: http://www.rossbar.com
SCS Engineers: http://www.scsengineers.com

Demystifying the Tax Overhaul

Invest: Miami partners up with local experts to make sense of the new tax legislation

“The hardest thing in the world to understand is the income tax.”–Albert Einstein

 

March 2018 — In December 2017, Congress passed the biggest tax reform legislation in more than three decades. The bill will affect most taxpayers, but the biggest question for many is: How? The Tax Cut and Jobs Act represents one of the largest reductions in corporate tax rates in U.S. history, dropping from 35 percent down to 21 percent. The bill also lowers individual tax rates for most Americans, as well as small business owners, but there’s a lot more than that going on in this major tax overhaul.

For that reason, Invest: Miami 2018 is dedicating an entire chapter to tax reform. With the help of our expert partners, we are deciphering the legislation and laying out for our readers what it means for South Florida residents, business owners and investors. Until the book is released, here is a bit of what you can expect from this year’s newest edition.

We recently spoke with J. Michael Custer, who leads the tax practice at CPA and advisory firm Kaufman Rossin. The firm just published a series of blog posts on how the Tax Cuts and Jobs Act will affect the specific industries most active in South Florida.

Here’s a sneak peek at what Mike had to say about the tax bill:

 

Mike Custer of Kaufman Rossin.

How have your clients reacted so far to the new tax legislation?
There was a certain amount of anxiety about the unknown after the new legislation was passed. Whenever the rules change, it takes time for people to figure out what’s going to happen moving forward. There are certain parts of the legislation where we know specifically how they’re going to change our clients’ behavior. On the other hand, there are a whole host of items presented in the bill that have no direction yet. Tax law is never black and white; it is still evolving. That’s why we’re here. We understand the policy and the policy issues, but we make a living by reading the rules, the guidance and even the lack of guidance. That’s where paid professionals really earn their value – interpreting these policies for particular industries and specific clients.

Will this legislation affect population growth in Miami and Florida in general?
Tax policy is a funny thing: it is designed to change human behavior. The fact that there is no individual income tax here in the state of Florida has always been a big draw. Is someone who was going to come into Florida before this tax change going to change her mind? I don’t think so. Are individuals going pick up the pace of moving into Florida? It’s a possibility. It comes back to travel times, housing supply and good schools.

Are businesses seeing the tax decreases they were expecting from the legislation?
Pass-through entities (like S corps and LLCs) got a 20 percent deduction. Many were thinking that since they paid 40 percent already, their rate would drop to 20 percent.  That’s not the case. It’s a 20 percent deduction. So if you make $1 million, you get a 20 percent deduction, bringing your taxable income down to $800,000, and then that’s subject to your top rate of 37 percent. So the effective rate went from 37 percent to around 30 percent, not from 40 percent down to 20 percent. A lot of people were not interpreting it that way initially.

 

For more from Mike Custer and other experts on how the tax legislation will affect you and your business, look for the tax chapter in this year’s edition of Invest: Miami.

For more information about Kaufman Rossin click here.
To pre-order your copy of Invest: Miami 2018 with the new tax chapter, click here.

The Shared Economy and What It Means for South Florida

 

February 2018 — Despite Hurricane Irma barreling through the region last fall, a record 88.2 million visitors came to Florida during the first nine months of 2017, a 3.3 percent increase over the same time period in the previous year. More specifically, South Florida welcomed more than 112 million visitors in 2016 and over 60 million visitors by mid-2017. The number of tourists who came to visit in 2016 set another record, surpassing the 106.6 million visitors in 2015 by 5.9 percent.

This pattern of growth is no coincidence. South Florida has been attracting tourists from far and wide with its vibrant cultural offerings as it slowly develops into a globally recognized art capital.

Despite, or perhaps because of, this increasing trend, there is fierce competition in the South Florida hospitality industry. The shared economy — particularly peer-to-peer home exchanges like Airbnb — has been increasingly vying with Miami and Fort Lauderdale hotels to meet visitors’ accommodation needs.

“The presence of Airbnb has been a bigger threat to the hotel market in Miami-Dade than in Greater Fort Lauderdale, but its impact is increasingly making itself felt here,” Bill Cunningham, general manager of Bahia Mar, told Invest:. “Everybody in the hotel industry is still trying to quantify the impact that it is having on hotels, and hoteliers have certainly been surprised by the growth in the number of Airbnb units there are in the county.”

One thing is certain: traditional hotels can no longer ignore the fact that the shared economy is here to stay. Miami-Dade County is one of the top 5 Airbnb destinations in the country, with 6,800 hosts renting their homes to visitors.

The hotel industry realizes that it needs to be flexible about the sharing economy, and that there will be people who prefer traditional accommodation, while others prefer new ways to stay when they travel,” Stacy Ritter, president of the Greater Fort Lauderdale Convention & Visitors Bureau, told Invest:. “It’s a matter of marketing, messaging, sales and customer targeting for hotels to reach the right customer.”

One of the biggest challenges the hotel industry faces in competing with companies like Airbnb is regulation, where the playing field has not always been level. South Florida officials are working toward finding a balance that will support both the traditional and consumer-to-consumer markets.

“Since May 2017, Airbnb has been paying a resort tax, convention development tax, tourist development tax and sports tax,” William Talbert III, president and CEO of the Greater Miami Convention & Visitors Bureau, told Invest: “However, while hotels must follow strict operating ordinances, nearby Airbnb rental properties do not. The tax provides a source of revenue for us, and we are currently working with County Commissioner Heyman to develop regulations for peer-to-peer property rentals. Any regulations that the county commission implements will only affect unincorporated areas of the county, as municipalities retain domain over their own regulations for services like Airbnb.”

In October 2017, Miami-Dade County passed new legislation that provides more stringent rules for hosts, improving the vacation rental standards. Under this new legislation, hosts are required to sign up for a certificate of use, register for a business tax receipt and screen for sexual offenders, among other tighter overall standards.

Airbnb and other companies like it offer an experience that is very different from traditional hotels, and consumers appreciate both. The hope is that the two can find a way to coexist, continuing South Florida’s stellar hospitality tradition.

For more information about our interviewees, visit their websites here:

GFLCVB: https://www.sunny.org

Bahia Mar: http://www.bahiamaryachtingcenter.com

GMCVB: http://www.miamiandbeaches.com

 

“It’s Official, Miami”

January 2018 — “Today you made my dream come true,” a giddy David Beckham, suited shoulders draped in an MLS scarf, told a small crowd gathered at the Adrienne Arsht Center on Monday, January 29.

After his first announcement four years ago fell through in the face of financing and stadium site challenges, Beckham’s dream of bringing an MLS expansion team to Miami is finally coming to fruition as the league made it official.

Beckham’s ownership group is planning to build a 25,000-seat, $225 million stadium in Overtown as the new home to Miami professional soccer. The stadium plan includes a training center and academy that will focus on developing local players. The team hopes to be deeply connected to the community — not just to the players but also to the fans. The goal is to grow locally in order to compete globally.

Miami has a complicated history with soccer. Its first MLS team, Miami Fusion, based out of Fort Lauderdale, flopped in 2001 after only a few short — and underwhelming — years. In a city known for its diversity and rich Latin American influence, it’s almost unfathomable that a futbol team isn’t already a huge part of its fabric. But while friendly matches bring out fans in droves, for some reason a home team hasn’t had the same impact.

Beckham and his co-owners hope to change that. Perhaps as they sort out the still-unannounced details — team name, colors, logo, start date — they should look to another team, in Capital Analytics’ Atlanta market, for some ideas on how to make a brand-new franchise shine virtually overnight.

In 2017, Atlanta United kicked off its inaugural season, and just five months after that first game, it had become MLS’s most popular team. It boasts the highest average home attendance in MLS history and better average home attendance than any MLS, NBA, NHL or MLB franchise in the country. Its opening weekend match was the best-attended game, by a factor of two, in the league.

Reports have suggested we would be the 24th team in Europe with our average attendance,” Darren Eales, president of Atlanta United, told Capital Analytics, “and for our first game of the season, we had an attendance of 55,000, which put us at the fourth most attended game in the world.”

So how did this team go from nothing to record-breaking so quickly? Two words: community investment. They spent a lot of time meeting with fans in bars, pre-selling season seats and generally pounding the pavement to spread the word.

“From day one, we wanted to create the feeling that this was a club centered on its fans,” Eales told Capital Analytics, “so we did a lot of grassroots events focused on international games and viewing parties. We decided that if we focus on our most dedicated fans, the rest will take care of itself.”  

They also spent some time making sure that the team would be worth watching, which included recruiting a talented coach and deeply investing in young players. Team owner Arthur Blank’s resources, such as commercial sponsorship and sales and marketing departments (he also owns the Falcons), didn’t hurt either.

If Beckham wants his Miami team to succeed, he will need to rely on more than his legendary right foot. Soccer is a collaborative sport, and the Miami MLS franchise will truly need to be a collaboration between the community and the team. All eyes on are on Fútbol Miami as the details get hammered out and we looked forward to opening day!

For more information on Beckham’s team, visit https://www.futbolmiamimls.com/
For more information on Atlanta United, visit https://www.atlutd.com/

Rate Increases on the Horizon

January 2018 —  Florida City Gas (FCG) recently filed its first rate case for natural gas service in 14 years. For typical residential customers, this means an average increase of $1.73, or 6.4 percent, per month on their annual natural gas bill.

FCG rates are currently the lowest in the region, and these rate increases are essential to providing safe and reliable natural gas to FCG’s more than 108,000 customers.

“Because of some recent changes at the federal and state levels, as well as the more than $284 million that we have invested since 2004 in improving our ground infrastructure and capturing greater operational efficiencies, this is now the right time for us to look at a rate case,” Carolyn Bermudez, Vice President of Operation for Florida City Gas, told Invest:.

Since the last rate case, FCG has added 400 miles of distribution mains, 55 miles of transmission mains and 5,800 customers. The rate increase will allow for further investment in capital projects to enhance the system, an increase of capacity needs to ensure reliability in the southern part of the system and employee development in the face of an aging workforce.

FCG is committed to containing costs and efficient management, but like everyone else in today’s economy, it’s not immune to rising costs.

“We have reduced our annual operating expenses by more than $9 million [since 2004],” Bermudez told Invest:. “In order to maintain the necessary standards of service and reliability for natural gas to meet consumers’ needs, the economic forces are going to push the rates slightly up.”

The rate increases are expected to take effect in late summer of 2018.

For more information, visit the FCG website: https://www.floridacitygas.com/

The Wait Is Over

 Brightline officially begins its introductory service

 

January 2018 — After much anticipation and a few delays, Brightline finally began its introductory service this past Saturday between Fort Lauderdale and West Palm Beach.

While Saturday’s rides were described as smooth, fast and comfortable by many excited passengers, the celebrations were dimmed by an unfortunate tragedy. During preview runs the night before, a 32-year-old woman was struck and killed by a northbound train when she ducked under the already lowered gates and tried to cross the tracks. Despite this dark cloud, riders are optimistic about the new service.

As the only privately owned, operated and maintained passenger rail system in the U.S., the Brightline train offers an unparalleled travel experience in South Florida. All passengers have access to free wifi, outlets and USB jacks while onboard.

A one-way ticket between Fort Lauderdale and West Palm Beach is $10 for its select service and $15 for its smart service. Seniors, active military and veterans receive a 10-percent discount, while children under 12 get a 50-percent discount. Trains will depart from 6:00 a.m. to 11:00 p.m. every day, and the high-speed train makes the trip in about 40 minutes.

The Brightline service to Miami is expected to open in the coming months, and an opening date for the Orlando station has not yet been set.

For more information or to book a ride, visit https://gobrightline.com/.

The state of play

How Florida is tackling unemployment by encouraging growth and education

Rick Scott Governor – State of Florida

 

Florida has seen the second biggest drop in unemployment in the U.S. What have you and your administration done to achieve these figures?

Unemployment is at 4.9 percent, and we’ve added some 1.26 million private-sector jobs, which is double the national rate. Four years before I was elected, Florida lost 832,000 jobs. To tackle this, we cut 4,600 regulations, cut taxes 55 times and recruited 900 companies either to come to Florida or expand into the state. We’ve gone on trade missions around the world, and we’ve made sure that our universities are focused on where the greatest job needs are. We’ve asked “how can we help businesses here to be more successful than they are anywhere else?” That is our attitude, and we are better than anyone else in the country. We have to keep cutting taxes and reducing regulations. U.S. News & World Report has said Florida is first for higher education, but we have to keep getting better. We have to make education more affordable and make sure the colleges and universities are very focused on where the jobs are. We now have 25 percent of universities’ budgets tied to three things: What does it cost to get a degree? What field can you get a job in? How much money do you make? We’ve got to make sure we are focused on getting people ready for careers and dealing with the system.

 

Technology, life sciences and healthcare are all growing sectors in the State of Florida. What is being done to encourage the growth of these sectors?

We’ve got to make these sectors more successful here than in any other place in the world. We have to build relationships, which is why one of the things we do as part of Enterprise Florida is consultations with businesses to help them do better. We make sure they have the right workforce, and we do that through a variety of programs through our state colleges and universities. We’ve got to keep reducing their taxes so they can reinvest in their businesses because when they reinvest in their businesses, we get more jobs.

 

What impact has a greater emphasis on developing education had on Florida? How will education develop in the future?

Tuition fee increases have been halted. They were increasing at 15 percent plus inflation every year when I came into office. We haven’t seen an increase in four years at our universities or state colleges. We reimburse the schools according to what’s important to students, lower tuition fees and getting a good-paying job when they finish. We have the highest graduation rates of the 10 most populous states. We’ve increased our funding for universities by almost 50 percent since I got elected. The most important thing is that every child has opportunity. It doesn’t matter where you live or how you grew up, I want every child to have the dream of this country

Fad or Future? Deciphering Cryptocurrency

January 2018 — A one-bedroom penthouse condo with bay views in Miami was listed on Redfin in early December. What makes this listing newsworthy is that the seller is only accepting Bitcoin as payment.

Most of us recognize Bitcoin as the first and most well-known cryptocurrency. Since its inception seven years ago, it has been making waves — tidal waves, some might say. Its value surged 1500 percent against the dollar in 2017 as it gained popularity among both Wall Street and real estate investors. Still, there are many skeptics who warn that Bitcoin is entirely speculative and that where there is a steep rise, there must also be a steep fall.

Whatever your feelings about this “money of the future,” 2017 was the year Bitcoin and other cryptocurrencies joined the global financial system. It looks like they’re here to stay — and no longer just as the de facto currency of cybercrime.

As Miami gears up to host the North American Bitcoin Conference, hailed as the “most important blockchain conference of the year,” on January 18-19, 2018, Invest: Miami decided to take a closer look at what this buzzworthy yet nebulous concept of cryptocurrency is exactly.

In the simplest terms, cryptocurrency is “virtual” money created from code whose economy is monitored by blockchain technology — basically, entry into a public ledger through a process called mining — rather than by a central server. Think of a database whose entries are limited, must be verified and can’t be changed unless specific conditions are met.

Money, after all, is all about verified entry into some kind of database of accounts, balances and transactions. Just look at your bank account.

With a limited and controlled supply, cryptocurrencies are not changeable by governments, banks or any other centralized institution, so they’re secure from political influence. They’re not subject to inflation; rather, their value is preserved and often even increases over time. Proponents laud cryptocurrency for its security, stability and deflationary quality even as critics denounce it for these very same things.

While it is unlikely that cryptocurrencies will replace cash anytime soon (unless you’re looking to buy that Miami penthouse, of course), Bitcoin has been steadily gaining investor approval. Today, this “digital gold” has a total value of $9 billion, but it also has a precarious relationship with volatility. Only time will tell whether there is a cryptocurrency bubble — and whether that bubble will burst.