WorldCity Business Magazine

Miami con Mole

by Santiago Fittipaldi

It’s 1 p.m. and passengers from Aeromexico’s morning flight from Mexico City are arriving at the Miami International Airport. Mixed in with vacationers and shoppers are laptop-toting executives here to scope out the city’s business opportunities. Mexican entrepreneurs are adding some new spice to Miami’s already international flavor.

“Mexico and Miami had been neglecting each other for a long time,” says Michael Carricarte, chairman of the U.S.-Mexico Chamber of Commerce’s Miami-based Inter-American chapter. “Now it’s become obvious to Mexican business executives that Miami is an easy place to do business. Houston used to be the hub for Mexicans, but today it’s Miami.”

Carricarte, who is also chairman and CEO of Amedex Insurance, says Miami’s booming real estate sector, ample access to financing sources and its role as a gateway to Latin American markets have been the main drivers for Mexicans’ twenty-first century discovery of the “Magic City.” “As Mexican companies expand,” he adds, “Miami is a perfect place for them to set up their headquarters.”

Jose Antonio Rivas, Mexican trade commissioner in Miami, says demographics are perhaps to blame for having kept Mexico and Miami apart in the past. “Traditionally, Mexican companies had focused mainly on California and Texas, and to a lesser extent on New York and Illinois, because there are large Mexican populations there that demanded Mexican products and fostered trade flows,” he says. “Those other markets are now mature and there are fewer new opportunities there.”

While Miami-Dade County has had a small Mexican community of laborers for decades, working mainly in agriculture and construction, the new wave of Mexican arrivals involves highlevel executives and entrepreneurs ready to invest in real estate and businesses. “When you go to a large firm in Miami, it’s not unusual to find that there are Mexican executives working there,” Rivas notes, recalling that was generally not the case a decade ago.

Starbucks, DHL, Visa and Comcast are just a few of the firms where Mexican executives figure prominently, particularly in their respective Miami-based Latin American headquarters. “Almost every major bank in Miami now has at least a Mexican vice president,” says Jorge Lomonaco, Mexican consul general in Miami.

While more and more multinational companies are importing Mexican executives to run their Latin American ventures, some of those Mexican imports are also choosing to remain in the city and establish their own businesses. Such was the case of Moiss Cielak, who was transferred by Hewlett- Packard but stayed to establish Merkatum as a business consulting firm. Similarly, Oscar Valencia, came with IBM and now owns Miami Rent-a-Car.

Then there are the Mexican investors who have chosen South Florida as a base of operations, like Leonel Azuela, managing partner at Quaxar, a Miami-based IT firm, whose family owns several bars and restaurants in Veracruz. After completing his studies at Harvard in 2000, Azuela moved to Miami to set up his firm. “In 2000, it seemed like all my university friends were moving here and, although many left in 2001 as the Internet business subsided, they were followed in by others who began investing in real estate and service firms.”

“There are three basic advantages to being in Miami: access to Latin American markets, proximity to Mexico, and the ability to tap the U.S. Hispanic market,” addsm Azuela, who says he first considered Los Angeles, San Antonio and Houston as possible sites for Quaxar. None provided the access to Latin America that Miami offered. Quaxar’s revenues soared from $200,000 in 2001 to $1.2 million in 2004. And the company expects to top $2 million this year.

Emilio Azcarraga Jean, chairman and top shareholder of Mexico’s Grupo Televisa the world’s largest producer of Spanish- language television programming is perhaps the most celebrated and glamorous member of Mexico’s Miami business community. After taking an American woman last year, The 36-year old Azcarraga is expected to move to Miami this year in what is speculated to be a first step toward U.S. citizenship, thus allowing him to up his stake in the U.S.-based Univision Communications broadcasting conglomerate from the current 11 percent level. As a foreigner, Azcarraga’s stake is limited by law at 25 percent.

Univision and Televisa both have production facilities in Miami. Though Univision is officially headquartered in Los Angeles, the operations centers for the company’s three networks Univision, TeleFutura and Galavision are all based here. As a result, the city continues to attract a considerable amount of Mexican on-air talent and performers.

The safety factor

Part of Miami’s appeal to Mexico’s business class, of course, is quality of life. “Here, you can do business while also enjoying your family and friends,” explains Azuela.

The issue of Mexico’s deteriorating security situation often comes up in conversations with recent Mexican transplants to Miami, some of whom escaped kidnapping threats at home as their businesses prospered. “In the late 90s and at the beginning of the 2000s, there were many Mexican families that decided to move to Miami, as the security situation in Mexico became more complicated,” recalls consul general Lomonaco. “Many businessmen sent their wives and children to Miami but stayed in Mexico to continue running their businesses, in effect commuting between both cities. Some eventually just moved to Miami altogether.”

Mexican-born Lionel Carrasco, senior vice president of Miami-based Neoris, a technology support and consulting firm owned by Mexican cement giant Cemex, also sees security as major factor behind the influx. “There are many Mexicans in the entertainment industry and in the business sector that are exposed to a certain degree of insecurity in Mexico that is prompting a shift in intellectual capital to Miami.” And the growing presence of influential Mexicans, says Carrasco, is “having an impact on this city.”

So far, the biggest impact has been felt in the real estate market, where high-earning Mexicans are among top buyers. Real estate agencies such as Miami Realty have established offices in Mexico City to promote Miami’s luxury condos. However, Mexicans are active on both the buy and sell sides, with Cabi Developers, whose parent is Mexico’s Gicsa, already investing more than $650 million in South Florida real estate projects since entering the market just three years ago.

Cabi’s most recent project will help transform the city’s downtown area. Replacing the old Everglades Hotel on Biscayne Boulevard, Cabi plans to build an 849-unit luxury tower its biggest venture to date at an estimated cost of $280 million. The group, headed by brothers Elias, Abraham and Jacobo Cababie, opted to relocate their US operations which had been run from their Mexico City office to Aventura.

Governor Bush sets the stage

Consul General Lomonaco credits Governor Jeb Bush’s 1999 trade mission to Mexico as a major turning point in Florida-Mexico relations. “This mission, which included 300 Florida business leaders, sent a signal that Florida had not been taking advantage of NAFTA,” he says. “In 1998, just before the visit, Alabama had more trade with Mexico than Florida.”

Between 1998 and 2003, trade between Mexico and Florida increased by more than 50 percent. Even as Florida’s global trade declined by 1.8 percent year-on-year in 2002, the state’s trade with Mexico still expanded by 28 percent.

However, Lomonaco argues Miami-Dade has been slow to come on board, with other Florida counties reportedly working more aggressively to increase their Mexico links. “After the governor’s visit all of the state’s large counties interested in foreign trade have sent follow-up missions to Mexico,” he says, “but Miami-Dade has not sent a single government-sponsored group.” Enterprise Florida, the state’s trade and economic development agency, maintains a Mexico City office.

Nevertheless, Lomonaco predicts Mexicans will continue to flock to Florida in coming years, although he is emphatic that his compatriots must strive to join the greater Latin American community in Miami. “This is not Los Angeles or Houston or Dallas, this is a Latin American community, and we are accustomed to being the dominant group in those other cities,” he says. “Here, we have to integrate ourselves into a community that includes people from all Latin countries.”

Lomonaco, meanwhile, is helping put together a group of high-level Mexican residents who can “take advantage of this dynamism that Mexicans bring and the influence that we are exercising over Miami.” The U.S.Mexico Chamber of Commerce’s Inter American chapter is also going strong, with its membership growing from just 33 members when it was founded in 1999 to a current roster of around 200.

“Miami is a Latin American melting pot that was missing some Mexican chile, says Lomonaco. “It’s now been added.”