WorldCity Business Magazine

X Blueprint: A Future Framework for South Florida

by Suzy Valentine

Some people are less au fait than others with the workings of the car or the inner churnings of the human body but we all rely upon them, one way or another.

In the same way, a world city relies upon a number of networks roads, schools, utilities to help it function properly.

When everything is running smoothly, they barely catch our attention, but the shortcomings of South Florida infrastructure have grabbed the attention of some of our contributors.

Inadequate roads, the cost of housing, insufficient rental properties, poor architectural efforts and shoddy public transportation count among commentators grumbles and thats just the developers.

A property expert who has lived in Hong Kong noted somewhat unfairly for its overcrowding points to poor provision of open spaces and parks here in South Florida, using the catchy phrase “concomitant investment.”

Then there is concern about the environment particularly the Everglades and this refreshingly comes from an architect.

An insurance specialist who heads a company based in the Netherlands famed for its canals makes an impassioned plea for the region to use its waterways more frequently to facilitate transportation.

At least were wired, experts claim. By that, they mean we have good telephony and Internet connectivity though there are calls to make the region wireless for the sake of tourists and the business community.WC

Jorge Perez, CEO, The Related Group

Over the past 10 years, American cities have experienced a great resurgence as people tire of long commutes, become cognizant of our dwindling resources (gas, water, air) and baby boomers adopt urban lifestyles they have seen at work in the foreign metropolitan cities they visit.

Urban living has become the preferred way of life for many. Miami is no exception.

Miami is entering a transitional period with great opportunities. South Florida is the area in the United States that is experiencing the most immigration from other states and Miami continues to be a Mecca for people to come invest, play, reside and visit.

The new buildings and cultural events and facilities such as the Carnival Center for the Performing Arts, Art Basel Miami Beach, the planned museums of art and science in Bicentennial Park, and the Design and Arts district immediately north of Downtown Miami, will make Miami even more attractive to foreigners as their perception of Miami improves.

But no progress is without challenges. These challenges lie in three main areas: economic development, public transportation and housing affordability.

In spite of the huge surge in residential and hotel construction in the past few years, economic development has lagged in attracting medium and large corporations that will lead to an expansion of the downtown office market. Without strong growth in downtown office employment there will be little need for further downtown housing, unless we become a city of second home owners and tourists.

Furthermore, when new construction is completed and new cultural facilities are finished, public transportation will become critical to the residents of Miami. Dependence on the automobile will have to lessen significantly and viable linkages between urban nodes will need to be created. This will require a steadfast will and great vision on behalf of the public sector.

Rental housing in the urban core has almost ceased to exist as it is not financially feasible for developers to build rental properties and existing rental buildings are either being torn down or converted into condominiums. With the scarcity of land and increasing construction costs, housing affordability in accessible urban areas to service the majority of our urban work force could become our most pressing problem.

I believe, however, that, as has been done in the recent past, the private and public sectors will team up aggressively and address these issues and Miami will become one of the world’s great cities.

Martha Bejar, President, Caribbean and Latin America division, Nortel

Part of making South Florida a true metropolitan area that drives economic growth and trade, as well as addresses the needs of tourists and business travelers, is to develop strong and reliable technology infrastructure allowing the area to become digital, by providing widespread access to broadband services and mobile communications.

For example, municipal wireless solutions have reduced crime in certain areas by 50 percent using wireless surveillance cameras, while utilities can increase productivity and lower operating costs with automated meter reading, reducing the costs of reading a meter by 50 to 90 percent.

At Nortel, we believe that municipal solutions enhance communities and ease communication, while increasing efficiency and productivity. In the township of Chapleau in Ontario Canada, Nortel along with Bell Canada, has transformed the neighborhood into a technologically advanced, connected community. People across the community have mobile, flexible and reliable access to Internet services including an online encyclopedia, adventure and strategy games, educational software and a downloadable music store.

Networks, one of the wireless mesh variety, link together small transmission access points hung on street lamps or the sides of buildings to form a local network, and can deliver affordable mobile communications throughout a city or campus, indoors and outdoors. A key advantage of a wireless mesh network is that it can be deployed very quickly, at low cost.

Another solution is a Worldwide Interoperability for Microwave Access or WiMAX network, an exciting and unique technology that delivers high-speed, broadband fixed and mobile services to large areas with less infrastructure than is needed today. More WiMAX networks are being launched in key metro areas across the globe.

South Florida government officials should realize that the benefits of a municipal wireless network will help improve city services, improve productivity and efficiency of government operations, increase economic development, enhance pubic safety and homeland security as well as address digital inclusion.

Hamilton Da Silva, CEO, AIG Latin America

As the head of a large multinational financial services entity that relocated its Latin America Headquarters to Miami, I believe that to be world-class the city must improve substantially in some critical areas such as public transportation, education, infrastructure and logistics and provide a steadier stream of skilled labor.

In the recent past, we have witnessed accelerated growth in population and real estate development, which is good, but the necessary investments in the critical areas mentioned are lagging and are not following the pace required which, if not given high priority, will create much larger challenges in the future.

The city could also position itself as a center of knowledge for Latin American culture and business. Universities should invest more in promoting specialized studies, research and advanced professional programs to develop higher levels of regional education to supply the needs of growing industries and sectors such as financial services, communication, entertainment, information technology alternative energy and so on.

Public Transportation is also an area that badly needs improvement. Most initiatives here will require heavy investment and take a long time to develop. Perhaps, due consideration should be also given to the use of the city’s extensive coastal waterways that could help provide quicker and cheaper transportation.

Cities such as New York and Sydney exploit their waterways providing with services including ferries and water taxis that enhance the city living experience. Ferries and water taxis could connect South Beach, Brickell, Coconut Grove, Aventura and other key areas.

Miami is a beautiful city that has the potential to become a world-class city, however, we have a long way to go.

Ted Carter, Senior Managing Director, CB Richard Ellis South Florida

In the coming years, we anticipate some attrition from the region by companies seeking cheaper labor, housing and space requirements. Although rents cannot be regulated, it is possible to mitigate some of the escalations by seeking to control associated operating expense increases due to higher insurance costs and building taxes.

There have already instances of companies relocating elements of their operations to other areas within the U.S. which offer more cost effective alternatives. This consolidation/downsizing has created new sublease offerings throughout South Florida.

South Florida is constrained by limited land. As land and construction costs increase, developers need to formulate appropriate public-private partnerships to ensure desirable investment and community objectives.

All commercial real estate building types are at a critical juncture. Developers and/or end users need to determine how to do more with the same or less space. For example, throughout Japan it is commonplace to see vertical industrial sites, which maximize space and efficiencies. In order to make such developments viable, industrial rents will have to continue their upward spiral. Limited industrial supply coupled with escalating rents may adversely affect the local economy by limiting distribution options. Industrial/distribution-based businesses are increasingly looking at St. Lucie and Martin counties to relocate their operations for more affordable accommodations.

South Florida faces challenges. They are education and the qualified labor pool, water supply, fractured and diffuse political governance; land, insurance and construction costs; a lack of global identity workforce housing; the exchange rate; transportation and infrastructure and the availability and price of commercial sites and inadequate land.

Elizabeth Garcia, Vice President for the Caribbean and Latin America, Avaya

Miami is becoming a very technology savvy city, a function of the number of technology companies based in South Florida as well as our penchant for the latest gadgets (because were so busy traveling around Latin America we need to keep in touch in real time).

This will accelerate as Latin America continues to grow based on free-trade agreements and similar policies that encourage cross-border commerce. Miami will be a prime beneficiary, capitalizing on its unique position and status.

Miami must maintain an affordable cost of living for workers, deal with congestion and infrastructure and diversify its economic base so the city’s fortunes don’t rely so heavily on one or two sectors such as real estate.

Julio Grabiel, Managing Principal, Spillis Candela DMJM

Location, climate and a distinctive culture have made Miami a great city.
But we face formidable challenges in taking our city to the next level. Paramount among those challenges is our environment.

Surrounded as we are with water and marshes, the perilous conclusions that experts on climate change are proposing are daunting. We first need to take resolve and address the damage we have thrust upon our region.

We have carelessly destroyed mangroves that protect us, planted invasive maleleucas, made rock-mining easier, and at this point are quite close to running out of land. The very natural qualities that brought us to this region we are carelessly destroying.

As I see it, the natural environment, education, transportation, and our built environment are the four key issues that will structure the creation of Miami, the world city. Our success depends on how quickly and effectively we act together with the municipal and county governments south of Lake Okeechobee.

Those of us in the development, architectural, engineering and planning professions need to take a unique perspective in our goal to meet the Global Sustainability Challenge. We have the continual task of making our buildings better, less expensive to operate, and more comfortable for us to live, work and play in.

We and other architectural companies have implemented the following specific solutions for all our buildings.

They are to set energy targets at 10 percent less than current building code.

We strive to have 10 percent of all energy consumed to be generated from on-site renewable energy sources, where allowed.

We aim to minimize solar heat gain entering buildings by improving glazing standards and/or the use of shading devices.

We capture and store rainwater for reuse.

Manuel Medina, Chairman & CEO, Terremark Worldwide

Over the last decade, Miami has become far more than a vibrant city blessed with multicultural diversity and robust tourism. The city has transformed itself into a bustling interconnected business hub and has gained credibility in the United States.

Businesses thrive here, nourished by outstanding universities, favorable tax incentives and a quality of life that’s hard to duplicate in other major cities.

An increasing fascination with Miami comes in part from the city’s regional commerce that boasts its strong international trade community. Miami’s proximity to Latin America makes it a natural headquarters for operations and connectivity for inbound and outbound traffic.

In this vein, the Network Access Point of the Americas is the transit point for more than 90 percent of the Internet traffic to and from Latin America.

As a longtime Miami resident, it’s always been easy for me to see the city’s allure.

Several years ago, Terremark made a couple of strategic bets. First, we sensed that downtown Miami was on the verge of a great renewal and that is where we built the Network Access Point of the Americas, a steel-and-concrete fortress designed to withstand Category 5 hurricanes, where governments, telecommunications companies and businesses exchange Internet traffic and protect their information technology infrastructure.

Our second assumption, closely tied to the first, was that the Internet was about to take off. Ten years ago, during the heart of the original dot-com explosion, the Internet was a new business channel that people were trying to figure out; e-mail was an additional way to communicate. Today, the Internet and everything connected to it is mission critical, the heart of business, and sustaining it and leveraging it is essential for success. Web-based businesses and applications or the equivalents of Google across the world have to be up and running, no exceptions.

As these businesses grow so does South Florida’s technology community.

Three years ago, Terremark had 140 employees and $18 million in revenues.

Today, Terremark has more than 300 employees and $100 million in revenue.

Domestically, we are expanding in California and Washington, D.C., while internationally new network access points are emerging in the Caribbean and near Africa to accommodate growing Internet traffic.

People don’t necessarily think of South Florida as a technology hub, but many of the world’s leading technology companies have their Latin America headquarters here. Miami residents are very comfortable with technology.

We are very active e-mail users, and, according to one telephone company, people in Miami talk on their cellphones more than other wireless phone users, making almost 300 calls a month, way ahead of the number two city, Los Angeles.

The Center for Digital Government shows Miami-Dade is in the top 10 counties in the United States for information technology serving residents.

Miami’s growth won’t necessarily come easy.

New buildings assuming theyre occupied will provide more residents meaning more congestion, more cars and demand for infrastructure, public transportation and open, green spaces.

We want Miami to progress and advance, but we want it to maintain the charm and allure that has made it the dream destination for so many people from so many parts of the world.

I think all of us in Miami, the business community and our government leaders are up to the challenge of making sure the city continues to be a great place to live, work and visit. Well see how well were doing in another 10 years when we celebrate the 20th anniversary of WorldCity Business.

Lee Sandler, Partner, Sandler, Travis & Rosenberg

We need to commit to significant investment in international trade infrastructure. It is not true that if you build it they will come; but it is true that if you don’t build it, they will not come, and those that are here will leave. But what do we need?

For the seaport and airport, we need efficient and separate routes for cargo to move on and off the port without stalling, stopping or intimidating the traffic in our downtown office area, the growing Doral business area, at centers for sports, culture, recreation, tourists and shoppers. The port tunnel and 25th street flyover are just a start.

We need to provide intellectual and financial support to our traditional and non-traditional trading partners in Central and South America, the Caribbean and Africa, to make them efficient and growing traders and ports looking first to the United States and not to Asia and Europe, and capable of participating in a modern, secure, intermodal trade environment.

Stephen Owens, President, Swire Properties

I would say our biggest impediment to the elusive status of world-class city is the inability to create a shared vision of what we expect of a world-class Miami.

This is both a failure of our political leadership to articulate the possibility of a common vision, and a lack of will. With so many jurisdictions local, city, county, regional, state and federal that need to be at the table in agreeing, never mind implementing, the big picture strategies, we too often throw up our collective hands, hoping naively that the big picture will take care of itself. Planning for the future has become a suspect activity in Greater Miami, yet never have the challenges of unplanned growth been more apparent.

We see this lapse in regard for the long view most acutely in the absence of infrastructure enhancements to support the unprecedented building boom that Miami has undergone in the past 10 years.

It is ironic that the very population of new urbanites which the building boom was intended to attract back to the center city is the population most likely to be impacted by the lack of concomitant investment in infrastructure.

Our county and city’s development philosophies seem to have focused over much on real estate, without providing concurrency in basic services, code enforcement, parks, pedestrian experience, traffic management and transit.

Simply put, great cities have great parks, great streets and great public transportation. A functioning port and a state-of-the-art, competitively-priced, self-governing airport must be part of the equation. Until we coalesce as a community around these fundamentals, it is hard for me to imagine Miami truly gaining the world-class status to which we all aspire.

Frank Scheibner, President &?Ceo, hellmann USA

Ten years ago, Hellmann USA moved its headquarters from Long Beach, Calif., to Miami.

Three factors influenced the decision to move to Florida.

The company was concerned about access to markets.

As a global logistics company, we concentrate on three main markets; Asia, Europe and Latin America. Being on the West Coast gives you great access to Asia, but the connection to Europe and Latin America is too long. Being located in the North East allows you to be close to Europe, but you miss the opportunity to develop business in Latin America and Asia.

Miami’s advantage is being close to at least two of the three markets, Europe and Latin America. We are in the same time zone as New York and there are plenty of flights to Europe.

The cost of living was also a concern.

With more than 200 employees in Miami and later, the City of Doral, it was important our employees enjoyed a good standard of living. Housing prices were low, traffic was acceptable and the infrastructure was appropriate for the size of the city.

We needed a talented labor pool.

As a company set up for growth, it was important that we were located in an area in which we could attract great talent at competitive wage levels.

Miami and Doral are still great places to live and great for our customers to visit. But looking at these three initial reasons to come here, only one is still valid today.

With more than 15,000 employees in 341 cities across the world, Hellmann USA operates in 24 cities nationally from the East to the West and the North to the South.

We handle the logistics and supply chain needs of many global enterprises including Fortune 500 companies.

Our head office for the United States and our Miami branch continue to grow and we are happy to be here, however, the current situation in regards to the cost of living and infrastructure are making it increasingly difficult to enjoy a good lifestyle and be competitive in a global market.

The proposed change in property taxes may be the first step in the right direction, however, solutions for infrastructure have to be found too.

William Holly, President, Holly Real Estate

When you think of all great cities, you think of real estate. Whether a city has the tallest tower or the greenest development or the best design. Miami is no exception.

Many have joked that the Florida state bird should be changed to the construction crane.

Construction activity has been a constant in our neighborhoods and our business centers. Real Estate in Miami has seen a boom over the past 10 years that is literally unprecedented.

In order to become a world class city, however, planners work intelligently with civic leaders toward quality, rather than quantity.

Although Miami has set records locally, nationally and internationally for development activity, we have not planned our growth and we are not gaining recognition for world-class design and development.

For too long, Miami developers have focused on speed and maximizing profits. There needs to be more focus on quality design that will lead to our becoming a world-class city.

It was only this year, with the help of City of Miami Mayor, Manny Diaz, that Miami’s first green office high-rise gained planning approval. Just three months later, two other projects (Brickell Financial Centre and 1450 Brickell Avenue) have joined Miami Green and there are as many as 20 other potential green projects in Miami now.

Unless gridlock is eased and mass transit improved and expanded, Miami’s growth and position as a world-class city will be hindered. This has been the hot topic in our region for the past five years and I implore our leaders to continue to make it a top priority.

The people and business that drive real estate are more focused on quality of life and balance than ever before. The Carnival Center for the Performing Arts, a planned museum park and a downtown Miami baseball stadium can only add value to the city.

Insurance and property taxes have not only dominated the headlines, they have had huge financial impact on Miami real estate in 2006 and 2007. We need to create a system which does not disadvantage Miami against competitive markets. We will have to wait and see how the legislature addresses this issue in the state legislative session.

Miami’s real estate market has survived downturns in the 1920s, the 1970s and the 1980s.

Our international buyer pool for residential real estate and multinational tenant pool for commercial real estate has led to better performance than in other U. S. cities. I look forward to being a part of our Miami real estate market as it progresses from an international market to a world-class one.

Kelly Smallridge, president, the Business Development Board of Palm Beach County

Some of South Florida’s key strengths include having a large and rapidly growing economy, high per capita income levels, excellent infrastructure, relatively low costs for doing business, a stable legal and regulatory framework, a culturally diverse society, a strong technology base, a highly sophisticated and efficient financial system, a flexible labor market and high levels of entrepreneurial activity.

On the downside, South Florida has experienced significant growth in the last decade and, as a result, larger pieces of contiguous real estate have been absorbed. Therefore, it is becoming increasingly difficult to recruit corporations that require more than 15 acres of commercially zoned, shovel-ready property that has all of the necessary permits, approvals and concurrency.