Brightline, Branson And Beckham Usher In New Era For Broward County

broward county

Greater Fort Lauderdale is in the midst of a development boom.

With Virgin Trains opening up the South Florida corridor, high-profile celebrity projects underway and dozens of cranes dotting the region’s skyline, Greater Fort Lauderdale has captured the national spotlight.

The latest jobs data clearly showed the strength of the Broward County region with a 2.8% unemployment rate in April 2019. The jobless rate was 0.5 percentage points lower than the region’s year ago rate of 3.3%. Non-agricultural employment increased by 16,400 jobs (+1.9%) over the year, with an employment of 867,000 in the Ft. Lauderdale-Pompano Beach-Deerfield Beach MSA (Broward County).

The Ft. Lauderdale-Pompano Beach-Deerfield Beach Metro Division had the highest annual job growth compared to all the metro areas in the state in other services (+2,200 jobs) in April 2019.

The industries gaining in jobs over the year were: Professional and Business services (+5,400 jobs); Education and Health Services (+5,200 jobs); ; Financial Activities (+1,300 jobs); Construction (+1,200 jobs); Trade, Transportation, and Utilities (+800 jobs); Manufacturing (+600 jobs); and Leisure and Hospitality (+300 jobs). The industry that lost jobs over the year was Government (-600 jobs).  The information industry was unchanged over the year.

GlobeSt.com recently turned to Bob Swindell, president of the Greater Fort Lauderdale Alliance, to discuss the factors that have been driving job growth in the region and Broward County’s rapid transformation from beach town to boomtown.

GlobeSt.com: What does the launch of Brightline (now Virgin Trains) mean for Greater Fort Lauderdale and how has it impacted real estate development?

Swindell: There’s no question that Virgin Trains is a game-changer for our region. The high-speed real has unlocked Miami, Fort Lauderdale and West Palm Beach by connecting a combined population of more than 6 million, giving the 200+ Broward-based corporate headquarters access to a deeper talent pool than ever before.

Late last year, the Alliance conducted an analysis of the activity that has occurred along Brightline’s route since the train was announced and found that millions in corporate investment have already been made within a one-mile radius of the Fort Lauderdale station. Much more is on the way now that the Fort Lauderdale City Commission and the Broward County Commission recently voted to move forward with the development of a joint governmental campus, co-locating city and county Halls in one facility. The new government building will be located across the tracks from the train terminal on a site currently occupied by the Main Bus Terminal on Broward Boulevard.

The marquee project in the area is Traina and BH3’s FAT City (Flagler Arts and Technology) which is estimated to encompass 1.4 million square feet of mixed-use space that will foster Broward’s growing urban community of artists, technology businesses and young professionals.

This new level of mobility and the development it has spawned has been a major selling point in retaining and attracting the skilled, high-paying jobs that are propelling our economy forward.

GlobeSt.com: What other new projects are rising in the area?

Swindell: The bulk of new development in the region is taking shape in downtown Fort Lauderdale where the population has grown by 30% as new apartments and condos rise.  There’s PMG Group’s redevelopment of Las Olas Riverfront, a mixed-use project that will consist of “social living” rental communities that combine residences with coworking space as well as a public plaza featuring restaurants and nightlife. Also set for completion by end of 2019 is Skanska’s $49.3-million renovation and revitalization of Las Olas Boulevard. Once complete, Fort Lauderdale’s most popular thoroughfare will have a brand new 670-space parking lot, a beachfront park, a new canopy, public spaces and interactive water features that will enhance the pedestrian experience. Stiles Corporation’s The Main Las Olas, a 25-story office building and 27-story residential tower, will span an entire city block bordering East Las Olas Boulevard and Southeast Third Avenue.

More growth is on the way, with approximately 6.2 million square feet of multifamily, office, retail and hotel construction either under development or in the pipeline within Broward’s urban core.

GlobeSt.com: What does the exposure from globally recognized names like Richard Branson and David Beckham mean for the Broward brand?

Swindell: Richard Branson turned heads when he launched the first-ever adults-only cruise line from a Plantation-based headquarters in early 2018 and then doubled down on the region by investing heavily in Brightline, which is being rebranded to Virgin Trains. Soccer legend David Beckham put Broward back on the soccer map when he joined forces with the City of Fort Lauderdale to transform Lockhart Stadium into an 18,000 seat, state-of-art arena for his MLS team.

And let’s not forget about the wave of positive publicity generated from South Florida being shortlisted for Amazon’s HQ2. These are all indicators of Greater Fort Lauderdale’s status as a thriving business and lifestyle destination finally being recognized on the international stage.

GlobeSt.com: How are advancements in infrastructure driving new talent to Greater Fort Lauderdale and supporting job growth?

Swindell: As an economic development organization, we look at the big picture. Recent innovations and investment in infrastructure have been a major step forward in creating the type of walkable, mixed-use environments that put our region on a path for long-term growth and success.

This urbanization of Broward County is helping us attract the type of young, skilled talent that draws the attention of global brands and moves the needle where it matters most: jobs. The Greater Fort Lauderdale area added more than 14,000 jobs year-over year in 2018 and continues to be a leader in the state in terms of job creation. With Broward County projected to gain 900,00 new residents by 2030, the region isn’t slowing down anytime soon.

 

Source: GlobeSt.

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Florida Governor Signs Business Rent Tax Rollback, The Third In Recent Years

Business Rent Tax

Gov. Ron DeSantis signed a law that will reduce the tax on commercial leases in Florida.

House Bill 7123, known as the business rent tax, lowers the commercial lease tax by 0.2 percent to 5.5 percent. Although the reduction is small, it marks the third such cut since 2018.

Florida is the only state in the U.S. that collects sales tax on commercial leases, according to NAIOP, the national commercial real estate development association. The state is otherwise considered a tax haven due to its lack of a state income tax.

“In Florida, the commercial tax is imposed on the base rent, plus any additional rent or consideration the tenant is required to pay,” said Darcie Lunsford, who has spearheaded reductions in the tax on behalf of the South Florida chapter of Herndon, Virginia-based NAIOP.

It’s also applied to the tenant’s share of common-area maintenance fees and property taxes. Some Florida counties also tack on a local surtax, including Miami-Dade, Broward and Palm Beach counties.

The tax reduction becomes effective on Jan. 1, 2020 and is expected to generate annual savings of $64.5 million, according to the governor’s office. DeSantis, who won the endorsement of the Florida Realtors in his race for governor, was elected in November. The tax applies to retail, office and industrial leases and does not include hotel or apartment leases.

“Reducing the tax helps to level the playing field when Florida competes for headquarters or major companies,” Lunsford, a senior vice president at Butters Realty & Management said. “It also releases investment capital that companies can now use to grow our businesses, hire people, and invest in equipment.”

“The reduction is minor,” said Marvin Kirsner, a shareholder at Greenberg Traurig. “A previous bill, which did not pass, called for reducing the tax to 3.5 percent, which would have had a much bigger impact, in addition to taxing e-commerce.”

Still, Steven Hurwitz of Colliers International South Florida said that “Over time, additional rollbacks would have an impact on tenants reinvesting in their businesses and the local economy. Any future movement definitely supports that sort of investment in our economy.”

NAIOP’s Florida chapter has been lobbying the state to ratchet back the commercial lease tax for years and is hoping to wipe it out completely.

“Former Gov. Rick Scott attempted to eliminate the rent tax altogether,” Kirsner said.

“It’s definitely a senseless tax that we need to work on eradicating over time, which is what NAIOP’s been doing,” Lunsford said.

Other real estate-related bills are awaiting the governor’s signature. The Florida Legislature recently passed a bill that would make remote online notarizations legal, a move that could speed up foreign and out-of-state real estate investment in the Sunshine State.

 

Source: The Real Deal

Jeff Greene Pushes The Launch Button On Multiple West Palm Building Projects

West Palm Beach

Developer Jeff Greene is moving forward with a four-building, 352-apartment complex that looks across Clear Lake reservoir toward the West Palm Beach skyline. But wait — that’s not all.

Greene, who owns probably more West Palm Beach property than anyone, and who long has drawn city criticism for holding off on construction, says he has pushed the launch button not just on Clear Lake Estates but on several projects in and around the city.

Among them:

– One West Palm, a two-tower, hotel/office/apartment complex downtown at 550 Quadrille Blvd., whose groundbreaking was last month, is scheduled for completion in the first half of 2021.

– A Westgate neighborhood apartment complex, off Congress Avenue north of Belvedere Road, is in the permit process.

– An industrial project off Jog Road, south of Okeechobee Boulevard, is a few weeks from construction.

– He hopes to start a refrigerated distribution center for McArthur Dairy off Florida Mango Road in 30 days. That would allow McArthur to move from its current location on Flamingo Road, where the developer plans to expand his Greene School and build indoor tennis courts.

– A residential complex overlooking Currie Park, with the city’s tallest towers, could be under construction in 12 to 18 months, depending on permitting and the city’s ability to more forward renovating the park.

Housing Affordability A Growing Challenge

The city commission gave initial approval Monday to site plan changes to will allow Clear Lake Estates to rise on the 11-acre site of the scuttled Sail Boat Club project, just across the water from downtown. A vote on final approval is expected as soon as May 20.

Greene said in an interview that another nearby apartment complex he built four years ago, Cameron Estates, is so fully leased it indicates the market is ripe for the Clear Lake project. He’s getting rough construction cost estimates now and would start building as soon as possible, with city approvals. As planned, the project is short 106 parking spaces of the 721 required, so in exchange for a waiver on that requirement, Greene has offered to contribute to transit alternatives.

He would build a waterfront walking and bike trail on the property’s lakefront, and a publicly accessible path linking that trail to Executive Center Drive, or pay the city $158,000 to do the work, by the end of 2020. That work would create a non-vehicular connection between the Palm Beach Outlets, Okeechobee Boulevard and downtown. The developer also agreed to install a PalmTran bus shelter on Executive Center Drive.

At Monday’s city commission meeting, commissioner Cory Neering asked planning officials whether they would require Greene to include workforce housing in the project. Housing affordability has been a growing challenge as the city works to attract companies and their employees downtown. Neering was told the city could broach that issue with the developer over the two weeks before the final approval vote.

But Greene told The Palm Beach Post the site, which he bought in 2015 for $17 million, was too expensive to offer subsidized, below-market rents.

“This building, with the cost of construction and rents will just barely make it” financially, Greene said. “It only works for someone like me, who builds it for what it’s worth when its done. The rents just aren’t high enough and construction costs have gone up so much. The problem is, I can build it if I just make a return on investment, make cash flow, like owning a bond. But if I had to sell it to make a profit, there’s not enough there,” In short, he concluded, “if you try to have any kind of reduced rents, it would probably kill the project.”

No Tenants Yet For One West Palm

One West Palm, its foundation finally under construction, also faces challenges. The project, which Greene announced several years ago and got city approval for two years ago, has yet to line up a tenant for its 209,000 square feet of Class A office space.

Meanwhile, The Related Cos. is coming out of the ground with a competing downtown office tower, 360 Rosemary, to be completed about the same time, next to Rosemary Square (the renamed CityPlace development).

And the city’s Community Redevelopment Agency this week approved a letter of intent for developer Charles Cohen to build an office tower as big as 490,000 square feet, on the ‘tent site’ at the corner of Okeechobee Boulevard and Dixie Highway. Greene, who owns the former Opera Place lot just north of the tent site, where he could develop as much as 1 million square feet, said that despite the current shortage of Class A space, he doubts there are enough tenants out there now to fill three or more buildings.

All the construction comes at a time of sustained growth in the city, which counts $3 billion of substantive projects in its development pipeline and has been challenged for solutions to the traffic that inevitably will generate. These include highrise residences off N Flager Drive in the North End, a sprawling Anchor Site mixed-use development and Currie Park redevelopment on opposite ends of Northwood Road, the renovation of the 1930’s-era Sunset Lounge in the Historic Northwest, a rebuilt golf course and tennis center in the south end, a Drive Shack indoor golf entertainment center and Mitsubishi dealership near the airport, condo towers on S Flagler Drive, and a possible doubling in size of the county convention center, just to name a handful.

Of course, not all proposed projects get built. Greene has tabled a number, himself. His Opera place site has remained vacant for years. He dropped a micro-apartment building a block from Clematis Street and tabled a residential project on Clematis, after commissioning drawings by the same high-profile firm that designed One West Palm, Miami’s Arquitectonica. For the 20 acres he owns around the Currie Park waterfront, he has hired an even higher-profile firm, the Switzerland-based Herzog & de Meuron, designers of the Beijing Olympics’ Bird’s Nest stadium, but that’s another site he’s been talking about for a long time that remains vacant land.

Despite complaints from city officials or neighbors of his vacant sites, the Palm Beach billionaire gets construction cost estimates, does the math and only moves forward when the numbers add up to a profit, particularly since he’s generally not using other people’s money but his own.

At One West Palm, he waited on the market, held off while the city politicked zoning changes that benefited a competitor and he took time off for a run for governor. Now he’s done the numbers again and they add up to a worst-case scenario in which he makes only a little money, and best-case in which he makes a lot, he said. So, the cranes are in place.

Meanwhile, seeing occupancy stabilize at Cameron Estates at a healthy 95-97 percent, the numbers told him that despite construction costs trending high amid the building boom, Clear Lake Estates stood a good chance at success.

 

Source: Palm Beach Daily News

As Pompano Thrives As Booming Beach Destination, It Braces For Even More Growth

An explosion of shops and restaurants is turning Pompano Beach into possibly the top beachside destination between Fort Lauderdale and Delray Beach.

Many businesses, attractions and other amenities have recently become available to the public — and much more is on the way. But the evolution also is posing challenges, such as a brand-new parking garage that is already packed full on the weekends. There’s also the hassle of driving around amid all the traffic and construction.

“The development is great. It’s going to help this area a lot more,” says Thomas Savino, of Margate, who has hit the beach in Pompano almost daily for nine years.

All the changes have wowed him: Where he once saw a sleepy community is now a sight for valet services, particularly on the weekends for a restaurant that opened last year.

“The only thing is — I’m scared. Where am I going to park my car with all these people coming?” asks Savino.

Here’s a look at all the changes afoot on this fast-growing stretch of beach.

The Boom

The city has long planned to shape itself into a thriving destination. Already, there are new restaurants and stores, as well as hotel construction underway. The city’s pier, closed to the public since 2017, could be reopened by October, which could help generate even more traffic.

The city’s new popularity is obvious: The 625-space “Pier Garage” that opened in 2016 is often filled to capacity on weekends. Other signs that throngs of people are coming: The Beach House restaurant that opened last year has found much success, said developer Tim Hernandez, who is building a development referred to as the Pompano Beach Fishing Village.

“I feel like there’s a lot of activity in Pompano for good reason,” Hernandez said. “It’s coming up. It’s going to be a great place — a true destination.”

Among the projects that’ll be part of Pompano Beach’s Fishing Village, east of State Road A1A, between Northeast Second and Northeast Third Streets:

— A 150-room, dual-branded Hilton hotel, from Home2Suites and Tru. It’ll be the first to be built in a city-owned beachside redevelopment area in more than 50 years. Its groundbreaking took place this past Wednesday.

— Alvin’s Island, a beach-apparel shop that’s under construction. It’ll open later this year.

— The Oceanic at Pompano Beach, a restaurant with an ocean liner-inspired design. It’s two or three months from opening.

— Lucky Fish Beach Bar and Grill, which intends to replicate a Keys-style open-air tiki bar. It’s under construction and may open late this summer.

— A building that’ll have a BurgerFi, Kilwin’s and a Cannoli Kitchen. Construction is expected to begin in a month or two.

— A banquet space west of the Oceanic restaurant on Pompano Beach Boulevard.

“The objective is to create a space suitable for wedding receptions, charity events, corporate meetings and private parties,” according to city records.

There is no start date yet for construction.

“The facility will be two stories and offer 18,000 square feet, with a rooftop bar amid ocean views,” said Tom Prakas, the leasing agent for Pompano Beach Fishing Village.  “We have so much going on here and this space is going to fill out in the next two years.”

Finding Solutions

To battle the traffic and parking crunch, the city is envisioning a beachside garage — in addition to one that already opened. The city says perhaps a hotel or grocery store would help pay for it. City officials said the proposed parking garage, offering 700 additional spots, would help draw even more visitors.

Requests for developers to make proposals for the 3-acre project — both for the new garage and accompanying projects — are due by May 31. The lot, at 109 N. Ocean Blvd., is west of State Road A1A, east of Riverside Drive and south of Northeast Second Avenue.

“We can’t ignore the issue — there’s building going on and there’s demand for parking,” said Assistant City Manager Suzette Sibble. “The city doesn’t want demand to outpace the supply. That won’t make anybody happy. We’re trying to stay ahead of the curve and be strategic. The parking garage — to be built on land that is now surface parking, north of The Plaza at Oceanside condos — could top five floors.”

It would either be self-parking or a hybrid of self-parking and an automatic car stacker, like an elevator for cars. Because it is estimated to be in the $17 million range, new development could offset the costs.

A beachside grocery store also would help replace the grocery store that was previously in the Oceanside Shopping Center, which was redeveloped into condos.

Currently, most beachside residents travel across a bridge to buy groceries from the Publix at 2511 E. Atlantic Blvd. But if a new supermarket were to open closer to the beach, it may help ease traffic across the Intracoastal Waterway bridge.

“We are very excited about it,” Sibble said. “It would be nice to get something the residents would be proud to look at, they don’t have to go across the bridge to Publix.” The possibilities are “like a Trader Joe’s type, an off-the-wall, grocery-type store — food, wine, cheese — a use for them to be proud of.”

Not all residents are pleased with an onslaught of construction near the water in what the city considers progress.

“I think they’re going nuts with this development phase,” said former Commissioner Kay McGinn. “They are running out of things to develop.”

But other locals are thrilled.

“This was a very quaint little city, and I think it will explode in the next few years,” said Patti Fanucci, who works at the Sandbar Snacks concession stand. “Pompano needed a face-lift. It’s making us more of a city.”

“Tourists are attracted because of the width of Pompano’s beach, but people can’t come to Pompano if they don’t have parking,” said Johnny Coppola, a Pompano Beach snowbird from Montreal. “More hotels, more condos, more retail means more money and money is good for everybody. It’s just as important as the blood in your body. Too much going out and not enough coming in, you die.”

 

Source: SunSentinel

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CRE Florida Partners Funds First Mortgage For Boynton Beach Client

Laskody

CRE Florida Partners Capital Markets is proud to announce the successful closing and funding of a first mortgage loan collateralized by a  ¹42,000-square foot single-tenant/owner-user industrial warehouse property located in Boynton Beach.

The $2.5 million loan was made at a 48% loan-to-value ratio and contained a 10-year term with a 25-year amortization schedule.  The loan was procured and placed by Greg Laskody, CCIM, and was ultimately closed by a local private bank that will portfolio the loan on its balance sheet.

CRE Florida Partners (CRE) is a full-service commercial real estate company based in Boca Raton, Florida.

CRE’s Managing Partner Michael Rauch commented, “Debt placement is becoming a critical component for our clients in this very competitive lending market. Having the ability to source full-service solutions is critical to our clients’ success.”

Marijuana Dispensaries Present High Risk, High Reward For Landlords, Panelists Say

Landlords who rake in rents from medical marijuana dispensaries may put their commercial bank accounts and title insurance at risk, according to cannabis real estate experts.

Meanwhile, cannabis retailers are baking early termination clauses into leases in the event municipalities deny permits to open dispensaries.

Dan Dietz, manager of real estate acquisitions for GrowHealthy, a Florida medical marijuana company founded in 2014, said his firm retained SRS Realty Advisors, a commercial brokerage based in Orlando, to handle all of its real estate deals in Florida.

“The SRS brokers are well-versed on state regulations on dispensaries, as well as at convincing landlords to accept the risks associated with leasing to a retail cannabis shop,” Dietz said. “We have pretty tight lease clauses we include. There are termination provisions based on the inability to achieve government requirements to operate, and line items that acknowledge selling marijuana products is against federal law.”

Dietz, whose company operates three dispensaries in Florida, was a panelist for an Urban Land Institute discussion on cannabis real estate in Fort Lauderdale. He joined Matt Ginder, senior counsel with law firm Greenspoon Marder’s cannabis practice; Nick Hansen, Southeast U.S. government affairs director for MedMen, a national cannabis company based in Culver, City, California that is currently suing Miami Beach over its dispensary restrictions; and Tara Tedrow, a shareholder at Lowndes, Drosdick, Doster, Kantor & Reed who chairs the firm’s cannabis & controlled substances group.

Leasing to dispensaries is a risky proposition because banks and major insurance companies do not want to do business with anyone tied to the cannabis industry since marijuana is still a federally banned illicit narcotic, Tredow told attendees.

“For rent checks, that is a problem,” Tredow said. “If a bank knows you are receiving rent from a cannabis company those are illegal funds you are knowingly accepting. Most federally insured banks do not care if the dispensary tenant is a licensed medical marijuana provider complying with Florida law. The money is considered dirty even if it comes from a legit cannabis company. A real estate investor or a cannabis company seeking to buy new land may also find it difficult to get title insurance if insurers find out the property will be used for marijuana purposes.”

MedMen’s Hansen said the company retained Blake Wilder to handle leasing for several locations, including in Fort Lauderdale and Miami Beach.

“They have a pretty good working knowledge of what to look for,” Hansen said. “The biggest hurdle is time and the changing political winds in cities tackling dispensary regulations.”

In Miami Beach, Hansen claimed, permitting officials had given the company assurances it could open a location on Alton Road.

“After MedMen signed a 10-year lease and invested $1 million renovating a former Panera Bread restaurant, the city commission passed new regulations that prohibited its dispensary from being within 1,200 feet of another medical cannabis store that is already open,” Hansen said.

The company details the allegations in a recently filed lawsuit. Hansen said MedMen has had similar experiences in other cities and counties.

“That is not an outlier,” Hansen said. “That kind of stuff happens all the time, every day.”

 

Source: The Real Deal

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Delray Beach Community Redevelopment Agency Green Lights $100M Mixed-Use Project

The Delray Beach Community Redevelopment Agency approved plans for AltaWest, a $100 million mixed-use project on West Atlantic Avenue.

The CRA board OK’d the sale agreement with BH3 Management for 7.4 acres at 600 to 800 West Atlantic Avenue. The developer has 30 days from the date of obtaining a construction permit to close on the land, according to the South Florida Business Journal.

Aventura-based BH3, led by Dan Lebensohn and Greg Freedman, was the winning bidder of six groups for the public-private partnership project. The development will include 43,000 square feet of ground floor retail, 21,600 square feet of professional office space, a 33,000-square-foot grocery store, 165 residential units totaling 272,242 square feet, 744 parking spaces, about 45,000 square feet of public space called “Frog Alley” and up to 30 workforce housing units, the latter of which includes 18 affordable housing units being built on an adjacent site.

The site is in an Opportunity Zone, which means the developer can qualify for a major federal tax incentive for developing the project. The federal program allows developers and property owners to defer and possibly forgo paying some of their capital gains taxes, or taxes resulting from the sale of certain assets.

While BH3 was the only bidder to not offer money in exchange for the land, the company said it plans to spend the most on development.

BH3 has to put $250,000 into escrow. The city commission still needs to grant the project final site plan approval.

 

Source: The Real Deal

Opportunity Zones Heat Up In South Florida

opportunity zones

Most real estate professionals are now aware that the federal Opportunity Zone tax incentive program became effective in 2018 and that Qualified Opportunity Zones are located in all 50 states and Puerto Rico.

In Southern Florida, in Miami-Dade County, areas such as Coral Gables, South Miami, Hialeah and Wynwood will likely be hot spots for Opportunity Zone investment given their access to road systems and water. In Broward County, parts of Pompano Beach, Plantation, Fort Lauderdale and Hollywood are likely to see investment interest given their access to existing highways and rail systems already in place.

Developers will likely seek to purchase land in these areas in order to build with their own capital and/or equity from Opportunity Zone investment vehicles in order to utilize cheaper sources of capital and, thereby, drive better development returns due to the ability to defer capital gains, reduce those capital gains, and, if the investor stays in the investment within the zone for more than ten years, and thereafter sells at a gain, 100 percent of the appreciated value is federally capital gains tax free!

The program is applicable to developers/owners/investors of all property types including multifamily rental, retail, hotels, industrial, commercial, office, industries, self-storage, assisted living, affordable housing, etc. Moreover, it applies to not only real estate investors but to those whom have sold personal property, including stock.

In order to maximize the “opportunity” of the Opportunity Zone program, developers and investors need to move quickly to take full advantage of the tax benefit as demand increases and the time period of eligibility diminishes. Developers and owners are entitled to rely on the proposed regulations now and need not wait for final implementing rules so long as they follow the regulations as stated. Since the program only lasts until 2026, the seven-year ability to reduce capital gains by 15 percent will disappear if investments in Florida are not made by 2019 and the five-year ability to reduce capital gains by 10 percent will disappear if not made by 2021.

One of the bills that the Florida legislature is considering during its 60-day session this year is a bill introduced by Democratic state Rep. Anika Omphroy from western Broward County. In it, she proposes the creation of development agencies for each opportunity zone in the state. Those agencies would include eight to 13 unpaid members each and they would be appointed by municipalities. The agencies would be responsible for developing strategic plans for each zone and applying for state incentives, including sales tax credits and a 60 percent reduction in property tax assessments for improvements made.

What will these South Florida owners and developers get from leveraging the Opportunity Zone program for their project? Appreciation of value of investments in qualified businesses or real estate within the Opportunity Zones that are held for at least 10 years are not subject to federal capital gains tax if the investment is sold prior to Dec. 31, 2047. Accordingly, the longer an entity has an investment within a Qualified Opportunity Fund within an Opportunity Zone, the more it can reduce its capital gain―either by 10 percent (if five years) or 15 percent (if seven years or longer).

Interested investors are already focusing on deploying capital in Florida and elsewhere in substantially improving various asset classes and in creating funds to deploy in investing in various asset classes.

 

Source: Commercial Property Executive

Dania Beach Government Solicits Developer Proposals For A New City Hall

The city government of Dania Beach started soliciting proposals from developers to build a new city hall and a commercial complex.

Dania Beach city hall project site (PHOTO CREDIT: Colliers International | Sun-Sentinel)

The development would unfold at 100 West Dania Beach Boulevard, a 6.42-acre site where the existing city hall is located. May 30 is the deadline for developers to submit proposals to redevelop the site, which has been appraised at $12.31 million. The city wants a developer to clear the site by demolishing the existing 29,000-square-foot city hall and relocating a fire station and two historic buildings to other locations in the city.

Dania Beach formally issued a request for proposals on March 15, three days after city commissioners approved the planned project. According to the city’s request for proposals, the 6.42-acre site is big enough for about 1.4 million square feet of new building space and more than 950 residential units.

Existing parking capacity at the Dania Beach site could be expanded from 440 spaces to 660 spaces by adding two floors, according to Colliers International South Florida, which is advising the city government on the project.

“A 1.25-acre site next to the existing city hall property is privately owned and has a $3.5 million asking price,” Bradley Arendt, a broker with Colliers, told the Sun-Sentinel. “So a developer who acquired the privately-owned site and won the bidding to build a new city hall could assemble 7.5 acres for potential development.”

 

Source: The Real Deal

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Industrial Buildings In Riviera Beach Opportunity Zone Sell For $11.7M

Interstate Industrial Park

A three-building portfolio of industrial property within an Opportunity Zone in Riviera Beach sold for $11.7 million, or $73 per square foot.

When the sale closed, the buildings were 98 percent leased to tenants including the City of Riviera Beach, Saf-Glas and Palm Beach Laundry. Interstate Industrial Park Holdings, LLC, led by Harry Spitzer, bought the three-building portfolio from The Silverman Group of Palm Beach.

The 160,302-square-foot portfolio includes buildings at 6555 and 6557 Garden Road and 3541 M.L.K. Jr. Boulevard in Riviera Beach. The one-story building at 6555 Garden Road was developed in 1987 on a three-acre site. Two one-story buildings at 6557 Garden Road and 3541 M.L.K. Jr. were developed in 1968 on a two-acre site.

Located equidistant to the Interstate 95 interchanges at 45th Street and West Blue Heron Boulevard, the industrial buildings are within the Census Tract 13.02 Opportunity Zone. Investors in Opportunity Zones can defer payment of federal taxes on capital gains.

“The fact that the assets are located in an Opportunity Zone, potentially affording tax advantages, drove further interest from potential buyers,” Scott O’Donnell of brokerage firm Cushman & Wakefield said in a prepared statement.

Cushman & Wakefield’s Capital Markets Team, along with Robert Smith and Kirk Nelson, negotiated the sale of the three buildings on behalf of The Silverman Group. Adam Robbins of ARC Equities, LLC, represented Interstate Industrial Park Holdings, LLC.

 

Source: The Real Deal

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CEOs Agree Tax Breaks Needed To Lure Businesses To Florida

cash

The Miami Herald CEO Roundtable, a weekly feature in the Miami Herald Business Monday, ask South Florida CEOs a question each week.

This week’s question is: Should the State of Florida and local governments be offering tax breaks and incentives to lure businesses?

Here are answers from some prominent South Florida CEOs:

  • Dr. Edward Abraham, executive vice president for Health Affairs of the University of Miami and CEO of UHealth – the UM Health System

Because these incentives are offered by other states and local governments, we will need to do so as well. It will be important, however, to ensure that the incentives offered are appropriate and that the true economic benefits of the business being located here are clear and compelling.

  • Jim Angleton, CEO for Aegis FinServ Corp.

Absolutely, and more: Tax Opportunity Zones, Empowerment Zones, CRA, and play up LatAm Hub. We need to focus upon technology, cyber, AI tax incentives, real community services and favorable talent pool.

  • Wael Barsoum, M.D., CEO and president of Cleveland Clinic Florida

Florida is a relatively low tax state, but we tend to have higher local taxes. Tax incentives are one way to help level the playing field.

  • Agostinho Alfonso Macedo, president and CEO of Ocean Bank

Tax incentives to lure new business have become part and parcel of the arsenal that economic development agencies such as the Beacon Council use to attract new businesses. They are needed and should be maintained.

  • Bill Diggs, president, The Mourning Family Foundation

Of course we should. It is more a matter of what those incentives should include. One area that we must do a better job with is our film and motion picture industry opportunities. With the attraction of Florida and Miami weather, we should have a more robust film industry.

  • Brett Beveridge, CEO and founder of The Revenue Optimization Companies (T-ROC)

I am a believer in offering reasonable incentives including tax breaks to attract new businesses and/or entice the expansion of current operations in South Florida for several reasons. First, although South Florida does have a thriving small business and start-up community, we don’t have many large corporations that employ thousands upon thousands of people. Second, and as a defensive measure, in order for us to keep the few large businesses we have and those that are growing rapidly and making decisions on where to locate, we need to be competitive. And third, we want to entice and encourage growth of our current businesses that might not have invested otherwise. All three of these constituencies will add employees that will live and work in South Florida. They will pay property and sales taxes, more jobs will be created, and we will be able to improve our long-term infrastructure. That said, we have to negotiate long-term and rock-solid agreements that guarantee those benefits will actually happen in exchange for the incentives that we provide.

  • Chelsea Wilkerson, CEO of Girl Scouts Tropical Florida

Yes, the state of Florida and local governments should be able to offer tax breaks and incentives to lure business when those benefits are thoughtfully and clearly measured. These types of incentives have become a standard recruitment and negotiation tool. If we do not use them, we are less competitive and will miss opportunities. However, tax breaks should be used among a mix of incentives — each with its own return on investment and parameters for use.

  • Dorcas L. Wilcox, CEO of Miami Bridge Youth & Family Services

As a state that is dependent on tourism, Florida should offer all it can to recruit legitimate, profitable businesses that will provide jobs and promote traditional family values.

  • Gregory Adam Haile, president of Broward College

A 2017 report from the Pew Charitable Trust estimates that state and local governments spend at least $45 billion a year on tax breaks and other incentives to lure or keep job-producing businesses and plants in their jurisdictions, but that this does not always yield the necessary returns. Careful evaluation and monitoring are needed to ensure that the incentives are achieving their intended goals. While incentives have their benefits, it takes more to attract businesses. The state must also invest in other necessary resources and services critical not only for business establishment but their competitiveness and profitability. These include ensuring it can offer an educated and diverse pool of labor, affordable housing, and services such as transportation access that will attract residents.

  • Jorge Gonzalez, president and CEO, City National Bank

Yes. We need to drive investment that creates employment in sectors that will solidify our future.

  • Louis Hernandez Jr., CEO, of Black Dragon Capital

Tax breaks and incentives are instrumental for state and local economic developers to lure jobs to a region. The benefits will outweigh spending, but the burden should be on the governments to ensure costly incentives aren’t a waste of taxpayer dollars. Florida’s lack of a personal income tax and a relatively low corporate income tax rate help to create an exceptional business climate.

  • Paul Singerman, co-chair of Berger Singerman

I think that the state of Florida and local governments should be smart about tax breaks and incentives to lure business. To be sure, I do not think that Florida or local governments should adopt a per se rule against tax breaks and incentives to lure business. Florida and local governments should take these opportunities up whenever possible and evaluate each on its own merits. Relevant questions include: Is this business good for our citizens? Is this an industry that enhances our communities? Are there significant environmental issues that would be implicated by the business of a prospective new entrant to our markets? If tax breaks and incentives are offered, is there a sound return on investment thatthe state and local governments could enjoy?

  • James “Jimmy” Tate, co-owner and president of TKA-Evolution Apparel and of Tate Capital; co-founder of Tate Development Corp.

I do believe in incentive programs as long as they are properly monitored and the people responsible for making these determinations follow a strict formula which eliminates biases or the possibility of personal gain. There should be a cost/benefit analysis performed on all such proposals and if the analysis shows the transaction is accretive to the city, county or state, then you do the deal. If it is not accretive, then you walk.

  • Rashad D. Thomas, vice president of business connect and community outreach for the Miami Super Bowl Host Committee

In order to compete with the other leading cities in the nation, it is necessary. Miami-Dade currently offers several tax credits and business incentives to attract new businesses, such as the Urban Jobs Tax Credit. This program provides up to $1,000 tax credit per job for new businesses with a minimum of 20 new jobs and for existing businesses with a minimum of 10 new jobs, which are regular and full-time (36 hours or more per week). The State of Florida has lost several projects because of its inability to create a film tax break. It has been reported that the $296 million allocated in state tax incentives, intended to last until 2016, had been spent by 2014, with “Ballers” and “Bloodline.” They were the last two major projects that received state funds. Two years later, the program was shut down. Florida is now currently the only Southeastern state without a program to attract film and television productions. While neighboring states like Georgia, Louisiana, and Alabama continue to benefit from the expanding industry.

  • Manny Angelo Varas, president and CEO of MV Construction Group

I believe the city should create tax incentives to lure businesses based on employment and taxable revenue generated.

 

Source: Miami Herald

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A Large Beachside Hotel Sat Empty For Years Along A1A. That’s All About To Change.

Lauderdale-by-the-Sea

A beachside hotel building near the entrance of Lauderdale-by-the-Sea is in for a big comeback after sitting dormant for seven years.

The five-story, 183-room hotel building — once home to a Holiday Inn — is being bought by developers who plan to add a “state-of-the-art hotel.”

The deal is among a growing lineup of new properties across Broward County, as many beachside communities add tourist and business hotels to beef up their commercial centers.

A joint venture of Concord Wilshire Capital LLC and TLG Investment Partners LLC said they signed a purchase-and-sale agreement to acquire the now-idle site along with the former Villa Caprice beachfront site nearby. The prices were not disclosed.

The former Holiday Inn is in the 4100 block of El Mar Drive, bound by State Road A1A to the west and El Mar Drive to the east. There’s also a second property, the former beachfront Villa Caprice Hotel, a 24-room, two-story bungalow-style hotel, across the street on El Mar Drive. It’s been out of service for nearly three years.

“The two sites will be redeveloped in collaboration with the town of Lauderdale-by-the-Sea,” said Nate Sirang, president of Concord Wilshire. “The developers intend to create a modern new hotel with a major flag brand and popular restaurant concepts. The deal is expected to close in 120 days.”

Sirang did not identify the brand or the concepts, and said there are no specific plans on the drawing board yet.

Who’s Behind The Upgrades?

Concord Wilshire, based in Marietta, Ga., develops and acquires residential, resort and mixed-use real estate properties across the U.S., including Las Vegas, Phoenix, and South and Central Florida.

TLG is a Fort Lauderdale-based real estate investment firm headed by Leland Pillsbury and Christopher Nieberding. They invest in recreation, residential and commercial properties.

The Lauderdale-by-the-Sea acquisitions come at an opportune time for the town and for the broader Broward County marketplace, as new hotels are cropping up all over the county, especially in Fort Lauderdale, Pompano Beach, Dania Beach and Hollywood.

Lauderdale-by-the-Sea spent millions overhauling its east-west business district from the Intracoastal Waterway to the beach on East Commercial Boulevard, making it more friendly to pedestrians and bicyclists. The town widened sidewalks, upgraded bus stops, improved traffic flows to and from businesses and created safer crosswalks for pedestrians to change sides of the boulevard. And the town emerged as a popular venue for Friday nights out, with live bands playing at the epicenter of its downtown on Commercial Boulevard east of A1A.

Other New Hotels Across Region

Elsewhere around the county, a new Hampton Inn opened for business on U.S. 1 in Pompano Beach.

In Dania Beach, the 143-room Morrison Hotel, 104-room Comfort Suites Downtown Dania and 142-room Wyndham Garde were among those opening inside the last two years.

The Dalmar Hotel and Fairfield Inn were completed in downtown Fort Lauderdale last year, the first new hotels to be delivered since 2012, according to the city’s Downtown Development Authority.

Two Marriott hotels are rising at the Dania Pointe commercial project east of I-95 and south of Fort Lauderdale-Hollywood International Airport.

 

Source: SunSentinel