West Palm Beach

Cash me out now?

Some West Palm Beach investors and business owners are selling real estate holdings to buyers hot on the downtown, including to businesses and investors coming to the city or expanding their presence here.

“Exterior of Glidden Spina building in West Palm Beach. (PHOTO CREDIT: Rob Woodham of Glidden Spina)

A prime example is Glidden Spina + Partners Architecture Interior Design Inc. In 2014, the firm paid $1.4 million for an old, empty building, the former Hopkins Marine Hardware store at 207 6th St.

After rehabbing the space, the firm sold the building for a whopping $6.8 million two months ago. The unnamed buyer is a company that plans a family office there, a part of town branded the Flagler Financial District.

Meanwhile, longtime West Palm Beach investor Jonathan Gladstone in recent months quietly sold two properties on Clematis Street for more than $6 million. A longtime local real estate investor, Gladstone said he’s starting to see the economy flash warning signs — even as outside investors continue to clamor for a piece of Florida real estate. In addition to his belief that the real estate market may be at its peak, Gladstone also is concerned about the stock market’s recent volatility and uncertainty over tariffs.

“I’ve been here for 35 years. It’s time for me to change things up,” Gladstone said of his Clematis Street divestments.

However, Gladstone said he still owns 114 Clematis Street in West Palm Beach, where Pizza Girls just signed another five-year lease.

With the continued influx of wealthy residents and investors fleeing high-tax states, not everyone is bearish on West Palm Beach. In fact, other property owners think there’s still plenty of room for new deals.

Up for sale is the longtime home of Pioneer Linens, the upscale home furnishings store at 210 Clematis Street. The family that runs the store also owns the building has the property listed for sale for $7 million. The price includes a prime, store-owned parking lot across the street at 209 Clematis Street.

In addition to the vast downstairs retail space, the 15,383-square-foot Pioneer Linens building, constructed in 1925, has upstairs storage space, too. Pioneer Linens building is a family-owned retailer from the prior century still doing business downtown, a rarity nowadays.

In a recent telephone interview, owner Penny Murphy didn’t want to talk much about the listing, but she said the store isn’t shutting down. The listing more is a testing of the market’s appetite for the property, at a time when Murphy is fairly fed up with the constant construction and disruption along Clematis Street.

Lately, the city has been working to turn the eastern end of Clematis Street into the same curb-less look done with the 300 block, in a bid to make the street more pedestrian friendly.

If the building sells for the price Murphy wants, she indicated a Pioneer Linens store would stay in business downtown, but she wasn’t specific. Given the sales activity in downtown lately, it’s possible Murphy could get her price.

Take the Glidden Spina building, which wasn’t even listed for sale. After buying the rundown building, Keith Spina spent $700,000 to design a cool, funky space that features a coffee bar and pool table. The property’s location is just steps from Flagler Drive and the waterfront.

Kelly Smallridge, president of the Business Development Board of Palm Beach County, said she was contacted by a broker representing the owner of a family office from the Northeast. The family office was looking around for space downtown but was keen for any other buildings that were available. Spina was open to a visit, Smallridge said.

Smallridge recalled that when Spina first bought the 6th Street marine supply store, he was ribbed about building out the firm in a 1950s-era building on a side street that no one even knows about. But who’s laughing now? The family office officials took one look at the Glidden Spina space, and that was that.

“They sent someone over who said, ’We’d love to have your building — and everything in it, ” Spina said.

As for Gladstone, the sale of the 537 and 539 Clematis building, now home to MedMen marijuana dispensary, caps years of frustration with the street. He tried for years to find a suitable retail tenant for the space, first bringing in Habatat Galleries and later Footwear & More shoe store.

Recently, the city changed zoning rules downtown to allow for non-retail uses on Clematis. That allowed him to lease the property to MedMen. Last month, a California-based real entity linked to a real estate investment trust bought the building.

The changed zoning rules also are giving a new use for the former Mac Fabrics building, which Gladstone recently sold an investment group. The 426 and 428 Clematis Street building will be the new West Palm Beach headquarters of Suffolk Construction,which built The Bristol luxury condominium on Flagler Drive.

Jeffrey Attanasio, Suffolk vice president of operations, said the company is looking forward to having a visible presence downtown and being part of the urban core.

“We’re very excited about it,”Attanasio said. “The 9,000 square foot space, which features tall ceilings, is being designed to allow for collaboration among the office’s 40 employees.”

He expects the offices to be completed by year-end. Suffolk’s new Clematis Street office will be convenient to the Virgin Trains/Brightline station, which employees already use to go to and from the Miami office.

“In addition, employees now working in the company’s Phillips Point office space are excited about being closer to lunch, art and entertainment options,” Attanasio said.

Suffolk isn’t the only company seeking to expand its presence downtown. Big Time Restaurant Group just bought another office next to its existing suite of offices at 400 Clematis Street.

“The restaurant company, which owns Rocco’s Tacos, City Cellar, Grease, Louie Bossi’s and Elisabetta’s, among other eateries, needs more space as it continues to expand operations,” said Big Time partner Todd Herbst.

Big Time’s second-floor offices are above the CVS on the southwest corner of Clematis Street and Dixie Highway. In October, Big Time will close on the purchase of a $1.1 million office that features 3,000 square space, substantially adding to its existing 5,000 square foot operation.

“With 17 restaurants, we need more space to put more people in human resources and accounts payable,” Herbst said.

Once the deal closes, Big Time plans to punch through the wall to create the bigger office complex.

As for Spina, he’s busy designing his new office space. He just leased 8,000 square feet in a ground-floor space part of Flagler Banyan Square, the mixed-use project being along Flagler Drive. The space is in ground-floor retail in the Oversea apartment complex on Olive Avenue. In addition to the apartments, Flagler Banyan Square will feature a hotel dubbed The Ben, plus a separate building that will house another Big Time-branded Italian restaurant.

Spina said he’s under the gun to get the space built out by a Dec. 1 move-in date. But he’s philosophical about the move.

“The city always is seeking to bring new business to the downtown,” Spina said. “And the story of his architecture building is one example of how it can be done.”

As a result, he’s bullish on the downtown’s prospects.

“I bought an old building, invested in it and brought 30 people to work there everyday,” Spina said. “Now we’ve got a company bringing 20 people and we’re going to expand into a new building. ”

 

Source: Palm Beach Post

Development is catching up with Dania Beach, a once-sleepy city between Fort Lauderdale to the north and Miami to the south.

Antique shops and mom-and-pop restaurants have been joined in recent years by a new casino and the under-construction $800M mixed-use project Dania Pointe. Coming soon: a total redevelopment of the city center.

The Dania Beach City Commission just voted to move forward with a proposal from Virginia-based REIT Armada Hoffler Properties and Boca Raton-based Capital Group to build a modern municipal building, plus five apartment buildings, two office buildings and a hotel.

The milestone came after an eight-month bid process that started when the commission entered into an agreement in December with the Dania Beach Community Redevelopment Agency and Colliers International South Florida for real estate services. They sought bids for a public-private partnership for a mixed-use development on 6.42 acres of city-owned land valued at $12.3M at 100 West Dania Beach Blvd., currently home to City Hall, a fire station, two historic buildings and a 440-space parking garage.

Three bidders submitted proposals. An evaluation committee gave the highest rank to the partnership between Armada Hoffler Properties and Capital Group. Dania Beach’s five commissioners voted unanimously to begin negotiations with the pair of developers.

According to Armada Hoffler‘s proposal, they would develop The First at Dania Beach — “a Catalyst for Entrepreneurs, Artists and for a Cultural Renaissance.” The project is estimated to cost $634.2M.

Armada Hoffler would redevelop the property in three phases, building five 14-story apartment buildings, two nine-story office buildings and a 150-room hotel. City Hall would be demolished and rebuilt, housing new city offices, a library, a women’s club and the chamber of commerce all in one building. A parking garage would be expanded by two stories, and two historic buildings would be relocated.

Armada Hoffler would lease the government buildings back to the city for 20 to 30 years and ultimately turn them back over to the city. The city would give the developers a lease for $1 a year. The REIT would also purchase some land needed for private development.

Armada Hoffler proposed that the yearly lease rate for the municipal building and parking garage improvements “be between $1.03M and $1.33M depending on the final terms and conditions … The annual lease rates for the Fire Station is expected to be $151K and $180K.”

At last night’s city commission meeting, Kevin Greiner, a development planner with the FIU Metropolitan Center who sat on the evaluation committee, called it “a potentially transformative project for Dania Beach” and said that “the financial deal proposed to the city is excellent for the city … the economics are extremely exceptional from the city’s perspective.”

Planners had spent months getting input from a community charrette and developer focus group, he said. Housing would be 100% for middle income earners, and the project would include performance space and an option to eventually connect to Tri-Rail Rail’s Coastal Link, he said.

One resident complained that citizens hadn’t been well-informed about the proposal. “It smells fishy to me. I’m not sure who on the board is colluding,” the man said, insisting that current residents didn’t want an influx of thousands of new residents and cars. Commissioner Chickie Brandemarte worried about impacts on water resources, traffic and schools. Already, Dania Beach‘s population has grown 8.1% since 2010.

Various speakers stressed that the site was just a first step and that the particulars could be tweaked and decided upon in the coming months and years. Ultimately, the commission approved a resolution allowing the city manager to establish a negotiating team to move forward and negotiate with Armada Hoffler and Capital Group.

 

Source: Bisnow

While there are increased worries about a recession at the national level, the economy remains in excellent shape in Florida.

There are some signs of concern of course–including recent estimates that the state government will bring in around $867 million less in revenue than expected over the next two years–but mostly things are looking up in the Sunshine State.

Last month, unemployment in Florida slipped from 3.4 percent to 3.3 percent, well below the national average of 3.7 percent. Jobs continue to grow at a 2.8 percent rate in Florida, above the national average of 1.8 percent.

Tourism also continues to boom in Florida with Gov. Ron DeSantis announcing last week that a record-high 68.9 million tourists visited the state in the first half of the year.

The Florida Realtors just announced that single-family home sales were up 10.4 percent last month when compared to July 2018.

Now, this could all head south of course. Florida’s economy continues to rely heavily on tourism and real estate, two industries that often take major hits in an economic downturn–as the Sunshine State can attest from the damage it took during the Great Recession.  Continued trade tensions with China could impact logistics and agriculture.

Thanks in large part to efforts from former Governor and now U.S. Sen. Rick Scott and current Governor Ron DeSantis, Florida continues to have a strong business and tax climate which continues to attract new residents and businesses. Even as the nation experiences increased worries about a downturn, for the moment at least, the economy remains in good shape in Florida.

 

Source: Florida Daily

While the U.S. markets are in fear of a recession, investors seem to know one place they want to park their money: real estate stocks.

Of the 28 real estate stocks tracked by The Real Deal — a sample of real estate investment trusts, mortgage companies, brokerages and other real estate services firms — 15 saw an uptick. That’s despite the S&P 500, Dow 30 and Nasdaq showing slight losses as of 1:45 p.m. Thursday, August 15.

The Dow plunged 800 points on Wednesday, August 14, after the yield on the two-year Treasury note pushed higher than the yield on 10-year Treasuries on early Wednesday — a sign investors think it’s riskier to make shorter-term investments than longer-term ones. Markets have been on edge since last week, after President Donald Trump escalated the trade war.

Of the 15 real estate stocks that were up, Realogy saw the biggest gains. The brokerage conglomerate’s stocks were trading at $6.03, up 2.29 percent. But not all stocks were up. Mortgage loan company Ocwen Financial Corporation recording the largest drop of 4.5 percent, trading at $1.40 per share.

The Real Estate Select Sector SPDR Fund, an index that follows real estate investment trusts and real estate management and development companies, was trading at $38.19, up less than 1 percent from the market’s close Wednesday, August 14.

As for only REIT stocks, their returns were up 0.91 percent as of 1:25 p.m. Thursday, August 15, according to the FTSE Nareit All REITs Index. But compared to last week, REITs overall may be losing: Last week the index’s domestic returns were up 1.67 percent, but so far this week they’re down 1.72 percent.

While a yield curve inversion may not always signal a recession, investors will be watching what the Federal Reserve does. Real estate stocks ticked up earlier this month when Fed chief Jerome Powell said there may be a possible cut in interest rates.

Last week, signs of an escalating trade war between the U.S. and China caused real estate stocks to dip but then largely performed well compared to the overall market.

 

Source: The Real Deal

opportunity zones

Months after the Treasury and the Internal Revenue Service released the latest round of regulations for Opportunity Zones, South Florida investors and developers are still wary enough about the rules to prevent them from investing.

A report by Bilzin Sumberg and the Urban Land Institute found that only 28 percent of respondents surveyed said that they intend to invest Opportunity Zones and only 7 percent have already done so.

The reason: investors still do not understand basic questions about the program. Nearly one third of the respondents cited uncertainty as their top reason for not investing in Opportunity Zones. The report surveyed 72 developers, investors and other professionals in June who specialize in real estate and finance in Florida.

One of the biggest questions that participants still have is around refinancings. Although the most recent regulations clarified how developers in an Opportunity Zone can refinance a property and qualify for the tax benefits, the report shows that the rules around refinancings are not understood by some members of the real estate industry.

“A lot of people still hadn’t fully digested the second set of regulations,” said Josh Kaplan, a corporate and tax attorney at Bilzin Sumberg, a Miami-based law firm.

Another reason that investors are avoiding Opportunity Zones is due to the rapid price appreciation of land in designated zones in South Florida, according to Kaplan.

Kaplan said he’s seen reports that land prices in South Florida Opportunity Zones have increased by as much as 30 or 40 percent, making it much more difficult for deals to pencil out for investors.

The Opportunity Zones 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. To reap the full tax benefit, those who invest in the more than 8,700 Opportunity Zones around the nation must hold the asset for at least a decade.

In Miami-Dade County, Opportunity Zones span distressed areas such as Opa-locka, parts of Overtown, North Miami Beach and Carol City, along with areas where major development is already taking place, like parts of Aventura, Edgewater and the Design District.

From April through September 2018, property sales in those areas tallied $942 million, a 25 percent increase from the same period a year earlier. Several of the Opportunity Zone tracts encompass some of the wealthiest enclaves and megaprojects in Miami, such as Turnberry Associates’ Aventura Mall and the Magic City Innovation District, a planned $1 billion development in Little Haiti.

The report shows that multifamily, however, is the favorite asset class for Opportunity Zones investors. About 82 percent of respondents view mixed-use and multifamily as the asset class most ripe for redevelopment.

Kaplan said he also expects to see more Opportunity Zones deals to close by the end of the year, as investors look to take advantage of the biggest tax benefits, which expire at the end of 2019.

 

Source: The Real Deal

The ink isn’t dry on Blackstone Group’s $18 billion buy of a U.S. warehouse portfolio, and it’s already negotiating to sell part of it.

The company, which finished its transition into a corporation this month, is drumming up interest from potential buyers for pieces of the GLP Pte portfolio, Bloomberg reported. Prologis is in private discussions to buy one such portfolio, valued at $1 billion.

Blackstone’s $18.7 billion deal for the Singaporean company’s 179 million-square-foot warehouse portfolio is one of the largest industrial real estate deals ever.

Selling non-core or non-strategic pieces of a recently required purchase isn’t uncommon. Blackstone applied the same strategy in 2007 when it sold off parts of its $40 billion acquisition of Equity Office Properties Trust.

On the whole, the warehouse sector has seen little supply, high demand and high prices, with available industrial and logistics real estate rising slightly for the first time in 34 quarters, according to a CBRE report. Demand for warehouse and distribution reached an 18-year high in 2018.

Large owners are optimistic that there will continue to be institutional investment in industrial real estate. As Prologis negotiates for a piece of Blackstone’s new holdings, it’s also in advanced talks to buy another $4 billion portfolio from Black Creek Group which spans 37.6 million square feet.

Colony Capital is weighing the sale of its $5 billion industrial in holdings on the heels of selling another warehouse portfolio for $104.6 million.

 

Source: The Real Deal

Developers are finally putting shovels in the ground and deploying capital in Opportunity Zones in South Florida and across the country.

But with 124 qualified Opportunity Zones in South Florida, developers, brokers and investors at a recent Bisnow panel said they are largely focusing their attention on projects near Fort Lauderdale and Delray Beach’s urban core.

Jaime Sturgis of the Fort Lauderdale-based brokerage Native Realty said his company is involved in about 10 Opportunity Zone projects. Most of the projects are around 13th Street and Flagler Village in Fort Lauderdale, where interest in the area was already promising and density is high.

“There is a finite amount of land in Flagler Village,” Sturgis said during the Opportunity Zones event held at Sistrunk Market & Brewery in Fort Lauderdale. “That is another reason Opportunity Zone investors are flocking to the area.”

The Opportunity Zones program was part of President Trump’s tax plan, and was designed to encourage investment into low-income and distressed areas. Real estate developers quickly became enamored with the program, and large real estate investment funds such as EJF Capital and RXR Realty sought to raise substantial Opportunity Zone funds.

The benefit for developers and investors in an Opportunity Zone is the ability to defer and potentially forgo paying capital-gains taxes. Yet some owners of property in Opportunity Zones are listing them at prices that are much higher than investors want to pay, panelists said.

“Some folks think that the Opportunity Zone supercharges the value of your land,” said Dale Reed, an executive at Merrimac Ventures. “They are unrealistic on what their land deals are worth.”

Daniel Lebensohn, co-founder of Aventura-based BH3, is planning to build a $100 million mixed-use project in an Opportunity Zone on West Atlantic Avenue in Delray Beach. He said that high land prices across South Florida will come down in the future once property owners realize that smart investors won’t pay the prices property owners are demanding.

“It’s like the tulip craze” said Lebensohn, referring to tulip mania in the 17th century, when tulips reached ridiculously high prices and then fell sharply.

Panelists also agreed that Opportunity Zone incentives alone would not lead them to invest in a project. Most already had secured the land and had the projects penciled out before the legislation came out in 2017.

“Merrimac Ventures invested in two projects before the regulations were in released,” Reed said. “The two projects we did were because they were in the Community Redevelopment Agency area — that’s really the driving force with those projects initially.”

Nick Rojo with Affiliated Development, who is building SIX13, a 142-unit workforce apartment complex at 13 Northwest Third Avenue near Fort Lauderdale’s Flagler Village, pointed out that Affiliated’s project is getting $7 million in gap financing from the Fort Lauderdale Community Redevelopment Agency to complete the project.

“Still,  the program helps make deals more feasible, especially since rents have gone up in Flagler Village and other areas,” Sturgis said. “The Opportunity Zone is the icing on the cake, its makes the pot that much sweeter.”

 

Source: The Real Deal

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

Laskody

CRE Florida Partners Capital Markets is proud to announce the successful closing and funding of a first mortgage loan collateralized by a  ±42,000-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.”

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

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

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