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Meet the new year, same as the old year. Or maybe better.

Palm Beach County’s economy is expected to continue its strong growth, as the year wrapped up with a still-booming real estate market, combined with continued business growth in the area.

President Donald Trump’s part-time residence at his Mar-a-Lago mansion on Palm Beach has drawn attention to the county both as a business and tourist destination. But even prior to Trump’s January inauguration, the county already was flush with new hotel construction geared to the rise in tourism.

“The county’s newest hotel, the Hilton at the Palm Beach County Convention Center, had a strong first with 85 percent occupancy,” according to Ken Himmel, president of Related Urban, the hotel’s developer.

More hotels are under construction, including an Aloft Hotel in Delray Beach and a Canopy Hotel in West Palm Beach. Tourism wasn’t the county’s only booming field.

“The past 12 months saw growth in a variety of industries,” said Kelly Smallridge, president of the Business Development Board, the county’s business recruitment arm.

Among the companies growing are Bee Access, a scaffolding manufacturer in West Palm Beach; Jupiter-based Parametric Solutions, which engineers and makes gas turbine engines for aircraft and industrial power applications; and GeoGlobal Partners, which designs and makes pumps and valves in West Palm Beach.

“We’re one of the rare counties that has six to eight solid industries,” Smallridge said, ticking off manufacturing, equestrian, tourism, agribusiness, financial services, corporate headquarters and distribution and logistics.

Another growing area: Companies run by entrepreneurs. Moderning Medicine, a Boca Raton-based medical records firm and one of the fastest-growing technology companies in South Florida, said in 2017 it plans to hire 800 people, in addition to the more than 500 it already employs.

Helping boost more corporate growth in the coming year: The Brightline passenger train, slated to start regular service in the coming weeks.

“Companies already are saying they feel more comfortable opening offices in Palm Beach County because they know they can pull employees from Broward or Miami-Dade counties,” Smallridge said.

Of course, the biggest driver of Palm Beach County remains real estate. Growth, particularly in the housing market, was hot in 2017 and will remain so in 2018, experts say. This is despite the lengthy real estate boom that now is stretching into its eighth year.

Housing analyst Jack McCabe said he expected to see a market correction on the horizon, but he now thinks a slowdown will be delayed by the the tax legislation passed by Congress. The sweeping tax law limits deductions for state and local taxes.

“This is bad news for residents in such high-tax states as New Jersey and New York but good news for Florida, which has no state income tax and already is a destination for residents from the Northeast,” said McCabe, of McCabe Consulting in Deerfield Beach.

It’s not just the housing market that will get a boost from the tax bill, business leaders said.

“Executives already have been making inquiries about bringing their companies to Palm Beach County,” Smallridge said. “We’ve seen 20 plus calls over the last month. There’s already a steady stream of inquiries by companies seeking to relocate. Among them are corporate headquarters and financial services firms out of Manhattan, Boston, Greenwich and even Chicago. Tax attorneys in the Northeast are hard at work figuring out how to domicile companies in Florida.

If they consider moving companies, corporate leaders will find rental housing available but for-sale homes difficult to find. That’s because there’s been little new home construction during the past decade.

“Homeowners are staying in their homes longer, prompting a number of residents to remodel existing homes,” said Brad Hunter, chief economist of HomeAdvisor, which connects homeowners with local service professionals to complete home improvement or remodeling jobs.

Although new apartment complexes are cropping up throughout the county, many come with rents that can reach nearly $2,000 a month or more.

“It’s very tough for people to rent right now, and if they do, it’s hard to save up for any down payment for a home,” McCabe said.

Among the new apartment complexes that opened in 2017: The 400-unit Altis apartments in Boca Raton; the 205-unit apartment tower dubbed The Alexander in West Palm Beach. Other projects commenced construction, including the 315-unit Broadstone City Center and the 290-unit Park-Line in West Palm Beach, both of which are expected to attract renters who may use the Brightline train station nearby.

High land prices have made it difficult for home developers to find locations to build. Some are turning to infill sites, such as golf courses, for new homes, while others are looking west. In July, Minto Communities started construction on Westlake, a newly-created city set to contain 4,500 new homes. The city is off Seminole Pratt Whitney Road north of Okeechobee Boulevard.

Also in demand are new offices and industrial space. But both are hard to find, said Rebel Cook of Rebel Cook Real Estate and president of the Economic Forum, a business group.

“Industrial space, particularly small sizes, is virtually impossible to find, crimping growth by companies that want to expand their businesses here,” said Cook. “If you’re a growing company and you want to go from 5,000 to 10,000 square feet, I can’t find you anything here. This is the first time in 35 years of selling warehouses that I don’t have one warehouse for sale. Not one.”

New offices could be coming to West Palm Beach but not right away. In early 2018, The Related Cos. of New York is expected to propose construction of an urban-style office building next to CityPlace in West Palm Beach. In addition, billionaire Palm Beach investor Jeff Greene has pledged he will start construction on One West Palm, a twin-tower office/hotel/housing complex set for 550 Quadrille Blvd. in West Palm Beach.

 

Source: Palm Beach Post

While airports and some retail locations have been hurt by traffic and road closures during President Donald Trump‘s four visits to his Mar-a-Lago estate since Inauguration Day, leaders of Palm Beach County area business associations see his visits as priceless free marketing.

“There is no question that President Trump’s Winter White House in Palm Beach has clearly elevated the profile of the island and the surrounding areas,” said Kelly Smallridge, president and CEO of the Business Development Board of Palm Beach County. “There is no way we could have ever been in a financial position to have the name ‘Palm Beach’ mentioned so many times on national and international media outlets as often as when the President visits Mar-a-Lago. Our county clearly benefits.”

In addition to the free marketing, the exposure is bringing more people to the region, although any net benefits are hard to deduce because it’s high-season for tourism in Palm Beach.

“All we’re hearing is that it’s good, there’s a trickle down of people coming down into town … they rent hotel rooms and go out to restaurants,” said Penny Pompei, chair of Palm Beach SCORE, an office of the national business counseling and development organization.

Rick Rose, who leads walking tours in the posh Worth Avenue shopping district and is a proprietor at the Grandview Gardens Bed and Breakfast, says he’s seen “no uptick at all” at either of his businesses since Trump has been president. That’s partly because this is the height of the tourism season. However, he gets more questions about Palm Beach and Mar-a-Lago on his walking tours, especially from international visitors and journalists wanting to know more about the history of the area.

“They’re a little more interested in Palm Beach than they have been in the past,” Rose said.

According to Marley Herring, president of the Worth Avenue Association and owner of Marley’s Palm Beach Collection, the first Trump weekend visit presented some obstacles like traffic, but Palm Beach has since adjusted and is benefiting from the exposure. The first presidential weekend stay brought closures which blocked a normal entrance to Worth Avenue, but now visitors are getting used to the traffic detours.

“It’s equaled out. At first, that initial weekend, because no one knew the traffic patterns, that was hard to deal with. But you can see an uptick every weekend since,” Herring said.

During the president’s fourth weekend visit, it was back to business as usual along Worth Avenue.

“It’s been positive, and the fact is it’s getting better every week,” Herring said. “I think he’s just doing what he normally does, and what a great place to do it. It’s just beautiful here.”

Like airports, the waters around Palm Beach and Mar-a-Lago have restrictions put in place when the president is in town. But the marine industry doesn’t seem to be as affected as the airports. In fact, Chuck Collins, executive director of the Marine Industries Association of Palm Beach County, seems to have an opposite view.

“It’s probably one of the best things that have ever happened to us,” Collins said.

Collins is a marine veteran, having served as the former South Regional Director for the Florida Fish and Wildlife Conservation Commission. For Collins, who joined the Marine Industries Association a little over two years ago, Trump’s visits to Palm Beach County are some of the best advertising for the region’s beaches and waterways.

“Think of what happens when President Trump comes down here. This is the ‘Winter White House.’ What do you see when they film down here? Palm trees, greens, beaches, you see all the different boats in the marine industry, you see all different people paddle boarding, in swim suits,” Collins said. “People are watching this, and you know what they’re thinking? That’s where I want to be when I retire. That’s paradise.”

Collins is familiar with the benefits of free publicity. While at Fish and Wildlife, he was part of the team that decided to launch the python challenge, a special hunting season where hunters were allowed to target invasive Burmese pythons. And although at first there was some criticism, the python hunt netted Fish and Wildlife millions of dollars in free publicity.

“I got a bunch of criticism and I said, ‘Are you kidding? I’ve got 20-foot snakes down here.’ I ended up getting $40 million in free publicity,” Collins said. “That was one little event. Trump’s visits are going to be worth hundreds of millions of dollars in free publicity.”

This is Part IV and the final installment of the Business Journal’s series on the impact of President Donald Trump‘s weekend visits to Mar-a-Lago.

Click here to go to Part I of the Business Journal’s series on the impact of Trump’s visits to Mar-a-Lago, “Trump’s Winter White House visits hamper some businesses in Palm Beach, help others.”

Click here to go to Part II, “Regional airports suffer when Trump touches down.”

Click here to go to Part III, “The free publicity Trump brings may overshadow the negatives.”

 

Source: SFBJ