September 22, 2015 | Newsweek
Thanks to the policies of Governor Rick Scott, Florida has enjoyed a robust recovery from the recession and is experiencing a period of enviable growth. “Florida is today what the rest of America will look like in coming years,” said Bill Johnson, Florida Secretary of Commerce and President of Enterprise Florida, the state’s economic development organization.
“Over the last four and a half years, under the leadership of Governor Scott, 900,000 new private sector jobs have been created,” Johnson explained. “Actually some states are still losing jobs, but we continue to grow and are currently the number one state in the US for job creation.”
To also ensure that Florida is a business-friendly state, more than 4,000 bureaucratic regulations have been eliminated in the last four years and thanks to its high visitor numbers – expected to exceed 100 million in 2015 – the state has a surplus budget, which allows its residents to enjoy some of the lowest taxes in the country.
Much of the growth can be attributed to the resurgence of the construction industry, which was badly hit by the recession but is now booming, so much so that Miami is now being called the “New York of the South” and is attracting a new generation of Big Apple millionaires.
Miami is a “vibrant city,” said Daniel Kodsi, Developer of Paramount Residences. “It has a city feel, so people are saying, “why am I living in New York when I can now get the same experience living in Miami?” he said, adding that today’s generation values mobility and the sense of freedom that Miami is uniquely positioned to offer, due to the quality of the development projects and of course, the weather. “Why would I be sitting in freezing cold weather when I could be in Miami? This is a trend that is building momentum and will continue to grow. Real estate is creating the rooftops, which in turn creates retail and they all feed each,” Kodsi said.
This new chapter of Miami’s real estate growth is also taking sustainability into account. “We are big believers that bringing great thinkers and experts to Miami can help us build a better city,” said David Martin, COO more of a sanctuary, while still close to the excitement and entertainment of the city. There are also places like Coconut Grove, where they have the best schools. We are always studying what drives each neighborhood and adapt our products accordingly,” Martin said.
It is also important to note that compared to other states, the cost of real estate in Miami is relatively low, in some cases up to 40% lower than similar properties in New York or Chicago. Add to that the state’s low tax structure – there is no income tax in Florida – and it becomes clear why Florida is attractive to property investors, people looking for a second home or people looking to relocate. “People today are discovering they can do business anywhere,” says Mayor Carlos Gimenez, Mayor of Miami-Dade, “they don’t have to be in specific location anymore because of technology, so naturally they are gravitating towards places where they can save more of their money. Plus, it is possible to buy a lovely property right on the water, next to our beautiful ocean with glorious weather. And now that we have invested in our arts culture, we can really compete with cities in the north on a number of levels,” he said.
This is a trend that is being replicated throughout Florida, as developers focus on projects that can truly add value to the state’s unique assets. According to Martin, “Florida is very welcoming to foreigners and makers people feel at home, which is a unique quality, and I think is part of our success.”
Inspired Developments that Connect
After the crisis, there was a shift in the definition of what luxury means. Today, people want “to be more” rather that “have more.” Understanding this principle has driven us to develop projects that enable people to connect with the community and inspire pride. We strive to create products that connect with people’s soul. We try to educate our consumers about what we are doing rather than sell to them. Our buyers are more sophisticated and this has led to a greater cultural confidence in Miami,” said Martin who is very aware of the new kind of customer Florida is attracting.
One of the most significant urban development projects in the state is the Miami Worldcenter, which is 30 acres of land located between South Beach and the Central Business District. “We had a vision for the state of Florida and we wanted to elevate Miami to a tier one city, which meant making it pedestrian-friendly, with easy access to public transportation, arts, culture and entertainment. Today that vision is coming to fruition and we feel blessed to be part of this new era for Miami and Florida,” Said Nitin Motwani, Managing Principal of the Miami Worldcenter project.
The influx of people is driving new developments in Miami that are transforming the city, creating demand for restaurants and retail. According to Kodsi, Miami is under-developed in terms of its retail offering, and as a result developers are keen to invest in these types of projects.
Stephen Owen, President of Swire Properties, the developers behind Brickell City Centre – a $1billion project with plans for retail, residential, office space and a hotel in downtown Miami – is philosophical about this new era of growth. “Florida is a state that’s driven by its diversity and that brings a different kind of creative energy. Everyone wants to contribute to this landscape. This is the new Miami. Some of us are investing in projects that won’t make money but contribute to the overall aesthetic of the city. This is driving the new phase of Miami’s dynamic growth.”
Basking in Sunshine and Prosperity
Florida’s tourism sector is booming. It is having its fifth record year with more than 100 million visitors expected in 2015.
“Our goal is to make Florida the number one tourism destination in the world,” said William Seccombe, President and CEO of Visit Florida. He attributes the runaway success of Florida’s tourism sector to several things. “First of all, we have a public sector that is supportive of the industry and is willing to invest in marketing. We have leadership that understands the importance of tourism to the economy and has put policies in place that allow for growth. The private sector also actively supports the industry. Our hospitality is key. It is the reason so many people come to Florida and then choose to return again and again. Finally, we have the best tourism product in the world. Just look at everything we have to offer,” he said.
As a result, tourism continues to be the state’s number one industry, employing over one million people and generating 24% of the state’s sales tax revenue. Despite the robust increase, Seccombe is confident there is room for further growth. “We have visitors coming from 189 countries,” he said, “we have seen significant growth from Canada, Europe and from traditional markets such as the UK and Germany. Now we are seeing growth from Latin America, in particular Brazil. In the future, India and China will also be key markets.”
Miami alone attracts 14 million visitors each year, a figure that is growing thanks to the success of shows hosted at the Miami Beach Convention Center (MBCC). “Art Basel is a good example of how our geographic location and our welcoming culture have allowed us to become a worldwide hub particularly in the Americas. The success of this show has helped put Miami on the map. As a result, we have attracted new shows, such as Maison & Object, which launched this May and was hugely successful. We expect it to grow in prominence and further cement Miami’s place in the design world,” said Matt Hollander, General Manager of MBCC.
A $500 million renovation of Miami Beach’s convention center is planned over the next two years, which is expected to attract new events from Central, South America and the Caribbean. “The impact of events on this scale will be felt throughout South Florida,” said Hollander, confirming that the renovation will add 150,000 square feet to the center, “Every inch of the building will be renovated. All the major systems and infrastructure are being redone. A plethora of technology will be installed to ensure that meeting planners will have today what they dream about for tomorrow. Our technology will be integrated in a way that makes it easily expandable and ready for the future,” he said. Despite the innovative upgrades, he attributes much of Miami’s success to its unique and open culture. “We know how to make guests feel at home here in Miami Beach,” he said.
Developments with Character and Homes with a Soul
David Martin, President of Terra Group
Terra Group creates high-end residential, commercial, land and mixed-use projects known for originality, attention to detail and design, and rich quality of community life, which has yielded over 2 billion dollars in sales. Founded in 2001 by Pedro & David Martin, Terra Group develops projects that have a positive impact.
Terra Group has invested
$10.5 million upgrading a
35-acre park at Miami Beach
Terra Group is currently
developing diverse projects
with a value in excess of $3 billion
Terra Group is currently
involved in 14 of Miami’s
How is South Florida changing and how is Terra Group approaching that change?
South Florida is experiencing a strong population migration from the US and other parts of the world. What we are finding is that people want to move here. It’s not all about a second or third home, we are talking about relocations. People are looking for a more stabilized environment and as such are moving from Venezuela, Argentina, Mexico and Colombia. We are also seeing people moving from the Northeastern part of the United States, choosing to live in a better climate that does not have a state income tax. So for us, it is a huge opportunity and what we are trying to do is take some calculated risks in creating products that can connect with people. Our firm is unique in what we do. We do not consider our developments commodities, but places that focus on further enhancing people’s lives. We are creating products that can speak to the true essence of what we are creating rather than some sort of commoditized product that people are just investing in to rent out. We are currently developing in excess of $3 billion of specialized products, ranging from retail center’s, office buildings, master planned communities, apartment buildings and luxury high-rise condominiums. Every neighborhood we focus on has a different thesis, a different game plan.
What projects is Terra Group currently working on?
In Miami Beach, we are developing a project called Glass, designed by architect Rene Gonzales. It is the last high-rise in the South of Fifth area of South Beach. We have buyers from Cleveland, Connecticut, New York and London. We meet with a lot of families and people who have realized they want to spend more time in Miami. We have two projects on Coconut Grove - the Bjarke Ingels - designed Grove at Grand Bay and the Rem Koolhaas-designed Park Grove towers. These projects adhere to our business strategy of a “less is more” approach. They also offer 12’ ceilings as compared to the traditional 8’ to 9’ ceiling found in other projects. The increased height gives one a little more volume in cubic area, which is one of the qualities found in having a home.
How will Miami evolve in the future?
People think of Miami as a coastal city that focuses in trade and it is, but today Miami is a global city with multinational companies and an international community. Miami has a strong identity. It also has some challenges that we are all focused on, such as infrastructure and mass transit. We are looking at what is the appropriate allocation of resources and speaking to experts to help guide us into the 21st and 22nd century. I think Miami as a city and Florida as a state are always looking for new ways to improve. There is a very strong activist community here that truly protects all of the state’s natural resources.