Oct 27, 2023, South Florida Business Journal

Even before the pandemic, South Florida was a known global brand. Decades ago, it earned the title “gateway to the Americas” for U.S. and international companies looking to do business throughout the hemisphere. More recently, its allure rose as an outpost for similar companies seeking entry into the U.S. or global markets.

The pandemic cemented the region’s place as a global business hub for an ever-growing number of companies and business sectors. From investment banks and financial services to real estate and development, manufacturing, logistics, hospitality, and professional services, the tri-county region of Miami-Dade, Broward and Palm Beach counties has the bona fides that put it in the same conversations among executives and site relocation executives as the nations and world’s major cities.

In a CEO Roundtable, hosted by Banesco, and the South Florida Business Journal, executives from across the region’s banking, real estate development, economic development and social service sectors discuss where the region came from and where it’s going. They discussed the opportunities and challenges presented by South Florida’s rise as a capital for business, investment and entrepreneurship amidst the continued wealth and business migration.

They explored several critical areas affecting the region:

• Educational and workforce development solutions to prepare employees — and convince employers the talent they need is here.
• Entrepreneurial spirit, and how Miami remains one of the best, most diverse cities for small businesses and startups to successfully develop given the growing ecosystem.
• Corporate and business migration, exploring the continued influx of out-of-market businesses and corporate players and the influence this is having on the regional economy.
• Growing foreign investment and capital from global entities beyond this hemisphere including markets such as Asia and the Middle East.
• South Florida’s efforts to overcome the challenges that exist in the eyes of corporate leaders, both locally and beyond.

The region remains an international gateway. At the Miami Dade County Beacon Council, of 130 active relocation or growth projects in the pipeline, 85 are from outside the U.S. One of developer Nitin Motwani’s projects has buyers from 63 different countries. But that diversity in global traffic only tells part of South Florida’s changing story.

Moderator Leslie Miller Saiontz, founder and CEO of Achieve Miami, which seeks to bridge disparities and opportunity gaps through educational experiences for Miami-Dade County students, began the discussion by asking panelists’ perspectives on “where we were, where we are” challenges and opportunities over the past 15 years.

 

To Nitin Motwani, managing partner Miami Worldcenter and Merrimac Ventures, the region is on the road to being taken more seriously in conversations about workforce, kindergarten through University education, business and quality of life. Economic developers across the region still struggle to change impressions from “fun in the sun” to Miami being a business destination.

What’s also helped is the region’s growing cultural base. Cali Garcia Velez, president and CEO of Banesco USA, ticked off a short list of the region’s amenities. Art Basel, the Adrienne Arsht Center for the Performing Arts and the cultural ecosystems they both spawned, even the presence of professional and collegiate, even professional tennis, Formula 1 and Lionel Messi’s signing with the Inter Miami futbol club, the region has become a cultural hotbed.

Education, workforce development

Yet, what remains are components critical to employers and the talent being recruited to the region, Garcia Velez noted. These include education and workforce development, regional affordability, and infrastructure and transportation elements that will ease commuting across and throughout South Florida.

Undoubtedly, the region has changed in the past decade, noted Ron Drew, executive VP with the Greater Fort Lauderdale Alliance, Broward County’s economic development organization. Over a decade ago, a survey of corporate site selectors put “business” fourth on a list of draws to the county, behind sun, beaches and boats, he said. That’s changed and its allure as a business destination has growth.

Rodrick Miller, president and CEO, Miami Dade Beacon Council, had a different perspective. Working with a rival region 15 years ago, Miami rarely came up in conversations about potential relocation destinations. A perception survey staged earlier this year showed it’s improved. What’s needed now is greater collaboration, a shared message and clarity on where the region is going, he said. The region needs “a value proposition” about the benefits and a level of coordination, he said.

That coordination came to play with the pitch for the Amazon HQ2 initiative to lure the ecommerce company’s East Coast headquarters. While South Florida’s bid didn’t win, regional leaders discovered areas of opportunity and challenges.

One tremendous opportunity is the workforce. From Homestead to Jupiter and countless submarkets in between, South Florida has over six million people and a workforce estimated at 3.2 million, with higher education and workforce development organizations throughout, Motwani said. The Academic Leaders Council from the Beacon Council is “having deep conversations” with area educators and employers to develop the workforce skills employers need to launch, grow and scale. As a result, students from area colleges and universities are being recruited before they graduate, Miller said.

Growing incentives

Economic development officials often lure new companies to a region with a host of corporate incentives. Some come easily — no local or state personal income taxes, business-friendly regulatory schemes, and high quality of life for employers and their families. Unique realities here include the political and public policy climate and often fewer financial incentives than those offered by other markets, for example. Yet, Florida outperformed most states economically regarding the influx of residents and businesses and the state’s positive budget.

“South Florida is winning the economy battle,” Miller said. “But we can win at a much higher level.”

Traditional public private partnerships, or PPP, are a collaboration between the public and private sector to deliver a significant program or project. In a sense, PPPs have earned favor as a powerful program in promoting a region and convincing businesses to relocate or grow here. Local private proponents, like Motwani and other developers, will invite or woo relocation prospects. The Miami Downtown Development Authority’s Follow the Sun campaign worked to recruit financial services firms and leadership. The DDA also would invite prospects to Art Basel events at the Perez Art Museum Miami, for example. The message: “this could be your home,” Motwani recalled. “This could be your life.”

A decade ago, the Business Development Board of Palm Beach County began pitching the concept, Wall Street on Flagler. In August, the BDB ran billboards in New York City inviting financial service professionals to “Wall Street South,” said Frank E. Navarro, managing principal, Navarro Lowrey Inc. For its part, the Alliance ran billboards in Silicon Valley after the recent mass tech layoffs with the theme, “Fort Lauderdale to the Rescue,” Drew said. Where once California tech firms traveled no farther east than Texas, now they’ve come to Florida.

The area’s private schools, social clubs, luxury condominiums and neighborhoods are seeing new faces. Across South Florida, housing — from luxury to affordable and working class — are the hottest commodity. Developers of all stripes are maximizing creative repurposing in the land-locked, space-starved region. Similar collaborations are working to bring workforce housing to a region quickly pricing its labor pool out of its downtowns and suburban markets.

Borders that once hemmed in the individual counties and cities today have been greatly erased by transportation options, especially the Brightline and TriRail commuter rail services. Whether commuting from West Palm Beach to a meeting in Broward or Miami Dade, or taking in a performance at a regional theater, both rail services have seen record passenger and revenue numbers since the pandemic. Downtown’s MetroMover similarly has seen strong growth. Plans call for additional growth of the services.

In no small part, the migration of business and wealth to the region from the Northeast, Midwest, and even California, has impacted our local economy and business ecosystem. The Beacon Council reports 5,000 new jobs and an average annual wage of $100,000, Miller said.

There has been much emphasis on bringing big companies here — the Amazons, Blackstones and Citadels of the world — but small and mid-size companies have long been the backbone of South Florida’s economy. Miller Saiontz wondered how local business leaders can ensure smaller businesses can take full advantage of our changing economy, and that they aren’t crowded out by rising costs or starved for talent by large corporations.

One need only look at the smaller companies that grew into national or global names. Chewy and UKG were start-ups in Fort Lauderdale before their $3.35 billion and $11 billion exits, Drew said. The infrastructure is there for smaller companies, he said. “Mid-sized companies are the backbone, the ones that grow over time,” Drew said. “The goal is to keep them here once they grow.”

Existing vs ”shiny new stuff”

The reason is clear, Miller said. Some 80% of any economy is driven by existing companies, “versus the shiny new stuff,” he said. “We have to spend the time to meet with them, tour their facilities, ask about their business, their impediments to growth…”

To wit, while Miami is strong with startups, scaling lags. Miller wondered how the community goes from a home for disruptive startups to a place where they can scale? Motwani suggested streamlined permitting or even a “concierge” service to help small restaurant, bar or business owners navigate the labyrinth of required rules, regulations and permits.

Additionally, access to capital that fuels those shiny new startups often misses other, less splashy companies. Navarro acknowledged that banking partners are critical. Yet, the big banks often ignore small borrowers. Bankers like Banesco are finding niche borrowers, he said.

“In an increasingly capital-intensive economy,” Navarro said, “if you don’t have a seat at the banking table, you have nothing.”

The time for small and community banks has never been stronger, Garcia Velez said. With rising interest rates and fears of recession, big banks are “tightening up,” he said.

“Generally speaking, that tightening is going to slow things down,” he said. “Banks are making a mistake with these big, broad-brush decisions. Smaller bankers are fast, agile and nimble.”

That also opens the doors and bankbooks of the venture capital and private equity firms and family offices that are funding accelerators, meetup events and social media chats to showcase and sport rising talent. Again, this is where connections come in, especially in a market like Miami’s, Motwani said. Introductions over a game of pickleball or padel, or an accelerator, or informal networking events become crucial.

Prosperity’s reach

Some wondered whether such prosperity is touching all corners of the community. Are small businesses enjoying similar growth, especially for businesses run by immigrants who came to America for safety, prosperity and opportunity, Miller wondered.

“Can Miami be that for me?” he said. “That’s a great story to tell.”

Some are taking prosperity to the streets. Broward UP is an adult education program from Broward College for individuals who do not have a high school diploma and who would like to earn a general education diploma (GED) while also pursuing a trade. It targets county ZIP codes with the highest levels of unemployment and poverty, Drew said.

Local employers are being encouraged to offer internships. Bean Automotive Group offers apprenticeships, with specialization around electric cars, Miller said. Miller Saiontz spoke of the need for companies to partner with inner city neighborhoods to train future workers. Realizing that college isn’t for all, schools delivering much needed trade and technical education will drive the future economy.

“The private sector is realizing they have to lead that conversation for the workforce that they need,” Miller from the Beacon Council said.

Panelists encouraged helping newcomers, including global individuals, families and institutions, become part of the business, cultural or philanthropic communities. By leveraging their talents, insights and funding, all can improve the region’s quality of life. Panelists spoke of newcomers who see their alma mater or cultural institutions “back home” as their first choice for giving. Inclusion may help drive engagement and giving.

In the end, panelists leaned into South Florida’s place as a diverse, dynamic and driven community. The region’s diversity and inclusivity has always been the “core of our secret sauce,” Garcia Velez said. “As larger employers and global companies come in, we can’t lose that

 

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