More Pushback Against Casinos in Miami

More pushback against casinos

South Florida Business Journal by Kevin Gale, Editor in Chief

Date: Tuesday, December 20, 2011, 10:10am EST

Miami Herald headquartersMark Freerks

Preservationists are seeking to protect the Miami Herald’s headquarters building.

Kevin Gale
Editor in Chief – South Florida Business Journal
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Resorts World Miami reacted quickly Tuesday to the notion thatThe Miami Herald‘s headquarters building should be preserved rather than torn down for a $3.8 billion destination resort.

“The Miami Herald Building has long been an affront to smart urban planning and does not comply with Miami 21 code, nor with the City’s Charter Amendment, which require 70 percent active uses, 50 foot setbacks from the water with public access, and a 25 percent view corridor from the street,” a statement attributed to Resorts World Miami President Christian Goode said.

An article in the Tuesday edition of the Herald by Andres Viglucci, who has written extensively about architecture, talked about a move by the Dade Heritage Trust to seek protected landmark status for the newspaper’s headquarters building.

That article and another one, about hotel rates, exemplify the myriad of opposition and obstacles to destination gambling resorts in South Florida.

A local section article talks about the Herald HQ’s status as an iconic example of Miami Modern (MiMo), a mid-century architecture that emerged from Miami’s resorts. The related category of mid-century modern architecture includes Fort Lauderdale’s Hyatt Regency Pier Sixty-Six, with its spires and revolving rooftop restaurant. Preservationists were unhappy that another mid-century modern hotel across the street was torn down, partly because of the parabolic roof by its front office.

Viglucci is on target when he talks about how a lot of people don’t appreciate MiMo. However, a lack of appreciation for architectural history isn’t anything unusual in South Florida. A few years ago, I found a 30-year-old article in the then-Miami Business Journal about plans to raze South Beach Art Deco hotels and dredge a bunch of canals.

Whether preservationists will succeed in their goal with the Herald building is debatable, but it’s another headache for Genting Group as it seeks support to build Resorts World Miami. (If you want to read more about the destination resort debate, here are links to a recent debate in Miami and an earlier one in Fort Lauderdale.)

The article said the existing Herald building might be incorporated into a casino, but how do you successfully meld the curvy lines of Arquitectonica‘s plans for a new resort with a boxy building squatting along Biscayne Bay?

Goode’s statement continued to emphasize economic benefits and pluses for the community.

“Any impacts derived from preserving the Herald building are far outweighed by the benefits that a new master-planned development will bring to the Omni neighborhood, including activating the downtown waterfront, employing tens of thousands of Floridians, generating meaningful tax revenue, and adding value to a depressed area,” the statement said. “Efforts to stall this progress show just how far opponents of sensible development will go in putting their interests above what’s best for everyday citizens in the community.”

The statement’s “just how far” comment is indicative of how the debate is heating up.

So, who’s on the Dade Heritage Trust?

The president is Bertram “Chico” Goldsmith, who began his career in downtown Miami working for the Walter Etling Real Estate Co., according to a biography on the website for Informed Families, an organization he has served as chairman. Goldsmith has focused his efforts on managing his family’s real estate holdings.

I didn’t recognize the names of most of the people on the trustee list, except for Matthew Greer, CEO of affordable housing developer Carlisle Development Group, and bankerDwight Hill. The separate advisory group includes banker Adolfo Henriques, who won the Greater Miami Chamber of Commerce Sand in My Shoes Award; PR specialistLeslie Pantin; famed architect Elizabeth Plater-Zyberk; preservationist Ava Moore Parks; former Coral Gables Mayor Donald Slesnick II; and Bruce Matheson, whose family was among the pioneers in Miami-Dade County.

For Genting, this could be a formidable opposition, even though the Herald article said some board members thought the move on the Herald building was overreaching.

In the other article, an analysis by Strategic Advisory Group shows Miami Beach hotels have dramatically higher rates than Las Vegas hotels.

That fits in with a general concern that a destination gambling resort, with room rates subsidized by a casino, could drive down overall room rates and hurt existing businesses. Genting is planning 5,200 rooms in four towers, so it would be a big player.

“They’re going to destroy the market inventory,” said Stuart Blumberg, who formerly led the Greater Miami and the Beaches Hotel Association.

Last week, the Miami Beach City Commission soundly rejected the concept of a gambling resort.

There are other issues Genting and other would-be destination resort developers face. I’ll cover some of them in a year-end look back in Friday’s print edition of the South Florida Business Journal.

Payroll Tax Cut Bill Boosts Cost of New Mortgages

WASHINGTON – Dec. 19, 2011 – Who is paying for the two-month extension of the payroll tax cut working its way through Congress? The cost is being dropped in the laps of most people who buy homes or refinance beginning next year.

The typical person who buys a $200,000 home or refinances that amount starting on Jan. 1 would have to pay roughly $17 more a month for their mortgage, thanks to a fee increase included in the payroll tax cut bill that the Senate passed Saturday. The White House said the fee increases would be phased in gradually.

The legislation provides a two-month extension of a payroll tax cut and long-term unemployment benefits that would otherwise expire on Jan. 1. It would also delay for two months a cut in Medicare reimbursements for doctors; the cut is currently scheduled to take effect on New Year’s Day.

However, the House intends to vote down the two-month extension of the payroll tax cut, Speaker John Boehner said Monday, and request immediate negotiations on a full-year renewal that can provide “certainty for people who are trying to create jobs.”

“I don’t believe the differences between the House and Senate are that great,” Boehner said at a news conference, although he provided no estimate on how long it might take to produce a compromise.

To cover its $33 billion price tag, the Senate-passed measure increases the fee that the government-backed mortgage giants, Fannie Mae and Freddie Mac, charge to insure home mortgages. That fee, which Senate aides said currently averages around 0.3 percentage point, would rise by 0.1 percentage point under the bill. The increase will also apply to people whose mortgages are backed by the Federal Housing Administration, which typically serves lower-income and first-time buyers.

The higher fee would not apply to people who currently have mortgages unless they refinance beginning next year.

Because of the weak housing market and the huge numbers of foreclosures in the last few years, private insurers have not competed strongly for business with Fannie Mae and Freddie Mac, which have the backing of the federal government. As a result, Fannie Mae, Freddie Mac and the FHA back about 9 in 10 new home mortgages.

President Barack Obama and many congressional Democrats and Republicans want to curb Fannie Mae’s and Freddie Mac’s dominance in the mortgage market. Obama earlier this year proposed raising the mortgage guarantee fees they charge as one way to do that.
AP Logo Copyright © 2011 The Associated Press, Alan Fram. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Brazil’s Slowdown Hurts South Florida Housing Market

The Miami Herald

Brazil’s economy slows

BY MIMI WHITEFIELD
mwhitefield@MiamiHerald.com

Brazil still might be the darling of foreign investors and Miami real-estate agents but as the year draws to a close, its once booming economy is slowing.Fueled by a commodities boom, a growing middle class, and mineral wealth, Brazil’s economy hummed along with a 7.5 percent growth rate in 2010. But now most economists are pegging gross domestic product growth at 3 to 3.5 percent this year — and in its most recent forecast, Fitch Ratings said the Brazilian economy would grow only 2.8 percent.“Brazil is slowing down; it’s been slowing down since the second quarter,’’ said Guilherme Da Nobrega, senior economist at Sao Paulo-based Banco Itaú, during a recent visit to Miami. His estimate has been revised down from 3.6 percent to 3 percent growth.

The Brazilian economy, he said, “was growing too fast at the end of last year.’’ Inflation also was rising.

That economic exuberance — coupled with a strong real and depressed local real-estate prices — drove Brazilians to Miami in 2011 to buy everything from ocean-view condominiums to sports gear, iPads, and fashion.

The Brazilian economy also is closely watched in South Florida because Brazil is the region’s top trading partner, and earlier this year a group of nearly 200 Floridians traveled to Brazil on a trade mission led by Gov. Rick Scott.

To cool things down, the Brazilian government adopted tighter economic policies at the beginning of 2011; its central bank also raised rates. The government also held back on public spending for infrastructure projects, such as bridges, said Da Nobrega, who spoke at the Americas Society/Council of the Americas Latin American Predictors Forum in Coral Gables earlier this month.

“That did the trick,’’ said Da Nobrega.

But Brazilian industrial production began to slump in the third quarter and was down 2.2 percent in October compared to the previous year. Twenty out of 27 sectors contracted during the month, according to Barclays Capital.

Though it is still considered strong, the Brazilian currency also began to bounce around this fall — a change that has affected some Miami real-estate purchases. The real has fallen 8.1 percent against the dollar in the past three months.

With the economy weakening, Brazil’s central bank began cutting rates in August.

And to counteract the potential impact of a widening European financial crisis, it took several measures Dec. 1 to stimulate and strengthen the economy. They included tax cuts on financial operations, tax credits of up to 3 percent on 8,500 manufactured products destined for export sales, and increased home-value eligibilityfor developer tax breaks under the My Home My Life program.

To encourage the inflow of long-term foreign investment capital, for example, the taxes on foreign investment in stocks and venture capital were cut from 2 percent to 0.

The tax on so-called white goods — stoves, refrigerators, washing machines, and the like — also was cut to encourage the consumption of durable goods.

Da Nobrega said he anticipates “another couple of months of negative numbers” before the economy begins to pick up again. With the tax cuts, he said, the Brazilian economy should be growing by the second quarter and he predicts growth of about 3.5 percent in 2012.

“We are happy with that number,’’ he said. With current policies, he said, there’s a little more risk for higher inflation but a bit less risk of slow growth.

But Da Nobrega said Brazil will have to continue to watch the European situation closely.

Meanwhile, with the approach of the 2014 World Cup in several Brazilian cities and the 2016 Olympic Games in Rio de Janeiro, Brazil is in the midst of an investment boom. “We don’t run any risk of over-investment in Brazil,’’ Da Nobrega said. “As long as there is financing at all in the world, Brazil is going to take an important chunk of it.’’

Figures released by Brazil’s central bank Thursday showed that the United States wasstill Brazil’s biggest foreign investor with $105 billion in investments, excluding inter-company loans, at the end of 2010. And although China has replaced the United States as Brazil’s top trading partner, Chinese investments totaled just $8 billion, putting it in 16th place among foreign investors in Brazil.

Overall, foreign investment increased from $163 billion in 2005 to $580 billion in 2010, according to the central bank report.

Other analysts also say that 2012 seems to be shaping up as a better year for Latin America’s largest economy.

“The recent depreciation of the Brazilian currency plus the slowdown in inflation and the drop in interest rates will be very helpful for improving the health of the Brazilian economy,” Eugenio J. Aléman, senior economist at Wells Fargo Securities, said in a report released last week.

Read more: http://www.miamiherald.com/2011/12/16/v-print/2548407/brazils-economy-slows.html#ixzz1gjug9QNk

Loretta Cockrum builds for the future in Miami – Business Monday – MiamiHerald.com

Native Miamian Loretta Cockrum developed 600 Brickell at Brickell World Plaza, a building that features the latest in technology and a concept rooted in the stewardship of land.

LEED CERTIFICATION

600 Brickell is pre-certified Platinum under the LEED for Core & Shell rating system, according to the U.S. Green Building Council. Core & Shell covers base building elements such as the structure, envelope and building-level systems, like central heating, ventilating and air conditioning. The rating system recognizes the division between owner and tenant responsibility for certain elements of the building varies.

Pre-certification is a unique aspect of the LEED for Core & Shell rating system that gives formal recognition to a project for which the owner/developer has established a goal of achieving certification under LEED. It provides the core and shell owner/developer the opportunity to market to potential tenants and financiers the unique and valuable green features of a proposed building.

ICORDLE@MIAMIHERALD.COM

Equipped with the utmost in technology and environmental sustainability, 600 Brickell at Brickell World Plaza is the latest entrant to Miami’s financial district, soaring to 40 stories of glass and steel.

The lobby is lined in eucalyptus wood, the floors decked in marble. And set back from the street, it is skirted by a grand plaza, designed to be to Miami what Rockefeller Plaza is to New York.

Yet, beyond the modern office building’s exterior, its conceptual roots are firmly planted in Midwestern fields of corn, and Southern plantations of timberland.

600 Brickell at Brickell World Plaza, just completed, lies at that crossroads of the past and future — years in the making and designed to next-generation standards, but now mostly unoccupied, its destiny is still unknown.

The building was developed by native Miamian Loretta Cockrum, who grew up spending her summers at her family’s farms in Indiana and Illinois. It was there that she formed a love of the land.

Nearly 40 years ago, after working for the nation’s largest ranch management company, she started her own business, Foram Group, helping families run their farms.

HIGH RATING

Now, she views Brickell Avenue’s newest commercial real estate tower — the only one in Florida LEED pre-certified platinum, the highest green rating — as the natural progression of that stewardship of land.

“It is the foundation of our sustainable commitment, because if you are managing farmland and timberland and you are not an incredible steward of that property, there is nothing that will deteriorate faster,” said Cockrum, whose company still manages 25,000 acres in South Carolina, Georgia and Colorado, for its clients. “So it applies to the building of a vertical building.

“Therefore, we didn’t wake up one morning and say this sounds like a cool idea, let’s build a LEED building.  . . .  This building is a culmination of all those years,” she added. “It just happened to get wrapped up in a vertical construction project.’’

Built at a cost of $310 million, including $180 million of equity, 600 Brickell at Brickell World Plaza is owned by a family originally from Malaysia, which has entrusted the preservation of its ample wealth to Foram Group, as its fiduciaries.

In fact, Cockrum created the tower as part of a 100-year strategic plan for the family, geared to be relevant 25 years from now, Cockrum said.

“You have to be building for a future,” she said. “I told them we are not going to be profitable in the beginning, and may not see a profit for 10 years,” she said. “They said do whatever you have to do.”

Cockum, who has represented the family for 35 years, first purchased the Brickell property in 1990. Over the next six years she assembled all the various parcels (in addition to the 85,000 square-foot building), including three outparcels between Brickell Avenue and the Metromover.

“My original plan,” she said, “was to hold it for 10 years and then build a significant building, a flagship for this family portfolio.”

Brickell was coming alive as a vibrant location, not just to work, but as a place to live and a destination to dine out.

“It was that energy and that ignition of life that would allow us to build something like this,” Cockrum said. “Otherwise, it’s just another stagnant office building.”

In 2006, Cockrum began the design and construction process and first applied for LEED silver status, a lower level than the current platinum. The former building on the site was torn down in late 2006, and she broke ground in April 2007.

But hindered by the recession and real estate market downturn, as well as competition from other new Class A buildings, she slowed construction. At the same time, she had her team of architects, engineers and builders take a fresh look at how to make the building stand out.

The end result is an office tower with 614,000 square feet of rentable space that qualified for platinum precertification, with all the latest eco-friendly and high-tech features.

Among them: the building uses “daylight harvesting,” within 15 feet of the perimeter of the building. There, sensors keep the light at levels considered optimum to decrease eye strain, and adjusts if it gets cloudy or as the sun trails, said Tracy L. Story, president of Foram Management and Leasing.

Additionally, the lights turn off completely when someone leaves the room.

The bathrooms are also equipped with automatic sensors to turn on and off the lights. They also have dual flush toilets and waterless urinals, Story said.

Water conservation is another key feature. Rainwater is collected and recirculated back up to cooling towers, with overflow directed to the irrigation system and to fountains on the plaza.

OPERATING COSTS

As a result, Story said, the building uses 30 percent less water than the average office building and offers an 18 percent savings on electricity, which add up to lower operating costs for tenants. In addition, the windows are impact-rated at 334 miles per hour, she said.

The building is directly connected to the NAP of the Americas in Miami, one of only eight Tier 4 Data Centers globally. And it has wireless Internet access throughout the building and on the plaza, among other high-tech offerings.

In earning its pre-certified platinum score, the highest level of certification, 600 Brickell achieved 45 out of 61 possible points, said Ashley Katz, spokeswoman for the U.S. Green Building Council, which develops and administers the LEED (Leadership in Energy and Environmental Design) rating system.

Included in its credits, 600 Brickell achieved points in the category of innovation and design for sustainable sites, exemplary performance in energy and atmosphere, and exemplary performance in green housekeeping, Katz said.

WHAT’S MANDATORY

Tenants have the option of building out their spaces in accordance with LEED commercial interior requirements, though certain features such as daylight harvesting and recycling are mandatory, Story said. And Foram intends to apply for full platinum certification once a majority of the tenant build-outs are made.

“We believe the building can accommodate any forward-thinking company that can appreciate the benefits of LEED, the technology aspects of the property, the security aspects of the property, and wants the amenities and location this property offers,” she said.

Among the amenities, on the building’s 14th floor, where Foram has its offices, is a rentable conference center with state-of-the-art video conference equipment, as well as a fitness center with more than two dozen Cybex machines

Outside, the grand plaza has lighted railings and fountains, and offers space for entertaining.

“The plaza is designed to integrate the community into the building, to enhance the live-work-play experience that is Brickell,” Story said.

600 Brickell at Brickell World Plaza’s official “coming out party,” scheduled for last weekend, celebrated the opening of the building, with the lighting of hundreds of thousands of colorful lights.

“We selected the first Saturday of December as the annual event because we really see this as something in the future that will be extremely significant for the holidays,” Cockrum said.

GETTING TENANTS

Soon, restaurants and possibly other service providers are expected to occupy the street-level retail space. Various bids are under consideration, Story said. Foram is leasing the 15,000 square feet of ground level space, plus the 14th and 15th floors, while Jones Lang LaSalle is now the broker for the rest of the building’s office space.

“We get six to eight calls a day,” Story said of the retail space. “And the key is to get the right mix for the building, so they feed off each other.”

As for the office space, besides Foram and its affiliate companies, so far just two tenants have leased space at 600 Brickell: Credit Agricole, which is leasing the entire 37th floor, and de la Peña Group, a Miami law firm, which is leasing about 3,000 square feet on the 17th floor.

De la Peña Group moved just a week ago, after spending 18 years on Brickell Key. The boutique litigation firm chose the new building for its location, efficiency of space and availability of conference rooms, and technological advantages, said Leoncio de la Peña, founder and managing partner of the de la Peña Group.

“The most important factor is connectivity,” he said. “The practice of law has changed dramatically and the type of law we practice has changed dramatically. We are 100 percent dependent on the Internet, and clearly the best building with the most secure, the most consistent and the fastest Internet is 600 Brickell, period.’’

Glenn H. Gregory, senior vice president for Jones Lang LaSalle , marketing and leasing agents for 600 Brickell at Brickell World Plaza, said the timing of the building, after deferring its entry into the market until now, should work to its advantage. For $42 to $46 a square foot, he said he will be marketing the “Class A tier one plus” office space to all South Florida businesses with leases expiring in the next five years. Other Class A competitive properties are in the $40 to $44 per square foot range, he said.

“The marketing program for 600 Brickell will cater to not only domestic tenants that have the need for the connectivity the building offers and sustainability,” Gregory said, “but we will test the market for the international tenant that might not have chosen Miami and may not be here today.”

MARKET RATES

In fact, the commercial real estate market in downtown Miami and on Brickell has stabilized, said Jon Blunk, senior director of Cushman & Wakefield, who is based in the firm’s Miami office.

“Rates have hit bottom,” he said, “and hopefully are slowly on their way back.”

Still, it’s a difficult climate in which to convince tenants to move and pay the costs of relocating, and it could be a long haul to lease all the space at 600 Brickell, Blunk said.

“It’s the most expensive building probably built in downtown Miami and Brickell, so it has the most amenities,” he said. “It should command the highest rents — in the low to mid $40s.”

Yet, Cockrum is counting on seeing the space leased.

“By this time next year if we are not significantly rented, and/or committed to rent, I will be disappointed,” she said, “because I will feel that what we have provided and what we’ve done and what we’re offering maybe wasn’t that special.  . . .  It’s very risky to be this cutting edge.”

Cockrum, 74, is a third-generation Miamiam. Her grandparents came here in 1923, settling in Coral Gables.

After studying dental hygiene at her mother’s request, she worked for six months as a dental hygienist in Atlanta. Later, Cockrum spent five years in the Atlanta office of Oppenheimer Industries, which she said was the largest ranch management company in the United States, with 5 million acres under management.

“I was running an agricultural management company — we managed farms and timberland,” she said. “I bought the crops, I sold the corn, I did the financial statements. I helped families manage family farm operations.”

It was a case of necessity, she said. Her husband had become ill, and she knew she would have to support her children, who were in their early teens at the time.

“I hadn’t worked for 14 years, so I got this job and it was something I was passionate about and it’s something I am still passionate about,” said Cockrum, who continues to run the agricultural arm of her company today.

It was in Atlanta, shortly before she launched Foram as an agricultural management company, that she met the Malaysian family that now owns 600 Brickell. In fact, Foram stands for Farm or Ranch Management.

“I started it in ’78 in Atlanta on my dining room table,” she recalls. “Like most women in the 1970s who were starting a business, it was very unusual.”

In 1986, she moved Foram’s headquarters to Miami.

“It was circling back to my roots, because my grandfather was in the real estate business at the time of George Merrick, in Broward and in Miami-Dade,” she said. “It’s pretty much in my DNA.”

Foram operates as a wealth manager, investing solely in real estate. Today, Foram has 26 employees and represents three families as clients. All are foreign, and each is very private and does not want their identities disclosed, she said. In all, the company manages hundreds of millions of dollars of real estate in Colorado, South Carolina, Georgia and Florida, including agricultural land.

“I develop properties, but I’m not a developer. To me that is a dirty word,” Cockrum said. “I am building real estate portfolios for families, but only a part of what I do is develop a property, if it is appropriate for a particular portfolio.  . . .  What I do is build value in real estate, and if that means I build a building on a property we already own, that is what I do.”

Over the past 15 years, she said Foram has purchased for its portfolios close to 1 million square feet of office buildings in Florida, including Miami.

“I love the city, I feel very attached to it, it’s very much a part of what I want to leave behind better than I found it,” Cockrum said. “And I really think that has a great deal to do with why 600 Brickell is what it is. . . .  The plaza — the city really needs something of that significance to make it a special place.”