Businesses Seek State Cuts In Commercial Lease Taxes

Governor Rick ScottGov. Rick Scott met with business leaders in Broward and Palm Beach counties last Tuesday to get their input on what tax cuts he should propose to the legislature since the state will have a budget surplus in 2014.

Their biggest concerns included rising personal property taxes and insurance costs, and taxes that affect businesses moving to the state or startups trying to grow.

The stops were part of Scott’s tax-cut tour across the state. Scott has pledged to cut taxes and fees for the state by $500 million in the 2014-2015 budget, the same year he would run for re-election.

“How do we give the money back to you, the taxpayers? I’m putting it back in your hands,” Scott told the group at the Palm Beach County Convention Center Tuesday morning.

Kelly Smallridge, president of the Business Development Board, the economic development agency for Palm Beach County, said when recruiting businesses to the area, Florida’s tax on commercial leases is an issue in being competitive with other states.

“We’re one of the only states that has a tax on commercial leases,” she said.

Real estate broker Robert Goldstein suggested to the governor the commercial leasing tax be reduced by 1 percent each year until it is phased out. “We’re at a competitive disadvantage,” he said. The current tax is 6 percent.

He said the impact on economic and job growth from eliminating the tax would far outweigh the tax revenues.

Several small business owners, including one who provided a sample of his company’s popcorn to the governor, attended the meeting at Broward College in Fort Lauderdale.

Rosana Santos Calambichis, owner of Davie catering company Big Chef, said she would like to see a reduction in the tax on fuel — her business has seven trucks — as well as the state tax included in insurance coverage and the commercial lease tax. “It adds up quickly,” she said.

Broward College radiology student Shelda Simon, 19, got her 15 seconds of fame — and a photo with the governor — after asking him why so many young graduates are unemployed.

“There are plenty of jobs around the state. But you have to get the right degree,” Scott told her.

Life science business owner Ken Kirby said the governor should consider proposing a new life science fund for startup businesses in the sector now that it has invested millions of dollars in Scripps Florida, in Jupiter, and other institutes.

“It seems a shame to waste the momentum,” said Kirby, whose company TransDermal Delivery Solutions Corp., which has developed alternative systems to deliver drugs to patients, opened a new headquarters in Palm Beach Gardens last year.

Florida expects a budget surplus by the time lawmakers draft the 2014-15 budget. A new forecast released Sept. 4 shows a surplus of $845 million in fiscal 2014, even after meeting current enrollment needs for schools and health care programs such as Medicaid and setting aside $1 billion in reserves, according to a draft report released Sept. 4 by legislative appropriation committees and researchers.

The surplus is mostly due to a recovering economy, said Amy Baker, state chief economist. “People here have more money to spend and more tourists are spending money here,” she said.

While general revenues are increasing due to pulling in more sales tax, the budget constraints have shrunk as some state programs were eliminated or reduced during the recession.

But forecasters warn that more than half of the surplus — $449 million — is a one-time windfall.

In recent weeks, Scott has promised to spend an additional $70 million on environmental projects dealing with the Everglades and Lake Okeechobee in the coming year, which could come out of the surplus.

Another target could be auto tag fees that were raised in 2009 when Gov. Charlie Crist was in office. Crist, now a Democrat, is expected to challenge Scott in the governor’s race in 2014.

Gov. Scott made a pledge in 2010 to eliminate the corporate income tax, which generates about $2.1 billion a year. But Florida lawmakers have steered away from the massive tax break, which would benefit mostly larger companies.

The “It’s Your Money” tour continues over the next three days in Jacksonville, Tampa and Orlando.

 

Source:  Sun-Sentinel

All Aboard Florida To Spend $320M On CRE Developments

All Aboard Florida Downtown Miami Corridor-LargeAll Aboard Florida plans to spend $320 million on the development of largely commercial real estate as part of its total anticipated expenditure of $2.4 billion for its passenger train service.

There will be offices, retail, entertainment venues and residential properties developed along the track. The developer estimated the total cost of the project at $2.6 billion

The service will connect Orlando and Miami. The Miami station is expected to have more than 1 million square feet of development projected to cost $325 million. Rent at the Miami terminal is $35 million, sources told the Orlando Business Journal.

Representatives from All Aboard Florida have come to an agreement with Don Peebles and Barron Channer over a parcel of CRA land in Overtown that the two had submitted bids for to build apartments, a hotel, shops, restaurants and music venues.

All Aboard president Mike Reininger and Peebles are currently finalizing terms of the deal.  Reininger and Peebles say that the agreement will maintain components of All Aboard Florida’s proposal that will mesh with the proposed mixed-use railroad station.

Sources:  The Real Deal and exMiami

South Florida Isn’t In Latin America – But It’s The Best Place For Doing Business There

The business magazine America Economia has ranked South Florida as the best place to do business in Latin America. That’s pretty cool since the region isn’t IN Latin America.

It’s actually the fourth year in a row Miami has been ranked that way, a newsletter from the Beacon Council, Miami-Dade’s economic development organization says. (A close look at Economia’s ranking table (below) indicates that it actually includes the entire region since the population listed is 5.7 million.)

Las Mejores Ciudades

South Florida was ranked first for infrastructure, regional platform for global business, corporate executive safety, corporate executive prestige, green city standards and best in executive salary to cost of living ratio.

The salary to cost of living ratio confirms why a lot of foreigners have been buying condos in the Brickell area.

Miami obviously has some great infrastructure with PortMiami, Miami International Airport and a growing mass transit system. There’s also the comprehensive business professional infrastructure, including international banking and law.

 

Source:  UBJ

A Light At The End Of The $1B Port Of Miami Tunnel

Port of Miami TunnelConstruction to the Port Miami tunnel has been in full effect and has reached the final stretch.

“Port Miami will be one of the only Ports in the world with a direct connection from the Port to the highway system without a single traffic signal,” Port Director Bill Johnson said.

The underwater tunnel will soon take cargo trucks and cruise passengers off the often busy Downtown Miami streets and directly to and from the Port.

“The importance of an improvement like the tunnel, which is a state-led project, affords the opportunity to move both passengers, cruise passengers, as well as containers more efficiently, more effectively, more safely,” Johnson said.

The dual underwater passage goes as low as 120 feet under Biscayne Bay and will have four lanes of traffic, two westbound and two eastbound.

Ninety percent of the tunnel is now complete, though construction of the interior, including lighting, traffic signs, ventilation, fire proofing and five emergency exits still need to be completed.

The nearly $1 billion project began in 2011, with workers drilling through 4200 feet under Dodge Island, Watson Island, Biscayne Bay and the MacArthur Causeway during the last six months. “We just cannot wait until the completion and just think about everything it’s bringing to Miami: 250,000 jobs directly and indirectly,” State attorney general Pam Bondi said.

The tunnel opens up at the MacArthur Causeway, connecting to Interstate 95. Officials said the tunnel is just short of a mile long and is on budget and on time.

The tunnel is expected to be completed by next Spring.

 

Source: WSVN

Valuing Southern Multifamily: GE Capital Sells, Blackstone Buys Big

 

multifamilyThe recent $2.7 billion purchase of approximately 30,000 apartments across the Dallas, Atlanta and other southern markets by private equity giant Blackstone has some multifamily sector observers scratching their heads.

At first glance the sell side makes the most sense: GE Capital appears to have corporate cultural issues with real estate.  But more interestingly,  while multifamily dwelling demand remains solid nationally, the idea that apartments in many metro areas are underperforming or offer a ton of upside in other ways just does not appear to be  the most popular view at the moment.  Owing perhaps to a national follow-on effect of the housing crisis, multifamily nationally has a lot of boom in its recent history and perhaps not as much in its future. The debt that has converted single-family homeowners into renters may have done most of its work already, says the conventional wisdom.  Apartment construction is up and declining vacancies have stalled out to post-crisis lows.

The great Llenrock blog had an interesting take on Blackstone’s head-scratching strategy.  With a shrug, Eric Hawthorne suggests stability or general energy-boom chasing as possible aims of the deal, noticing that Blacktone’s recent history in single-family might make their play more about market and less about asset class:

After years of high demand and value creation, the multifamily sector appears to have reached something of a plateau, which will no doubt continue as more and more apartment buildings open and fill. Multifamily development has outpaced the rest of the CRE world since the recession, and the market will soon have to catch up with all the new inventory.

It could be this deal is simply a bid for stability. Whether they gain value or not, no one can deny multifamily communities offer their landlords stability. More likely, I think, Blackstone’s sudden shift from single-family to multifamily is less about the asset class than the market. According to RTTNews, the 30,000 apartments (give or take) Blackstone acquired are in Atlanta, Dallas, and other parts of the Southeast and Texas. Dallas, of course, enjoys a great deal of activity from the energy sector and is a major growth market. Atlanta, on the other hand, has lagged behind many other cities in the economic recovery, so its values are yet to reach the levels of other comparable markets. All of this is to say that multifamily may indeed have some value-add opportunities left–in certain cities, anyway.

Further suggesting Blackstone’s idea is about future rent raises in a rising market is Marcus & Millichap’s recent report on the Dallas /  Fort Worth Metroplex, celebrating the new inventory pipeline and low vacancies with unrestrained enthusiasm.

Time will tell, but it looks to me like Blackstone’s DFW bet is on the location more than anything else.

 

Source:  Commercial Source