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

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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

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

Demand For Cold Storage Space Heating Up

floral warehouse

Floral Logistics of Miami Inc. occupies one of Miami-Dade County’s largest cold storage facilities with more than 250,000 square feet under refrigeration in a 350,000-square-foot building.

Yet, company executives including sales and marketing director Linda Nunez are pondering how to increase the volume of flowers and produce Floral can store at the 3400 NW 74th Ave. building about a mile west of Miami International Airport.

Floral, which picks up imported products from the airport before cooling and distributing the goods, has enough room in its facility to avoid taking on another lease.

“We definitely have to maximize the number of pallets we have and also utilize existing space,” Nunez said.

But other cold storage users who want to expand face significant challenges.

The county’s shining tourism and trade industries, growing population and resurgent economy are generating heavier demand for perishable goods. That puts pressure on companies that store and ship the products to expand their businesses.

Cold storage represents 5 percent to 8 percent of Miami-Dade’s industrial inventory, according to Sperry Van Ness LLC managing director Matthew Rotolante. That range is likely to increase as more perishables are imported into the county, which already has the nation’s largest floral import business with more than 90 percent of U.S. flowers passing through the airport.

“What we see is a lot of demand from hotels and cruise ships” for refrigerated and frozen goods,” Rotolante said.

Nunez notes the volume of produce handled by Floral has significantly increased to account for about 45 percent of the company’s inventory. She cited a boost in tropical food items like yucca that are sold in South Florida supermarkets throughout the year.

No Spec Market

Cold storage supply space is limited, and vacancies are rare in the sector. Real estate firm Transwestern reports a vacancy rate of less than 5 percent for Miami-Dade’s 8 million square feet of refrigerated and freezer space.

“The market is very tight,” Transwestern managing director Ben Eisenberg said. “Our team represents a company looking for space, and we can’t place them right now.”

Earlier this month, Eisenberg and Transwestern brokers Thomas Kresse, Walter Byrd and Carlos Gaviria represented RREEF in a 40,000-square-foot long-term lease with seafood producer and distributor Marine Harvest USA LLC at Beacon Centre-Building 22 in Doral. Marine Harvest had been subleasing the facility. But when the previous tenant’s lease expired, the company moved quickly to sign a direct deal with the owner of the 8500-8550 NW 17th St. building.

“Obviously that was a great benefit to the landlord with no downtime” between leases, Eisenberg said.

Supply is also being constrained by a lack of new construction. Cold storage facilities are too expensive for a landlord to build speculatively. Converting traditional warehouses to refrigerated or freezer facilities is also costly.

“It’s still four to six times more expensive than building regular industrial space,” said Zac Gruber, senior vice president at Miami-based Easton Lynd Management LLC.

“That limits the market too much for industrial landlords,” Gruber said. “If you see anything built on spec, it would be for an existing user, a build-to-suit.”

Jones Lang LaSalle Inc. managing director Steve Medwin estimates a cost increase of $30 to $100 per square foot to build out cold storage facilities. That doesn’t mean industrial landlords should ignore the niche, however.

“There is demand,” he said. “If someone made an investment in that, they may be rewarded. But meeting the exact needs, trying to anticipate that, would be difficult.”

Rent Premium

The long-term rental returns for industrial landlords could still outweigh the additional construction expenses.

Gruber estimates an owner could receive a $2-to-$3 per square foot premium on rents for refrigerated space.

“That depends on the quality of the cooler, sophistication of the landlord and how much work is done in there,” he said.

Potential rent appreciation was the driving force behind a California investor’s $8.75 million acquisition of a three-property freezer facility in northwest Miami-Dade in May. Rotolante represented the buyer, Miami Business Park LLC, in the purchase of 6960 and 6831 NW 36th Ave. and 7007-7025 NW 37th Ave.

The facility was more than 40 percent vacant when Miami Business went under contract, Rotolante said. Before closing, the company received lease offers from several large national tenants willing to pay substantially higher rents than existing tenants.

“That shows the demand for this product is popping right now,” he said.

For Floral Logistics, the solution to its growing space needs could be racking.

Nunez said the company plans to have racks installed at its facility by December. The building has numerous temperature “zones” and 38-foot tall ceilings, which is well above the norm for South Florida industrial facilities.

“We can have a pallet on the floor and triple our space by racking,” she said.

In rare instances, users like Preferred Freezer Services LLC opt to build their own cold storage facilities. Preferred began construction this month on a 118,000-square-foot facility in Hialeah Gardens. Once completed in March, the facility will be the company’s third in Miami-Dade.

Preferred and other companies have to take such measures because institutional landlords are “more conservative and not comfortable spending money on these improvements” despite the potential rental revenue, Eisenberg said.

 

Source:  DBR

Preview What’s in Store for Port of Miami After Panama Canal Widens!

CMA CGM's Don Carlos

Port of Miami making history

Mega-sized cargo ship arriving

 

(Miami-Dade County, FL) — 
CMA CGM Don CarlosThe CMA CGM Don Carlos, a 8,500 TEU container cargo ship-nearly twice the size of the average cargo vessel operating at the Port of Miami, will arrive here on Sunday, November 14, as a “test run.” The ship represents the new generation of mega-sized container cargo vessels that have the potential to drastically change cargo operations at the Port.

“This ad hoc call of CMA CGM DON CARLOS in Miami helps insure that the Miami Port is ready and has all infrastructure needed to welcome this size of vessels (8,500 TEU), which will become the new minimum standard – once Panama Canal enlargement is completed in 2014” explains Jean-Philippe Thenoz, VP North America Lines at CMA CGM.

“It’s all about increasing the Port of Miami’s cargo business and infusing millions of dollars into the local economy-we have the potential to create thousands of new jobs,” said Port of Miami Director Bill Johnson. “The CMA CGM Don Carlos arrival not only makes history for the Port of Miami but it is the largest cargo container ship ever to visit a Florida port.”

The ship is expected to arrive at the Port of Miami at approximately 4 p.m. on Sunday. The public can view the vessel from a number of vantage points including South Point Park on Miami Beach.

CMA CGM, the third largest container shipping Group, operates the CMA CGM Don Carlos on a routing that includes stops in Japan, China and South East Asia to the United States East Coast via the Suez Canal, and South East Asia, China and Korea to Pacific North West and Canada (Vancouver).

The average container cargo vessel now operating out of the Port of Miami is 4,500 TEUs compared to the 8,500-plus Post-Panamax ships. The larger ships require deeper water than the drafts at most U.S. East Coast Ports. The CMA CGM Don Carlos will not be carrying a full load when it arrives in Miami following stops in New York and Norfolk, Virginia.

“The CMA CGM Don Carlos clearly illustrates why it is critical that the Port of Miami proceeds with dredging its waters to -50 feet from its current -42 feet depth,” Johnson said. “If we are to be a player in the global market place we need the Deep Dredge prior to completion of the Panama Canal expansion scheduled for 2014.”

The Port of Miami is currently seeking $75 million in federal funding to move the project forward. The Army Corp of Engineers is expected to complete preliminary design and engineering work for the project next summer.

To gear up for the new generations that will traverse the expanded Canal, the Port of Miami plans to invest more than $2 billion in infrastructure improvements over the next decade. Projects include the Port Tunnel, now underway in partnership with the Florida Department of Transportation and City of Miami, along with improvements to the Florida East Coast Railway tracks linking the Port with the Hialeah Rail Yard and the national rail system. The Port recently received $23 million in federal economic stimulus funds for the rail project.