Florida Commercial News - Land, Development, Building, Business

This week, the Mortgage Bankers Association (MBA) released its Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, and it's nice to read good news in forecasts by experts into the future of commercial real estate development in this country.  It's been awhile as the nation, especially the Sunshine State of Florida, had to deal with the past few years' housing crises, banking scandals, and unprecedented industry financial valleys.

Mortgage Bankers Forecasting Good Things for Commercial Real Estate in 2013 

According to the Mortgage Bankers Association, there will be a jump in the originations of commercial and multifamily mortgages of $254 billion this year.  That's going to be higher than 2012 by 11%.  It gets better: the MBA is forecasting this to be $289 billion two years from now, in 2015. 

"2012 was a strong year for the commercial and multifamily mortgage markets, and 2013 is shaping up to continue the growth,” said Jamie Woodwell, MBA’s VP of Commercial Real Estate Research. “Despite a 21 percent decline in the volume of commercial and multifamily mortgages maturing this year, we expect origination volumes and the amount of mortgage debt outstanding will both increase. Our forecast anticipates Fannie Mae, Freddie Mac and FHA, as well as life insurance companies, will all continue to have strong appetites for making loans, and—coupled with growth in originations for CMBS—the total market will continue to expand.”

Meanwhile, MBA predicts that outstanding commercial/multifamily mortgage debt will exceed $2.4 trillion by the end of this year (2% higher than 2012) and over $2.5 trillion at year-end 2015. 

Read and download the MBA Report here.

National Association of Realtors Commercial Real Estate Forecast for 2013

Meanwhile, the National Association of Realtors released its predictions for commercial real estate sectors in the United States a couple of months back in their Commercial Real Estate Outlook (CREO).    

Among their forecasts, 2013 will see declines in vacancy rates as follows:

• 1.0 percentage point in the office market;
• 0.6 point in industrial;
• 0.2 point for retail;
• 0.1 point in multifamily.

The Realtors' Report also predicts the following in 2013:   

Office Ma​rkets

Vacancy rates in the office sector are projected to fall from an estimated 16.7 percent in the fourth quarter to 15.7 percent in the fourth quarter of 2013.... 

Office rent is expected to increase 2.0 percent this year and 2.5 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 21.7 million square feet in 2012 and 49.0 million next year. 

Industrial Markets

Industrial vacancy rates should decline from 10.1 percent in the fourth quarter of this year to 9.5 percent in the fourth quarter of 2013. 

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.3 percent; Los Angeles, 4.4 percent; and Miami at 6.5 percent. 

Annual industrial rent is forecast to rise 1.7 percent in 2012 and 2.2 percent next year. Net absorption of industrial space nationally will probably total 93.4 million square feet this year and 89.6 million in 2013. 

Retail Markets

Retail vacancy rates are expected to ease from 10.8 percent in the fourth quarter to 10.6 percent in the fourth quarter of 2013. ...

Average retail rent should increase 0.8 percent this year and 1.4 percent in 2013. Net absorption of retail space is estimated to be 9.1 million square feet this year and 19.8 million in 2013.

Multifamily Markets

The apartment rental market - multifamily housing - is projected to see vacancy rates decline from 4.0 percent in the fourth quarter to 3.9 percent in the fourth quarter of 2013; vacancy rates below 5 percent are considered a landlord's market with demand justifying higher rents.... 

Average apartment rent should increase 4.1 percent in 2012 and another 4.6 percent next year. Multifamily net absorption is likely to be 219,700 units this year and 234,600 in 2013.

Read the National Association of Realtors' report online here.

Image: Wells Fargo Center in Miami, Florida (Wikimedia Commons)

Last week, internationally-known real estate investor Maxwell Drever was quoted in an interview published in the Tampa Bay Business Journal that he was excited about the Florida real estate market and planned on investing around $100 million in Florida real estate development -- soon. 

That's right.  Maxwell Drever likes Florida -- he calls Florida a “terrific market,” and the question for many may be, who is Maxwell Drever and why is this important to Florida real estate?

Maxwell Drever has been investing and developing real estate across the United States for over 40 years, with much of his background tied to multi-family residential real estate properties. Currently, he is Chairman of the Board at Concierge Asset Management.   His investment skills can be tracked back to the 1970s, when Drever forecast profits to be had in a troubled Seattle market and where he invested successfully in a series of apartment complexes there, to project after project since then, where Drever has made significant profits for himself and his companies by discovering distressed markets and investing in real estate development with profitable results. 

Today, Drever is at the helm of Concierge Asset Management, which does three kinds of investment:

• invests in undervalued REIT stock
• invests in loans on investment real estate - performing and non-performing
• invests in multi-family apartment real estate that is underdeveloped.

Go visit the Concierge web site and you'll learn much more about their proud history of "counter-cyclical parallel" investing, where Drever and his team have achieved success after success by determining the appropriate real estate market in which to invest ... and it's good news to learn that this California-born company with its headquarters in Houston is planning on putting money -- lots of money -- into Florida.

Concierge has already started moving into the Florida market.  Two years ago, Drever and his company bought almost every unit (143 out of 153 units) in Clearwater's Water’s Edge condominium tower project.  (They bought all but ten units for around $30 million.)  At the time, the condo tower was somewhat of a ghost town, dark and mostly vacant.

Drever's people moved in and bought the tower at a good price, and began redevelopment and marketing.  Today, they've sold all but seven (7) of the units.  

According to the Drever interview, Maxwell Drever is very excited about the investment possibilities in Florida right now.  And he's not giving details but he's putting his money where his mouth is ... which means that others will be following his lead.

For Drever, based upon past history, this means condos, townhouses, apartments -- he is an expert in multi-family residential investment and development.  However, as real estate experts recognize, what Drever forecasts here for his niche dovetails into other areas of commercial real estate as well:  shopping centers, rental development, office towers, etc. 

Maxwell Drever's got something good to say for all of Florida.  Better development days are ahead.

Lake Nona is a master planned community located in Orlando that seems to be getting more successful by the day.  For those that aren't aware of Lake Nona, here's the description of this unique Florida community from the LearnLakeNona web site:

Lake Nona is a 7,000-acre master planned community within the city limits of Orlando that will be home to world-class education, medical and recreational facilities, a medical city, diverse workspaces, retail centers, entertainment choices and residential options for all types of people seeking the best the city has to offer with all the conveniences of living within a dynamic, vibrant community. Lake Nona is being developed by Lake Nona Property Holdings, owned by Tavistock Group, a private investment company with a broad portfolio of assets around the world.

Lake Nona Development Booming

This week, the Orlando Business Journal reported on how popular Lake Nona really is these days: in this bad economy, 300 new home sales were made in 2012 in the Lake Nona neighborhoods of Laureate Park, Lake Nona Golf & Country Club, Village Walk and Water’s Edge: the best sales record for Lake Nona since 2005.  For more details, check out the info at the Lake Nona blog.

Commercial development is looking good for Lake Nona, too. 

It's not just residential development that is booming -- some would argue that the residential boost in 2012 is following on the coattails of commercial development that is already in place (Medical City) or is in the process of being completed.  Consider:

1. In August 2012, Valencia College ’s Lake Nona campus at Medical City opened for students
2. In March 2012, construction began on a 79,000-square-foot Publix-anchored shopping center.
3. Additionally, there are the new and expanding medical facilities in Lake Nona's Medical City:

•Nemours Children's Hospital at Lake Nona Medical City will open at a cost of $380 million next month.
•VA Medical Center at Lake Nona, 1.2 million-square-foot medical center costing more than $650 million expected to be open for patients in mid to late 2013.
• Orlando Regional Medical Center adding a 10-story patient tower at a cost of $300 million; scheduled to be complete in late 2015.

For more information regarding Lake Nona, leave a comment or visit the Lake Nona website.

Miami's Design District is well-known to almost everyone: tourists seek it out, investors appreciate its success, heck - television shows use it for backdrop.  It's a beautiful part of the city and one of the jewels of South Florida.  Set among some of Miami's great neighborhoods -- Wynwood, Buena Vista, and the Upper East Side communities -- the Miami Design District has sprung its art galleries, retail stores, cafes, restaurants, antique shops, and the like from a place that long ago was primarily a bunch of warehouses. 

However, from a land use perspective, the Miami Design District has also provided an example both to South Florida and other parts of the country on how to plan and develop a mixed-use community that benefits not only its commercial and residential residents but the area economy as well.

First on all, Miami's Commissioners okayed land development group DACRA's $312 million plan to revamp the current Design District into much more: there will be new plazas, cafes, stores, and both hotels and residential housing in the new District.  Second, Miami's use of land in its Design District has already been an example to a number of municipalities over the country as a way to boost their local urban areas.

Design Districts aren't a new concept. For example, Waikiki, Hawaii, has had its own Design District since the mid-1970s.  However, for places like Hartford, Connecticut, the design district of Miami has been something to consider as its own North Park Design District mixed use land plan was recently created.

2012 - Amending the Design District in Doral, Florida

South Florida is seriously considering the mixed-use land plan seen in Miami as a way to ignite economic growth in urban locales.  This month, the City Council of Doral made national news when it voted on the "Doral Design District Core" and its application to 185 acres of land inside the city's design district. Doral already created a Design District back in 2010 (you can read the Master Plan online): now, an Ordinance has been passed to amend that 2010 concept.

The Doral vision is to create a Design District from a place that currently houses lots of offices, warehouses, and showrooms into a pretty place that will be easily accessed by foot traffic and particularly inviting to the design industry.  The City leadership envisions a place that is " ... the mecca for designers, artist(s), architects, boutique retail stories, galleries and restaurants."  There will be places to live within the Doral Design District, too. 

For more, check out the website here. 

Florida real estate developers and those interested in investing in Florida real estate, from timeshares to condominium projects to shopping centers, restaurants, and other projects that serve the big Florida tourist industry, will be happy to see that Governor Scott is continuing his work in promoting the Sunshine Shine to tourists.  Here, our news release of the week:

Governor Scott Applauds Florida’s Tourism Marketing

Signs HB 1001 to increase confidence in Florida’s timeshare market

Continuing his focus on promoting Florida’s tourism industry and its economic impact, Governor Rick Scott thanked the Florida Legislature today for increasing state funding for VISIT FLORIDA by 55 percent. Funding for Florida’s official tourism marketing organization will total $54 million during the fiscal year beginning on July 1, compared to $34.9 million in Fiscal Year 2011-12.

“To keep Florida in the front of travelers’ minds, VISIT FLORIDA is constantly fine-tuning our tourism marketing to attract business travelers and vacationers from around the world,” Governor Scott said. “This investment is good for Florida taxpayers because for every dollar spent on tourism marketing, VISIT FLORIDA generates $177 in tourism spending and $11 in new sales tax collections.”

During a visit today to the University of Central Florida Rosen College of Hospitality Management in Orlando, Governor Scott also signed House Bill 1001, relating to timeshares.

“As visitors enjoy their vacation and business travel to Florida, it is only natural for them to want to figure out ways to keep coming back, and timeshares can be a way for vacationers to keep returning to our state,” said Governor Scott. “Unfortunately, several scams involving timeshare marketers eroded investors’ confidence in the timeshare system.”

Attorney General Pam Bondi’s office received nearly 7,000 complaints during a nine-month period last year, more than all other consumer-related complaints combined. The most common complaints included false claims that the marketer had a specific buyer ready to purchase or rent the timeshare, unkept promises that the property would be rented within a certain period of time, and failure to honor cancellation policies.

“This legislation will cut down on timeshare fraud and protect owners from unscrupulous resale companies,” Governor Scott said. “As we fight this fraud, integrity will come back into the system, and people can feel more confident investing in Florida, and in the timeshare market.”

Governor Scott thanked Representative Eric Eisnaugle and Senator Andy Gardiner for working to pass the legislation and commended Representative Mike Horner, who leads the Transportation & Economic Development Appropriations Committee, for his work to increase VISIT FLORIDA funding.

About Florida Tourism

As the state’s No. 1 industry, tourism is crucial to Florida’s economy – generating 23 percent of the state’s sales tax revenue and employing more than one million Floridians.

In 2011, tourism was responsible for welcoming 86.5 million visitors to Florida and generated $67.2 billion in direct economic impact.

VISITFLORIDA.com is the No. 1 trafficked state destination marketing organization website in the country.

For every dollar spent on tourism marketing, VISIT FLORIDA generates $177 in tourism spending and $11 in new sales tax collections.

VISIT FLORIDA’s vision is to establish Florida as the No. 1 travel destination in the world.

Every 85 visitors supports one Florida job, which means a growing tourism industry equates to increasing employment and a stronger economy.

First things first, here's the bottom line: Florida developers and builders are very, very interested in what the local county will be charging in impact fees because it can be a big, big number. So what is happening in Osceola County Florida and the possible end to impact fees there is big news.

What are impact fees exactly? 

Impact fees are fees set by the county on new building - whether it's an expansion of something that already exists or whether it's a new development of custom homes, a new residential neighborhood, a shopping mall, an office building, a condo, or some other type of business structure. 

The impact fee is an amount that the county levies against whatever is being developed or built so the county can take that money and use it against the county's costs to meet the added use on county utilities, etc.  -- in other words, it's a fee to cover the added impact of the build upon the county's services.

What is happening to impact fees in Osceola County, Florida?

Osceola County has been hit hard in this Great Recession. It had one of the highest foreclosure rates in the nation.  Its tax base was slipping:  from 2011 to 2012, it fell 5.45%. 

So, Osceola's powers that be decided that one way to spur new growth in the area was to waive impact fees -- and it worked.  Osceola County saw an increase in commercial construction as a result of allowing developers to build without this cost to their bottom line.

Here is the Osceola County Impact Fee Office explanation of its commercial construction impact fee waiver (there's also one for residential construction):

OSCEOLA COUNTY IMPACT FEE WAIVER FOR COMMERCIAL CONSTRUCTION

Transportation and Fire/Rescue Impact Fees are currently waived for new commercial construction. To qualify for the commercial impact fee waiver:

Building permits need to be issued between December 13, 2010 and September 30, 2012

Initial inspection needs to be called in within 60 days of permit issuance

Certificate of Occupancy must be issued within 18 months from the date the building permit is issued

The County Manager may approve an extension of the completion date:

6 additional months for projects of 20,000 to 100,000 square feet

12 additional months for projects of more than 100,000 square feet

(Example: For a building permit issued on January 31, 2012, the C.O. would not be due until July 31, 2013, with the possibility of an extension ranging from December 31, 2013 thru July 31, 2014)

The current Building Permit Fee Waiver program will continue to be in effect on both residential and non-residential construction for permits issued by September 30, 2012.

Water and Sewer Impact Fees are assessed and collected by Toho Water Authority (TWA) and can be contacted at 407-944-5000.

Permanent Moratorium Up for a Vote

Now, Osceola is considering making that temporary waiver of impact fees into a permanent moratorium.  It's hopefully up for a vote next month. 

Expect it to pass: with a moratorium, it does not mean that the county will never have the power to assess impact fees in the future, but it does mean that builders and developers can count on the fact that for the near future, Osceola County may be a cheaper option for a project than other parts of the state that are still assessing impact fees on new growth.

It can be argued that no organization knows Florida real estate better than Florida Realtors (formerly known as the Florida Association of Realtors).  So, when Florida Realtors issues a release complete with its in-house economist giving optimistic projections about the housing industry and the banking industry to boot, then hands down this has got to be our "news release of the week."  

You can read the report referenced in the news release here.

Here from the Florida Realtors on May 4, 2012:

Florida Realtors®: Fla. 'Shadow' Inventory Easing, Growing Demand Should Absorb Supply

ORLANDO, Fla., May 4, 2012 /PRNewswire-USNewswire/ --

Fear of the unknown and what lurks in the shadows may be common, but it's greatly overrated when it comes to the "shadow inventory" of Florida's real estate market, says Florida Realtors® Chief Economist Dr. John Tuccillo.

"The fear is that the inventory of delinquent and foreclosed loans will be released onto an already weakened market," Tuccillo says, explaining the findings of a new report conducted by the Florida Industry Data and Analysis department. "But the reality appears to be different, even in Florida where distressed properties make up a significant portion of the market."

Tuccillo points out that lenders have no reason to flood the state's real estate market with more homes if doing so would drive prices down and impact the lender's profit. While some worry that lenders were holding back on purpose, Florida Realtors chief economist says that's not the case – the large number of distressed properties on hold was "largely the result of confusion over the rules of the game, and thus missteps by the lenders."

The study, "The Distressed Property Market and Shadow Inventory in Florida: Estimates and Analysis," reviewed data from Multiple Listing Service (MLS) providers around the state, along with data provided by CoreLogic, a statistical analysis company.

Tuccillo says, "We looked at the recent history of distressed property listings and transactions relative to normal market data, as well as estimates for the shadow inventory, and came to some conclusions about the likely course for the future."

Some of the study's findings include:

• While Florida remains one of the nation's hardest-hit states for distressed property sales, distressed property sales and listings have declined since late 2010, except for single-family-home short sales.
• Average prices for distressed and normal property sales have been stabilizing.
• In general, Realtors in Florida and lenders have learned how to cope with distressed properties in a way that stabilizes the market.
• Florida's highest percentage of distressed property (compared to total listings) occurs in the I-4 corridor and Southeast Florida; the lowest percentage occurs in Northwest Florida.
• Florida's shadow inventory was 550,000 units at the end of 2011, a decline of about 9 percent from its peak in the first quarter of 2010.
• Currently, the flow of new seriously delinquent (90 days or more) loans moving into the shadow inventory is offset by the roughly equal flow of distressed sales (short sales and REOs).
• The number of foreclosures and REOs was significantly lower in February of 2012 than one year earlier, suggesting slower shadow inventory growth.

Tuccillo predicts that while distressed properties will be a significant feature of the Florida real estate market over the next 10 years, it will be considered just one property type that a buyer can consider – one that has its own unique sales techniques and documentation.

The full report is available on Florida Realtors' member website, floridarealtors.org, at http://www.floridarealtors.org/Research/index.cfm; look under Research Reports, Residential, to select "The Distressed Property Market and Shadow Inventory in Florida: Estimates and Analysis."

Florida Realtors®, formerly known as the Florida Association of Realtors®, serves as the voice for real estate in Florida. It provides programs, services, continuing education, research and legislative representation to its 115,000 members in 63 boards/associations. Florida Realtors® Media Center website is available at http://media.floridarealtors.org.

SOURCE Florida Realtors

###

This week, the National Association of Home Builders is hosting its annual convention in Orlando, Florida - and a big part of that for Florida real estate professionals is its International Builders Show.  (Get all the details here on the web site).  It's heralded as the U.S.'s largest residential construction industry tradeshow.

Countries from all over the world are being represented at the International Builders Show.  In fact, you can download the International Builders Show brochure in several languages including Chinese, Arabic, Spanish, French, and Portugese (just click on the image here to go to the site for downloading in the language option of your choice). 

Good News for Florida Real Estate

And, of course, this big meeting of real estate industry professionals is making news.  And the news is good for Florida.  Already, a big story is being shared around the country and around the world about the Florida housing market gaining ground in the past year.  That's a big change from past years, right?

According to the National Association of Home Builders, around a half-dozen Florida real estate markets are seeing improvement - and it's a steady improvement that is expected to continue into the future.  No fluke here.

What markets are we talking about here?  The following six metro areas (as defined by the U.S. Census):

• Cape Coral
• Charlotte County
• Deltona
• Jacksonville
• Miami
• North Port/Brandenton/Sarasota, and
• Tampa.

What are they using to make this determination?  Data from independent sources, including not only the U.S. Census but the Bureau of Labor Statistics and FHLMC (Freddie Mac). 

And the report is food for optimism here, with findings that include a 7.3% increase in new home permits in the Miami-Dade/Broward/Palm Beach area along with an upswing in housing prices of 2.6%. 

You can read all the statistics and all the findings online here at the NAHB web site. 

If you are interested in attending this major event up in Orlando, then you're not too late: the event schedule is online and there are still open spots availalble. 

• For instance, you might want to hear Federal Reserve Chairman Ben Bernacke speak to the International Builders Show on Friday, February 10, at 12:30 EST.
• Or you might be interested in what the Finance Roundtable has to say during its discussion entitled "How to Obtain Cheap Capital for Your Development Projects," later that afternoon (at three o'clock) where foreign investor program experts will be sharing their take on "how to obtain cheap capital for your development projects."

Market reports are confirming the great amount of international interest in Florida real estate investment and development.  In the last quarter of 2011, one report reveals that Florida took the lion's share in foreign investor interest from the rest of the United States, as over one-third of all international investment queries targeted this one state.  Florida.

What is bringing so many foreign investors to Florida?  Of course our state is beautiful, with miles and miles of sandy beaches.  Of course Florida is culturally inviting: many different nationalities make their home here - especially Spanish-speaking ones.

However, one major factor may well be the proactive way that the State of Florida is working to court foreign investors and international development.  A prime example of this is the massive deregulation efforts that became effective this past summer.

I have written a short e-article that summarizes what this summer's reforms are  - and what they can mean to savvy land developers and real estate investors in an e-book available on Amazon.com.   Entitled Florida Community Planning Act and Florida Real Estate Investment: 2011 and Beyond, it is priced for easy access to everyone at $2.99 and right now, it's available to read for free to those with an Amazon Prime membership.

The book is intended to help foreign and domestic real estate investors learn more about how legal burdens have been lifted from them by the Florida Legislature and how they can benefit from this reform.  Information is provided in English and Spanish.

I invite you to read Florida Community Planning Act and Florida Real Estate Investment: 2011 and Beyond.

The Miami Herald has reviewed its coverage of South Florida business during the past year and this week, released its compliation of the Top 10 Business News Stories for South Florida.  Some we have covered here; some we haven't.  

To read the entire Miami Herald story, written by Douglas Hanks, entitled "Top business stories of 2011," go here.  

It's interesting to find that the story estimates the South Florida economy at $233 billion.  If you're interested in statistical analysis of the local economy, the monthly online reports of the Bureau of Vital Statistics is worth a look: the entirety of Florida can be considered, as well as economic segments such as the Miami-Fort Lauderdale-Pompano Beach area, where construction has consistently fallen over the past six months but in better news, we may see a break from two-digit unemployment once November 2011 numbers are tallied.  If you're wondering about the upcoming year, Kiplinger has already released its Economic Outlook.  Surprise: it's not so bright that you need your shades.  

On Florida Commercial News, the focus has been upon ForeclosureGate and its impact upon the local economy as well as the growing global interest in Florida land development and real estate investment.  Of particular interest here in Miami: the Genting contribution to our economic recovery with its Resorts World Miami.  

Locally, whether or not that casino becomes legally acceptable - and whether or not Genting's current massive development can be manipulated (read that: lessened) to accommodate the infrastructure needs of the Miami location seem to be the Big Issues for 2012.  

Genting's entry into Miami cannot be underestimated.  

While the Miami Herald compliation does a good job of summarizing what happened in business here in South Florida last year, the remaining stories (even FATCA, even ForeclosureGate) are as pale in comparison to the news of the Genting development as its proposed massive undertaking currently overshadows its surroundings in the 3D visuals.  

In many ways, particularly if the casino gambling legislation passes, 2011 may be remembered as the year that Genting came to Miami -- and with it, Miami's future as one of the world's true cosmopolitan hubs.  

Here in Miami, those involved in real estate investment and land development had one eye on Tallahassee yesterday, as the Florida Senate's Committee on Regulated Industries began its consideration of casino legislation - which means, of course, the Florida Legislature is making decisions about Miami's future and the proposed three resort-casinos to be built here, starting with Genting's Resorts World Miami.

Specifically, committee debate began yesterday - including the taking of testimony - in the drafting and approval of Florida legislation that would allow these Vegas-style resorts here in Florida. 

You can read the minutes of the meeting or watch a podcast of the entire proceeding this week over at the Florida Senate website.

While many industry experts view the three resort-casinos as economic powerhouses for Miami and South Florida, there are those that do not want the Florida Legislature to approve this land development. Look closely and you will find, as expected, that many of the opponents have vested interests in challenging the resort casinos.

It's really no big surprise that one of the loudest voices is the already-operating casino here, which would be faced with all this competition, the Seminole Tribe, and that casinos operating in Las Vegas are none too happy to hear that beautiful, sunny, oceanfront Miami might have swanky casinos to tempt visitors that might otherwise visit Vegas. 

Yesterday, testimony began where all these voices would be heard by the Committee.  Already presenting the Genting position, Colin Au, president of Resorts World Americas, one of the world's largest gaming companies.  Au explained:

• the 3 proposed Vegas-style resort casinos are expected to 100,000 permanent jobs in the Miami area;
• the 3 proposed Vegas-style resort casinos will provide 50,000 construction jobs for the Miami area;
• they will bring $10 billion to the local Miami economy; and
• it is reasonable to expect that they will draw approximately 6 million new tourists to Miami (with all their tourist dollars) each year.

Look around.  These resort-casinos are an economic game-changer for our stalled economy  - people out of work will get jobs, new businesses will be born and existing businesses will get a boost.   Do they need to be heavily regulated? Sure. Do we need to have vigorous debate to make sure that our environment is protected, that our infrastructure is adequate (or is improved so that it becomes adequate) and that the ultimate product is consistent with Miami's culture and community? Absolutely.  Should we demand from our government the continuous and strict enforcement of controls to make sure that the casino element is mimized, that tax revenues benefit the people of Florida, and that the resort is in every way both first class and complementary to our landscape? No question. 

That's what land development and real estate is all about -- building better lives for people -- and it's important that this legislation get passed.  Miami needs this. 

The Florida Supreme Court made national news as well as in Florida land development and real estate investment circles this week as it released its opinion in Koontz IV (read the full text here), ruling that it is not a "taking" by the government, for which payment must be made, when a government agency denies a development permit for private property. 

What the Koontz Fight Was All About: Developing a Small Patch of Land Near a Florida Roadway

Specifically, Florida property owner Coy Koontz asked his local Florida water management district for commercial development permits for 3.7 of acres of his 15 acre patch of land on State Road 50, near the East-West Expressway. The majority of Koontz's land tract has been classified as wetlands.

Negotiations began, and the water management district responded with a request that the property owner reduce his development plan to 1 acre, cutting back 2.7 acres off the development project, as well as turning the rest of his 15 acre tract into a conservation area, restricted by language in the deed, in return for the requested development permit. 

Not surprisingly, the property owner didn't agree with this proposal by the water management district, and litigation began.  This, with many developers wondering how the water management district could have thought any other response to their proposal would be a reasonable reaction. 

Mr.Loontz won at the Florida appeals court (read the Florida Fifth Court of Appeals decision here).  Now, the tide has changed, and the state water management district is the victor after the Fifth Court of Appeals certified the issue to the Supreme Court as a question of great public importance. 

From the Florida Supreme Court opinion (emphasis added):

Based on the above analysis, we conclude that the Fifth District in Koontz IV erroneously applied the Nollan/Dolan exactions test to the offsite mitigation proposed by St. Johns. Since St. Johns did not condition approval of the permits on Mr. Koontz dedicating any portion of his interest in real property in any way to public use, this analysis does not apply. Further, even if we were to conclude that the Nollan/Dolan test applied to non-real property exactions—which we do not— Mr. Koontz would nonetheless fail in his exactions challenge because St. Johns did not issue permits, Mr. Koontz never expended any funds towards the performance of offsite mitigation, and nothing was ever taken from Mr. Koontz. As noted by the United States Supreme Court, Nollan and Dolan were not designed to address the situation where a landowner‟s challenge is based not on excessive exactions but on a denial of development. See Del Monte Dunes, 526 U.S. at 703. Here, all that occurred was that St. Johns did not issue permits for Mr. Koontz to develop his property based on existing regulations and, therefore, an exactions analysis does not apply. See id. (“[T]he rough-proportionality test of Dolan is inapposite to a case such as this one.”).

 

What Does Koontz v. St. John's River Water Management District mean to Florida?

First, it's reversing two existing decisions, already in place as rendered by lower Florida courts, finding that this type of negotiation failure would constitute a taking worthy of compensation. 

The St. Johns River Water Management District had been ordered to compensate a land owner in Orange County for the temporary taking of his land because of permit negotiations to the tune of $376,155.00.  Now, with the Florida Supreme Court ruling, that land owner may be waiting a very long time to see a dime of that money.

According to the Florida Supreme Court, to rule otherwise would be cost-prohibitive to Florida land development:  

"Governmental entities must have the authority and flexibility to independently evaluate permit applications and negotiate a permit award that will benefit a landowner without causing undue harm to the community or the environment." 

However, the argument remains that by demanding that a property owner cut back his proposed development along with turning the rest of his track into conservation lands - or alternatively, get no development permit at all - the water management district has essentially taken that land from the land owner.  

This is how land developers and real estate investors both in Florida and in other parts of the country as well as the world will interpret this case. 

Will the case be taken to the United States Supreme Court for review?  Maybe.  Koontz has been fighting this since 1994, cost-wise it seems like a worthwhile investment at this point.  Assuming that he does so, there's still the big question:  will the United States Supreme Court agree to hear his case?  Who knows -- but it's an open issue before the High Court, so there's the chance that they might do so. 

FYI -- interestingly, Justice Polston agreed with the result, but not the reasoning: Polston believes that failure to exhaust administrative remedies before filing suit was sufficient to reverse the lower court's decision. Chief Justice Charles Canady concurred with this position.  Easy way out for the majority would have been to follow Polston's analysis and kick the case out because Koontz hadn't gone through agency channels before entering the courtroom. 

Miami-Dade County Commissioners learned a lot more about the proposed new Resorts World Miami this week, as Genting's proposed casino resort was discussed in detail at a Commissioners' meeting.  Proponents and critics alike were there to put their two cents' worth into the debate about casinos being built in Miami.  Specifically, the three resort casinos currently being proposed in Tallahassee with Genting's casino the one that has all the details all ready to go.  Genting's got a plan, Genting's already moving ahead.

Genting's Resorts World Miami Will be HUGE

Genting is sharing lots of information about its Miami project, much like a proud new mother shares photos of her baby.  Just check our their video (below).  Amazing stuff.

And, at the Commissioners' meeting this week, Genting shared:

• Resorts World Miami is estimated to cost $3.8 billion to complete
• Resorts World Miami will be bigger than any Vegas hotel or casino
• Resorts World Miami is expected to create "tens of thousands" of construction jobs in the short term and "tens of millions" of tourist dollars in the long run
• Genting will issue casino debit cards to its guests for use at restaurants, shops, etc. in the surrounding area (i.e., non-Genting establishments)
• Resorts World Miami is expected to have 5200 hotel rooms (compare this with the MGM Grand at 5044)
• Resorts World Miami plans include two casinos in two different parts of its project, one almost twice as big as the other.  8500 slot machines are included along with 50 restaurants. 
• It is targeting a higher-stakes gambler (more "whales" for Miami).
• Resorts World Miami will be the biggest casino resort in the world - if the plans are okayed by the Powers That Be. 

Bigger than Vegas?  Bigger than anything else in the world?  That's real estate development in a big way and its impact on our economy will be staggeringly positive. Now and later. 

Genting is good for Miami. 

Watch what Genting is planning here:

Florida casinos, like the one proposed for Genting's Resorts World Miami, are one step closer to reality as Florida legislators will begin consideration of a new bill designed to regulate these new Vega-like, resort-style casinos here in the Sunshine State.

It's expected that Florida House Rep. Erik Fresen (R-Miami) and Florida State Senator Ellyn Bogdanoff (R-Fort Lauderdale) will debut their joint effort in a proposal that would impose state regulation on gambling in these swank casinos in much the same way that has proven successful in places like Las Vegas and Atlantic City. 

This would include a Florida gaming commission to oversee things.  Following Nevada's example, Florida offiicials would be able to monitor the casino operations in detail worthy of a television drama - casino operators would have to understand that they would lose some privacy in exchange for being allowed to profit from gambling operations here, since the state would be able to check their bank accounts, etc., without the usual legal hurdles.

Gambling Industry Optimistic About Future, Looking to Florida

Meanwhile, industry insider Peter Amsel reported last week that the recent three-day Global Gaming Expo (G2E) found gaming industry leaders excited about the future, with a whopping 77% of those surveyed believing that 2012 would be better than 2011, and 80% thinking that their industry would "kick into a higher gear" in 2012. 

And, the eyes of the gaming industry are looking at Florida.  Specifically, there is a lot of interest not only in what Genting is accomplishing here, but what the Las Vegas Sands will be doing in Florida.

The Las Vegas Sands has been interested in Florida land development for awhile.  Stories about the Las Vegas Sands wanting to invest in Miami with a Sands resort-type casino have been part of industry chatter for a long time now.

However, as Amsel points out, the recent ruling by the First District Court of Appeals that a voter referendum is not legally required before Florida legislation can okay casino gambling in the state means that the gambling industry's fires are stoked.  

The debate now should not be whether there will be casino gambling, but what industry leaders will be developing Florida property into Florida casino resorts. 

While Miami is feeling the first few waves of the economic hurricane being built in downtown Miami by Genting, i.e., Resorts World Miami, there is more news to quiet those critics who considered this project to be a single bright light in a dark economy.  What's the latest?  Another resort by a proven resort developer will be built in Hollywood, Florida. 

On Hollywood Beach, the Jimmy Buffett / island themed Margaritaville will be built, smack dab in the middle of the Boardwalk.  Smaller, of course, than the mammoth Resorts World Miami, but still a significant spark to flame the economic fires of our fair state.

Margaritaville is reported to include a hotel (350 rooms) which will open to its first guests in January 2014.

In a news story appearing this week in the Miami Herald, business people in the area were interviewed, and alreaady there are signs that this new land development project is boosting the Hollywood economy.  With savvy foresight, over $14,000,000 was allotted a few years back to give the Broadwalk area (including the beachfront) a face lift - the community now has a new bike path and new benches as well as little parks, new art features, artistic lighting, etc.

Completed in 2010, the CRA has seen the Hollywood Broadwalk upgraded with:

• Multicolored concrete decorative pavers in the pedestrian area
• Tabby concrete bike path
• Crushed shell jogging path
• 18" high decorative wall with LED lighting
• Historically significant Tri-globe and Acorn lighting fixtures with decorative concrete pads
• Palm Tree clusters
• Re-location of showers and the addition of ADA accessible shower
• New public restrooms

The organization that has funded this face lift, Hollywood’s Community Redevelopment Agency, is now offering $1 million to local land owners if they want to join in the campaign and do mini-lifts to their businesses.  The Herald interviewed the proprietors of Billy’s Stone Crabs and the owner of Blue Sky Apartments about their renovations as part of the CRA incentives.

Now, Hollywood's progressive attitude toward land development appears to have reaped its rewards, as the Margaritaville resort hits the local economy.  Perhaps it is not as grand as Resorts World Miami, but it is an excellent example of how Florida real estate development will play a key role in Florida's statewide economy recovery. 

Genting Malaysia has closed many of its land deals and debuted its plan for Resorts World Miami, a new $3 billion mega-resort located in downtown Miami (part of it in the old Miami Herald building, part in the Omni) with news that it's moving fast:  Genting developers see doors opening as soon as next year for the hotels, condos, restaurants and other amenities. 

We're already posted about Resorts World Miami and what it means to Miami.  It offers a unique opportunity for South Florida's renewal, and signals economic recovery - even a new prosperity for our community. 

After all, Genting won't be a development in a vacuum: other symbiotic and even parasitic developments will be popping up around Resorts World Miami.  That's a given.  (To check out the details surrounding Resorts World Miami, check out Genting's new website on the planned development.)

So, it's no surprise that some would be concerned at all this fierce activity.  Lots of things will be happening now, and fast.

Miami Powers that Be are justifiably concerned about how Genting's new economic bombshell - as well as the expected additional developments  - will work with what is already here: particularly, the cultural arts facilities that exist in the area.  So much so that the non-profit entity The Town Square Neighborhood Development Corporation is now focusing its efforts on working out the infrastructure kinks (traffic, parking, etc.) that Genting's bringing to the party.  Adrienne Arsht Center's Michael Eidson and Parker Thomson are involved here, along with developer Armando Codina and architect Cesar Pelli.  

Cautiously, and rightfully so, they're turning a watchful eye on Resorts World Miami. Their hope: another Lincoln Center, but this one in Miami not NYC. 

It's too bad that some in Miami haven't been so gracious to Genting.

Others are not so welcoming.  Luther Campbell in the Miami New Times comes right out and challenges the new development in an opinion piece entitled, "Genting casino will kill Miami and Miami Beach." Campbell argues that Genting will keep its visitors on Genting property - that tourists who come will be lured to stay (and spend) only on Genting property, and that Miami Beach and other nearby restaurants and attractions will not only not benefit, but also suffer by having their tourist base drawn to the Genting project. He also argues that the jobs Genting brings are all low paying service jobs, because the casinos will be operated by experienced employees Genting imports from other states, with experience running gambling tables.

 It just does not make sense. A project like Genting's will bring all kinds of jobs - from construction jobs, to development jobs, to service jobs, to jobs for those who will run the hotels, restaurants, and retail establishments.  There is, by the way, no downside to bringing lots of service jobs to Florida - we need the jobs.  Plus, it is hard to believe that tourists who come to Genting won't also be drawn to our beaches, to the Everglades, and to the many nearby attractions that make Miami a world class city. We are all likely to benefit.

The Miami Herald published a piece on Tuesday by Michael Putney, "Genting deals winning hand for Miami," where, after researching the specifics of the deal and Genting's background, including that of its CEO, Mr.. K.T. Lim,  Putney ultimately supports the project (even though there are some comparisons in the article to con men and Ponzi scammers like Scott Rothstein and David Paul).

What brought trust to Putney?  First, that Genting has already invested so many hundreds of millions of dollars here already, just to buy land.  (The Miami Herald spot for $236 million, for example.) Second, that Genting's been hiring locally, getting Floridians to do their work here - Putney points out that  Arquitectonica is doing sculptural design.

Third, Genting's got a track record of success with this sort of thing.  Resorts World Miami isn't Genting's first rodeo.  They've got successful examples of similar types of developments all over the world. 

Is It Wise to Already Be Biting the Investor's Hand That Is Feeding Our Economic Recovery?

Genting is well aware that it may be single-handedly instituting a local recovery here and still, its plans and behavior have been gracious and considerate of local interests.

Billions of dollars are coming into Miami.  Now.  Infrastructure concerns?  Of course.  Water, electricity, traffic, roads, parking.  Wow - lots of work.  And work means jobs.  Jobs.  Right now, as well as later.

Once again, the national news media is spotlighting what is happening here in the South Florida real estate market; however, it's not more coverage about robosigning or mortgage fraud.  Instead, another world-renown, national news source is discussing foreign investment in Florida real property - just as the New York Times did earlier this year. 

Things are being sold here in Florida daily - it's just to a new type of real estate buyer.

Fortune magazine took notice of the international investor interest in South Florida real estate this month in an article entitled, "For foreigners, the American Dream is very much alive," written by reporter Nin-Hai Tseng.  (Ms. Tseng should know:  prior to being a writer/reporter for Fortune, she covered the development and land-use policy beat at the Orlando Sentinel.)

Written for Fortune and published online at CNNMoney.com, the story spreads the word about something that those of us here in the Miami-Dade metroplex already know all too well:  there is continued global interest in Florida real estate, both residential and commercial, because foreign investors have money to spend and know a good deal when they see one.

Bottom line, we need these foreign investors and their savvy is helping our economy survive as we find our way back to a full recovery.

According to the Fortune article, citing Trulia research, approximately 20% of all residential real estate sales in Florida last year were to foreign buyers.  They are paying in cash for the most part, and they are buying these Florida properties not only as vacation homes but as income-producing rental properties. 

Foreign Real Estate Investment in South Florida is Important to Our Economy Now

Taking these properties off the sales market as well as infusing our local economy with cash -- these are both good things.  Foreign investors are not the cavalry, coming in to save the Florida economy; however, they are helping us much more than many realize.  Much more. 

To the extent that more news coverage advances this story, bringing more and more attention to foreign investors of the opportunities that exist for them in South Florida today, the better.  Perhaps more media outlets will follow the lead of the New York Times and Fortune Magazine - getting this word out is a good thing. 

Brazil's investment in Florida, particularly South Florida, is growing, exploding really, and every Brazilian investor in real estate here in Florida is most welcome - particularly as we combat the Great Recession.

So it may be shocking for many to realize that while the Florida state government is taking major steps to welcome foreign investors here - Washington is lagging far behind particularly when it comes to easing the access of Brazilians to Florida and elsewhere in the United States.

Brazil is still excluded from the Visa Waiver Program

The Visa Waiver Program allows citizens from 36 different countries to travel to the United States for tourism or business for up to three months (90 days) without having to go through the time-consuming and expensive process of getting a U.S. visa.  The Visa Waiver Program was created to encourage travel from these 36 countries by both business folk and tourists in these nations. (For a list of the 36 countries included in the VWP, see the list at the end of this post.)

Today, Brazil remains excluded from this federal program, although (as reported by Time Magazine last month) Brazil currently enjoys the reputation of being the largest economy in all of Latin America.  Time quotes the head of the U.S. Travel Association as opining at a California conference that concerns over homeland security since 9-11 have meant that a lot of economic opportunity has been lost -- to the tune of over $600 billion dollars lost in the past decade, and almost half a million jobs. 

According to Time's sources, if Brazil and Chile were both included in the VWP now, the USA would see twice the number of visitors from those two Latin American countries in just this next year, bringing with them $10.3 billion in new tourism revenue and fostering the creation of almost 100,000 new American jobs.

Ten billion dollars in one year coming into the United States sounds smart and easy enough to do, right? 

Council on Foreign Relations Task Force Recommendations Include Brazil in VWP

As Forbes Magazine reported a couple of weeks back, over at the Council on Foreign Relations (CFR) an independent task force has just issued a press release with its recommendations regarding Brazil - US relations, reporting that “to understand Brazil as a complex international actor whose influence on the defining global issues of the day is only likely to increase,” and it is in the best interests of the United States both economically and politically to build a closer relationship with this growing Latin America powerhouse.  (Read the full press release from the CFR here.)

Among the CFR Task Force recommendations: expediting the inclusion of Brazil into the Visa Waiver Program.

Congressional Action Needed

There have been rumors of a bill making its way through the House and/or Senate to fix this problem, placing Brazil into the Visa Waiver Program.  Congress isn't rushing.

Maybe Congress needs to rethink this.  And maybe business interests in South Florida that are interested in helping visitors, tourists, and investors from Brazil come to Florida as easily as those from Italy, Japan, or New Zealand - without the time and expense Brazilians now face - should write their Congressional representatives and Senators to let them know that Brazil's inclusion in the Visa Waiver Program should be made a priority. 

You can find the email and phone numbers for both Florida Senators and the various Florida Representatives online at govtrack.us.

Continue Reading

In an article written by Gil Shlomo for The Jerusalem Post this week, entitled "Israelis are No. 2 foreign buyers of real estate in US," a recent study was discussed which reveals that Israel is second only to Canada in buying income-producing real estate here in the United States.  According to the Globes' study, Israeli investors spent $1.2 billion last year purchasing American real estate investments.

What are Israeli interests buying here in the U.S.? 

Office towers are the most popular investment, followed by shopping centers; however, a lot of this foreign investment from Israel is going into residential investments - both single family dwellings that are for sale as well as larger rental projects.  One example that the Jerusalem Post uses in its article is the January 2011 purchase of 21 Miami condos for $8.6 million by Optibase Ltd. / Optibase Real Estate Miami LLC from Leviev Boymelgreen Marquis Developers LLC.

While the majority of the Israeli investment in residential properties was reported to be in Manhattan, those Israeli dollars not going into residential investment in NYC were going into residential properties in South Florida.

We should expect more Israeli investment here in South Florida.

South Florida has longstanding ties to Israel, and there are several organizations here in South Florida that promote and encourage Israeli investment in Miami and South Florida.  These include:

• The Florida-Israel Business Forum

• Israel America Chamber of Commerce
• Enterprise Florida

It's already happening.

Within the last month, Dizengoff Group, an Israeli-based trading and real estate investment company, issued a press release to announce the relocation of its U.S. operations to a larger office space in Boca Corporate Plaza - a move necessitated by its continued growth. From the Dizengoff Group release:

Dizengoff held an open house on June 16 to dedicate its new office and thank all of its colleagues and business associates who have become part of their U.S. activity. More than 100 business partners, friends and associates attended as well as company executives from the corporate office in Israel: President/CEO Menashe Zelicha, Shlomo Cohen, Vice President and Sassi Zelicha, a company Director.

Dizengoff Group established a U.S. presence two years ago to invest in income producing properties in Florida. To date, the company has invested $85 million mostly in quality anchored retail centers and bulk condominium deals. At this time, Dizengoff is mainly targeting acquisitions of retail centers and bulk condos in garden style and mid-rise developments.

Another example, Israel's PC Townhomes, LLC, purchase of the Palm Club Apartments, a 160 unit townhome community in Lake Worth, for $7.8 million. From the broker's press release:

CBRE’s Multi-Housing Group in South Florida, marketed Palm Club for sale on behalf of a court-appointed receiver. Commenting on the purchaser, CBRE’s Richard Tarquinio points to an increase in foreign capital. “Nearly one-third of the 49 transactions our team negotiated since 2009 have been completed with a foreign buyer,” said Tarquinio. “Overseas capital is actively searching the South Florida multifamily market.”

Osceola County, Florida, is an urban community which many may recognize as being in the Orlando/Kissimmee area.  In 2006, it was the 17th fastest growing county in the United States according to the U.S. Census Bureau. 

Of course, all that productive growth has been hard hit by the Great Recession.  Now, with the new drive among state and local governments to fuel real estate investment and land development throughout Florida, examples of concrete financial incentives, such as waiving impact fees, are starting to appear - not a moment too soon given the current economic environment we're facing. 

Osceola County Commission Waives Impact Fees

Yesterday, at its regular Monday afternoon meeting (watch the online video of the proceedings here), the Osceola County Commission approved a moratorium on it collection of any (1) road impact fees; (2) park impact fees; or (3) fire impact fees from now through next February (02/01/2012).  

What does this mean to Florida real estate investors and land developers?  The Osceola County Commission will save builders around $6,500 per unit, a welcome and needed boost in this bad economy.

Full Text of Osceola County Commission Ordinance No. 11-18, Passed July 11, 2011

Here is the complete, full text ordinance passed yesterday in the regular meeting of the Osceola County Commission:

ORDINANCE NO. 11-18

AN ORDINANCE OF THE OSCEOLA COUNTY BOARD OF COUNTY COMMISSIONERS ESTABLISHING A MORATORIUM ON THE COLLECTION OF ROAD IMPACT FEES, FIRE RESCUE IMPACT FEES AND PARK IMPACT FEES; PROVIDING FOR CONFLICTS; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE.

BE IT ORDAINED BY THE BOARD OF COUNTY COMMISSIONERS OF OSCEOLA COUNTY, FLORIDA:

SECTION 1. LEGISLATIVE FINDINGS. It is hereby ascertained, determined and declared that:

Continue Reading

Mortgage fraud is a national problem that's getting more and more rampant in our area, according to  Interthinx, a company that periodically releases its research analysis of national fraud numbers.

Its warnings are particularly dire for the Miami area, where South Florida's ranking 2nd in the country for mortgage fraud risk in 2011.  Last year, that ranking was 20, making South Florida the only area in the country with a significant increase in mortgage fraud. 

You can read the Interthinx Mortgage Fraud Risk Report for the first quarter of 2011 here (downloadable pdf format).

The report is dealing with housing scams, and the study focuses upon a review of mortgage applications provided by cooperating lenders.  Interthink scans the applications for red flags that suggest something is not quite right in an application, using its internally devised system of mortgage fraud indicators.  The report itself measures (1) overall fraud as well as four subsets:  (a) property valuation fraud; (b) identity theft; (3) occupancy fraud; and (4) falsified income reports. 

Our local area is number 1 in all these rankings, except for the falsified income report frauds.

When considering occupancy fraud, identity fraud, and property valuation fraud, things may need to be clarified.  In many cases, fraud is very much what we think it is - scam artists falsifying documents, hiding relevant information, and wrecking havock with the lending community.  There are, however, instances where the fraud is to some extent more benevolent (though fraud nonetheless).  In these cases (and this happens often in South Florida), the "fraud" is really an attempt by family members to help eachother out, in transactions where individuals close on homes that become theirs, with mortgages that are kept current. 

It is true that mortgage fraud in this area is rampant.  There are con artists taking advantage of buyers from foreign countries as well as other parts of the country (in addition to Floridians), and general mortgage fraud that fits into the category of classic white collar crime - falsifying information, hinding information, and creating deals for short term transactional profit - at the expense of others and of our economy at large. It's good to make everyone aware of these scams.

However, this new Fraud Report provides numbers that also incorporate family members that are trying to help loved ones stay in their homes, however fraudulent their actions may be.  These instances do not reflect a danger to the investing public at large, and potential buyers and investors should not be swayed by the Fraud Danger that is being discussed as being overwhelming here in South Florida.

There may be a lot of hinky mortgage applications in South Florida right now; however, in our Great Recession there are lots of applications that are disingenuous as family members try and help each other out. 

These fathers and brothers and sisters and cousins are not a danger to the incoming investor, and that should be considered when pondering the impact of this new Fraud Report.

Brazil has discovered Florida, which is not news to the Latin American community here in South Florida but is a story newsworthy enough to be covered by the national media in a June 21, 2011, Bloomberg article entitled, "Brazilians Buy Condos at Bargain Prices." 

According to this news story, Brazilians are in a fantastic position to take advantage of the low Florida real estate market, because of two main reasons.  First, Brazil's currency (the real) has skyrocketed up 45% against the U.S. dollar in the past three years and second, Brazil's real estate prices are high in comparison to what we offer here in Florida.

Along with Mexicans and Venezuelans, Brazilians are flocking to the Miami metroplex to buy condominiums, in particular.   The story quotes Craig Studnicky, president of International Sales Group, in reporting that around 50% of Miami's downtown condos have been sold to foreign buyers, many for over half a million dollars. 

You will remember Mr. Studnicky from our post last week: his ISG group has just joined forces with the "Condo King" Jorge Perez to build several condominium projects in the Miami area that are being targeted to Latin America, and with Latin American financing, which is very different for the American financing model.  For details, see "Latin American Investors Targeted by Miami's "Condo King" Jorge Perez and His Related Group: 4+ New Condo Projects With Intl Sales Group."

Bloomberg predicts Brazil's interest in South Florida to explode, given how powerful its currency is here - Brazilians can buy a lot more here in the United States than back a home - and the Brazilian economy is growing (4.2% in 2010). 

Brazilial investors and others from Latin America have a shared culture - with similar traditions, religion and outlook.  Though there is a difference in language - the national language of Brazil is Portuguese -  this is unlikely to create an impediment.  Many Brazilians are multi-lingual.  They speak English or Spanish (or both) and are extremely comfortable navigating in Florida's real estate and investment communities.  Savvy, smart Brazilian looking at great investment opportuniites here in South Florida are contributing a great deal to our economy, and benefitting from it.

With ink barely dry on the Community Planning Act, savvy foreign investors are flocking to Florida and its real estate investment opportunities.  In the same month that Resort World Miami was announced by Malaysian investors, Condo King Jorge Perez and his well-known firm, The Related Group, revealed their new partnership with International Sales Group, helmed by Philip Spiegelman and Craig Studnicky. 

Jorge Perez Knows Real Estate, Florida, and Latin America

You may remember Jorge Perez: in 2005, TIME magazine him one of the 25 most influential Hispanics in the United States; in 2007, Forbes magazine named him one of the 400 Richest Americans, and in past years, his Related Group was routinely named as one of the largest Hispanic-owned businesses in the USA, although current economic factors have found Related Group no longer on that list in 2010.

The new partnership between the real estate developer and the international brokerage will operate under the name "Related ISG" and their efforts are targeting the South Florida condo market for interested buyers in Mexico, Central America, and South America.

First, they will be promoting a Hollywood, Florida, condo project at Apogee Beach (ground breaking set for early 2012) where condominium homes in the 22 story oceanfront building will be marketed primarily to Latin American buyers.  

That's right: Florida is getting an influx of cash from foreign sources, as we've been predicting for awhile now.

Condo King's Dedication to Bringing Latin American Clients Into South Florida Real Estate Gets National Attention

The Wall Street Journal considers Related's financial package to be "unconventional" because it will ask buyers to pay over 80% of their condo's building expense during construction - lots more cash that Americans are used to considering, even at a 20% down payment.  

Related's proposal? Buyers must provide 20% down payment; 20% when building commences, and another 40% during the construction process.   That's right: by the time the new owners move into their new home, they've only got 20% left to pay before they own the condo outright.

However, this is "unconventional" only to American ears.  In other countries, this isn't a bizarre request at all.   Most Latin American real estate is sold in this staggered payment system; Related's targeted foreign buyers are not going to find the proposal "unconventional' in the slightest. 

Already, More Future Related Condo Projects Slated for South Florida and Latin American Buyers

Related has already bought the land and released its plans for four condo projects in the Miami area, using the same financial strategy and marketing the same Latin American buyers:

1. A small condo building with around 250 units to be constructed next to Related's 500 Brickell project and called "My Brickell;"

2. A condo project designed by Mexico's renowned architect Enrique Norton in the same area as My Brickell, this with 300+ units;

3. A 400+ unit waterfront condo in Midtown Miami; and

4. The above-described Apogee Beach condominium project in Hollywood, Florida.

Prediction: More and More Foreign Investment Comes to Florida Real Estate Developers

Jorge Perez is just one of many business savvy folk who are seeing opportunity in the crisis Florida faces in this current recession.  With the current Florida lawmakers and their goals of making Florida more business-friendly, as evidenced by the recent Growth Management Reforms, Latin American investors will be finding great opportunities here in South Florida, a beautiful and cosmopolitan locale with a shared heritage, language, art, religion, and culture.

Jorge Perez is one of the pioneers leading the way. 

Today, hundreds of new laws are effective here in Florida having been signed into law by Florida Governor Rick Scott, demonstrating a controversial and concrete attempt by Florida lawmakers to resolve the state’s current economic crisis and promote a turnaround. 

This was done with the state bringing in $3,800,000,000.00 less in revenue than it had the previous year (yes, that is $3.8 billion); without raising taxes; and without closing hospitals, schools, or cutting back on health care. 

From the Florida Senate News Release of May 31, 2011:

• State spending cut by over $3 billion
• Not one penny of taxes or fees were increased
• Over $300 million in tax reductions benefited property owners and small businesses. Medicaid, the biggest cost in the state budget, was reformed with a billion dollars in savings. Highly effective teachers will be paid more, chronically ineffective teachers will lose tenure
• Florida state workers, like those in 49 other states, will contribute to their own retirement, ending a practice of taxpayers subsidizing 100 percent of public pensions.
• Expanded educational benefits for children with disabilities
• Second Amendment rights protected against local government interference
• Public funds won’t be used for elective abortions
• Golden parachutes and phony bonuses prohibited for public employees
• “Smart Cap” prohibiting state taxing and spending from rising faster than family income
• 1,100 regulations on small businesses eliminated

From the 2011 Legislative Session Report released by the Florida Senate on May 31, 2011, here are the laws passed from Florida Senate bills into law that impact Florida real estate and/or Florida land development. This, of course, does not include legislation originating in the Florida House that became law this week

(Go here for the complete Florida Senate press release and full list of Florida Senate bills that became law.)

Oil Spill Economic Recovery Act

(passed as SB 2156)

This major legislation is designed to help coastal Northwest Florida recover from the economic consequences of the Deepwater Horizon Oil Spill.  The bill provides that three fourths of all fine and settlement monies paid by B P or other responsible parties coming to the State of Florida would be used to benefit Escambia, Santa Rosa, Okaloosa, Walton, B ay, Gulf, Franklin and Wakulla counties.

The legislation also provides a preference for Northwest Florida in the use of state economic development programs and tax incentives for the next three years.  The bill calls for a multi-state cooperative agreement among Gulf states to monitor industry safety practices and influence federal policies regarding offshore oil and gas exploration and includes a $30 million appropriation to help expand and attract businesses, create jobs and diversify the region’s economy.

Elimination of Government Agencies, More Jobs in the Private Sector

(passed as SB 2156 and HB 143)

As Chairman of the Senate Appropriations Committee with jurisdiction over transportation, tourism, trade and economic development, Senator Gaetz championed legislation to eliminate the Florida Department of Community Affairs, eliminate the Agency for Workforce Innovation, and eliminate the Office of Tourism, Trade and Economic Development.

This bill achieves $8.6 million in recurring savings by eliminating job-killing functions of the Department of Community Affairs and overlapping unnecessary functions of other state government agencies.  The legislation turns over more authority and responsibility for planning to local governments and simplifies permitting for businesses and individuals.

A streamlined Department of Economic Opportunity will be a one-stop for businesses and local EDCs seeking state support for job creation activities.  The current protracted and complicated approval process is vastly simplified with the Governor given more latitude to approve projects and attract new businesses.

Under this legislation, the state is doing more to encourage private sector job creation.  To promote tourism, VISIT FLORIDA funding is increased from $26,647,961 to $34,899,209.  The Quick Action Closing Fund, used to close deals to bring higher paying jobs to Florida, is increased from $16 million to $42 million.  Commercialization of public research – or bringing university-level research to market with products that can be made in Florida – is funded at $10 million, up from $2 million.  Funding in the amount of $5 million is provided to promote our state’s military bases and the hundreds of thousands of jobs linked to the bases. The state’s ports will be improved with a $117 million appropriation, including widening the Port of Miami to accept larger ships following the expansion of the Panama Canal.  Overall, the economic development, trade, tourism and transportation budget is increased from $6.1 billion to $6.7 billion.

Support for Military and Veterans

(passed as HB 1141, HB 95, and HB 227)

Florida-based military members deployed in war zones don’t have to pay property taxes during the months they are deployed.  Families of members of the military killed in action and families of law enforcement and firefighters who died in the line of duty are given free lifetime entrance passes to Florida parks.  Uniformed military and overseas voters are permitted to use a federal write-in ballot to ensure that all military votes are counted in all elections.

Constitutional Amendments

The only way the state constitution can be amended is if 60 percent of the voters agree.  Constitutional amendments may be proposed either by petition or by a super majority vote of the Legislature, but in either case, voters at the next general election must approve any changes.

This session, among others, four proposed constitutional amendments will be on the November, 2012, general election ballot:

1.       Cap on Taxing and Spending (passed as SJR 958) Called “Smart Cap,” this proposal would limit revenues collected by state government to only the amount collected the previous year, plus an annual adjustment based on a combination of population growth and inflation.  This provision would stop legislators from using inflated revenues in good times to expand government and spend more.

2.       Health Care Freedom (passed as HJR 1) This provision protects Florida citizens from the “Obama-Care” federal mandate to purchase health coverage dictated by the federal government.

3.       Cap on Non-Homestead Property Taxes, Elimination of “Recapture Rule” (passed as HJR 381) This proposal would prohibit local governments from increasing property taxes by more than 5 percent per year on non-homestead property.  Current law limits non-homestead tax increases to 10 percent per year. The constitutional provision also allows the Legislature to prohibit increases in the assessed value of homestead and non-homestead property if the just value of the property decreases.  This would in effect repeal the controversial “recapture rule.”

4.       Disabled Veterans Property Tax Discount (passed as SJR 592) SJR 592 would grant partially or totally disabled veterans an enhanced property tax exemption on their homesteads.

Of note: Special Budget Provision/Septic Tanks

Provision placed within the new budget laws that protects December 2010 moratorium on the unpopular septic tank mandate objected by so many Florida property owners.  During the regular session of the Legislature, Senator Evers, with Senator Gaetz’s support, then sponsored SB 168, which would have permanently repealed the mandate.  Unfortunately, Senator Evers was unable to pass his bill.  Therefore, Senator Gaetz placed in SB 2002, the state budget, a provision which prohibits the Department of Health from implementing the mandate – in other words, the moratorium continues.

For those of us with longstanding ties to Mexico (I was born there), the story that appeared in Wednesday's Miami Herald was not big news; however, the fact that there are a growing number of investors in Mexico, Central America, and Latin America that are interested in investing large sums of money in Florida - particularly South Florida - may be a big surprise to some Floridians.

(You can read the May 25, 2011 story entitled "Mexican investors see Miami as safe haven for their money" and written by Alfonso Chardy of the Miami Herald online for free.)

East Coast Opportunity (ECO) Opens Offices in Miami

Given, it is news that three men from Mexico are doing business over in the Latitude Building (in the Brickell district) as executives of the East Coast Opportunity Group.  Mario Alonso, Emilio Braun Burillo and Iñaki Negrete helm the Miami Office; their company LinkedIn page (still being built) has Kelly P. as their office manager for almost a year now.  

ECO will be working with Mexican investors (and other foreign investors) to find and buy real estate properties that they believe to be good deals with the ability to turn a nice profit for them.  They'll sell some, they'll rent some. 

Mexico Has Seen Florida As An Investment Opportunity For Some Time

Mexican capital has been flowing into Florida in search of good real estate investment opportunities for some time now.  Back in January 2011, for example, the South Florida Business Journal covered the saving of the 396 Alhambra Circle renovation in Coral Gables by Grupo JB, a division of Agave Group of Mexico. 

Seems that it was only because the Mexican investors were able to infuse the $130 million project with funds that the development of the office tower (and garage) gained sufficient financing to be completed.

Agave Group may ring familiar to Florida real estate readers: Grupo JB, via its Agave Acquistions, bought significant office space (17 office condos) in the SBS Tower on Bayshore Drive in Coconut Grove last year. 

Ties Between Florida and Mexico are Growing

The Miami Herald story focuses upon ECO as being part of a growing trend of American businesses seeking to help Mexican investors find properties here in the United States; however, the Herald's article discusses the motivation as being Mexico businessmen seeking to escape growing violence at home.

Is this true?

Maybe the truth is that Florida real estate is at Clearance Sale Prices

The reality may well be that savvy Mexico investors (remember this is the homeland of Carlos Slim) see Florida as a place where great real estate bargains await - given our bad economy and no light at the end of the tunnel (yet).

Another contributing factor that is bringing Mexican business into Florida: ease of doing business.  Florida, and especially the Miami area, is well connected to Mexico and all of Latin America. 

• Families share ties in Florida and Mexico (mine do). 
• Businesses in Miami speak Spanish and English (e.g., both my paralegal and I are fluent in Spanish).
• Local communities, especially in South Florida, provide Latin American visitors with touches of home, from restaurants serving recipes originating in Mexico, etc., to stores that provide Mexican products for visitors who prefer their brands from home

Florida's Growth Management Laws are a series of statutes passed during times of a booming Florida economy, designed to control growth within Florida communities including protecting the environment and discouraging urban sprawl.  They include:

1. Environmental Land and Water Management Act of 1972 (Florida Statutes 380.012 -380.07)
2. Florida Water Resources Act of 1972 (Florida Statutes 373)
3. Florida State Comprehensive Planning Act of 1972 (Florida Statutes 186.001)
4. Local Government Comprehensive Planning Act of 1975 (amended in Florida Statutes 163.3161)
5. State and Regional Planning Act of 1984 (Florida Statutes 23.01-.015,160.002-.076 - now appearing as 186.001 et seq. )
6. Local Government Comprehensive Planning and Land Development Act of 1985 (Florida Statutes 163.3161)
   

Changing Times, Changing Laws: The Florida Growth Management Laws Are Overhauled

The Florida Legislature ended its 2011 legislative session this month by passing big changes to these longstanding growth management laws in a dedicated effort to free land developers throughout the State of Florida from burdensome statutory requirements.

The real estate industry - developers, investors, lenders, and the like - welcomed these changes.  Environmentalists did not.  Many of the conservationists in Florida and across the country fear that the 2011 overhaul to the Florida Growth Management Laws will doom species and habitats, such as the vulnerable Florida wetlands. 

What has the Overhaul of the Florida Growth Management Laws Really Done?

The changes are designed to spur economic development in a state sorely in need of it.  Florida needs land development for all that it brings with it:  an infusion of revenue, an increase of jobs. 

Land development will bring short term and long term economic growth to Florida.  This isn't something that anyone is disputing. 

Problem was that there isn't that much land development happening in Florida these days.  We're in a slump (and that may be an optimistic description).  How to turn this around? 

From the perspective in Tallahassee, this is done both by repealing regulations that placed monetary burdens on land developers as well as removing state involvement in community decisions, moving those resolutions to the local government.  For example, the doors to the Florida Department of Community Affairs have been closed, and developers are no longer mandated by the state to build parks, roadways, or schools whenever they plan and build a new development. 

New laws were passed just as old laws were being amended or abolished during this overhaul.  These included freeing land developers trying to get water permits.  A new law (HB 993) removes the requirement that developers prove to the Powers That Be that their proposed project would not harm the environment, lessening their costs, and instead places the burden of proving there will be harm on anyone challenging the project. 

Will the local communities just pass the same measures for their jurisdictions?  No.  Under the new laws, local Powers That Be will not be allowed to mimic previous regulations that were established at the state level.  Counties and municipalities cannot, for example, set impact fees on commercial development until 2013.  

This is not the end of efforts to encourage and promote Florida land development.  However, what has happened this month with the Florida Growth Managment Laws' overhaul is a great beginning.  These efforts are not just important to land developers, they are critical to moving the Florida economy forward.

In yesterday's Sun Sentinel, Michael Mayo's column covers the latest developments in the growth management bills pending before the Florida Legislature, suggesting that one new law (HB 7129/ SB1122) should be labelled the "Build, Baby, Build Act" and not the officially proposed title of the "Community Planning Act." 

The "Build, Baby, Build Act" Likely Will Become Law Soon. 

We've been monitoring the path of HB 7129/SB 1122 through the Florida lawmaking process. For details, including links to read the proposed language and following their status, read our earlier post. 

News coverage of the proposed legislation is also getting lots of column inches.  It's a big deal, and lots of its opponents are very vocal, and very adept at getting their voices heard.

Mr. Mayo's criticism of the "Build, Baby, Build Act" warns that its passage may return our Sunshine State to "... our development Dark Ages, " which he and others have defined as life in Florida prior to the passage of the 1985 Growth Management Act.  He quotes one activist as predicting that this new law, if enacted, will flush conservation in our state down the toilet, leaving land developers to run amok -- presumably intent upon destroying every bit of natural beauty they can find.

Beware of Doomsday Predictions

Perhaps Florida doesn't have the luxury right now of pondering the "what ifs" because of what is staring us in the face today.  These doomsday predictions are simply that: predictions, suggestions, worries, fears. 

The truth is that this legislation is being considered as part and parcel of the Florida lawmakers' focus on the Florida budget.  It's all about money and the cruel reality that Florida doesn't have any -- and that for the many Americans, our economy is dealing with a depression (yes, depression; not recession - see the latest Gallup poll).

It's a difficult time and action is needed to get us out of this mess.  These laws aren't being discussed, drafted, and passed because anyone is desperate to destroy anything.  These laws are being created because we've got to get moving in order to stop the economic destruction we've already experienced.

Build, Baby, Build?  Yes.  You betcha. 

Today, lots of things are happening in the news that will have a big impact on Florida real estate. Big things, with consequences both short term and long term.  Consider the following:

1. Possible Shutdown of the Federal Government on Friday, April 8, 2011

FloridaRealtors.org has published a list of how the potential shutdown of the federal government tomorrow may impact the Florida real estate market.  From their information, for example:

• Federal Housing Administration (FHA)  -- FHA will not make new loans, but it will continue basic operations regarding paying claims and collecting premiums, as well as running its REO portfolio.
• Internal Revenue Service (IRS) -- The IRS will stop all refunds as well as working on income tax returns. 

Secretary of the Department of Housing and Urban Development, Shaun Donovan, told Congress today that the shutdown would essentially force lenders to stop making home loans if the FHA is put on hold tomorrow. 

This is bad news for Florida, where we need every home loan made as soon as possible. Florida banks do not need another hit right now, they are in enough of a crisis-mode already. 

2.  Commercial Leasing - Blockbuster Sold on Auction Block to DISH Network

Blockbuster video stores were very popular across the country at one time; now, they are empty spaces with "for rent" signs replacing the movie posters on their front windows.  On the auction block, Blockbuster, Inc. was purchased today by DISH Network, which reports it will fill some of those empty spaces with its own product, selling DISH systems from storefronts.  Meanwhile, commercial leasing looks to rumors like those coming out of Memphis, where companies like Chipotle Mexican Grill and Five Guys Burgers are considering leasing out the old Blockbuster sites. 

That's good news for Florida commercial leasing, if it's true and it pans out. Commercial leasing in Florida today already has a lot of prime locations to show prospective lessees -- the idea that national chains are interested in filling those Blockbuster spots is good for us. 

3.  Trulia Report Reveals Millions Lost to Miami Economy as Home Prices Plummet

In a report released today by Trulia, it seems that Miami homeowners are growing so desparate to sell their homes that they have dropped their sales price by 11% in the past year, which totals to a tremendous amount of money taken out of the real estate market in just the Miami-Dade area.  The 11% price cut was the second-highest slash in the country, according to the Truvia statistics: only Detriot sellers cut more, coming in at 19%.  Bad news for us. 

It goes without saying that this money is now lost to the Florida economy - permanently.  No one expects these home prices to rebound before they sell, and it's only the shortsighted that don't consider that the money leaving the buyer's pocket enters the seller's, where it will be invested and spent - which helps Florida's economy. 

Florida commercial real estate already awaits the final tally on how much the real estate market will be impacted by proposed deregulation of professionals such as surveyors, landscape architects, and the like.  However, that isn't the only jab to the Florida commercial real estate market by the state government these days. 

Florida commercial leasing is being hit by disappearing government leases - the State of Florida isn't the trustworthy tenant that it used to be, office-space wise.

The new Powers that Be in Tallahassee are all about cutting back on state government - as we've been following with the massive deregulation bill (HB5055) in the past few weeks.  That proposed law would end lots of regulatory efforts by the State of Florida, meaning less state tax dollars would be needed to fund state oversight.  (Read more about it here.)

However, in today's bad economy, the State of Florida has been slashing agency budgets across the state by reducing its office lease rents -- which may look good for the state's budget-balancing monthly accounting, but which is far from good news for those leasing companies and owners of leaseholds who are now facing lots and lots of empty, unprofitable office space.

The Wall Street Journal, in an article by Anton Troianovski entitled "Government Cuts Clip Office Market," reports that already Florida's statewide total of leased office space has declined by five percent (5%) and it's predicted by industry experts that approximately half a million (500,000) of leased square feet will be lost in 2011 as the State of Florida vacates its current leaseholds. 

That is a lot of empty offices in an economy that's already reeling from business declines.

Moreover, this doesn't appear to be the only whammy that the Florida commercial real estate industry will have to survive - and attempt to thrive in spite of its impact.  Those holding leases with the State of Florida may not be secure in those profit projections: the Florida Tax Watch, for example, is calling for existing leases held by the State of Florida to be reviewed and renegotiated.  

Last week's post about the Florida Legislature considering massive deregulation as a budgetary strategy resulted in lots of discussion and commenting - and rather than respond to each item individually, we're providing the following information so anyone with a strong opinion on this issue can give that opinion where it counts: to their representatives in the Florida Legislature itself.

To get the email or phone number or mailing address of your representatives in the Florida Senate and the Florida House of Representatives, go here and input either your zip code or your mailing address. 

The Florida Deregulation Bill Moves Forward - Track it as HB 5055

In our earlier post, the bill was gaining momentum in the House but it was still in subcommittee.  Now, it's official over 300 pages and it's HB 5055, which you track online at the government website. 

On Friday, it moved to the Economic Affairs Committee of the Florida House. You may also want to contact those serving on the Florida Economic Affairs Committee.   

Read the text of this proposed law here.  Here is the summary of what this bill intends to do, according to the Florida House (the official description of the proposed law):

Deregulation of Professions and Occupations: Deletes provisions establishing DBPR's Division of Florida Condominiums, Timeshares, & Mobile Homes, Florida Board of Auctioneers, Board of Employee Leasing Companies, Board of Landscape Architecture, Board of Professional Geologists, & Board of Professional Surveyors & Mappers, Motor Vehicle Repair Advisory Council, & Regulatory Council of Community Association Managers; deletes provisions for regulation of yacht & ship brokers, auctioneers, talent agencies, community association managers, athlete agents, employee leasing companies, home inspectors, mold assessors & remediators, professional surveyors & mappers, persons practicing hair braiding, hair wrapping, or body wrapping, interior designers, landscape architects, professional geologists, professional fundraising consultants & solicitors, water vending machines & operators, health studios, ballroom dance studios, commercial telephone sellers & salespersons, movers & moving brokers, certain outdoor theaters, certain business opportunities, motor vehicle repair shops, sellers of travel, contracts with sales representatives involving commissions, & television picture tubes; revises name & membership of Board of Architecture; revises license classifications of public lodging establishments; deletes DBPR's authority to enforce & ensure compliance of certain provisions relating to condominiums, cooperatives, vacation plans & timeshares, & mobile homes.

Of importance, since this bill is considered to be budgetary in nature it will not need to follow the more well known path of substantive legislation - which means it can get passed a lot faster than the substantive proposals. 

If you want to have your opinion heard by the Powers that Be, then speak now, speak soon -- the proposed effective date of this bill is July 1, 2011. 

This afternoon at six o'clock, Florida Governor Rick Scott will deliver his State of the State address from Tallahassee. You can watch it online via The Florida Channel (www.thefloridachannel.org). 

The Country is Watching Florida Governor Rick Scott

The eyes of the nation will be watching today's address, as well as lots of Floridians concerned about the current business and economic climate.  Rick Scott is well known for having put $73,000,000 of his own money into his victorious election campaign as part of his stance that he was taking on the job of governor not as a politician but as a businessman. 

The New York Times points to this cornerstone of Governor Scott's current position on many economic proposals in a piece entitled "Florida Republicans Are at Odds With Their Leader,"  and one of their big examples of how the Governor is being criticized for failing to understand the distinctions between how a for-profit corporation is run and how a state government operates is his thumbs-down to the bullet train proposal.

The Los Angeles Times is also covering this story, providing their readers with reporting from Aaron Deslatte of the Orlando Sentinel that "Scott, legislators ready to begin contentious 60-day session."  Here, the focus is on Scott's promise to bring 700,000 jobs over the next 7 years to the State of Florida as well as the huge number of folk predicted to show up today to voice their support or their opposition to what the Governor is wanting to do in order to achieve his goals.

Among them:  David Koch's Americans for Prosperity, which is reported to be footing the bill to have activists travel to Florida and rally around Governor Scott's nixing of the the high-speed rail line bullet train between Orlando and Tampa. 

So, is there still a chance for the Bullet Train/High Speed Rail Line Here in Florida?

If there are a bunch of activists showing up to rally around the issue of the Florida High Speed Rail Line, then some might argue that the issue isn't dead in the water yet.  And that's because it's not.

Yesterday, it was reported in the media that Secretary of the Department of Transportation Roy LaHood extended his deadline by another week for Florida to take the money.  (Yes, even though as the Hawaii Reporter points out, Governor Scott has turned it down TWICE.) 

However, other news reports are stating that LaHood has already accepted Florida's refusal and is opting to fund the Fresno alternative, sending the money over to California. 

Apparently, after the Florida Supreme Court ruled last Friday that the state's governor did have the legal right to decline the offer of federal monies for the rail system, LaHood worked with Florida Sen. Bill Nelson to have a regional rail authority in central Florida compete with California and the other states interested in the Bullet Train Money for the federal funds. 

Curious by its absence, there is no official news release on this issue at the Department of Transportation website. There is, in comparison, a recent release on federal funding of a Washington high speed rail line. 

So, is there still hope for the Bullet Train here in Florida?  Maybe so.  Those who believe that this influx of funds would help spark land development here are keeping their fingers crossed.

Land Developers in South Florida must work with numerous authorities within the State of Florida as they move from conception to completion of a wide variety of projects.  For ready reference, here is a link list of those Florida agencies most often involved in land development issues:

1. Agriculture and Consumer Services
2. Department of Community Affairs
3. Department of Environmental Protection
4. Department of Housing and Community Development
5. Department of State
6. Department of Transportation
7. Fish and Wildlife Conservation Commission
8. South Florida Regional Planning Council
9. South Florida Water Management District
10. Southwest Florida Water Management District
11. St. Johns River Water Management District

Right now, there's lots of chatter in investment circles (see yesterday's Fortune magazine coverage for details) about St. Joe Company, a well-known Florida real estate developer, since news is that there will be a fruit basket turnover of the St. Joe board of directors. 

The board meeting takes place today.

What will be proposed is Bruce Berkowitz taking on the mantle of Chairman of the Board; Charles Fernandez (Berkowitz's partner) becoming Vice-chairman; and new blood coming to the St. Joe board in the form of Carnival's Howard Frank (its COO) and Florida Fish and Wildlife Conservation Commission's Chairman Rodney Barreto.

That's right: in a move that might (or might not) appease the character Clinton Tyree, aka Skink, in Florida bestselling author Carl Hiessen's series of books, the head of the environmental agency is being offered a spot on the real estate development company's board, just as St. Joe's Billy Buzzett (its former head of strategic planning) is now working for our new governor as the head of Florida's Department of Community Affairs. 

News of this possible change (leaked over the weekend, apparently) has already upped the cost of St. Joe stock 11%, and one can assume that the price will go higher after the vote.  Bezinga is predicting more of a jump ("St. Joe Poised to Go Higher").

St. Joe Company isn't the biggest land development in Florida.  St. Joe Company isn't the only developer with an awareness of conservation.  However, St. Joe Company is important to Florida for its impact upon the real estate industry - and having the national eye upon it and stock voting confidence in its future with this leadership change bodes well for our economic future.

Let's see what happens.

There are lots of news stories dealing with issues concerning those of us working with commercial and residential real estate matters, however the internet also offers us the opportunity to learn how to interpret the events as they happen. 

It's one thing to read about the latest ForeclosureGate scandal; it's another to ponder its impact upon the Miami economy and particularly, things like commercial leasing; land development; construction; franchises; real estate finance, etc.  Some great, free online resources for this type of analysis are:

1. Property Profs Blog - a blog giving a professorial perspective on current real property and contract issues written by D. Benjamin Barros, Associate Professor of Law at Widener University School of Law and having as contributing editors Alfred L. Brophy, Reef C. Ivey II Professor of Law at the University of North Carolina School of Law; Stephen Clowney, Assistant Professor of Law at the University of Kentucky College of Law; Mark A. Edwards, Associate Professor of Law at William Mitchell College of Law; and Tanya D. Marsh, Assistant Professor at Wake Forest Law School.

2.  The Bigger Pockets Real Estate Blog - edited by Joshua Dorkin, founder of Bigger Pockets, and with 18 regular contributors from a variety of real estate niches, this site provides daily input on a variety of issues that impact the residential and commercial real estate markets in an easy to read format and from a street-smart viewpoint.

3.  Calculated Risk - described by Time Magazine as " ...among the most thoughtful and thorough financial commentary on the internet. Period," this six-year old blog is written by Bill McBride, a retired senior executive from an unnamed corporation with MBA from the University of California, Irvine. Highly respected, this blog covers a number of finance topics, but does have a dependable focus on real estate topics.

4. The Wall Street Journal offers several good reads, including its Deal Journal (discussing various big events where "money changes hands") and its Law Blog (discussing, well - law and lawyers).

5. Heard Along the Coast published by the South Florida Business Journal and offering commentary by editor Kevin Gale, reporter Paul Brinkmann, and web editor Susan R. Miller on a variety of news stories that impact our local community. 

This week, the Miami Herald reported on the increasing popularity of rental properties in the South Florida area.  Apparently, several recent independent real estate studies agree that the rental properties are so popular that their rents are rising (especially for the fancier units) and with an occupancy rate of 95% going into 2010, renting in South Florida will be even more popular in 2011. 

Meanwhile, these same real estate forecasters are looking overseas for the investment funds necessary to revive the South Florida real estate market.  In fact, Florida property is being actively marketed in other countries by such powerhouses as Stirling Sotheby's International Realty as "undervalued" and therefore, a great investment opportunity.  Sotheby's International even promotes "Worldwide Auction Realty Services" on its home page. 

Leases, Sales - Real Estate Transactions Will Be More Complex Now, Legally and Factually

Combine all this information, and from a legal perspective it's not hard to predict that we will be seeing foreign buyers coming into Florida's jurisdiction not only to buy property under state real estate and contract law - but many will likely rent out those investment homes and condos, at least a part of the time.  That means Florida's landlord and tenant law will also come into play.

However with foreign ownership, federal law that deals with United States citizens dealing with foreign nationals will also impact every single one of these transactions - and the foreign nation's laws might apply to the deals, too.  Treaties might be involved, for example. 

Add to that the fact that property managers, tenants, real estate agents, and others involved in these transactions are going to be communicating in many languages other than English -- inviting foreign investors means folk who speak their native tongue which may well be any number of Asian dialects as well as German, Italian, French, Spanish, etc.

Miami is already known as an international city (for example, we have more international banks than any other metropolitan area in the US), but we may not have seen anything yet - and all because of a depressed real estate market.  

Today, RealtyTrac issued its report on 2010 foreclosures across the United States, with a record-breaking one million (1,000,000) foreclosures last year and with experts predicting a 20% increase in foreclosures next year.  More than half of these foreclosures happened in Florida along with four other states (Arizona, California, Illinois, and Michigan). 

Which means that banks have a lot of homes on their books right now, and here in Florida, financial institutions are expecting to have a whole lot more.  RealtyTrac predicts that banks across the country could hold over 6 million properties on their balance sheets by 2013. 

That's a lot of property for businesses who are not in the real estate business. 

Banks (and other mortgage institutions) are in the money business.  They are not set up to hold real property - which not only isn't producing income for them (unlike their loans, for example) but which brings with it various costs of upkeep. 

As we all know, even the most self-sufficient condo needs to have periodic maintenance.  Repairs will be needed, too, periodically.  A frozen pipe bursts, for example.  Banks here in Florida should be very interested sellers.

For real estate bargain hunters, these new foreclosure predictions may be good news.

Which means lots of savvy investors - both here and from countries all over the world - are checking into real estate deals here in Florida.  Several businesses have already popped up to fill this need, including foreclosure.com (helping with government foreclosures); and real estate brokers like Orlando's IPG Real Estate (targeting potential buyers of bank-owned properties in the Orlando area).

These deals may be complicated.  Foreign buyers have special needs.  There may also be ForeclosureGate issues regarding clear title and other legal concerns. 

However, the news of record foreclosures is not bad news for everyone.  For many buyers, this is simply advertisement for some great future sales. 

It the first week of Florida's new governor Rick Scott being in office he's making news already -- and this includes his appointment of Billy Buzzett as secretary of the Department of Community Affairs. 

Check out Buzzett's background on his LinkedIn page and you'll find that after getting his law degree back in the 1980s, Billy Buzzett has been involved in Florida real estate development for many years - and currently serves as the vice-president of strategic planning for the St. Joe Company. 

Good background for the man who will now be Florida's new Big Kahuna of land planning. 

St. Joe Company, currently the state's second largest private landowner, has a long history here in Florida, going back to the 1930s.  Built on the foresight of Edward Ball, brother in law of Alfred I. duPont, the company is known for pulling part of the state out of the Great Depression with employment at its Port St. Joe Paper Mill and having ecological challenges afterward from the paper mill's impact on the surrounding ecosystem. 

Today, its efforts focus on four areas of real estate development:  residential, commercial, rural, and forestry.  Explore the company website, and you can find all sorts of related, diverse development interests -- things that have all sorts of commercial complexities that Buzzett will bring with him in his new job.  Accordingly, Buzzett is bringing a developer's mind to state government. 

Buzzett's appointment is good news for Florida - especially in this economic climate.  We're all the better for it. 

Yesterday, Garrison Keillor lovingly acknowledged the 1947 dedication of Florida's Everglades National Park by President Truman in his Writer's Almanac - including a brief history of the Everglades themselves, and the many atttempts to capture its rich beauty, including those by naturalist Archie Carr, author Peter Matthiessen, and Florida's own Zora Neale Hurston, who wrote this in Their Eyes Were Watching God (1937):  

"To Janie's strange eyes, everything in the Everglades was big and new. Big Lake Okechobee, big beans, big cane, big weeds, big everything. Weeds that did well to grow waist high up the state were eight and often ten feet tall down there. Ground so rich that everything went wild. Volunteer cane just taking the place. Dirt roads so rich and black that a half mile of it would have fertilized a Kansas wheat field. Wild cane on either side of the road hiding the rest of the world. People wild too."

The Florida Everglades are well known to Floridians, in no small part due to the fights that have gone on for decades over who gets to use and control the rich wetlands: years before the Civil War (in 1858), there were already legal battles over building the canals necessary for drainage and land development. 

Today, over half of the Florida Everglades has been adapted for human use: we're using it for agricultural purposes, or as urban areas.  The fight continues over that other half, and there doesn't seem to be an end in sight: the juxtaposition of land development against the interests of conservationists over best use of the Everglades guarantees courtroom battles for years to come.  For example:

The United States Supreme Court just declined writ on November 29, 2010, in a case where the petitioners sought High Court review of the federal Clean Water Act's impact on the question of whether water managers can pump water from a canal into a lake without a permit in Friends of the Everglades v. South Florida Water Management District (10-196). 

And, as we discussed in an earlier post, the Florida Supreme Court just announced its ruling in the well-publicized U.S. Sugar litigation, allowing the use of bonds by the South Florida Water Management District in the government's land purchase.

Development vs Conservation: What Does the Future Hold?  Consider the Tamiami Trail

Just last year, the American Recovery and Reinvestment Act of 2009 provided almost a billion dollars ($96 million) toward restoration of the Everglades.  Part of this legislation will result in a bridge to substitute for the Tamiami Trail, a road running alongside the northern border of the Everglades National Park which has been controversial since the Tamiami Trail blocks water from getting to the south. 

The road itself connects Tampa with Miami, and is the last 275 miles of roadway along U.S. Interstate 41. Famous among Floridians and tourists alike, the Tamiami Trail is its own tourist mecca; for example, it is featured in Fodor's Travel Guide.  What happens when the bridge replaces the road? Who knows - and who knows if we won't be seeing future litigation on the impact here, brought either by conservationists or developers whose interests are harmed by this change.

Meanwhile, construction of the mile long bridge has already begun.  In 2010, the State of Florida proposed an additional 5+ miles of bridges be added to the Tamiami Trail.   

Meawhile: Happy Anniversary, Everglades National Park.