Loading...
HomeMy WebLinkAboutR-93-0382J --93 -406 6/3/93 dWOUUMMORIffif • a • { ' ? 1 ;al• • i1 • • • •,• { • ' ••• { • II{ • ',• !!' • WHEREAS, the City of Miami Downtown Development Authority passed Resolution No. 13/93 , on April. 29, 1993, requesting that the City Camni.ssion authorize the use of the Community Development Float Program to establish a Business Incentive Program for Downtown Miami; and WHEREAS, the City Commission supports the efforts of the Downtown Development Authority in the development of a Business Incentive Program for Downtown Miami to retain existing businesses and attract new business,; and WHEREAS, the City Commission now wishes to authorize the use of the Community Development Float Program to establish a Corm ni.ty Development Float Loan Program for the Downtown Community Development Target Area to be used for renovation/retrofitting space for office use; • >«+• ar • • :c • al. a �w w / !•; Iy{ •� •111111111 111411111111111• us • r Section 1. The recitals and fixdixigs oontain+ed in the Preamble to this Resolution are hereby adopted by reference thereto and incorporated herein as if fully set forth in this Section. CITY co!t IISSION MEETU G O I J U N ?. 9 1993 1'9 3��I,�t�� -- Seat on 2. The City Mam,�er is hereby t33.re<Itr-Tl to A-,�tri,bl_i.sh a, Community Development Block Grant Float lron Program for the Downtown Coainm ni.ty Developmnt Target Area ( "Program") for purposes of renovation/retrofittJ,-g space for office Use. Section 3. The City Manager is hereby authorized to issue a Request For Proposals to inform potential applicants of the availability of and invite their participation in said Progran. Section 4. This resolution sba1..1 become effective immediately upon its adoption. PASSED AND ADOPTED this 2 9 th MATI'Y HIRAI CITY C1= ...� DID . • •JZ WN z I Ixt-C • day of Jun 1993. XAVIER. . SUA0EZ, MAYOR -2- 93- 382 ;T ! 1 }Jt - ? }_! F- Py 1 t P T? Ka f 1 Z ery t7 T �• Fir"r; NY tflf Alit • � t t t -� C0MMUNITY DEVELOPMENT FLOAT LOAN PROGRAM 1. INTRODUCTION The City of Miami is seeking qualified applicants and proposals for its Community Development (CD) Float Loan Frogram. This Request For Proposals (RFP) is being issued by the City of Miami as per City Commission Resolution No. 93 passed on (See Attached). Upon evaluation of proposals by the Department of Community Development, recommendations will be presented to the City Commission for final approval, II. PURPOSE AND INTENT The Purpose and Intent of the CP Float Loan Program is to provide a low cast source of funds, as a business incentive, for renovation/retrofitting existing space within the Downtown CD Target Area for office use. Said funds shall be provided as per the requirements of the Community Development Block Grant (CDBG) program (benefiting low and moderate tncone residente or clitaination of slum and blight). Applicants for said funds shall be tenants and/or office buildings. Applicants shall be required to comply with all federal CDBG rules and regulations. Creation of new jobs shall be given highest priority and consideration in the evaluation of proposals. All loans shall be required to be secured by an irrevocable and unconditional Letter of Credit insured by a local bank. Letter should have a forty-eight (48) hour sell provision. Submitted into the public III. SUBMISSION OF PROPOSALS reCClrd 3"? lfh Interested parties shall be required to s}�?it followl for uvisluationt A. Name of Propoeer/potential Loan Recipient B. Proposers Office Location(a) and Address(s) 1-L; :fy Hirai C. Proposers Background and Description of Company City Clerk D. Proposers Personnel/Minority Participation Information 93- 382 ..-. I 77 77 ra t1 s ca 111 f'+ REQUEST FOR PROPOSALS CD float Loan Program pago 2 Cierk 1. Summary Description of Proposers Intended Une for Loan F. Address/Location of Proposed Project C. Summary of Estimated Impacts of Proposers Intended Use of Loan (Permanent and Full Time Jobs, Economic Public Benefit and the Like) It. Implementation Program, Detailed Plane of Improvements and Cost Estimates I. Financial Background of Proposer to Document Proposer'o Financial Capability to Undertake improvements and Ability to Repay Float Loan J. Letter of Interest from Rank Issuing Letter of Credit IV. EVALUATION All proposers shall make, at their expense, a presentation to the Department of Community Development upon determination that the Proposal Submission pre -qualifies proposer as applicable for a CD Float Loan as per the requirements of the CDBO Program. Proposers shall be evaluated according to the requirements of the CDBC program and the Items submitted for evaluation in Section IIl., A.-J. of this RFP. Proposers shall also be evaluated for compliance with all other rcquiremente of this RFP including, but not limited to, Section VII. SUPPLEMENTAL. CONDITIONS. V. SUBMISSION,RIQUIREMENTS Proposals shall be submitted to the Department of Community Development, Suite 420, Dupont Plaza Center, 300 Biscayne Boulevard Way, Miami, Florida 33131. Proposals shall be submitted according to the following format and conditions. A. Proposals shall be submitted in 8 1/2 x 11 format. l4. One (1) original plus, six (6) copies of the proposal *hall be submitted in a sealed envelope. C. Across the center of the envelope the words "RUQUEST FOR PROPOSALS -CD FLOAT LOAN PROGRAM" shall appear. D. The City of Miami Department of Community Development reserves the right to accept or reject any, or all, proposals not submitted according to the above stipulations. 93-- 38 _.T 1,.0 V$ _.._ n __. 17� 7 7. 11 �. F= pgQURST FOR PROPOSALS CD Plos.t Loan Program page 3 YI. SUPPLEMENTAL CONDITIONS r1 r f-� r7 I 4'?1T�1T'3`iliic�t_ /;i(3 Al id? '�1i1 r- _ P? i"P(7f-)T"f1 iT1 V111("'()T1 1) item T- .tii:'y H!rC City Clerk A. The City of Miami may, at its discretion, reject any and ell, or parts of any and all, proposals; re -advertise this RFPI postpone or cancel, at any time, this RF? procesai or waive any as a resulte8ofinthisthis RFP- or Nonconditionalproposal proposalspackages received shall as a accepted. B. The determination of the criteria and process whereby proposals are evaluated, the decision as to vhom shall receive a loin, whether or shall be at the loan soleshall and absolutemade discretion result Of this RFP of the , City of Miami. C. In the event that the City of Miami cannot negotiate a loan with the proposer, or said proposer does not meet the requirements of the City of Mia,Mi and the Department of Community Development within 30 days of its selection, the City of Miami shall give notice to said proposer of its intention to not grant the subject loan, or if it so chooses, call for the submission of new proposal packages. D. the submission of a proposal package shall be taken as prime facie evidence that the proposer has familiarized itself with the contents of this RFP and with these terms And conditions, in particular. E. The failure or omission by sny proposer to receive or examine this RFP shall in no way relieve the proposer of any obligation with respect to its submission, or any term or condition of this RFP. V. either the proposer or the City of Miami nay terminate the process prior to final loan approval with or without cause After giving fifteon (15) days prior written notice to the other Party- G. Under the Florida Public Records Act and the Florida 118unshine Laws"s materials submitted by a proposer and the results of the City of Miami's evsluation are open to public e of this as I It inspection. Proposers should take Apecial not that might be included in relates to any proprietary their proposal package. N. Proposers agree that there will be no discrimination se to race, sex, religion, age, handicaps, color, creed, or notional origin with regard to obligations, work and services performed under the terms of any loan ensuing from this RFP. 93- 382 REQUEST FOR. PROPOSALS CD Float Loan ProgrAr page 4 :3171- i-liffo( itl#o) fl)- J)iii>iif: }lnC,llol item 14.citty I:tir(< City C.IIerk 1. Proposers agree to comply with gxecutive Order No. 11246 entitled "Equal Rmployment Opportunity" as amended by gxecutive Order No. 11375, its supplemented by the Department of Labor Regulations (41CFR, Part 60) And the City of Miami, Affirmative Action Ordinance. J. Successful proposers shall be required to indennify and save harmless, the City of Miami, from any and all claims, liability, losses and esuses of action which may arise out of the fulfillment of the ensuing loan. K. The proposer shall pay any and all claims and losses of any nature whatever in connection therewith, and shall defend all 'Butte, in the name of the City of Miami when applicable, and shall pay all costa and judgments which May ensue there from, except those caused by.the sole negligence of the City of Miami; officers and employees. 1.. 140 proposal packages shall be accepted from, nor will any loan be awarded to, any proposer who has defaulted on any previous loan or who has a bad credit history of repayment. H. The successful proposer shall comply with all lava, ordinances and regulations applicable to actions contemplated. N. Proposers are presumed to be familiar with all federal, state and local laws, ordinances, cods rules and regulations that may in any way affect the loan and actions contemplated. 0. The successful proposer shall furnish to the City of Miami, Certificates of Insurance, subject to review and approval by the City of Miami Insurance Coordinator, which must be in effect at the time of loan award and remain in effect during the proposed period for the following minimum amounts, 1) Workers Compensation for all employees of the Proposer, as required by Florida Statute 440. 2) Public Liability Insurance (the City of Miami shall be named as additional insured with respect to this coverage)3 Bodily Injury Insurance of $1,000,000 for each occurrence and up to the amount of the loan general aggregate; Property Damage Liability of $1,000,000 for each occurrence and $1,000,000 aggregates and Personal Injury Coverage of 01.000.000 combined single limit and $1,000,000 aggregate. 93- 382 T' D r� rj T r� 11 7 REQUEST FOR pROFUSALS CD Elost )loan l'xogram page 5 iTl�rli"l�' n i it �teTin . ..... ..... M---- IJ Ci.tY file uCance {updated and o 3) Automobile Liability Intn' In the amount of $1,OOQ,©QQ with the City of ltian+i) combined single limit for bodily injury and property damage. oser ahull not enter into contracts. p. The successful prop transfer, convoy, subcontracts, retain Co pose or adSign, or any of its sublet, or otherwise die of the ensuing loan, title or interest herein, or its power to execute to any right, orr,ti.on without prior written consent of persons company or Corp the City of Miami The proposer must complete and Submit Sri Affidavit Attesting to t South proposer's business Activities and xnveetmhnts proposer must Africa. An authorised rPpro€antativabuainesae activities or idontify whether the proposer has licable and investments in South Africa, must list these if gpp agree to terminate these interests by not leter than one week a8 Failure to prior to the date of the proposal subsiesiopro oenl package complete and submit the Affidavit may render the p p non -responsive.. shall be in compliance with th R. The Successful Proposer ulatione and shall not applicable Conflict of Interest Reg of Miami until such the City in BatoWhd to negotiate a loan with in fact. time as o is determined that said proposer is, compliance. 93•- 382 INTER-OFFIC-F MFM1 0RAtJD1.fM The Honorab le. riavor inn JtI�,11 1 1 +J 6 W ,1 7° Hembers of the City Commission �'°r` 1�1 ROY Ces d i o C i t pager Recommendation :nF CD float Loan Program Downtown Business Incentive Program REFERENCES For June 17, 1993 FWA-QSURFS City Commission Meeting It is respectfully requested that the City Commission adopt the attached Resolution establishing a Community Development Float Loan Program to fund a Business Incentive Program for the Downtown Miami Community Development Target Area under the requirements of the Community Development Block Grant Program (benefiting low and moderate income residents). Background The Downtown Development Authority and the Greater Miami Chamber of Commerce New World Center Group cosponsored a study by Behavioral Science Research to investigate "Factors Influencing Choice of Office Locations" and patterns of business relocation Downtown and throughout Dade County. The Study was undertaken to ascertain what factors businesses consider when making their business location decisions. The DDA is concerned about Downtown Office vacancies. This concern is reflected in the impact the vacancy factor has had on the Downtown tax base, and will continue to have, unless positive action is taken to retain existing and attract new businesses to Downtown. The key issue from the study, for the Downtown CBD and Brickell areas, is the attraction of new businesses and retaining them once they have located there. The CBD and Brickell do as well at attracting new business from outside Dade County as any other business community; better than Coral Gables but not as good as the Airport area. The Downtown area also draws more businesses from other areas of Dade County; which indicates a clear potential for business attraction. However, the potential for business loss is great. Study data indicates that the CBD and Brickell areas have a higher than average number of office leases coming up for renegotiation over the next 2-3 years and only about a 70% chance of retaining them. This potential for significant tenant loss is a major concern. s�- 3�� 33-[ Thp Honnr,�hie iiayor and }}embers of the City Commi ss lon pa ge 2 The DDA 's goal. is to keep its Downtown business community healthy and growing; to retain i.ts present tenants and to attract new ones. To this end, the DDA is requesting that the City Commission establish a Community Development Float Loan Program to fund a Business Incentive Loan Program for the Downtown CD Target Area (See Attached DDA Resolution). It is also requested that the City Commission authorize the Department of Community Development to issue a Request For Proposals to notify Downtown Businesses and office Buildings of the availability of the Program. The Loan Program would entail the following: 1) C i t Y set aside of CD Float Loan Funds for renovation/retrofitting existing space in the Downtown CD Target Area for office use. 4) loans. City would advertise availability of these -I w interest 3) Applicant would be tenants or office buildings. 4) Applicai:ts would be required to comply with all CD rules and regulations. S) Creation of new jobs would be given highest priority and consideration. 6) Creation of mechanism for loan extensions for 3-5 years if funding availability exists. 7) All loans would be required to be secured by a Letter of Credit. It is respectfully requested that the City Commission adopt the attached Resolution to support efforts directed towards retaining Downtown's existing businesses and attracting new business; thereby ensur-.; continued economic growth and expansion of the tax base. CHO/MDSjjt encl °� 93-- 382 El RESOLUTION NO. 13 /93 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE DOWNTOWN DEVELOPMENT AUTHORITY OF THE CITY OF MIAMI, FLORIDA REQUESTING THAT THE MIAMI CITY COMMISSION AUTHORIZE THE USE OF THE COMMUNITY DEVELOPMENT FLOAT PROGRAM TO FUND A BUSINESS INCFNTIVE PROGRAM FOR DOWNTOWN MIAMI AND TO SET ASIDE A PORTION OF SAID FUNDS FOR SAID PURPOSE. WHEREAS, the Board of Directors of the Downtown Development Authority is concerned with the fact that there is currently 3 million square feet of vacant office space in Downtown Miami; and WHEREAS, the Board of Directors of the Downtown Development Authority is aware that this factor is causing a decline in the Assessed Valuation of Downtown properties and a decline in the overall tax base; and WHEREAS, the Board of Directors of the Downtown Development Authority wishes to establish a Business Incentive Program utilizing the Community Development Float Program to attract additional business to Downtown Miami. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE DOWNTOWN DEVELOPMENT AUTHORITY OF THE CITY OF MIAMI, FLORIDA: Section 1. The Board of Directors of the Downtown Development Authority requests that the Miami City- Commission authorize the use of the Community Development Float Program for a Business Incentive Program for Downtown Miami and to set aside a portion of said funds to be used for said program. 93- 3%%2 n 1993 PASSED AND ADOPTED tlii-s (I victor DeYurre c Mayor hair -man Ma[Ahew D. Schwartz Ex/ec. ut ive Director ATTEST: Linda E. Wolf Secretary to, the Boar 9 -2- 93- 382 w l W C�7 0 ®o®mo® WAIINNE FIVAh�® ►fAwmh� BEHAVIORAL In SCIENCE S RESEARCH Intelligent Solutions • Guaranteed Quality FACTORS INFLUENCING CHOICE OF OFFICE LOCATIONS PATTERNS OF BUSINESS RELOCATION DOWNTOWN AND THROUGHOUT DADE COUNTY May 11, 1993 Robert A. Ladner, PhD Behavioral Science Research Corporation conducted in conjunction with THE DOWNTOWN DEVELOPMENT AUTHORITY and THE GREATER MIAMI CHAMBER OF COMMERCE NEW WORLD CENTER GROUP (305) 443-2000 ' (800) 282-2771 2121 PONCE DF LFON ROI 11 FVARD m CORAL CABLES, FLORIDA 33134 ■ FAY: (305) 448-6825 0 E i . 111 ell Ilia li'I 1 111' 11 ' I 1 p111 �'111 '11 'II I I rt'111 1p 111'! 1 1111 11 J!a11'r I1II I I '111"fJ r�y yam`' i� TABLE OF CONTENTS 1. OUTLINE OF THE STUDY page 1 2. DISTRIBUTION OF BUSINESS TYPES, EMPLOYEE MIXES AND SIZE page 3 3. DYNAMICS OF OFFICE RELOCATION page 6 4. DYNAMICS OF BUSINESS COMMUNITY CHOICE page 11 5. BARRIERS TO RELOCATING DOWNTOWN page 14 6. SUMMARY AND IMPLICATIONS page 17 �a�� Oriy.,����11�C�`I'��'i�`�('bir �.��, �'"�''I°'���'°PIS III Il'il91il r�i "'. ��'T"Il l' 11u1i'p''iMIIiYNIf°!il�f�lli'��r�IiU��.,.11C�ip�l�9�p'�� 1. OUTLINE OF THE STUDY This research is a study of the factors influencing the choice of office location for businesses locating in the Downtown Miami CBD and elsewhere throughout Dade Count"",1 conducted by Behavioral Science Research for the Downtown Development Authority and New World Center Group of the Greater Miami Chamber of Commerce. The study was designed to address several critical issues: + What "business communities" in Dade County are experiencing than greatest activity in business relocations? How much of this activity is upsizing of an existing businesses base within these communities, and how much is accounted for by new business influx or intra-county migration? * Which communities show the greatest influx of businesses from out of town? Which communities are the most attractive to businesses already located in Dade? * Which communities appear to have the greatest loyalty among existing businesses? What are the factors that appear to make them most desirable? + What are the dynamics of business relocation in Dade County? How recent are these relocations? What is the likelihood of additional relocations over the next several years? Which business communities are likely to show the greatest activity? + What are the strengths and weaknesses of the Downtown Miami business W is DYNAMICS OF OFFICE INFLUX AND RELOCATION May 11, 19931 3 BEHAVIORAL SCIENCE RESEARCH Pagje ,1 III: Ilf"f""I11ITIJ+�rii'i �fI TiI'1' i�Yiii ryo �qql qi„�Il�gr, community?' How is it perceived by the businesses who are located there? How is it perceived by businesses in the suburbs? + What must the Downtown Development Authority do to strengthen the appeal of the Downtown CBD to businesses? Should the appeal be directed toward businesses entering the Dade County business community for the first time? toward businesses in other communities in Dade? or toward the existing business base? + Where do the companies located downtown and elsewhere throughout Dade County obtain their business? Where is the real hub of international business in Miami? Ij These issues were addressed in a survey of office -based businesses throughout Dade County, designed by Behavioral Science Research Corporation and conducted in Ie period from January through April, 1993. The first stage consisted of a self-administered survey sent to about 2,800 non -retail businesses who were members of the Downtown Development Authority or the Greater Miami '::amber of Commerce. About 300 were returned. The self-administered survey was followed by personal executive interviews with the heads of 50 top businesses in Dade County, half conducted among businesses in the downtown area and half conducted among businesses located throughout the balance of the County. The interviews were conducted by volunteer executives in the New world Center Group of the Greater Miami Chamber of Commerce, and asked essentially the same questions as were contained in the self-administered s.Lvey. The executive interviews, however, allowed greater probing and clarification of important issues. All data were collected and analyzed to ensure the confidentiality of the survey participants. 1. In this report, "Downtown Miami" is referred to as "Downtown CBD" in order to distinguish it from the Brickell Avenue downtown business district. Although both communities are, strictly speaking, part of "downtown Miami," the business mixes of the two areas are unique and there are clear differences in the way the two sub -communities are perceived. I DYNAMICS OF OFFICE INFLUX AND RELOCATION May 0c, BEHAVIORAL SCIENCE RESEARCH page i1: ���-i�+,�.�•-_..�,_,, 2s DISTRIBUTION OF BUSINESS TYPES, EMPLOYEE MIXES AND SIZE JTABLE 3) Table 1 shows the distribution of businesses in the respondent sample, subdivided according to the business community where the respondents' offices are located. Across the County, the bulk of the firms responding to the survey were law firms (211 of tl total), miscellaneous service and consulting companies (19%) and banking/finance (111). + Companies in the Downtown CBD account for 26% of the total universe of survey respondents. The offices are dominated by law firms, accounting for almost 60% of the respondents (vs. 21% overall), and by finance and banking (16%). + Brickell Avenue companies account for 9% of the office marketplace, predominantly in the areas of banking and finance (27%, vs. 11% overall), and in real estate companies (21%, vs. 7% overall).`' + Coral Gables companies account for about 14% of the survey respondents, and show a broader mix of companies than either Brickell or the downtown CBD. The banking and finance percentage is within normal limits (13%), law firms are under -represented (10%) and construction and health care - related companies are over -represented. + Airport and Airport West office areas show a strong preponderance of miscellaneous service companies, consultancies and support companies affiliated with the airport. 2. The reader is cautioned that these percentages should be interpreted cautious',, especially when they are based on the smaller sample sizes yielded for some of t i business communities. W 00 DYNAMICS OF OFFICE INFLUX AND RELOCATION Z14 BEHAVIORAL SCIENCE RESEARCH may 11, 1993 page :3 e .,I,• ,,rl.„I i` Ili" i,y �� rlI llll" I"1 �Ili� II I i I I+ 11711 I r I II I l f l tl I I I CI t l i 11 9 1 � tfl� ,I 11 fi I I I!I I I III I I I I III 11 IdN I �Illa �� � �Ilil�l ICI sample size TYPE OF BUSxi MSS: Law firma svices., consulting Finance/Banking Retail management wholesale/Distributr Real Estate Insurance Import/Export Construction Medical communication Human resource Publishing Education Government Airline Non-profit others g MLOYJM MZX ... Hanagerial/Prof. Clerical/Support SOFT OCCUPY r (mean) ! UPOR"S FROM PREVIOUS SPACBt TABLE 1: BUSINESS TYPES IN SAMPLE TOTAL Downtown IBrickell CBD Ave ` 349 100 90 100 33 100 68 21% 55 17% 35 11% 22 7% 14 48 24 78 17 58 17 5% 15 51 18 5% 14 4% 9 38 8 2% 4 1% 3 It 3 18 3 1% 2 1% 45% 55% 12420 82% 52 59% 4 48 14 16% 6 7% 1 1% 1 1% 2 2% 1 1% 3 3% 1 1% 2 2% 6 111 2 63 jl 9 27% 7 21% 3 9% 3 98 2 6% 1 33 1 1% 42% 50% 58% 50% 11528 9502 128% 96% LOCATION OF PRESENT OFFICE Coral Gables 48 100 1 5 10% 5 10% 6 13% 2 48 5 10% 1 28 2 4% 6 13% 5 10% 3 6% 3 6% 1 2% 1 2% 3 6% s . Miami. Airport Airport S. Dade area West 27 100 59 100 63 100 0 0% 4 7h 1 21A 5 18% I 19 33% 16 27% 1 2% 3 51 3 118 4 711 6 111" 4 7% 7 11"1 3 11% 4 7% 4 71 5 19% 3 5% 3 51 � 1 49 5 9% 4 71 3 5% 2 3A 2 7% 4 7% 3 51 2 7% 2 4% 5 81 2 78 2 31 1 4% 1 21 3 51 3 11% 2 4% 49% ` 57% 51% !I 43% 9267 { 11846 188% 17% other 23 100 4 243 2 63 3 lay 1 Gi 1 5 1 6 2 12 1 61 1 21 1 5 � 1 2% I I 2A 43% 411 35.% 571 591 651 12460 19407 I i 9175 40% 821 ` NA t * "t upgrrade" is only computed for firms reporting former and new space estimates in Dade Count-". DYNAMICS OF OFFICE INJrLUX AND RELOCATION BEHAVIORAL SCIENCE RESEARCH May 11, 1993 page 4 The distribution of managerial./professional vs. clerical/support employees is generally consistent across all business communities. Overall, the split in these -job functions is about 50/50, and the differences shown in the individual communities are not significant. overall, the average office size among the survey respondents is 12,400 squar feet, ranging from a low of about 9,200 - 9,500 in Coral Gables, Brickell and in. "miscellaneous Dade" to a high of 19,400 in the Airport west business community. No -re, however, that these office sizes represent significant upsizing for businesses reporting both former and current office sizes in Dade County: + Coral Gables businesses show the highest uptick in office size, with the average Gables business relocator located in space that is 198% larger than the space occupied before. + The Downtown CBD is in the same ballpark, with the average business growing by 128% into its present location. By contrast, businesses in the Brickell area grew by 96%. + Airport West businesses moving into their present offices in this area grew by 82%, compared to Airport businesses growing by 40%. W C� DYNAMICS OF OFFICE INFLUX AND RELOCATION BEHAVIORAL SCIENCE RESEARCH May 11, 1993 page a W e G' C�^ ION: Table 2 shows the dynamics of the movement subdividing the respondents according to when they time relocation or an intra-county migration, Table 3 display the relocation data in terms of business community. Overall, 57% of 1988, with fully 11% into the present office location., relocated, whether this was a first - where they came from. The data in shifts in the market share of each the respondents reported relocating to their having relocated in 1992. + The Airport of recent communities of + The Downtown CBD area and Bric33$1 show relocating relativelylow 1990.ve1This is can relocation, with only 30% indication of the maturity ofthewill market these atou�rnl and Bri t3ce11.1ar.n as the data in Table 5 (below) poised for a major surge in office lease renegotiations within the next few years. present offices s inca ities show the greatest proportions and Coral Gables commun relocations, with 46% of the offices in each of these relocating since 1990. New movement by companies coming into b a the county ysurvHy accounts participants. bout one in e7 a 7 six office relocations -- 16% -- reported y office + In -migration accounts for the sm Airport West t( 92$) f Airport relocation (151) and Air activity in Coral Gables (11%), p Downtown (13%) areas. + By contrast, Brickell businesses show the highest percentage of new -in - Dade offices (31%). May 11, 199 DYNAMICS OF OFFICE INFLUl AND RELOCATION Page - BEHAVIORAL SCIENCE RESEARCH TABLE 2: DYNAMICS OF OFFICE RELOCATION TOTAL LOCATION OF PRESENT OFFICE DowntownBrickell I Coral Miami I Airport j Airport ( Other CBD Ave I Gables IS. S. Dade i area , West areas Sample size 349 100 90 100 33 100 48 100 27 100 59 100 63 100 18 100 NKEN RKLOC.ATBD TO PRESENT LOCATION? 1992 36 11% 9 10% 3 9% 13 27% 4 15% 3 51 3 51 1 b3 1990-1991 87 26% 20 23% 7 21% 9 19% 6 22% 24 41% 13 21% 8 471 1988-1989 68 20% 19 22% 6 18% 11 23% 6 22% 10 17% 13 21% 3 i9*1 1986-1987 50 15% 10 11% 7 21% 3 6% 2 7% 15 25% 12 19% 1 6'1 1980-1985 54 16% 17 20% 6 18% 8 17% 5 19% 4 7' 10 16% 4 2.4k Before 1980 39 12% 12 14% 4 12% 4 88 4 15% 3 5% I 12 19% LOCATION OF PREVIOUS OFFICES Outside Dade County 49 16% 10 13% 9 31% 5 11% 6 25% 8 15% 7 12% 4 29A Downtown B District 67 22% 42 54% 6 21% 6 13% 5 9% 7 121 Brickell Ave 26 88 11 14% 4 14% 3 6% 1 43 5 9% 1 23 1 7 Coconut Grove 7 2% 2 3% 1 38 1 28 1 4% 2 31 Coral way 6 28 1 3% 1 2% 1 2% 3 5% Coral Gables 31 10% 3 4% 2 78 17 36% 5 21% 4 7% South Miami 9 3% 2 3% 2 4% 2 8% 2 4% 1 21 South Dade 16 5% 1 1% 1 2% 7 29% 2 41 5 88 Airport area 26 8% 1 18 2 78 3 6% 1 4% 15 27% 2 33 2 14'1 Airport Best 37 12% 1 3% 2 4% 1 4% 7 131 i 25 42A i 1 71 North Miami 16 5% 4 58 2 7% 1 2% 4 7% 3 5% ( 2 14A Miami Beach 7 2% 1 1% 1 3% 4 9$ 1 21 I ' Miami Lakes 3 1% 1 2% 1 2% 1 7l Hialeah 6 28 1 18 2 48 1 2% 2 11� C41) DYNAMICS OF OFFICE INFLUX AND RELOCATION CO BEHAVIORAL SCIENCE RESEARCH t�: May 11, 1993 Page 111 jl'lIlll li-j "19!, I'lllI 1111I1 II iI SIP I �l illl �i�i -1 And although intramural relocations -- upgrades and relocations within the same business community -- accounts for a substantial portion of the office market activity in the Downtown CBD and other communities throughout Dade County, the magnitude of t.hs intramural activity varies widely from one community to another. + The highest level of intramural activity is in the Downtown market, where intramural relocation accounts for 54% of the office rental activity. The lowest level is in Brickell Avenue, where only 14% are intramural relocations. + Intramural relocations account for 36% of the office leasing activity in Coral Gables, 27% in the Airport area and 42% in Airport 'Kest. The actual relocation magnitude is difficult to evaluate on a community -by - community basis. Table 3 depicts the "share shift" in the relocation market, standardizing the movements on a common base of "all office relocation." Please note_ + 16% of all office relocations reported by the survey respondents are from businesses outside Dade moving to offices inside the county. This represents potential opportunity for each business community to capture "share of influx." + 41% of all office relocations reported by the survey respondents are intramural, i.e. from businesses upgrading or relocating from one office in their business community to another office in the same community. This represents potential opportunity to capture "share of retention." + 43% of all office relocations are intra-county, i.e, from one business community to another. This represents potential opportunity to capture> "share of relocation." The data in Table 3 show, for example, that 12% of the overall relocation act.ivit," reported by the survey participants consists of businesses within the Downtown C-BD relocating within the same area. In Table 2, above, these same cc DYNAMICS OF OFFICE INFLUX AND RELOCATION May , 9' BEHAVIORAL SCIENCE RESEARCH'S `" 3 00 i`: ',i, IN1� .I .. ,I.,I..,_Ill ..1..,,111.1,11- migrations are shown to account for 54% of the activity within the CBD; 'table 3 .shows them to represent 12% of all the office relocation activity in the County. TABLE 3: MARKET SHARE SHIFTS (% OF ALL RELOCATIONS) ... FROM VARIOUS BUSINESS COMMUNITIESRELOCATI O11 1 outside INTO THE DowntownlBrickelll Coral (Airport j All (' TARGET AREA ... CBD Ave `` Gables area 4 others Dade Downtown 12% 4% 1% 08 4% 38 Brickell 2% 18 18 1% 28 38 coral Gables 28 18 5% 2% 4% 28 Airport 4% 28 1% 18% 8% 5% All others 0% 1% 2% 2% 5% 3% " BOX BCoR—%,3 Total f Total Vet Gain Loss I Gain 12% 8% + 4A 9% 8'A + 11 - 21 11� 5 + 61 } a� 20% 5% 8% 181 -103 -i3 t Influx from outside: 161 Intramural relocation: 41% Intracounty migration: 431 Movement from Brickell Avenue to the Downtown CBD accounts for 4% of the marK-, activity reported by the survey participants; movement from the CBD to Brickell accour,` for 2%. Overall, this represents a net shift of two percentage points of "relcca'-1^_- market share" -- office tenant relocation inventory -- from Brickell to the Downtown Similarly, 1% of the market activity consists of movement from Coral Gab.1e3.-1 Downtown Miami, and 2% consists of movement from Downtown to Coral Gables. 77-1 represents a transfer of 1% from the office tenant relocation inventory from DownCow^ '. Coral Gables. These trends are summarized in the "box score" section of Table 3. W C.Z � DYNAMICS OF OFFICE INFLUX AND RELOCATION May 11, 11991, BEHAVIORAL SCIENCE RESEARCH Page G+C a� + Overall, Downtown CBD shows a "credit" of 12% of the office tenant relocation inventory from intracounty migration and influx "from outside f 8% loss to other business communities in Dthe Dade, and a "debit" o County. Net gain -- reflected in the relocation since 1980 reported bj survey participants -- is 4%. Rem i g$the relocations cited as coming from outside Dade reduces the total + Briekell shows an influx of 9% the office tenant relocations from outside the area and from outside Dade, but loses 8% to other parts of downtown or elsewhere in Dade County. Because the 9% "credit" includes 3% from outside Dade, backing this activity out of the market yields a net loss of 2% of the tenant relocation activity from Brickell to other business neighbor- hoods. + Coral Gables posts a credit of 11% and a debit of 5%, showing a net gain of 6% of the tenant relocation market. Backing out 2% of the market coming from outside Dade, Coral Gables posts a satisfying net intracoun`y migration gain of 4% of the market movement. This is especially impressive in light of the modest inventory of space available in Coral Gables. + The combined Airport and Airport West areas, however, are the most active, with office relocation credits of 20%, debits of only 5%, an overall gain of 15% and a net migration gain of 10%. + It is clear that most of this represents consolidation into the Airport areas from elsewhere in Dade County (influx from "all other areas in Dade accounts for 6%t of the office areas ation market, net of losses from the Air- + It is also clear that the Airport area draws very strongly from the Downtown CBD: 4% of the tenant relocation market activity came from movement Airport Downtown CBD to Downtown was hlessrP than port alga L of the ment from P market. May 11, 1993 DYNAMICS OF OFFICE INFLUX AND RELOCATION page 10 BEHAVIORAL SCIENCE RESEARCH I� the ice hoo Table 4 illustrates the factors a f fect e g ended h�ommeroitsbusiness the survey oo zt d ipa>- 's , most recent relocation, as expressed in op -ended -M, reported as The data in this table also reflect the propor�.t andon oBrowardeSfrom elsewhereoming nefcmit?=`' immediate environment, from elsewhere n Dade States and businesses overseas. d N The principal reason for. locating (or Brickell areas is "central location," mentions among Downtown CBD businesses tier reasons for being in these places, accounts for 26% of the mentions by Downtown CBD. + Being close to customers" businesses located in the relocating) in the DoIIantown an accounting for fully 57% of the and 41% in Brickell. The second - however, differ: + "Prestigious location" eanmentionsale by businessneighborhood"e located oon f 25% of th account or Brickell Avenue. The principal reason for locating in Coral Gables is the "prestigious location" and "upscale business neighborhood," bes"BeinguCliose to for 34% of the astomers" mentions by businesses in Cora , sea t2o$ly tied with "being close and accounts for 26% of the mentions nnvenient to home and neighborhood" The principal reason for locating in "central location," accounting for locations. The second -tier reasons West, however, differ: Airport office relocatoos cite "being close to customers" in 21% of the cases. Cz GC DYNAMICS OF OFFICE INFLUX AND RELOCATION I� BEHAVIORAL SCIENCE RESEARCH the Airport and Airport West areas is over 45% of the mentions at both; for being at the Airport or Airport may 11, 1993 page 11 El El 1. 1 1 111 I lr'lii'1I tiu li"�'Ill'�II�9I111lulliilulllli'iiu°ill III R1iil111III III IIII jl1111' 1111, JII TABLE 4: DYNAMICS OF BUSINESS COMMUNITY CHOICE - _-TOTAL LOCATION OF PRESENT OFFICE Downtown I G Brickell I Crral IS. Miami I Airport I Airport other CBD able$ S. Dade area West areas Sample size 349 100 90 100 33 1.00 48 100 27 100 59 100 63 100 18 100 DECIDINC FACTORS IN CAOOS.rKG CURRENT LOCATIONS Central location 104 40% 48 57% 13 41% 3 9% 1 88 20 48% 17 441 2 1-11 Close to customers 58 22% 22 26% 5 16% 9 26% 2 17% 9 21% 5 131h 5 131 Closer/convenient 34 13% 5 6% 3 9% 7 20% 5 42% 6 141 5 13% ( 3 21'k Prestige/Neighborhd 31 12% 5 6% 8 25% 12 34% 2 171 2 5% 2 5A I Price/cost of space 24 9% 1 18 2 6% 3 9% 2 17% 5 12% 9 23A 2 111 Been there long time 4 28 3 48 1 3% 1 31% 1 ; 1 Others 3 18 1 3% t DISTRIBUTION, C I BUSINlSSS ACTIVITIES I Immed. environment 21% 19% 16% 27% 24% 23% 2011 171 Dade or Broward 43% 46% 40% 33% 54% 34% 47A 50 Elsewhere in US 19% 16• 20% 24% 15% 24% 181% 111 International 18% 19% 25% 16% 7% 18% 17A 211 I DISTIBUTION It , ANNUAL MWENUSS t Immed. environment 20% 18% 17% 26% 24% 1.9% 18A 171 Dade or Broward 41% 44% 36% 31% 53% 32% 47A 501 Elsewhere in US 19% 16% 20% 23% 15% I 27% 17A I 9`3 Ilnternational 20% 1 21% 27% 20% 93 21% i8� 233 1 W DYNAMICS OF OFFICE INFLUX AND RELOCATION �^ BEHAVIORAL SCIENCE RESEARCH May 11, 1993 parse 12 r I1 II A I"I Firl ��■ 111.1 16!1,.I1n I11IL1111 i .IIIII II 1 NAIL. J III in I11111111IiI I IL111.1 I:I1IJI III Ii Ili Ibq�!.Vld + Airport West office relocators cite "lour cost" as the reason for relocation in 23% of the cases. Whether you measure it in terms of dollars or business activity .level, roughly one - fifth of the business done by the companies in the survey come from other companie-s their immediate environment, two -fifths come from elsewhere in South Florida, one fif��a from elsewhere in the United States and one -fifth from overseas. + The highest levels of international business are reported in companies on Brickell Avenue, at about 25% of business volume. + All other business neighborhoods except South Miami/south Dade are essentially tied for second place, at between 16% and 21% of volume. Given the sample sizes shown in Table 4, these differences are not statistically significant. W Cc DYNAMICS OF OFFICE INFLUX AND RELOCATION � BEHAVIORAL SCIENCE RESEARCH May 11, 1993 page 13 F 4 .1.u.i I� I . i I n, 1lia 11 1 1' 111119 I,I F"'I'I i'IrIII 'I I I II : 1!, 1. 1 1 1 1 .1 1 I1 V 5. BARRIERS TO RELOCATING DOWNTOWN: TABLE 5 The data in Table 5 report perceptions of the Downtown area and perceived barriT's to relocation, as itemized in responses to open-ended comments on the self-administe.�=d survey and executive interviews with top businesses in the downtown and non•-downt-ow: areas. The overwhelming negative perception of the downtown area is that of traffic congestion and inadequate parking. Together, these account for 50% of the cited facto.s to overcome in locating a business downtown, fully 56% of the responses from per3o 3 already in the Downtown CBD as well as in Coral Cables. Interestingly, these problems .a_Le cited by only 17% of the businesses located in Brickell. The respondents were asked to indicate what the Downtown Development Authority coul,-! do to stimulate business relocation downtown. Again, the bulk of the responses pertained to improving parking availability and lowering the cost (23% overall, predominantly -'~rom persons located in the Airport West district) and improving traffic flow (20%, virtuail across the board). "Reducing crime was cited by 21% overall (25% of companies loc13`-_d in the Downtown CBD, 29% among companies located on Brickell). "Clean up the streets was cited as one of the major priorities for the DDT in+� minds of the businesses located downtown, cited by 28% of these businesses and significantly less by all others. One of the key findings in this table comes from the responses to a question on �,.. likelihood of relocating downtown if the business's current lease were to expire over next two or three years. Predictably, most of the businesses in the suburban bus?ne3J communities placed relatively low odds on locating downtown (37% of those in Coral Gabla3 rated it "no chance, as did 50% in the Airport and 41% in the Airport West areas.). More importantly, 66% of the businesses located in the Downtown CBD indicated �_-hay probably would (re)locate downtown, as did 71% of the businesses located on Brickell Avenue. Clearly, there is a strong loyalty toward the downtown area among businesses located there, DYNAMICS OF OFFICE INFLUX AND RELOCATION may 11, 17"1 � page 14 BEHAVIORAL SCIENCE RESEARCH C1: GO 4T� ,I ,1�;, - I� I'P�'"1IC L�er�.�� 1j� �I,,•I "O�r_-_1.,,�.1 11'� �rt I I�,., �.�I�,.-��, I,, 1 �1. 'f 1�__ .�11�0! �°� 11��i I'll[ 1_, J ' Il 111111111 ! IJI�i� NI1III1�AIfll cc i E� � h S Ip P L TABLE 5: REACTIONS TO DCWNTOWN AS A BUSINESS COWUNITY Sample size FCT�QRSs r0 0VZjZC01W/ AGAINST DONhiTpKX t Bad traffic Lim_i.ted parking Long drive from home Price/cost Crime rate Others IWRAT DDA H" TO DO TO ATTRACT HORS BUSISS,sst ?lore/free parking Improve traffic Clean up street Less crime Up-®cale atmosphere 'lore public transit mower rental rates )thers WITURS L rMMZA00D 02► LOCArnro DONN"ax trrTRyS 2-3 rr"St o chance ome chance 0891bly would robably would !ase not expiring TOTAL f t 'CB LOCATION or PRESENT OpFICE --- =Downtown IBrickell Coral '"'-- _ I Ave � Gables s. Miami IS. Dade I Airport Airport � ' Other ' 349 100 90 100 1 33 100 area iciest _.__________ � ar:a<33 I( 48 100 27 100 59 100 53 100 �3 lu0 {I 56 30$ 31 20% 12 26$ 14 30e 1 1 6$ 12 39% 5 50% 14 37% I 1i 31 17% 5 11% 16% 3 17$ 6 19$ 1 10$ 5 134 32$ 7 21� 1 141 28 15% 9 20% 4 22$ 6 19% 1 2 2C8 9 24$ 5 15% 2 29; 1 18 10$ 14 8% 5 lI$ 4 228 3% 1 1014 6 161 7 213 1"41 1 14`1 1 2$ 4 22% 4 13% 1 10% 118 2 6$ 2 61 2 29'j + i 54 23% 47 20% 11 151 14 19$ 5 16% 7 19% 3 17% 8 27% i 37 16$ 21 28% 6 19% 4 7 19% 2 11$ 10 33$ 1�3 55�! I 2 203 l 49 21% 19 25% 13% 9 29% 4 118 3 17$ 2 7% 5 15 I 3 9$ f 3 301 j 18 Q$% 16 3 10% 8 22% 4 118 5 28$ 3 103 !1 3 9� 2 203 3% 1 18 1 1% 1 .$ 3 8$ 1 68 4 13% 1 3%1 3$ i 101 10 4% i 1$ 3 10% 2 l 1 31 61 1 3% I 2 6$ I 6% 1 3$ j 2 201 I 93 29% 1 4 4% 36 11% 19 4 4$ 4 13$ 17 37% 11 24% 13 52$ 5 29 50$ 24 41$ 6 383 61 85 26% I4 168 59 2 6% 1 2% 20% 2 8$ 3 5$ 9 I53 I 91 28% 66% 8 9% 22 71% 3 10% 2 4% 15 33% 5 20$ 21 62% ,= ,, 1 6$ - 1 C.+C DYNAMICS OF OFFICE INFLUX AND RELOCATiO'N BEHAVIORAL SCIENCE RESEARCH — -yn 1 y 56$ r May 11s 1993 Page 15._- V That loyalty will be tested substantially in the next several years. Only 9A of the businesses Downtown and 10% of the businesses on Drickell disqualified themselves from answering this question on the basis of their not having their lease coming up fo.r renewal. Based on this, roughly 90% of the office leases in the downtown business district will be in play over the next several years. This 90% figure contrasts with the 72% overall average for all businesses responding to the survey (i.e., 28% say their lease is not expiring). Within individual - business communities: + In Coral Cables, 67% of the office leases will be in play during the next several years. + In the Airport and Airport West areas, about 56% of the office leases �► will be in play. Based on these figures, the 66% loyalty shown by businesses in the downtown area is not as reassuring as it could be. Fully 24% of the businesses in the Docwnto-wnn CZD rate their likelihood of staying downtown as "possible" or worse. And the data indicaL-- that both historically and prospectively, the downtown area is not attractive to firms located in the suburbs. tz 00 DINAmres OF OFFICE INFLUX AND RFZOCA ro?? May 11, 1993 ZN; BEHAVIORAL SCIENCE RESEARCH page 1r, 5• SUMMAR$ AA1D IMPLICATIONS The Downtown CBD and Brickell Avenue is a business center wit of law firms and banking and financial corporations, and one h a business internationally than any other business community whose + y in Dade Its attractiveness as specialization in the many of the firms that to do business, firms downtown. 92 high concentration businesses do mores County. a business community is based on an businesses located thereintense , houh are located downtown feel thereisne odthertplace located elsewhere are not interested in moving "Central location" is what concentrates businesses downtown with centrality, "closeness to customers" �% combined "prestigious location" places them across t the s river lon t ric�Ht CBD' Businesses who value the ambiance of the community more 11 Avenue. centrality move to Coral Gables; businesses who are price and conscious move to the Airport,than its centrality Everybody agrees that downtown traffic is a mess and parkin is news, and most businesses downtown and in the suburbs do not think very much about the traffic congestion. What they feel the DDA g awful. This zs not the availability of p that the DDA can do ng theay parking and reducing crime and blight, canacton is increasing establishing priorities, these are key issues, g and w.ien it comes down to If parking were abundant, the streets were clean and visible vagrants, would businesses flock downtown to enjoy spectacular views of the ocean? Perhaps some would, based not considered particularly hard to get to and not seen as of intraurban business migration shown in this report do the key issue cz and retaining them oy appears once the have ev I uncongested and there were no the high-rise excitement and on the fact that downtown is expensive. But the patterns not suggest it, to be attracting new businesses to the downtown area located there. Downtown and Brickell do as well at W DYNAmres OF OFFICE INFLUX AND RELOCATION C+� BEHAVIORAL SCIENCE RESEARCH d t: May 11, 1993 Page 17 r> N attracting businesses from outside Dade County as any other business community better than Coral Gables, not as good as the Airport area -- and Downtown draws many more businesses from the scattered business communities throughout Dade County. Clearly, there is a potential for attraction. But there is also a substantial potential for defection. The data indicate that there is a higher than average rate of office leases up for negotiation in the Downtown CBD and Brickell office market tenants. next two to potential forthree yars, and s gn ficant tenant iossb�houicij be chance of retaining those P a serious concern. DYNAMICS OF OFFICE INFLUX AND RELOCATION Co BEHAVIORAL SCIENCE RESEARCH May 11, 1993 page 18 -u1