The 2017 Fla. Legislature Returns To CondoLand

0531_CondolandSocialOnce again, after a one-year hiatus, the Florida Legislature has produced several condominium bills. Typically, the Legislature passes a single condominium bill into which other approved bills have been merged. This year, perhaps to make up for the failure to enact any condominium legislation, four bills were passed: CS/CS/CS/HB653 (HB653), CS/CS/HB1237 (HB1237), (CS/CS/CS SB398 (SB398), and CSSB1520 (SB1520) were passed by both houses of the Florida Legislature and are awaiting approval or disapproval by Governor Scott.

The HB653 and HB1237, as typical, run 69 and 51 pages respectively and deal with a potpourri of issues for Florida condominiums. SB398 deals only with estoppels and SB1520 deals only with condominium terminations which also appears verbatim in HB653. The principal changes are summarized below. HB653 and HB1237 share many of the same provisions and the references below to “both bills” are to these two bills. Continue Reading

Florida Sales Tax on Commercial Rents Reduced

0531_InterestRates_SocialThe State of Florida has imposed a sales tax on commercial rents since 1969.  Currently, the tax is imposed at the rate of 6 percent in every county except Miami-Dade which fixes the rate at 7 percent by reason of an add-on at the county option.  Florida is the only state in the United States to impose a sales tax on rents.  There has been a movement to repeal this tax for several years, but it should be noted that Florida’s general revenue stream is very heavily reliant on sales tax in general.  For the 2016-17 fiscal year, the sales tax accounted for 78.5 percent of all such revenue.

Perhaps with this reliance in mind, the Florida  Legislature has been reluctant to eliminate this tax on commercial rents.  In prior years, efforts to phase out the tax have stalled.  This year, however, the Legislature in HB-7109, took a baby step forward by reducing the rate from 6 percent to 5.8 percent or a 3 1/3 percent reduction.  In Miami-Dade County, the rate will fall from 7 percent to 6.8 percent. Continue Reading

Best Practices for Hedge Fund Due Diligence

0524_HedgeFundSocialJoin us Wednesday, June 7th, for an in-depth panel discussion for family offices and other investors about the process of conducting due diligence on potential hedge fund investments and the best practices by which to do so.

Corporate Partner Josh Stone joins Glide Capital Managing Partner Mark Fitzpatrick and Kaufman Rossin Principal Robert A. Kaufman to discuss hedge fund investments from a business, accounting, and legal perspective. Panelists will also provide valuable insights to hedge fund professionals who are involved in the due diligence processes of prospective investors. Global Director of Trident Fund Services Thalius Hecksher will moderate the discussion.

Josh, a Partner in Bilzin Sumberg’s Corporate group, has spent nearly a decade of his career focusing on private investment funds and investment advisor regulation. He has particular experience evaluating and pursuing investments in emerging and frontier markets. Continue Reading

New Federal Infrastructure Plan Coming Soon

0522_InfrastructurePlanTransportation Secretary Elaine Chao recently informed the U.S. Senate that the President’s $1 trillion infrastructure plan will be announced by the end of the month. The new plan is anticipated to rely upon public-private partnerships (P3s) to bridge the gap between the cost of needed infrastructure and available government dollars.

The American Society of Civil Engineers recently estimated that, over the next 10 years, there is a $2 trillion investment gap between available government funding and required infrastructure investments. Unfortunately, our infrastructure is in a severe state of disrepair, and the recent failures of aging roads, bridges, and dams highlight the need to solve this investment problem–with urgency.

Fortunately, private investors have $120 trillion in assets and are always on the lookout for good long-term investments, and a well-structured P3 certainly qualifies.  Although a P3 requires that the private partner accept risks in exchange for its anticipated returns–there is no free money–private investors can mitigate those risks by pooling their investments and by monitoring and disciplining the private contractors to ensure performance targets are achieved.  The end result is a win-win for both the public and private sectors.  The public obtains the private investments required to construct infrastructure that the government could not afford on its own, as well as an additional layer of oversight.  And so long as the private sector delivers what is promised, it obtains a reliable long-term investment.  Continue Reading

Frontier Markets – Smallest Markets Represent Promising but Overlooked Investment Opportunities

Frontier Markets Blog PostThe general public may not be familiar with the term “frontier market,” but frontier markets represent the vast majority of the fastest-growing economies in the world.  The term “frontier market” generally refers to the smaller emerging markets, including those that have been excluded from the emerging markets indices, such as the MSCI Emerging Markets Index. Frontier markets represent extremely promising investment opportunities as a result of this potential for growth. However, investing in these markets can come with additional risks and background work when compared to investing in more developed markets.

When investing in frontier markets, it is important to understand the situation on the ground in the target market, since the potential risks and opportunities may not be adequately reported in news stories or in investment analyst reports. Having friends, family members, or business associates in the target country or who travel frequently to the target country and can report back to you (or, even better, invite you to visit) can be an invaluable resource. Given the number of international visitors from around the world, the strong ties many in Miami have to friends and relatives in smaller emerging markets and the fact that Miami serves as a second home to so many international business people (including from certain frontier markets), Miami is uniquely situated to serve as a hub for frontier markets investing. This is a natural extension of Miami’s status as a hub for inbound U.S. investment by foreign nationals, including many from emerging and frontier market countries. Continue Reading

What to Expect When Buying a Home in Miami

0120 Incentive-Driven Workforce Housing Ordinance FacebookGuest blog post written by Erin Holdgate of Zillow.

While sellers enjoyed favorable conditions for years, Miami buyers finally have a reason to celebrate. In fact, a recent report placed Miami as the second-best real estate market for buyers.

If you’ve been waiting to buy property in Miami, 2017 might be your year.

Market Conditions and Home Values

Miami is now officially a buyers’ market, with supply outpacing demand. Listings are subject to more price cuts and spend a longer time on the market, so buyers retain the negotiating power and are more likely to pay below the initial asking price.

Miami home values rose 4.5 percent in the last year, but are predicted to fall back 1 percent over the next 12 months.

Miami is an incredibly diverse city, and while some of the most exclusive Miami-Dade County communities fall outside the city limits, buyers can expect to find plenty of luxury in these popular neighborhoods. Continue Reading

New P3 Opportunities for Government Technology

De Yurre Technology Blog ImageAlthough public-private partnerships (P3s) are frequently associated with physical infrastructure, P3s are inherently flexible and can be utilized for the time and cost-effective delivery of virtually any public good or service, including software and other information technology.  The private sector is constantly expanding and improving upon its government technology offerings (examples include recent advances in smart parking and real-time coordination technology for mass transit), and the public sector is beginning to see the benefit of procuring and maintaining these advanced systems through the P3 model. 

This legislative term, the Florida House and Senate are considering a bill (SB 332 / HB 607) that would expand the application of Florida’s P3 statute to information technology.  The bill broadly defines information technology to include software, hardware, networks, and numerous other forms of IT.    If adopted, the bill will become effective July 1, 2017, and will permit public agencies in Florida to utilize the flexible statutory framework to procure new technology through P3s.  The bill would also permit providers of government technology to develop their own creative solutions to governments’ technology needs and submit unsolicited proposals in order to jump-start the procurement process.  Continue Reading

Additional Opportunity for Increased Extension of Building Permits and Development Orders

ZikaBlogPostImageInterested parties must notify issuing governmental agency by September 7th to receive a new extension.

Due to Governor Scott’s recent expansion of the State of Emergency issued for the Zika Virus, holders of permits and development orders have another opportunity to toll the period remaining to exercise rights under the permit or order for nearly 18 months. Section 252.363 of the Florida Statutes permits a tolling of development orders and permits upon the declaration of a state of emergency by the Florida Governor. The statute provides that the tolling lasts throughout the state of emergency, plus an additional six months.

On June 23, 2016, Governor Scott declared a State of Emergency in response to the Zika Virus. Because each declared state of emergency can last for only 60 days, the Governor has since extended the Zika Virus State of Emergency now five times, with the most recent extension occurring on April 10, 2017. Thus, the total duration of the Zika Virus State of Emergency is 351 days. Continue Reading

Secretary Ben Carson Kicks Off Public Housing P3

BenCarsonYesterday, Miami-Dade County hosted Dr. Ben Carson, the Secretary of the United States Department of Housing and Urban Development, at the Liberty Square public-housing development, one of the oldest in the nation.  The meeting formally commenced an exciting public-private partnership for the complete redevelopment of Liberty Square.  The project will be transformative for the community and a model for new public-housing projects throughout the country, and we have been fortunate to have been a part of the project as counsel for the County’s private partner, Related Urban Development Group.

The unique public-private framework leverages limited public funds with private investment (at approximately a 5:1 ratio of private to public dollars), combines public housing with mixed-income and market-rate housing, and incorporates numerous community benefits into the development, including healthcare facilities, commercial and retail businesses, a national grocer, internet access, and educational and recreational facilities for all residents.   The private partner has also developed a phasing plan that ensures that no existing resident of Liberty Square will have to be displaced during construction. The private partner has committed to innovative ways of supporting increased employment opportunities for the residents and contracting opportunities for small and minority companies as a part of the construction and ongoing management of the new development. Continue Reading

Major P3 Real Estate Development Opportunities in Downtown Miami

construction conceptOn March 7, the Miami-Dade County Mayor will be presenting a report to the Board of County Commissioners on County-owned properties in downtown Miami that are ripe for joint development with the private sector. The upshot: the County has at least nine properties, totaling 22.7 acres of land, that can support over 20 million square feet of new development.  Through public-private partnerships (P3s) with developers, the County could leverage these properties to acquire new public facilities and generate new revenues.

Due to the massive development potential of these properties, and the flexibility of the P3 model, the County can have its cake and eat it too. The County could, for example, enter into an agreement with a private developer to design, construct, and operate a new public facility on one of these properties–at no cost to the County–and pay the developer with the remaining development rights (for example, a private office tower built on top of a new public building).  Under the right circumstances, the County could also receive rent payments, either fixed or a share of revenues, for the private development. Continue Reading