Business In The New Fort Lauderdale Goes Beyond Beaches And Boats

When outsiders think of Fort Lauderdale, they may see images of tourists relaxing on sunny beaches, retiree communities, yachts, and college students on spring break.

These images still hold true, though spring break has shrunken dramatically since its wildest days in the 1980s and the city’s population of retirees has remained relatively stable.

But over the last two decades, Fort Lauderdale has evolved into a dynamic, ethnically and racially diverse city, a thriving center for businesses from the United States and overseas.

While tourism and yachting-related businesses remain pillars of the local economy, Fort Lauderdale today is a magnet for new, expanding and relocating companies looking for space in the city center, its outskirts and in the 30 neighboring Broward County communities.

Over the last five years, 123 companies have relocated to Broward or expanded their operations with the assistance of the Greater Fort Lauderdale Alliance, a public-private organization that promotes new investment and jobs in Broward County.

“Between 2013 and 2014 alone, there were 21 relocations and expansions in the county, and these companies invested more than $265 million,” said Bob Swindell, the Alliance’s president and CEO. Nearly 200 companies have their corporate or regional headquarters in the county today.

With a population of 1.9 million, Broward is the state’s second most populous county after Miami-Dade, and 18th in the country.

The shiny cluster of mid- and high-rise residential and commercial buildings along the New River in downtown Fort Lauderdale is home to diverse companies like AutoNation, the world’s largest automotive retailer; Stiles Corp., a major real estate developer, builder and property manager; and Patriot National, a nationwide provider of technology and outsourcing solutions to the insurance industry.

Many people living in the downtown residential towers work in the city center and can walk or bike to their jobs there, take the Sun Trolley or the Water Taxi. There are more than 3,000 multifamily residential units built in downtown Fort Lauderdale with more than 1,100 under construction, another 2,609 approved and more than 5,000 additional units proposed, according to research from CBRE, the world’s largest commercial real estate firm.

“Fort Lauderdale has been transformed into a truly livable, urban environment,” said Kenneth Krasnow, a real estate expert and former managing director of the South Florida offices of CBRE. “People want to live and work in attractive urban environments. Miami has developed its brand of downtown lifestyle and Fort Lauderdale has created its own.”

As in Miami-Dade, the urban core and surrounding communities are a draw for tech enterprises and other businesses.

Among them is SATO, a Japanese company that specializes in point-of-sale and barcode applications. It recently set up the world headquarters for its SATO Global Solutions unit in offices at 110 SE Sixth St., a few blocks away from Las Olas Boulevard, downtown’s main street. This is a new division of the multinational, which operates in 26 countries.

Prolexic Technologies, an international cyber-security firm, moved its global headquarters to downtown Fort Lauderdale from just down the road, in Hollywood. And Chiquita Brands International is relocating the headquarters of its banana division to Dania Beach from Charlotte, North Carolina.

DRIVING CHANGE

Fort Lauderdale’s change has been driven partly by design and partly by the high cost of real estate in Miami-Dade.While comparative real estate costs are a factor in Broward’s ability to attract new businesses, say local businesspeople and economic development officials, city and county investments in cultural and liveability projects have made the area more desirable. Those include the Broward Center for the Performing Arts, improvements in the city’s downtown and Riverwalk areas, festivals and other programs, beaches, parks and public transportation.

Expansions of the Fort Lauderdale-Hollywood International Airport and Port Everglades also have been critical in making the city more competitive and increasing international trade and travel.

The local system of public and private colleges also has expanded, along with schools for vocational training. Broward College, for example, has grown from a junior college to a four-year state institution offering more than 100 degrees, certificates and diplomas covering a range of academic and specialized areas, including programs preparing students for jobs in health sciences. Classes are available day and night at several locations.

The city’s ability to attract new business has grown thanks to the promotional efforts of institutions like the Greater Fort Lauderdale-Broward County Convention Center, which stages events like car and boat shows, a robotic competition, and sporting events that attract thousands of businesspeople and other visitors.

The Alliance has been able to encourage domestic and international companies like Prolexic, SATO, Chiquita and dozens of others to set up or expand their operations in the county, offering cash incentives related to job creation and other forms of advice and assistance. The organization’s budget this year is nearly $3 million, up about $200,000 from 2014. Most of that goes to recruit new businesses and create jobs in Broward County.

“We offer a location with no personal state taxes and lower taxes than companies pay in other parts of the country,” said the Alliance’s Swindell, who is a former business owner and was born and brought up in Oakland Park. A company relocating from New England, for example, would find property and other taxes about 10 percent lower.

“But you can’t just offer a low tax rate, you have to offer amenities. Fort Lauderdale has a great lifestyle — beautiful weather, beaches and water sports, cultural events, great restaurants, easy access to professional sports. We are business-friendly, and we’re strategically located near an international airport, Port Everglades, railroads and universities,” Swindell said.

When Mike Jackson, the chairman, CEO and president of AutoNation, arrived in Fort Lauderdale in 1999 to run the company, people told him how dramatically the city had changed from a “beach/spring break town” since the mid 1980s.

“It had gone from being a place to visit to being a place to live,” said Jackson, who was convinced to come to Fort Lauderdale by local entrepreneur and billionaire H. Wayne Huizenga. “But it was still missing a powerful and growing business sector, up-and-coming cultural institutions, and an exciting mix of people from different backgrounds and with different perspectives,” said Jackson.

All that has changed, said Jackson, whose company logged revenues of $19 billion-plus last year, with profits of $418.7 million.

“The transformation between then and now is just as profound as it was in the 15 years before I got here — maybe more,” he said. “The city has advanced light years in terms of its opportunities for business, for entertainment, for enrichment. There has literally never been a better time to be in Fort Lauderdale.”“The infrastructure and facilities right here are as new and contemporary — if not more so — than what you’ll find anywhere else,” said Jackson, who is also vice chair of the Atlanta Federal Reserve Bank board of directors for the U.S. Southeast Region.

Jackson points to the city’s location, which makes it a natural hub for doing business with the Caribbean and Latin America; its relationship with commercial centers in Miami and Orlando; and its climate and growing population.

“The commercial opportunities remain strong and growing. The talent pool should be the envy of almost any other market out there. And perhaps the most compelling reason of all is that we’d never be able to get anyone to leave for somewhere else! Try telling your staff that they’re going to have to give up everything we have down here for another city, and you’re going to have a lot of important positions to fill wherever you go to.”

YOUNGER, MORE DIVERSE

As Broward attracts more residents, the pool of potential workers has expanded.

Since 2010, the county’s population has mushroomed by 6.9 percent, continuing a diversification that began in the 1990s. Over the past 25 years, the local community has become younger and more ethnically diverse as immigrants arrive from Latin America, the Caribbean and other parts of the U.S. The most recent U.S. Census figures, from 2010, put Fort Lauderdale’s population at 63 percent white (including some Hispanics), down from 64.3 percent in 2000; 31 percent African American, up from 28.9 percent in 2000; and 13.7 percent Hispanic, up from 9.5 percent in 2000.

At the same time, people 65 and older in Broward now make up 15 percent of the city’s population (compared to 18.7 percent for the state), about the same as in 2000.

Fort Lauderdale’s population has grown more slowly than the rest of Broward, increasing by 3.5 percent since 2000 to around 176,000. “In the 1980s, the overall population of Fort Lauderdale remained near constant because of the explosive growth of residential areas just outside the city in Miramar, Plantation and other suburbs where people were able to live and commute the short distance to Fort Lauderdale and other neighboring cities,” said Casey Angel, director of communications at Greater Fort Lauderdale REALTORS, a business organization.

But as in other cities around the country, interest in the downtown core is growing. Today, since much of the downtown area is built up, there is “increased interest in revitalization of properties in the area, to give buildings a modern, multi-use look,” Angel said.

And for Broward County as a whole, sales of office and retail properties have surged. Through the first six months of 2015, sales of commercial properties reached $431.2 million, compared to $55.2 million for full-year 2009, according to CBRE research.

A new wave is rolling over Las Olas Boulevard, the popular downtown main drag. During a recent visit on a Saturday afternoon, the boulevard was thriving, packed with locals and tourists who filled the restaurants and bars, shopped at expensive fashion, art and antique stores and checked out prices for homes and apartments ranging into the millions posted outside omnipresent real estate outlets.

Louie Bossi’s, an Italian restaurant that opened in June, was booming in the early afternoon. Bossi’s and other newcomers including Sweet Nectar have joined familiar longstanding Las Olas eateries like The Floridian, Noodles Panini, Timpano Italian Chophouse and Mango’s Restaurant & Lounge.

“We’ve been very busy since we opened, even though that was after the winter tourist season,” said Fara Gonzalez, Louie Bossi’s service manager. “We have a huge mix of customers – business people, students from Broward College and FAU, tourists, retirees, families,” she said.

The restaurant features a spacious dining room, patio and covered rear garden. Bossi’s opened on the former site of Mark’s Las Olas (a longtime feature on the boulevard) and its successor, both of which closed; it seemed to be taking a risk on a street where many businesses have failed. But the company did its homework, Gonzalez said.

Bossi’s is part of the West Palm Beach-based Big Time Restaurant Group, which owns and operates six restaurants, including two others on Las Olas: the Big City Tavern, which has been in operation for 13 years, and Rocco’s Tacos and Tequila Bar, open about 18 months.

“We like to have our restaurants on the main drag, and summer isn’t slow for us,” said Gonzalez. “Las Olas has restaurants and bars that are like nightclubs,” she said. “This is the place to be.”

Another trendy downtown area just a few blocks away, Himmarshee, also boasts bars and restaurants that draw crowds day and night. The district is near the Broward Center for the Performing Arts, the Museum of Discovery & Science, AutoNation IMAX 3D theater and Riverwalk, an attractive park and walkway along the New River.

Construction and real estate also have been major drivers of growth in the city, and are still going strong, having recovered from the overbuilding and condo speculation that peaked in 2008-2009.

Despite limited space in the downtown core, 21 new residential projects are under construction or in review, according to the Fort Lauderdale Downtown Development Authority. In addition, projects for new retail, government and hotel structures include 13 hotel and residential projects along the city’s beach.

And while there are several new commercial projects in the center of Fort Lauderdale, interest is growing in modernizing existing buildings, said Krasnow.

“The demand is there, and as space on Las Olas has gotten tighter, companies are looking for commercial space around the core — it’s no longer ‘Las Olas or bust,’” he said.

One example is SATO Global Solutions, which develops software for auto-identification and tracking of equipment and merchandise in commerce, industry and healthcare. It has invested $5 million in its new Fort Lauderdale operation and plans to invest more by year-end, said Mike Beedles, president of SATO Global Solutions, who previously was based in Charlotte.

The company looked at, and rejected, locations in Miami, Silicon Valley, Dallas, New York City and Chicago before choosing Fort Lauderdale.

“We were attracted to Florida because the economy has been growing, and because of the quality of life for our employees,” Beedles said. The company now has 35 employees and expects to eventually reach 200.

“We want to make Florida as important as Silicon Valley. Other high-tech companies we worked with there are asking why we chose Fort Lauderdale.” Beedles tells them, “Florida is business friendly and we received help in our search from the Alliance and from the state,” he said. “The growing base of high-tech companies in South Florida was an important factor in making our decision.”

But as people move to Fort Lauderdale for work, they face rising prices on the residential sales market.

John Putzig, a longtime real estate agent who covers home and condo sales in Fort Lauderdale and surrounding communities, sees a lot of buyers entering the local market from the U.S. and overseas, including young people who want to lease in mixed-use communities, rather than buy right away.

“Demand for housing is up and will remain there a long as interest rates are low,” said Putzig, an agent with Campbell & Rosemurgy Real Estate. The number of single-family homes sold between June 2014 and June 2015 is up more than 21 percent, while the median sales price is up 8.1 percent, according to Greater Fort Lauderdale REALTORS. “At the same time, I’ve seen growth in median sales prices for townhouses and condos,” Putzig said.

According to REALTORS, the median sales price for single family homes in Broward was $302,750 in June 2015, compared to $280,000 in June 2014. For townhouses and condos, the median sales price in June this year was $135,000, up from $130,000 a year earlier.

“Young people are coming into the area for jobs and retirees are also looking for homes. Prices are higher and homes are selling faster than last year. The only limitation is a lack of inventory for people who want to buy.”

Fishing, pleasure boating and water sports are some of the city’s biggest businesses for residents and visitors alike. As the “Yachting Capital of the World,” Fort Lauderdale remains the country’s most important center for sales, maintenance, repairs and leasing of multimillion dollar yachts from all over the world, accounting for hundreds of marine-related businesses and tens of thousands of local jobs.

The annual Fort Lauderdale International Boat Show is one of the globe’s largest marine industry events and has a local economic impact estimated at $500 million to $650 million — more than a Super Bowl appearance.

Fishing and sport fishing are also important local businesses that embrace ten of thousands of people, ranging from those who spend a few bucks for pier/dock fishing tackle to people who lay out $2.5 million for a sport fishing boat.

But the local economy might never have grown beyond boats and beaches without Huizenga’s entrepreneurial prowess, say Jackson and others. He set up several major companies in Broward (including Waste Management and Republic services), attracted jobs and new professional talent, and created new awareness of Fort Lauderdale among companies in the U.S. and overseas. His donations to cultural, educational and charitable organizations have supported causes as diverse as homelessness, animal welfare and business education. (The College of Business and Entrepreneurship at Nova Southeastern University is named in Huizenga’s honor.)

For AutoNation’s Jackson, “He is the man who put Fort Lauderdale on the map as a place where serious business can be done. He made it a place where corporations can thrive and where a whole network of supporting businesses can grow. If not for Wayne’s vision, I wouldn’t be talking to you today, and it certainly wouldn’t be about Fort Lauderdale.”