For South Florida’s economy, 2012 centered on one main question: Would the recovery continue?
The answer: Yes, and slowly.
Housing values continue to climb, unemployment rates shrink, hiring grows and spending strengthens. And yet 2012 ends on the same general theme as 2011: Things are getting better, but at a slow enough pace that South Florida will have to wait at least another year for a healthy recovery to begin.
Behind the broad economic tide, news crashed onto the scene. And now it falls on Business Monday to rank their significance.
We do this each year December as a way to put the year’s business news in perspective. For the rankings, we use three criteria.
First, how important was the news for South Florida’s economy? We only have 10 slots to fill, so the news needs to be big.
Second, how unique was the news to South Florida? National events can have major impacts in South Florida, but we’re looking for news that’s particularly noteworthy to the region.
Third, how unique was the news to this year? Long-term trends can impact an economy for years, but we’re looking for stories clearly linked to 2012.
On to the rankings...
Miami-Dade’s economic development agency, the Beacon Council, spent more than a year drawing up what’s supposed to be a blueprint for the county’s economic future. We won’t know for years whether the One Community One Goal plan will actually guide leaders’ decisions as they decide on education priorities and corporate-recruitment targets. The authors of this report boasted that they were determined not to have the latest version seen as obsolete the way the 1996 version was. But with hundreds of people involved in the forums that led to the report, One Community One Goal is sure to be cited in debates and discussion about Miami-Dade’s economy for years to come.
It was a tumultuous year for the Miami-Dade trucking giant, which spent the summer backing off early predictions of strong recovery for clients. In July, Ryder CEO Gregory Swienton announced companywide cost cuts to combat flat sales in a year he had originally seen as going well. That move included 60 job cuts at Ryder’s headquarters in western Miami-Dade, out of 450 across the country The end of 2012 brought another big announcement: Swienton was retiring in two weeks, and handing over the top job to his longtime deputy, Ryder COO Robert Sanchez.
Swienton, 63, said he was looking forward to getting back to Texas, where most of his grandchildren live. The board praised Swienton’s 13-year tenure, which saw Ryder stock rise from $17 a share to $50 a share.
Sanchez, 47, is only the company’s fifth CEO since its founding in the Great Depression. A Miami native, he becomes one of only three CEOs of a Fortune 500 company headquartered south of Palm Beach County. The other: AutoNation’s Mike Jackson and World Fuel Services’ Michael Kasbar.
The debut season of Miami’s first official Major League Baseball team brought a string of disappointments on and off the field. Promises of a revitalized Little Havana retail scene around the tax-funded stadium instead brought vacant storefronts. Attendance, a big part of the economic argument for the $635 million stadium, ended up being the worst for a new ballpark in 30 years.
November brought a string of trades for the Marlins’ best players, causing a big enough fan outrage that it’s weighing on both the Miami Dolphins and the Miami Heat as those teams ponder new deals with Miami-Dade County over tax support for their venues.
South Florida’s most eclectic shopping district picked up some major brand names in 2012. Luxury retailers including Cartier, Louis Vuitton and Prada opened stores in the northern Miami neighborhood, striking a blow to the dominance of the Bal Harbour Shops, which since 1965 has been the premier place for the affluent to shop. This is only the beginning of developer Craig Robins’ broader plan for the district, which calls for 40 to 50 luxury brands by 2014.
The influx marks a big turning point for a district that less than five years ago had no national brands. And it continues the momentum underway in that area, with Midtown Miami as a big draw for shoppers and diners, while Wynwood shifts from edgy warehouse district to edgy arts district.
Citizens Property Insurance Corp. raised rates 11 percent at a time when goodwill isn’t exactly flowing toward the state-backed insurer. It was a year of scandal for Citizens, with reports of $600-a-night hotel stays by executives, an interoffice sex scandal and the disbanding of the agency’s internal-affairs unit. The revelations led to resignations, stern letters from Gov. Rick Scott and a general sense that an organization crucial to Florida’s housing market was under siege. By year’s end, there were calls for Scott to appoint an outside investigator for Citizens.
When Univision and ABC announced a deal to create an English-language network aimed at Hispanics, the venture seemed like a natural for Univision’s home base of Miami. But that was never for sure, as Univision shopped for sites in other Spanish-heavy metropolitan areas, like New York and Los Angeles.
But in October, the announcement came that the joint network would operate out of a studio in or near Univision’s headquarters in Doral. In exchange for $3.5 million in state and local subsidies, the new network pledged to create about 350 jobs during the next five years. More importantly, the deal ratified Miami’s status as the capital of Latin media.
The debacle may have happened half a world away, but the wreck of the Costa Concordia on the Italian coast instantly rattled South Florida’s cruise industry and the ship’s Doral-based owner, Carnival
On Jan. 13, a skipper inexplicably rammed the 950-foot-long ship onto the rocks of the Tuscan island of Giglio, nearly capsizing the Costa and killing 32 people. The images were so dramatic, and the tales of survivors so scary, that cruise bookings quickly took a hit. Carnival CEO Micky Arison came under fire for staying out of the public response to the accident, and profits sunk at the company, one of South Florida’s largest private employers. After posting a loss in the second quarter from the Costa wreck, Carnival saw third-quarter profits drop 57 percent from the prior year to $93 million. In December, Arison called 2012 the toughest year yet for Carnival.
Cruise demand remained down through the end of 2012, no small concern for a region that sets more cruise passengers to sea than anywhere else in the world.
In May, the University of Miami’s vast medical arm announced 900 job cuts. It was a severe restructuring for one of South Florida’s leading institutions, and cast doubt on UM’s big-spending pursuit of prominence for its medical school. UM President Donna Shalala, the former U.S. Secretary of Health and Human Services, blamed the cutbacks largely on hard times in the healthcare industry and a slowdown in federal research funds. And she said no UM employees who dealt directly with patients lost their jobs. But it was a tough and public blow for one of the biggest private payrolls in the region. Once listed as Miami-Dade’s top private employers, UM now holds the No. 2 position behind rival Baptist Health South Florida.
South Florida’s real estate market has seemed on the mend for several years, as sales bounced back strongly from their depths in the financial crisis. But 2012 brought the first solid evidence that the long-awaited “bottom” in the housing crash had finally arrived.
September brought the 10th straight months of gains in Case-Shiller’s closely watched real estate index for South Florida. The last time the index had such a streak was 2006.
The year also brought encouraging signs. Foreign investors continued to put down cash to scoop up unsold condo units throughout the Miami area. Real estate brokers reported a shortage in homes for sale, prompting a return to bidding wars in the battered market. And with tight inventories on the resale market, tenants were staying put with landlords hiking rents.
Gambling topped our list of 2011 stories, too, but we have no hesitation giving it the top slot again this year.
As 2011 came to an end, Malaysia’s largest casino operator had joined with Las Vegas Sands to push a bill allowing resort-size casinos in South Florida. Malaysia’s Genting already owned the land currently housing The Miami Herald, which it bought for $236 million in May 2011.
All it needed was approval in Tallahassee to move forward with plans for what was described as the world’s largest casino, a 5,000-room resort on the Miami waterfront.
But on Feb. 2, 2012, the Genting-backed bill died without ever coming to a floor vote during this year’s legislative session. It was a significant setback for the casino push, since 2012 was considered the best shot for getting a pro-gambling bill passed amid a battered economy. Politicos thought the defeat would lead Genting to put casinos to a statewide referendum in 2014.
Then, in early December, came a surprise. After spending almost $1 million on the effort, Genting said it would not pursue a referendum. Instead, it would participate in a review process underway by lawmakers to take a comprehensive look at Florida’s gambling laws. The effort is supposed to take two years, all but assuring gambling won’t make our top story in 2013..