In the swirl of the nonstop news cycle, headlines that one day sweep the airwaves so often become mere footnotes just a few days later.
For our list of top South Florida business stories for 2014, we bypassed those flash-in-the-Twitterverse trends. Instead, we favored stories with the potential for lasting impact here in South Florida.
The result is a dizzying baker’s dozen stories chosen by our business writers. Included are inaugurals, acquisitions and acts of defiance.
For longtime residents — and even some newer ones — some of the year’s most important headlines may sound like echoes. Although we left off our list perennials like Art Basel Miami Beach, we could hardly leave out stalled projects that gained new momentum and the ongoing boom in real estate.
Other events are so recent that their meaning remains decidedly murky. While the recent move to normalize relations between the United States and Cuba will surely bring change to both sides of the Straits, it will likely be months and years before the impact is seen.
Herewith, our decidely subjective list for the year past. In David Letterman-like style, they are presented in reverse order.
13. Miami Beach Convention Center renovation plans gain steam
After years of stops and starts, plans for the long-awaited renovation of the Miami Beach Convention Center are finally moving forward.
In April, city commissioners chose a firm to draw up partial plans for the $500 million renovation project. Last month, they narrowed the field of contenders to complete the planning and carry out construction to three construction companies.
And earlier this month, the commission decided to let voters have their say on the future of a proposed 800-room hotel next to the convention center in November of 2015.
Under the current timeline, renovation work would start in early 2016.
City officials and tourism boosters are eager for the convention center to be updated and expanded so it can be a more competitive venue when vying for big group meetings and events.
12. Condo boom — again
Miami’s latest condo construction boom hit full swing in 2014, with a host of new projects announced. Several projects from the latest cycle were completed and delivered to buyers, including MyBrickell, a Related Group project, and BrickellHouse, developed by Newgard Development.
The forest of new pre-construction projects, fueled by foreign buyers willing to put up big deposits, posed stiff competition for existing condos and resales of existing condos started to sputter amid a growing inventory.
Perhaps only in Miami would an 8-year-old apartment be considered passé.
11. Cash remains king
Although mortgages have become somewhat easier to land, cash-wielding foreign buyers and investors continued to dominate home purchases in South Florida. Sellers typically prefer the certainty of a deal that isn’t tied to a buyer’s ability to obtain financing in a still-tight credit environment.
Cash accounted for 63.8 percent of condos sold in Miami-Dade in November. That was down from 73.2 percent a year earlier, as investors are gradually replaced by those looking for a home. Behind the cash phenomenon: Mortgage lenders set tougher standards for Florida condos than for single-family homes.
10. Virgin Cruises announcement makes a splash
Billionaire entrepreneur Richard Branson shook up the cruise industry with an announcement that his Virgin Group plans to tackle the ocean.
The investment group said it is teaming up with Bain Capital to form South Florida-based Virgin Cruises, which plans to operate two ships.
Details were scant: The early December announcement did not say how much money the partners are investing, what size the ships will be, where they will sail or when they might launch.
Tom McAlpin, president and CEO of The World, Residences at Sea and a former president of Disney Cruise Line, was named CEO of Virgin Cruises.
In a statement, Branson said the cruise line would “shake up” the industry and provide “great quality, a real sense of fun, and many exciting activities all delivered with the famed Virgin service.”
9. Design District value rises to $1.4 billion
Miami Design District’s re-developers, Craig Robins’ Dacra and L Real Estate, in October sold a minority interest in the burgeoning luxury shopping destination to a heavyweight joint venture, in a deal that values the district at more than $1.4 billion.
General Growth Properties, a Chicago-based real-estate investment trust that owns, manages, leases and develops high-end retail properties throughout the United States, and New York-based Ashkenazy Acquisition Corp., which specializes in trophy and iconic retail properties in prime luxury locations nationwide, formed a joint venture to acquire the minority interest.
The joint venture paid $280 million to acquire a 20 percent stake in the holdings of Miami Design District Associates, a partnership between Dacra and L Real Estate, a private equity fund dedicated to luxury retail real-estate developments whose investors include LVMH. Miami Design District Associates retains the remaining 80 percent interest in the once-gritty neighborhood that is turning into a sparkling gem within Miami’s urban core.
By 2016, the Miami Design District is expected to include more than 120 luxury-brand stores, a boutique hotel, 15 to 20 restaurants, luxury residential condos and lofts, galleries, furniture showrooms and numerous large-scale public art, design and graphic art installations.
Ina Paiva Cordle
8. Lincoln Road properties sell for record $342 million
In one of the biggest property deals in South Florida history, a portfolio of six buildings on Miami Beach’s Lincoln Road sold for $342 million in August. It marked the biggest transfer of property on the pedestrian promenade, with one of the sellers remaining a part-owner of the new entity.
Miami Beach-based Terranova Corp. and investment partner Acadia Realty Trust, the largest property owners on Lincoln Road, sold the six buildings to a new partnership of Morgan Stanley Real Estate Investing and affiliates of Terranova.
The properties, sprinkled along Lincoln Road and on nearby Lincoln Lane, include the sites of such popular hangouts as Sushi Samba and Dylan’s Candy Store. They were originally purchased in two parcels, in February 2011 and December 2012, for a total of $191 million. In all, the transaction translated to a profit of $151 million — or 79 percent for Terranova and Acadia, in a combined total of a little over three years.
Terranova Corp. Chairman Stephen Bittel said that as the managing member of the new entity, Terranova continues to manage, lease and develop the properties. Two of the properties on Lincoln Road have received Historic Preservation Board approval for expansion, allowing for a new, large retailer. Additional development is proposed on Lincoln Lane, creating a three-level building.
Ina Paiva Cordle
7. Downtown takes center stage
The transformation of Miami’s downtown into a liveable urban center cranked into high gear with a bevy of ambitious real estate development projects.
The massive Brickell CityCentre project under construction by Swire Properties hit a milestone in December with the topping off of the first building — EAST, Miami hotel — at the massive mixed-use development that will cost more than $1 billion to complete. Along with EAST, the complex will include retail, residential and office space.
The Brickell CityCentre project has served as a catalyst for a host of other downtown Brickell development that is tranforming the urban core and encouraging locals to adopt a city lifestyle. In December, a proposed site plan for the long-delayed Miami WorldCenter was filed with the city of Miami. The 10-block mixed-use project is slated to include, among other things, a hotel and expo center, an upscale shopping mall with a Bloomingdale’s and Macy’s, and residential towers.
6. Uber, Lyft ride in anyway
Consumers have a new cab-like alternative to the entrenched taxi industry, with ride-sharing services Lyft and UberX opening for business in South Florida this summer.
Only problem: They are breaking the law, operating without the proper business licenses and driver registrations. “To be brazen enough to start a transportation service in Miami-Dade County without proper certifications ... it’s like the wild, wild west,” said Diego Feliciano, president of the South Florida Taxicab Association at the time of Lyft’s launch in May.
The Miami Herald’s Glenn Garvin took a spin and reviewed UberX and Lyft, but the services got no thumbs up from the authorities. In a sting shortly after the services launched, Miami-Dade County impounded vehicles and fined drivers $2,000 a pop. Officials in Broward and Palm Beach counties recently threatened arrests and fines.
But the popular services aren’t going anywhere, it seems, with deep war chests to fight regulatory battles. Uber alone raised $1.2 billion in venture capital funding this year.
5. A Magic Leap onto VC Map
In one of the largest venture capital deals on record, Magic Leap raised $542 million in Series B funding, a round led by Google and including Kleiner-Perkins, Andreessen Horowitz, Obvious Ventures, Qualcomm, film-finance company Legendary Entertainment and Paul Allen’s investment firm Vulcan.
Magic Leap, based in Dania Beach with more than 100 employees and led by co-founder and CEO Rony Abovitz, has been quite stealth, but the startup is believed to be developing its own eyeglasses-like device, different from Google Glass, designed to project computer-generated images over a real-life setting. In an earlier interview, he called the technology “Cinematic Reality,” much different from virtual reality.
Abovitz has done this all before as co-founder and chief visionary officer of Mako Surgical, which raised more than $300 million in equity financing and sold for $1.65 billion to Stryker last year. His new team includes leaders from film and comic book realm, such as “Guardians of the Galaxy” comic writer Andy Lanning and Dave Gibbons, co-creator of the “Watchmen.” Magic Leap raised $50 million earlier this year.
Singlehandedly, the company put Florida on the VC map. While normally the state ranks in the bottom half for VC investments, when the fourth quarter is tallied up it will be up there with the big guys — California, New York and Massachussetts — for the first time. It has been a hot year for Miami tech, with Medina Capital, Richmond Global Ventures, Scout Ventures, Krillion Ventures and Thesis Ventures raising new funds and opening local offices.
4. Norwegian acquires upscale Prestige Cruises
The world’s third-largest cruise company got a little bigger in 2014, when Norwegian Cruise Line Holdings acquired upscale Prestige Cruises International.
The $3 billion deal, which closed in November, added the five-ship Oceania Cruises line and Regent Seven Seas Cruises, which has three luxury ships, to the Miami company’s fleet. Including the 13 ships under Norwegian Cruise Line, the company now has 21 ships with six more on the way by 2019.
While the company’s size is still a fraction of that of competitors Carnival Corp. and Royal Caribbean Cruises, the acquisition gives the combined fleets greater economies of scale and diversifies Norwegian’s portfolio with high-end ships that generate more revenue.
Since the deal was announced in September, the parent company has named new leaders to head both the namesake brand and Prestige. Drew Madsen was hired as president and chief operating officer of Norwegian Cruise Line in October, while Jason Montague was named president and chief operating officer of Prestige Cruise Holdings at the beginning of December.
3. Beckham shut out — for now
Men, women — and oh yes, “football” fans — went giddy at the prospect of an MLS team owned by David Beckham. Unlike the unpopular Marlins Park deal, Beckham and his investors promised to foot the construction tab if it could lease government-owned waterfront land. But the fervor cooled after Royal Caribbean and the previous PortMiami director opposed the Beckham team’s proposal to build a stadium on an unused corner of port land.
With the initial blessing of Miami-Dade County Mayor Carlos Gimenez, Beckham and friends retrained their sights on the mainland, with the idea of filling in the downtown slip between Museum Park and the Miami AmericanAirlines Arena. The City of Miami balked just weeks before World Cup fervor decimated productivity in offices across the region. Seeing the potential dollars associated with stadium jobs, tourism and the Beckham appeal, communities to the north clamored for Beckham’s attention. Beckham’s group has been silent. In recent weeks, murmers of potential new Miami-Dade sites have begun to surface. None, we hear, are waterfront.
2. The show goes on, with tech in the spotlight
Miami is famous for putting on shows — art, cars, boats, swimwear, to name a few. As Miami’s tech pioneer, Manny Medina, sees it, we will soon be able to add tech to the list. Tech?
Last May, the Miami Beach Convention Center buzzed with technology talk during the inaugural eMerge Americas conference put on by Medina and his team at the Technology Foundation of the Americas. The event attracted big community support, too — from the Knight Foundation, Miami-Dade County, Greenberg Traurig and other organizations.
The result: The two-day conference and auxiliary events attracted about 6,000 attendees — 1,000 more than expected — as well as about 400 companies, 150 speakers and 115 startups from Miami and across the globe.
eMerge Americas will be back May 4-5 at Miami Beach Convention Center and will again bring together entrepreneurs, business leaders and technologists from around the world. It has a big mission: “We are committed to establishing South Florida as a key hub in the global tech community,” said Medina, who also heads Medina Capital and founded and ran Terremark Worldwide.
1. Burger King buys Tim Hortons
Miami-based Burger King in August struck an $11 billion deal to buy Tim Hortons, a Canadian coffee-and-doughnut chain, elevating it to become the world’s third-largest fast-food company. The deal was completed earlier this month.
The two chains will continue to be run independently, and Burger King will continue to be based in Miami. However, the corporate parent company will be headquartered in Canada. And don’t expect to buy a whopper at a Tim Hortons, or get a Tim Hortons doughnut at Burger King. The company said there are no plans to mix the products.
Burger King has stressed that the deal wasn’t being driven by a desire to lower its tax rate but by the potential for growth. Yet earlier this month, the Americans for Tax Fairness issued a report that said Burger King's plan to base its corporate parent in Canada will allow the company and its top shareholders to “dodge” $400 million to $1.2 billion in U.S. taxes from 2015 to 2018.
Burger King responded to the report: “The analysis in the report is materially flawed and the figures do not accurately represent our facts and circumstances.”
Ina Paiva Cordle
▪ Coconut Grove renewed: As new luxury condos sprout at the waterfront, a new generation of Grove devotees seeks to revitalization the neighborhood’s Bohemian spirit.
▪ Women cruise into the C-suite: After decades when nearly all cruise companies were captained by men, 2014 saw two women appointed to top spots. In December, Christine Duffy was named president and CEO of Miami-based Carnival Cruise Line; earlier this fall, Lisa Lutoff-Perlo took the helm at Celebrity Cruises. In late 2013, Jan Swartz was named president and CEO of Princess Cruises, while Edie Rodriguez became president and COO at Crystal Cruises.
▪ LeBron leaves Miami: When he brought his talents to Miami in the aftermath of the Great Recession, LeBron was hailed as an economic kingpin whose local presence would boost condo sales and lure tourists. No one can say for sure what part of Miami’s economic rebound can be attributed to the former Miami Heat player. But except for game ticket sales, there was no noticeble downturn when he returned to Cleveland earlier this year.
▪ Snail-like progress at the bayfront: As the fortunes of resort gaming have stalled in the Florida legislature, so has the demolition of the Miami Herald’s former bayfront headquarters near the Arsht Center for the Performing Arts in downtown Miami. While Malaysian gambling giant Genting, which purchased the land in 2011, has said it will continue with plans for a mixed-use residential-retail development on the site, it appears to be in no hurry to clear the land.
▪ Deal for the Dolphins: After initially falling short on the political gridiron, Dolphins’ owner Steve Ross and Miami-Dade County struck a deal for the team to renovate the stadium in exchange for county payments when the stadium brings in big events. The stadium upgrades should clear the field for future Super Bowl bids — though whether bringing the Big Game to South Florida actually brings local benefits remains in question.
▪ Baseball’s big deal: Giancarlo Stanton’s 13-year, $325 million contract with the Marlins was the richest in North American sports history. Time will tell whether it will bring wins to the team, fans to the stadium and even more tourists to South Florida.
▪ New Cuba rules: Cuba’s small business owners could benefit as relations with the U.S. warm. As new trade rules develop, some South Florida businesses could benefit.
▪ Will the boom continue? The volume of sales of existing homes — both single-family and condo — dropped in both Broward and Miami-Dade in late 2014, and some new condo projects were rumored to be on hold. Is the next slowdown coming?
▪ Wealth gap: Miami’s wealth gap remains among the nation’s highest. As the luxury market continues to absorb land once occupied by affordable housing, workers may struggle to afford housing and education.
▪ New design show in Miami: Paris-based Maison & Objets, a luxury design trade show, debuts in Miami in May, further cementing Miami’s position as a center for art and design.
▪ Arts district growth continues: If all goes according to plan, construction will begin on the Institute of Contemporary Art, Miami, in the Design District, and Edgewater’s Fairholme Foundation headquarters, home to monumental works by James Turrell and Richard Serra; look for 2016 openings of ICA and the Frost Museum of Science. Meanwhile, the Related Group plans three mixed-use towers next to the Arsht Center. Will Genting finally reveal plans?
▪ Soccer in South Florida: Will Beckham finally get a deal on a site for MLS? Or will another political snarl send him packing for good? (Soccer fans, keep your fingers crossed.)