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AUGUST 2016 SFBWMAG.COM 7.95 Greenspoon Marder Behind the law firm s rapid growth Where can we help you next Over three decades of experience advising clients on strategic acquisitions and dispositions and providing landlord representation tenant representation property management and construction management services. We bring you real estate solutions around the block or around the world. Fountain Square Boca Raton FL A 241 000 square-foot Class-A office property consisting of three buildings surrounding a cafe courtyard and a grand fountain. Minutes to I-95. Flagler Waterview West Palm Beach FL Stunning space exquisite rates Enjoy Class-A office space with stunning water views and fantastic amenities close to I-95 and the hospital. City Centre Palm Beach Gardens FL A 93 700 square-foot office mixeduse plaza in Palm Beach Gardens offering retail and office tenants excellent choices at great rates. Golden Bear Plaza Palm Beach Gardens FL A 243 000 SF Class-A office complex with beautiful Intracoastal and ocean views with lush landscaping. Located just north of PGA Boulevard on US 1. Centrepark Office Buildings West Palm Beach FL A 479 000 square-foot collection of Class-A office buildings with access to everything... I-95 PBIA downtown and more. If you need it we ve got it 4400 PGA Boulevard Palm Beach Gardens FL This newly renovated 10-story 80 000 SF office building enjoys a highly visible and prestigious location at the intersection of PGA Blvd. and I-95. West Palm Beach 561 471 8000 Boca Raton 561 394 5200 R C H T I N G ICO LE I O S C ENT R YA SOUTH FLORIDA S PREMIER FULL SERVICE SHIPYARD UNPARALLELED SERVICE 3201 STATE ROAD 84 FT LAUDERDALE FL 33312 954.581.9200 RYCSHIPYARD.COM AUGUST 2016 3 DESTINATION... How long have you dreamed of living on the water Right now Riva is building the perfect blend of both. The carefree living of a stylish condominium. Plus the casual leisure of a home on the water. Whether you travel by paddleboard or speedboat. Whether you host dinner parties for 20 on your oceanview terrace or moonlight cocktail parties on your private rooftop. Whether you relax at the gym and lap pool or indulge at the spa and sundeck. The elegant lifestyle at Riva is everything you expect in luxury waterfront living. PREMIER DEVELOPERS We are pledged to the letter and spirit of the U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race color religion sex handicap familial status or national origin. Oral representation cannot be relied upon as correctly stating representations of the developer. For correct representations make reference to the documents required by section 4 AUGUST 2016 How long have you dreamed of living in the city And whether your home will be an exceptionally large 2 bedroom with sunsets and city lights a 3 bedroom with a 60 foot terrace over the river or a two-story penthouse with a private pool you ll find it under construction at Riva today for move-in next season. From 700K to over 3 million. Dream no longer. Visit our new sales center at 1200 E. Las Olas Boulevard. 954.233.3288. 718.503 Florida Statues to be furnished by a developer to a buyer. Obtain the property report required by federal law and read it before signing anything. No federal agency has judged the merits or value if any of this property. All features dimensions drawings graphic material pictures conceptual renderings plans and specifications are not necessarily an accurate depiction and are subject to change without notice and Developer expressly reserves the right to make modifications. TABLE OF CONTENTS 12 SPACES SLS Lux Brickell is Part Two of the brand s South Florida story 44 BANKING Regional President Ernie Diaz is tops at TD for the state of Florida 68 NONPROFIT GOVERNANCE Is your president a leader 20 INSURANCE 24 FEATURE 28 PROFILE 32 SPORTS The Big One How losses from a hurricane could hit 150 billion 48 NEW SOUTH FLORIDA 52 REAL ESTATE 54 DIVERSITY 70 TECH HUB Barlington Group fuels change in Little Havana but keeps its character Boca Raton company remakes thermometers 72 SALES STRATEGIES PROFITS Are you tracking the right stuff Rex 3 s founder is 94 but still embraces technological innovation Condopacolypse now An industry veteran tells what needs to be done 74 PEOPLE PASSION AND Seven steps to leadership success Emerging marketing strategy pays off for Pinnacle s Peter Gary Black business leaders see success but want more results Lessons on life and management from FAU Coach Charlie Partridge 60 UP & COMER AWARDS Giant robots and more excitement from the SFBW celebration 76 THE FAMILY OFFICE An entrepreneurial pioneer The alternative The quest for returns leads to illiquid investments 34 CONSTRUCTION 40 HOSPITALITY The Ironman behind the construction of MiamiCentral 62 SFBW AGENDA 66 REAL ESTATE 82 HISTORY VIEWPOINT Cool streets cool condos cool travel and a cool supermarket The leader behind Kolter Hospitality s growing collection of hotels Data hints at a slowdown in the region s office and industrial market 16 6 Greenspoon Marder law firm accelerates growth as it hits 35 years COVER STORY AUGUST 2016 You earned it we protect it For more than 75 years Brown & Brown has met the needs of the mass a uent community. Signi cant personal assets and wealth require a higher level of attention o en with unique coverage requirements not available on standard insurance policies. Our personal approach helps to identify client s long-term goals and create a customized risk management program which adjusts along with the client s nancial pro le. Linda Carry Veronica Jimenez Ann Marie Abreu Michelle Bergin Fort Lauderdale s Private Client Group Fort Lauderdale Division - 1201 West Cypress Creek Road Suite 130 Ft. Lauderdale FL 33309 Ph. 1-800-330-3241 Fx. (954) 771-9192 privateclientgroup bb Auto Aircra Bonds Condominium Collectables Flood Health Bene ts Homeowners Liability Marina Personal Property Umbrella Workers Comp LETTER FROM THE EDITOR Powering your bottom line right solution. right service. At Any time. 1-800-385-3187 The Rest of the Story One of the dangers of having written thousands of stories is that it s easy to forget about some of them especially if they were 30 years ago. I habitually do Google searches on subjects of SFBW stories and often Wikipedia entries pop up high on the list. I don t take what s on Wikipedia as the gospel truth but the footnotes to the original sources can be very helpful. When researching this month s cover subject Art Falcone I noticed the second citation from Wikipedia was headlined Brothers to Beef Up Wendy s in South Florida. Much to my amusement it was an article that I had written on Sept. 8 1986 for the Sun-Sentinel. It talked Editor-in-Chief Kevin Gale about how Art and Ed Falcone had developed McDonald s franchises in upstate New York but traded them in for Wendy s in South Florida. I printed the story out and took it to the interview with Falcone in his Boca Raton office. I said I don t know if you remember or not but I interviewed you 30 years ago. He said I think the story is up on the wall. Sure enough there was a framed copy of the article. It had significance to him because it was one of the first articles in which he was featured. One of the things I found most impressive about Falcone was his sense of market timing. He took advantage of the S&L crisis in the late 1980s to pick up master-planned communities at huge discounts rather than doing lots one at a time. He sold Transeastern Homes just before the residential meltdown. He initially stumbled with Miami Worldcenter when the Great Recession happened but recapitalized to keep the project alive just as Miami was headed into its current upcycle. Falcone has also been able to adapt to the changing face of the housing market. While his Encore Capital Group still has about a dozen master-planned communities it has twice as many multifamily and urban mixed-use properties. That s exactly the trend unfolding in our region but it s also a broader trend nationally. You can see a list of some of these projects which span from New Jersey to California as part of our cover story. I think it gives a good idea of the scope of Falcone s business. I expect this won t be the end of our coverage on Falcone. I told him we shouldn t wait another 30 years between interviews. Kevin Gale 8 AUGUST 2016 YOUR PREMIER AIRPORT FOR BUSINESS Conveniently located in Uptown Fort Lauderdale Fort Lauderdale Executive Airport (FXE) is positioned to enhance your business travel experience. Notable amenities at FXE include a 24-hour air traffic control tower U.S. Customs facility with extended hours 24-hour security and your choice of four exceptional fixed-based operators. FOR EFFORTLESS TRAVEL TO FORT LAUDERDALE VISIT WWW.FLYFXE.COM. Gary Press gpress EDITOR-IN-CHIEF AND SENIOR VICE PRESIDENT OF STRATEGY Kevin Gale kgale COPY EDITOR Sherri Balefsky CHAIRMAN AND PUBLISHER Creative ART DIRECTORS Melanie Smit Alexander Hernandez Frank Papandrea Alisha Riddle Evelyn Robles CREATIVE DIRECTOR Writers CONTRIBUTING WRITERS Malcolm Berko Gerald Czarnecki Chris Fleck Steve Garber Kevin Kaminski Howard Kaye Leslie Kraft Burke Martin Lenkowsky Paul O. Lopez Darcie Lunsford David Lyons Julie Neitzel Arnold Rosenberg Greta Schultz Nick Sortal Photographers Downtown Photo Fort Lauderdale Larry Wood James Woodley Managing Director CLAYTON IDLE cidle Vice President of Business Development JILL HOROWITZ jhorowitz RICH LOPEZ GAIL SCOTT Market Directors lcastle JORDAN KNOWLES-BARTLEY jknowles LORI CASTLE OPERATIONS DIRECTOR DIRECTOR OF MARKETING & EVENTS MARKETING MANAGER rlopez gscott Monica St. Omer monica Jennifer Barb jbarb Estefania Marin emarin Steven Mariano SunCoast Holdings Chairman and CEO Neil Merin Merin Hunter Codman Chairman Ed Pozzuoli Tripp Scott President Chris Roberts Lexus of Kendall President Ron Shuffield EWM President Rachel Sapoznik Sapoznik Insurance CEO Terry Stiles Stiles Corp. Chairman and CEO Lisa Anderson TD Bank Vice President of Commercial Lending for Broward and Palm Beach Counties Mark Trowbridge Coral Gables Chamber of Commerce President and CEO Yamal Yidios Ytech International Jordan Zimmerman Zimmerman Partners Advertising Chairman and CEO Editorial Advisory Board Marc Brotman Brotman Nusbaum Ibrahim Founder and Partner Bob Birdsong OK Generators President Rick Case Rick Case Automotive Group Owner Monroe Gang Atlantic Partners CEO Gerald Greenspoon Greenspoon Marder Co-managing Director Howard Kaye Howard Kaye Insurance Michael Kaufman Kaufman Lynn Construction Founder President and CEO Michael Keeby Brown & Brown of Florida Executive Vice President Jeremy Larkin NAI Miami President Alan Levan BBX Capital Founder Gerry Litrento BankUnited Senior Executive Vice President SFBW Magazine 3511 W. COMMERCIAL BLVD. SUITE 200 FORT LAUDERDALE FLORIDA 33309 954.377.9470 FAX 954.617.9418 WWW.SFBWMAG.COM Manage Your SFBW Subscription Is SFBW arriving in your office with an outdated subscription label Contact Debra Curtis at dcurtis or (954) 377-9595 to give us updated information such as a new executive or someone no longer with your organization. Visit to see our digital content and sign up for our weekly newsletter 2016 SFBW magazine is published by Lifestyle Media Group all rights reserved. SFBW is a monthly advertising magazine. All contents are protected by copyright and may not be reproduced without written consent from the publisher. The advertiser is solely responsible for ad content and holds publisher harmless from any error. Covering the whole spectrum of Senior Living From independent to assisted living skilled nursing and memory care facilities Kaufman Lynn Construction has the building expertise to bring your project to life. In fact we continuously look for ways to save you time and money while building a best in class product. On-time performance accurate pricing & stringent quality control. Allegro Boynton Beach 561.361.6700 KaufmanLynn KaufmanLynnConstruction KaufmanLynnConstruction Lic. CGC 021732 Company Kaufman-Lynn-Construction SPACES Terraces will be outside each living room and bedroom 12 AUGUST 2016 SLS LUX BRICKELL IS PART TWO OF THE BRAND S SOUTH FLORIDA STORY BY LESLIE J. KRAFT Branded in Brickell Will there ever be enough luxury condos in Brickell Plenty of developers seem to think not and SBE a global hospitality and real estate development company is no exception. AUGUST 2016 13 SPACES A rooftop pool 58 stories up An LED facade by artist Ana Martinez Following the success of SLS Brickell Hotel & Residences which is already sold out and slated to open soon SBE and The Related Group along with The Allen Morris Company are developing SLS Lux Brickell slated for completion in 2017. With 450 residences and 86 luxury suites SLS Lux will feature world-class art private residential elevators a tennis and fitness center a rooftop pool a rock wall a wine cellar and cigar room a cocktail lounge and a ground-floor restaurant from celebrated sushi chef Katsuya Uechi. Residences range in price from 499 900 to 5.3 million. SLS Lux is an elevated brand created by SLS Hotels & Residences to offer luxurious accommodations and homes each with high-end amenities and an array of VIP services. The 58-story tower between Brickell City Centre and Mary Brickell Village was designed by internationally renowned architectural firm Arquitectonica and it will feature the first LED facade by prominent lighting artist Ana Martinez. Interior design is by Yabu Pushelberg with offices in Toronto and New York. Museum-quality art is planned in all common areas including works by Colombian sculptor Fernando Botero and Argentine artist Matias Duville and an exterior mural installation by Argentine abstractionist Fabian Burgos. Units will have views of Biscayne Bay and the Miami skyline. Terraces with glass and aluminum railings will be accessible directly from each unit s living areas and bedrooms. The private SkyBar on the 45th and 46th floors will have outdoor lounge space with a fire pit overlooking the bay and Miami s skyline. Inside will feature private wine cellars a tasting area and poker tables. A landscaped pool deck terrace will include cabanas live entertainment and open-air dining. The health and wellness center will have Technogym equipment and Kinesis Personal fitness stations. A spa will offer treatments and massage beds with iPod docks and herbal steam rooms. A children s playroom is planned as well with monitoring services and a supervised activity center led by professional staff on-demand. There will be indoor and outdoor play areas. Lounges are located throughout the building including a clubroom lounge that includes a media center with home-theater screening an iPod dock station with builtin speaker systems and a fully equipped kitchen. And an executive business center will have high-speed wireless connectivity and a conference room with audiovisual capabilities. TechnologyEnhanced Lifestyle The SLS Lux App compatible with Apple and Android smartphones and tablets will allow residents to Reserve a table for dinner at or order in-room dining from the ground-floor restaurant. Sign up for a class at the nearby Equinox gym. Reserve a time for the tennis court. Call for valet service. Make a spa appointment. Book a limousine ride to SLS Beach Club. Buy tickets to the opera or a movie. Control each unit s lighting window treatments audiovisuals and temperature. The SLS Kid s Room 14 AUGUST 2016 Don t overthink transportation and logistics. That s our job. It s hard for you to grow your business when you re too focused on moving it. We ll get rid of your headaches by bringing you the Fleet Management Supply Chain and Dedicated Transportation solutions you need to improve - all backed by over 80 years of expertise. Discover how outsourcing with us can improve your fleet management and supply chain performance at Ryder and the Ryder logo are registered trademarks of Ryder System Inc. Copyright 2016 Ryder System Inc. AUGUST 2016 15 COVER STORY GREENSPOON MARDER ACCELERATES GROWTH AS IT HITS 35 YEARS STORY BY KEVIN GALE PHOTOGRAPHY BY ALVARO MATA Founders in Charge The names of the top law firms in South on a daily basis Marder is based in strong an unbelievably synergistic thing. They worked together there for three Florida typically come from long-since- Orlando and Greenspoon is based in Fort years gaining experience in real estate departed founding partners. However Lauderdale they talk constantly. Even as ideas are coming to me or business and commercial litigation law that s not the case at Greenspoon Marder. Gerald Greenspoon and Michael I m thinking about something it s never but they became unhappy and wanted Marder started their firm in 1981 and are in a vacuum it s never alone. It s done some changes. The request was rejected still running it as co-managing directors 35 with a discussion with my best friend so they left. Their backgrounds may help explain Greenspoon says. years later. Marder says they first met 38 years their perspectives as leaders and That s probably an understatement. Greenspoon Marder has been a juggernaut ago while working for a seven-member willingness to take risks. Greenspoon who left Montreal amid during the last two years with offices law firm a few blocks from the new Miami opening from Miami Miami Beach and office. We became instant friends like the Quebec separatist movement in the Tallahassee to Las Vegas San Diego brothers he recalls. I would say our bond 1970s is the son of Holocaust survivors. and New York City. It has vaulted up the has grown through the years. It was always My dad survived various camps and my mother survived with ranks of national her dad by hiding in firms and is now the woods of various the sixth-largest secret areas he law firm in South says. They both Florida on track witnessed atrocities to employ 200 and experiences attorneys by the that we can t even end of the year. describe. He says And it recently their experiences made headlines cause him to become by becoming one upset by any form of of the nation s discrimination. first major firms Marder was born to open a cannabis in Philadelphia but law practice. grew up in North SFBW caught Miami Beach. He up with the duo lost both his parents at their new office to illness as a on the 36th floor teenager. of Miami s 600 A party to celebrate the opening of the new Miami office whose bar symbolizes At different Brickell. While Greenspoon Marder s alcoholic beverage regulated industry practice. points in the they aren t together 16 AUGUST 2016 Michael Marder and Gerald Greenspoon COVER STORY COVER STORY The new Miami office includes a caf for employees interview they both said We do not have any fear of our ability to do anything. The foundations to their success include putting clients first keeping an entrepreneurial mind-set anticipating growth areas in law taking calculated risks and creating a lowturnover career-minded workplace. During the hiring process the firm tries to project where someone will be in five 10 or 15 years. We want them to be successful and show them the way Greenspoon says. Sometimes there are tough decisions that lead to separations but Marder uses a football analogy to explain why many associates stay Someone who can accept being the backup quarterback can bring value as well. One early example of anticipating growth areas was offering legal services for the timeshare industry when it was in its infancy. We said this is a really interesting business and it is going to be big some day Marder says adding that he didn t dream that the likes of Disney Universal Marriott and Hyatt would turn it into a multibillion industry. While the firm started out in North Miami the Orlando office was added because the timeshare resort business became strong there. In fact Marder is general counsel for Westgate Resorts which was ranked in 2015 by the Orlando Business Journal as the region s secondlargest private company with 841.68 million in sales. Marder is also on the board of the American Resort Association and played a role in 2010 state legislation that allowed nonjudicial foreclosure on timeshare interests. In South Florida Greenspoon Marder has a long relationship with Berkley Group which is headquartered in Fort Lauderdale. Its website says it has 14 resorts and offers timeshares for sale in 50 resorts. We are more than extremely close with the executives the employees and the strategies of those companies Greenspoon says. As they grew we grew with them. The multidisciplinary nature of the timeshare legal work helped Greenspoon Marder diversify into a full-service firm with 188 lawyers in 60 practice areas. In June it jumped 35 places to No. 236 on The National Law Journal s list of largest U.S. law firms. We don t wait for opportunities to come to us. We envision where the opportunities are and seek them out Marder says. The partners have a philosophy of trying to make good decisions with all the information available knowing some decisions won t turn out perfectly Marder says. We don t beat ourselves up if it doesn t turn out. There s no secondguessing. ... We know we are going to be right more than we can be wrong. In making key decisions they weigh the worst-case scenario and formulate their risk tolerance Marder says. If they can accept the worst-case scenario they can more comfortably focus on the opportunity. Marder says he is good at execution while Greenspoon is a tremendous visionary. Gerry has an amazing sense of what the next opportunity is. I never know what the day is going to bring and what sort of call I m going to get from him Marder says. 18 AUGUST 2016 COVER STORY COVER STORY TIMELINE 1981 Greenspoon Marder begins with a handshake between Michael Marder and Gerald Greenspoon. 2004 Greenspoon Marder reaches 52 attorneys as it combines with Abrams Anton a 12-lawyer firm with offices in Hollywood and Boca Raton. 2008 Former State Senate Minority Leader Steve Geller joins the firm. 2011 Gerald Greenspoon and Michael Marder talk to party attendeees 50 attorneys from Ruden McClosky join Greenspoon Marder after Ruden files for bankruptcy. Greenspoon says a key consideration is always how a decision will affect shareholders. We want them to benefit as much as possible. That has worked because we basically have no turnover in our shareholders. They are here for life they love it and they are so happy. It s not because we tie them here but because they say this is a great place to be Greenspoon says. The firm has had significant talent acquisitions most notably in 2011 when 50 attorneys from Ruden McClosky came on board. Ruden had 200 lawyers at its peak but ended up in Chapter 11 bankruptcy after Florida s real estate market collapsed. Creditors got 5.8 million in cash as part of Greenspoon Marder s bid to buy what was left of the firm excluding its Tampa office. We were fortunate we didn t have any layoffs of attorneys during the recession Marder says. That wasn t just by chance though. Many years before we had made a strategic point to diversify the practices Greenspoon says. At the same time we looked at what will be productive during this time. ... We were able to redeploy real estate attorneys into representing banks and institutional lenders in the foreclosure process. Greenspoon says the firm watches costs carefully. The goal is to maintain and increase profitability and compensation for shareholders. Opening a New York office was considered for several years he says. The firm wanted to be involved in high-level corporate securities such as large private-equity deals and representing public companies in registrations and filings with the Securities and Exchange 2013 Commission. Lease signed for 65 000-square-foot office in We came to the conclusion downtown Fort Lauderdale. that needed to be done from New Firm forms nonprofit foundation. York City Greenspoon says. Tampa office opens. In April the firm announced the addition of Jacob Medinger 2015 & Finnegan a New York litigation boutique. It has Revenue tops 100 million for the first time. experience in complex corporate Miami Miami Beach and Tallahassee offices and commercial matters product open Boca Raton and West Palm Beach offices liability defense and mass torts move to larger spaces which have multiple plaintiffs Alcoholic beverage division begins. and sometimes more than one defendant. 2016 Greenspoon Marder added a Regulated-industries practice expands to include family and family law practice in cannabis law with offices opening in Las Vegas New York in July with the addition Denver and San Diego. of new shareholders Robert M. New York office opens. Preston and Arthur D. Ettinger and Miami office moves takes over 36th floor of 600 six more attorneys. Brickell building. In June Greenspoon Marder announced the opening of its cannabis practice and the related People ask the partners if they have a personal addition of lawyers in Las Vegas Denver and San Diego. The practice will represent investors view amid the cannabis legalization debate. private-equity funds public companies health Marder says everyone deserves a lawyer even if care providers growers processors and retailers. it means taking on an unpopular issue. That is what makes the country great he A news release estimated the size of the legalized says. It s our job to do that whether it s popular or marijuana industry at 5.4 billion. We have clients who got in this business unpopular even though we might have a personal opinion. Marder says. The firm is already in the regulated industries of health care alcohol firearms and tobacco. AUGUST 2016 19 THE BIG ONE Flooding after a 1947 hurricane in Miami (HistoryMiami) 20 AUGUST 2016 INSURANCE INSURANCE Wind insurance losses could hit 150 billion in a worst-case scenario BY MARTIN LENKOWSKY Weather experts say it s simply a matter of when and not if. South Floridians someday will find themselves staring into the literal eye of a monster as a huge potentially catastrophic hurricane makes landfall. We ve been fortunate the past 10 years. The last time a hurricane struck South Florida was October 2005 when Hurricane Wilma made landfall near Naples as a category 3 storm and churned east across the southern portion of the state two days after ravaging Mexico s Yucatan Peninsula. Historically South Florida is no stranger to major hurricanes like Wilma. Hurricane Andrew brought 175 mph (category 5) winds ashore in Homestead in August 1992. The damage was catastrophic but it could have been much worse At one point Andrew was projected to hit near the Miami-Dade Broward county line. Instead it hit on the southern end of the metro area. Hurricane Andrew s afermath (Tim Chapman Collection History Miami) AUGUST 2016 21 INSURANCE Hurricane Andrew pounded southern MiamiDade County One worrisome scenario would be a repeat of the 1926 Great Miami Hurricane (category 4) which carved a path of destruction throughout MiamiDade Broward and Palm Beach counties resulting in at least 350 deaths and 105 million in damages. Many deaths occurred around Lake Okeechobee when the winds swept water over the dikes and into surrounding rural communities. That storm s path took the eye directly over Miami resulting in massive structural damage and a 10to 15-foot storm surge. It s estimated Brian Zachry if a similar storm struck South Florida today we would incur at least 100 billion in damages. A repeat of that hurricane would create 43 billion in insurance losses not counting deductibles says Florida International University professor Shahid Hamid chair of the school s Department of Finance. He leads the development and operation of the Florida Public Insurance Loss Model which forecasts the insurance losses caused by hurricanes. With deductibles subtracted the cost to insurance companies would be reduced to 36 to 38 billion. The total economic loss would be two to three times that Hamid says. That would include damage to infrastructure. Experts say the most horrific scenario would be a major hurricane striking the coast of Miami-Dade County turning north and then hugging the coastline of both Broward and Palm Beach counties. That s our worst nightmare Hamid says but the chance of that happening is low. Should that scenario come to fruition insurance losses without deductibles could reach 150 billion. Hamid points out the insurance-loss models are based only on wind damage and don t include losses from flooding. Flood insurance is obtained through the federal government. THE CASE FOR FLOOD INSURANCE Everyone living in South Florida should consider buying flood insurance whether or not they re required to have it says Erik Salna associate director of FIU s International Hurricane Research Center. In the event of a hurricane there would be two sources of flooding coastal storm surges and torrential rainfall inland. Severe wind and flood damage are a fact of life with any hurricane hitting land. However the loss of life would be less today than in the past because of technology and an increasingly accurate forecasting ability experts say. Storms don t sneak up on us anymore Salna says. Emergency management would have time to evacuate. They need two or three days lead time. Salna says getting some people to evacuate is never easy. How many will evacuate he asks. The bottom line is if you live in an evacuation zone you should evacuate. End of story. 22 AUGUST 2016 Storm surge risk Cost of reconstruction based on total destruction (billions) New York South Florida New Orleans Virginia Beach Tampa 94 83 80 144 260 Number of homes at risk South Florida New York Tampa New Orleans Virginia Beach 780 482 719 373 454 746 390 806 385 084 Source CoreLogic NEW STORM SURGE WARNINGS Inland waterways have been known to flood as well in major hurricanes Salna says. Rivers can overrun their banks as the ocean s storm surge flows into them. The biggest killer in a hurricane is the storm surge. Fifty percent of the lives we lose in a hurricane is due to the storm surge says Brian Zachry a National Hurricane Center storm surge specialist. This season for the first time the NHC is issuing colorcoded prediction maps to advise those in danger to evacuate. If people can see on a map that they re going to be underwater they might heed the warnings Zachry says. Our technology has gotten so much better we can create these products. When storm surge forecast maps are drawn Zachry says they run between 500 and 1 000 different scenarios. Every possibility is built into that he says. Our new products not only show how high the water will get but how far inland it will go. The 1926 hurricane caused a 10- to 15foot surge leading to massive flooding Michael Lyons and structural damage. (For comparison Hurricane Andrew created a 17-foot surge.) When it struck an unprepared South Florida there were two phases to the death and destruction. First many lives were lost people were trapped by the onslaught of water and wind when the eye passed says Paul George a noted South Florida historian and a history professor at Miami-Dade College. Then because many Miami residents at the time were new to the area and had never experienced a hurricane before many left the safety of their homes and ventured outside unaware the dangerous second half of the storm was still to come. In 1926 we weren t prepared he said. The region still wasn t in 1928 when another hurricane made landfall in Palm Beach County and killed more than 2 500 people in and around Lake Okeechobee. He points out even in the case of Hurricane Andrew which hit six decades later forecasters knew it was coming but didn t have a precise idea exactly where it was going to hit. I think if we had a better idea we would ve evacuated more people George says. If a hurricane approaches South Florida the South Florida Water Management District immediately institutes measures to lessen the threat of inland flooding. The first thing to do is to communicate with all drainage and flood control districts says SFWMD spokesman Randy Smith. We would coordinate a pre-storm drawdown to handle a lot of runoff. The primary purpose of this agency is flood control. A drawdown refers to draining existing bodies of water to the ocean in order to lower the levels. You can accomplish a lot of flood control with this system Smith says. However no system is perfect. You never can guarantee there won t be flooding he says. We still have very low-lying areas without a good system. Lowering the water levels will allow for some runoff from secondary systems but some waterways can become clogged from uprooted trees and other storm debris. Overall Smith expects the drainage systems will function adequately in the suburban areas. In the event of a storm surge the district also can close coastal flood gates on some canals and rivers. PAYING THE CLAIMS In the aftermath of a damaging hurricane countless insurance claims will be filed for property damage. Michael Lyons CEO of Weston Insurance Company in Coral Gables is optimistic the insurance industry will be able to honor its obligations. Weston Insurance is a member of the Florida Property & Casualty Association. I can t speak for everyone else but we can handle it Lyons says. He says insurance companies purchase billions of dollars in reinsurance a shared-risk arrangement from other companies around the world just in case the big one hits. We buy a little more than 1.2 billion in reinsurance he says. We try to buy the right amount. The risk gets spread around the world to people you don t think would be involved with the hurricane risk in Florida. Lyons says the insurance industry looks at models of the 1926 hurricane with particular concern. That was the worst he says. The worst part of the storm the top-right quadrant went right across Miami Beach and downtown Miami. It was a high category-4 storm. Even back then that area had a high population density. AUGUST 2016 23 FEATURE King Rex Printing company s founder and family keep innovating for six decades BY KEVIN GALE Rex 3 founder Julius Miller is 94 but that doesn t stop him from embracing change. His company recently spent 4.75 million on new technology including a 4 million Heidelberg Speedmaster XL 106 press. It s dubbed The Superpress because it can print 18 000 29-inch-by41-inch sheets of paper an hour. It can provide 30 percent more output than the six presses it replaced says CEO Steve Miller and there are only four of its kind in the United States the company says. It also cut waste by 30 percent. Rex 3 which has 200 employees is one of those companies you might not know about although you ve probably seen its products. Among other things the 100 000-square-foot plant in Sunrise makes product packaging such as folding cartons and pop-up displays Topps sports collectible cards and onboard printed information for Royal Caribbean International s cruise ships. For nearly 60 decades it has continued to broaden its services investing heavily in software that automates processes and interacts with customer systems. One of its spinoffs is SproutLoud which helps brands engage local sales and distribution partners. Meeting with Julius his son (CEO Steve) and his nephew (COO Howard Shusterman) is a cross between meeting savvy business leaders and walking into a comedy club given the ongoing banter. I m an old-time photo engraver. I m young but I look old Julius says. I m just here to see if they show up every day. Julius who sometimes entertains Steve and Howard with tales of his nonagenarian love life was born in Poland and came to Miami via New York. His father-in-law taught him about photo engraving a process that results in images for printing plates. His first business started in 1956 on 20th Street in Miami. Rex Engraving was born in 1959 when he borrowed money from someone in Washington D.C. whose business was called Rex. The longtime Miami home was at Sixth Street and Miami Avenue next to the Florida East Coast Railway tracks. A good deal eventually led to the move to Sunrise where Rex 3 has a 10-acre site. Rex was able to accumulate an array of prestigious clients such as advertising agencies (including Crispin Porter & Bogusky and Young & Rubicam) hotels and department stores. Emphasizing technology and broadening services is a long-standing strategy. In 1972 Rex 3 says it became the first company in Florida with digital scanning to do color separations which is needed to create the multiple printing plates that add up to full color. In the 1980s it opened a design production and photography division. In the 1990s Rex 3 founder Julius Miller it added at the control panel of the mailing Heidelberg Superpress 24 AUGUST 2016 FEATURE AUGUST 2016 25 FEATURE The Heidelberg Speedmaster XL 106 can print up to 18 000 29-inch-by-41-inch sheets an hour distribution and fulfillment services. SproutLoud launched in 2006 to offer custom marketing and brand management solutions. That includes social media search engine optimization email marketing mobile websites direct mail and event marketing. Its CEO and managing partner is Howard s son Jared. In 2009 Rex 3 created software to automatically replenish print products used on Royal Caribbean s fleet. Its variable data service department can change out data and images to create individualized marketing material. If someone went cruising because they liked food we would show food shots. If someone liked beaches we would show beach shots Shusterman says. The company engineers intricate product boxes for major clients at no cost with the idea of winning the printing business. One of the biggest things we push is we are a one-stop company Shusterman says. It s all done under one roof. That allows us to be more price-efficient. One of the most interesting aspects of Rex 3 s business is the Topps sports cards which have gone well beyond the pack of cards with a piece of gum. Customers can design cards using templates on that includes their own photograph and the logo of their favorite team. The online orders flow through directly to Rex 3. A pack of eight cards is 9.99. Topps Now cards commemorate dramatic sporting events such as the Miami Marlins Ichiro Suzuki setting a record June 15 for the most combined hits in Japanese and U.S. baseball. Topps puts a 24-hour time limit on how long the 9.99 cards can be bought at that price. Then there are relic cards which have embedded artifacts such as a piece of a game uniform or piece of a basketball. They can go for 1 800 to 3 000 each. Each relic card is numbered Shusterman says. There is nothing fake about this. Shusterman picks up an autographed card with a piece of a bat embedded. It s of former New York Yankees All-Star Don Mattingly who now manages the Miami Marlins. Shusterman quips I actually would like to steal this myself. 26 AUGUST 2016 The Lattitude One Building 175 SW 7 Street Suite 2310 Miami FL 33130 Ph. 305.809.8085 w w w. l i f e s t y l e i r. c o m Westchester Branches Located Brickell Westchester Miami Lakes And Coming Soon To Miami Beach & Las Olas Fastest Growing Real Estate Firm In South Florida 24 Hour Concierge Service 13202 Nw 102 Ave Miami Fl 33018 Asking Price 1.3M 5 Beds 6 Baths 7 700 Sqft Custom Built In 2016 Over 1 Acre Lot 1100 Biscayne Blvd 4704 Asking Price 1.15M 2 Bed 2 Bath 1500 SQFT Furnished Custom Finishes Beautiful Bay View AUGUST 2016 Miami Lakes 27 Brickell 28 AUGUST 2016 PROFILE Going leveraging it for success. Emerging marketing strategy pays off for Pinnacle s Peter Gary BY ARNIE ROSENBERG PHOTOGRAPHY BY LARRY WOOD Mobile For Peter Gary it s all about developing expertise then After eight years in the Marine Corps he found himself in automotive retail sales rising quickly to become the No. 1 Nissan salesman in the country in 1989. He parlayed that into running auto dealerships across the country including a major South Florida dealership and to running the sales team for Autobase an automotive customer relationship management service provider which he grew from 167 dealers to 3 000 in just five years. Yet he knew that wasn t the end. I absolutely loved listening to the dealers and what their issues were and on the opposite side what the challenges AUGUST 2016 29 PROFILE were inside the agency to fix the problems the dealers had recalls Gary 52 CEO of Pinnacle Marketing and Advertising Group. But as an entrepreneur I felt that having all your eggs in one portfolio and just automotive was limiting yourself. In about 2006 he began seeing possibilities for mobile technology. I began looking at different ways to market through the internet not only how people would be doing it but also what devices they were going to be using. People were carrying a lot more devices they could interact with he says. When marketers remained skeptical worrying that mobile was too intrusive Gary embraced it. He started a company called Mobile Engage just 15 employees doing about 18 million in business that allowed him to open people s eyes. In 2006-07 when advertising dollars were shrinking quickly Gary was offering clients his digital expertise and the same return they already were getting at a fraction of what they already were spending. His knowledge in what was a relatively new field landed him on the board of the Mobile Marketing Association and ultimately to found Pinnacle Marketing and Advertising Group in 2010. His vision for the Boca Raton company isn t to be a traditional advertising or marketing shop but a marketing solution. It doesn t matter if you need production digital mobile coding. Everything is done under one roof so you have consistency going to market including the vision he says. I truly believed back then that (mobile) was going to change the way we looked at how media buying was done that it no longer was just three forms of media to buy radio print and TV. It was going to be a minimum of seven or eight with mobile as a specific medium. Until then little marketing had been done directly on mobile applications and Gary once again took his expertise to his clients. They wanted custom smartphone apps but they didn t really know how to use them he says. Having an app isn t a mobile strategy Gary says. Having an app is a crutch. It makes you feel good. In order to have a mobile strategy you need to define how you re going to communicate with your client and how your client wants to use you on a mobile platform. Gary still is building his digital product portfolio. Now in beta testing is Peak Intelligence designed to offer clients in a wide array of industries endless information analytics and ways to use them all no matter their tech savviness. An eighth-grader will be able to read it he says. Gary says Peak Intelligence will take Pinnacle from 32 employees today to 120 in five years and boost business from 40 million to 100 million. He expects the philosophy that s brought him success is what will enable Pinnacle to grow. You go in (to a client) and establish a relationship and once you have that relationship you prove what you can do and then build that relationship Gary says. You need to be able to show them you re a subject-matter expert that you can perform and help them grow. COI access ...connecting Centers of Influence TM COI access works closely with our clients to cultivate and execute on their business development growth and talent acquisition strategies. Corporate Lobbying Strategy Execution Talent Advisors 30 AUGUST 2016 N E W S TA D I U M - N E W E X P E R I E N C E As par t of the 450 million new stadium modernization all suites will be remodeled for the 2017 season. Enter tain your top clients prospec ts and employees with best-in- class benefits and amenities. F O R M O R E I N F O R M AT I O N P L E A S E C O N TA C T D AV E B A L D W I N AT 3 0 5 - 9 4 3 - 6 6 5 4 O R D B A L D W I N D O L P H I N S . C O M . AUGUST 2016 31 SPORTS 32 AUGUST 2016 SPORTS Man on a Mission FAU football coach Charlie Partridge reflects on the foundation he s building in Boca Raton Everything you need to know about the head football coach at Florida Atlantic University fits on a walletsized card that each of his players are expected to carry. On one side are the team s five rules Be on time don t do drugs make good decisions respect others and compete. On the flip side is a reminder from Charlie Partridge to get out when confronted with a situation that could embarrass or hurt the program. That s what real men do says Partridge who begins third season at the helm when FAU hosts Southern Illinois on Sept. 3. The childish thing is to stay and engage. When you know there s trouble leave and get everyone you love and care about out of there with you. Someone will make a mistake. I know that. And we ll address it and deal with it. But our culture is now sustainable. And that will lead to victories. Three years ago following the abrupt departure in November 2013 of secondyear coach Carl Pelini amid allegations of drug use football at FAU felt rudderless on and off the field. In dire need of a steady hand the program turned to a straight shooter with local ties (Partridge is from Plantation) a strong sense of family purpose and direction and no head coaching experience. The record book may show consecutive 3-9 seasons under Partridge but wins and losses don t tell the entire story. Something is brewing on the campus at Boca Raton a sea change that extends to the classroom where last year more players recorded a GPA of 3.0 or higher than any year in school history. As a player Partridge was an undersized defensive lineman and threeyear starter at Drake the same school that gave him his first coaching job in 1996. Back then he relied on raw emotion because I always felt I had something to at Eastern Illinois for I think 30 000. prove. As a coach Partridge is seeing the I said Honey we have a chance to go bigger picture and doing so with greater coach in Charleston Illinois and my pay is going to get cut in half. I didn t even clarity every day. He shares some of what he s learned have a chance to finish the sentence. Let s figure out how to make it work over the years. Words to live by I came in here she said. My wife is incredible. Eye on the prize The best teams that with a concept of what we were going to be from a culture standpoint. What we I ve been a part of have been the ones with were going to stand for. You better stand the fewest distractions. The sheer volume for something or you re not going to be of our distractions has dramatically decreased from when I first got here. anything. Brick by brick I talk to our kids Straight talk Through years of recruiting the South Florida area I about this. When an office building is established a reputation I may not tell you being constructed you don t see much what you like but I m going to tell you happening for months and then all of what s truly going on. Sometimes that the sudden it s up. What was happening all those months They were building line gets blurred in recruiting. Savor each second More than anyone the foundation. We re at that level now. I ve been around J.J. Watt (the three- Culture has inertia. It s hard to get going time NFL Defensive Player of the Year but when it starts it s hard to stop the for the Houston Texans who Partridge momentum. coached at Wisconsin) understands the clock. He knows that the clock is always ticking. He has a finite amount of time to accomplish everything he wants Age 42 to accomplish in Hometown Plantation life so he takes Family Wife Julie (married 15 years) daughters advantage of every Alexa (10) and Kylee (7) minute. College Drake (bachelor s degree in secondary Unsung hero When I was education 1995) Iowa State (master s in education at Iowa State I 2002) was promoted to Coaching highlights Head coach at Florida Atlantic director of football University since 2014 (6-18 overall record) assistant operations (in head coach at Arkansas (2013) associate head coach 2000). It wasn t my at Wisconsin (2011-2012 defensive line coach at calling I wanted to coach and my UW from 2008-2010) special teams coordinator at wife knew it. At the Pittsburgh (2006-2007 defensive line coach at Pitt time I was making from 2003-2005) defensive line coach at Eastern somewhere around Illinois (2002) 60 000. ... I got a chance to coach The Partridge File FAU Coach Charlie Partridge AUGUST 2016 33 CONSTRUCTION THE ULTRA PROJECT Meet the Ironman leading construction of MiamiCentral BY KEVIN GALE John Planz is leading construction of Miami s half-mile high-speed rail station the same way he runs 100mile races by breaking it into small manageable parts. Brightline s MiamiCentral station which has a 9-acre site just north of the historic Miami-Dade County Courthouse on Flagler Street has come out of the ground rapidly in recent months. Workers were poised to start attaching steel framework to the concrete support structures during a tour given by Planz who is vice president of Miami operations for Suffolk Construction. He sees a parallel between MiamiCentral where he is the project manager and his ultramarathon runs. It should look overwhelming. It s a half-mile-long bridge with three buildings being built over it Planz MiamiCentral overview looking south. Inset John Panz running in the Florida Keys AUGUST 2016 35 CONSTRUCTION John Planz on MiamiCentral site The core of a MiamiCentral building emerges says. You say it s impossible. When it comes to a 100-mile race you think it s impossible. For both the races and the project he has a plan and a crew. His mental approach to ultramarathons is to tell himself he s just running 2 miles at a time which is when he swaps out his hydration bottles. You just continue to go 2 miles. I did the same for the project. I broke it up into small manageable parts. He has a 30-member team on the project including some colleagues who have been part of his support team for ultramarathons. Planz s job is akin to being an orchestra conductor for the roughly 15 contractors who may be working on the project at any given time. There are typically 400 workers on the site. Planz took up ultramarathons after earlier doing marathons and Ironman races. He has done at least 150 marathons which are 26.2 miles and 18 Ironman Triathlons which combine a 2.4-mile swim a 112mile bike ride and a marathon. It s not unusual for Planz to get up at 3 a.m. at his home in Miami s Roads neighborhood to do a training run before work. Planz finished the 2016 Keys 100 Ultramarathon in 25 hours and 22 minutes placing 28th overall and third in his age group. It was his third time doing the race and at age 54 his best time. His next long race is a 50-kilometer run (31 miles) on Aug. 28 in upstate New York. Planz who was born in Albany New York was a scholarship baseball player at Gannon University where he majored in electrical engineering. He returned to Suffolk three years ago after working with the company from 1996 to 2008. Working with Suffolk Southeastern President and GM Jeffrey Gouveia and VP Chris Kennedy is like working with family he says. After working on some other projects including Atlantech Plaza in Fort Lauderdale he had the opportunity to work on the station proposal. Bostonbased Suffolk which is one of the nation s largest construction companies was chosen from a handful of finalists Planz says. At the start of the tour Planz explained how passengers arriving in Miami will glide up an incline north of Northwest First Avenue and Eighth Street the northern edge of the station. The tracks will be 50 feet above street level. As an example of just one of the complexities of the project Planz pointed to a concrete support that bridges over the Florida East Coast Railway spur leading to PortMiami. That had to be built while freight trains still rumbled underneath. His project must not only cross over three city streets but the Metromover as well. During the tour the concrete cores of the three buildings had taken shape. The northernmost building will house offices while the southern two towers which are connected at the base will be apartments. The first phase of the rail system in mid-2017 will connect the downtowns of Miami Fort Lauderdale and West Palm Beach with each segment about a halfhour of travel time. In 2018 the system will provide a three-hour trip to Orlando International Airport connecting the state s two biggest international tourism destinations. MiamiCentral also has platforms for the Tri-Rail commuter system and will have connections for both Metrorail and Metromover. When I started reading about it I realized it was more than just a project because of what it s going to do for the state. It s also going to change the entire landscape of downtown Planz says. You become in awe that you have the opportunity to be a part of something like that. AUGUST 2016 37 Over 100 Skippers Crews Compete To See Who is Best in World Melges 24 World Championships Miami Yacht Club 26 Nov - 3 Dec 2016 The Melges 24 is the World s Premier Sportboat Racing Class. Its Diverse Racers vary from Top Professionals to Amateur Yacht Club Racers and Families. 38 AUGUST 2016 For Sponsorship Information contact Tim Browne 952-594-5395. Entrepreneurs Organization The Entrepreneurs Organization (EO) is a global business network of 11 000 business owners in 150 chapters and 48 countries. Founded in 1987 by a group of young entrepreneurs EO enables small and large business owners to learn from each other leading to greater business success and an enriched personal life. The EO South Florida chapter is one of the top 5 chapters worldwide and helps leading entrepreneurs learn and grow through peer-to-peer workshops once-in-a-lifetime experiences and connections to experts. Visit Ask a South Florida Entrepreneur Zachary S. Kirstein Matthew J. Weiss CEO RDZ Productions LLC RDZ Productions is a production company that just finished its first film entitled Man In Red Bandana a documentary about an extraordinary 9 11 hero Welles Crowther. Based in Boca Raton RDZ is releasing the film in September 2016. Proudest Accomplishment Convincing Gwyneth Paltrow to narrate our film a first for this Oscar-winning actress. Greatest Challenges Making a compelling film about a hero with only roughly 30 seconds of footage of Welles. What motivates me Telling an amazing story in a way that is engaging educating and entertaining. What do you love about what you do Inspiring others to push their comfort zones and be the very best that they can be. If I could make a quality film with no experience or training what is stopping you from pursuing your passion Most memorable EO Experience Too many to list but partying at the Playboy Mansion helicoptering to the floor of the Grand Canyon and raiding a mock crack house at the DEA offices. What distinguishes your company RDZ s ability to make a professional and inspiring film without the large budget usually associated with similar productions. Recent Movie Exit Through The Gift Shop one of my favorite documentaries ever. Vice President - 4th Generation Recycling Inc. Fourth Generation Recycling (4G) is an international recycling company headquartered in Fort Lauderdale FL. We specialize in paper plastic and metal recycling that is generated from Printers Packaging Companies Paper Converters and Distribution Centers. Proudest Accomplishment Building a world class organization that promotes global sustainability while assisting our clients in maximizing revenues from waste byproducts. Celebrating the birth of my first Daughter Mirabel (5G). Greatest Challenges Coordinating the shipment of thousands of trucks across the country and exporting containers of recyclables all over the world. What motivates me Revolutionizing the recycling industry through creativity & innovation and making my family proud. What do you love about what you do Creating a family environment in our offices that makes our team proud to be a part of 4G. Helping to educate our customers on how they can make more from their waste and recycle smarter. Most memorable EO Experience My first day in EO I attended an event at Excel Autos in Boca. I walk in the door and they ask me if I prefer to test drive a Ferrari or a Lamborghini... I picked the Ferrari. What distinguishes your company We are the industry leader in customer service with a commitment to continuous improvement and transparency. Recent Book Good to Great Why Some Companies Make the Leap... and Others Don t by Jim Collins. AUGUST 2016 39 HOSPITALITY Kolter Hospitality is planning a 46-story hotel at 100 E. Las Olas Boulevard Kolter s growing collection of hotels keeps its leader going BY ARNIE ROSENBERG PHOTOGRAPHY BY LARRY WOOD MORE THAN GUEST-WORK Scott Webb knew all about office buildings. Heading up the commercial division of West Palm Beach-based Kolter Group he oversaw some 5 million square feet of office space. Yet he didn t know hotels. So when the company created its hospitality division two years ago and tapped Webb as president it was a learning experience not just for him but for everyone involved. The challenges were numerous recounts Webb despite having 19 years of Kolter experience at the time. While we were commercial owners and managers of office buildings hotels were a totally different animal. It s going from owning bricks and sticks and managing the physical plant to running an operating business. Kolter had opened the Hyatt Place in downtown West Palm Beach and the Hilton Garden Inn in Palm Beach Gardens in late 2008 and early 2009 respectively with an eye toward stabilizing them and selling them. But a combination of the poor real estate market and new opportunity helped drive 2014 s formal launch of Kolter Hospitality. Today the company owns five Westin Hilton and Hyatt hotels across Florida and has another four under construction or development. By 2018 its portfolio will grow 40 AUGUST 2016 Margaritaville Hollywood Beach Resort Scott Webb HOSPITALITY to nearly 1 900 rooms including a 200-room Hyatt Place in downtown Boca Raton and Fort Lauderdale s tallest tower a 46-story hotel condominium project on Las Olas Boulevard. We re targeting Florida to start but real estate is local. To really understand it you have to live here you have to work here you have to play here Webb says. You can own 50 hotels and be all over the place but you really have to understand it properly to maximize your performance and that s what we do. Webb visits Kolter s hotels every week and in the process demonstrates not only the company s culture but also his own commitment to the employees who make the operation a success. Most employees of a hotel don t make a ton of money Webb acknowledges. It s a very tough life and they deserve all the respect for making a hotel run properly. I m on a first-name basis with most employees. I don t want them calling me Mr. Webb. Call me Scott. I don t think of myself as the president of the company. I m just one of the cogs in the wheel that makes this thing work. Webb s real estate experience whether in office buildings or hotels is helping drive Kolter Hospitality which has begun adding full-service hotels to its portfolio of limited-amenity properties. Earlier this year Kolter received Hyatt s Strategic Partner award. It recognizes companies for their commendable culture performance and operating philosophies among other qualities Hyatt says. The reality for us our focus always is about loyalty loyalty to our team members which will translate into loyalty from our guests. If our team members are happy and enjoy what they do and like where they work that comes across in everything we do Webb says. It has been great to watch the hotel operations grow Webb says. We ve taken it from two little hotels we were going to sell and built a very solid operating company out of it and it continues to grow. We ve worked hard and really have some momentum going. It s incredibly satisfying to watch this come together and watch us grow as a team. KOLTER HOSPITALITY PORTFOLIO Open Hyatt Place Coconut Point 108 rooms 23120 Via Villagio Estero Hilton Garden Inn 175 rooms 3505 Kyoto Gardens Drive Palm Beach Gardens Hyatt Place West Palm Beach 165 rooms 295 Lakeview Ave. Hyatt Place Delray Beach 134 rooms 104 NE 2nd Ave. Hyatt Place Fort Lauderdale-17th Street Convention Center 126 rooms 1851 SE 10th Ave. Upcoming Hyatt Place 200 rooms 100 E. Palmetto Park Road Boca Raton To be named 46-story hotel (238 rooms) and condo (120 units) at 100 E. Las Olas Blvd. Fort Lauderdale Westin Sarasota 255 rooms One North Tamiami Trail Sarasota Hyatt Place St. Petersburg 175 rooms 25 Second Street St. Petersburg MANAGE YOUR SFBW SUBSCRIPTION IS SFBW ARRIVING IN YOUR OFFICE WITH AN OUTDATED SUBSCRIPTION LABEL CONTACT DEBRA CURTIS AT DCURTIS TRIBALBUSINESSJOURNAL.COM OR (954) 377-9595 TO GIVE US UPDATED INFORMATION SUCH AS A NEW EXECUTIVE OR SOMEONE NO LONGER WITH YOUR ORGANIZATION. Attractive Affluent C-Suite page is looking for South Florida companIES that want strong double digit revenue growth. VISIT SFBWMAG.COM TO SEE OUR DIGITAL CONTENT AND SIGN UP FOR OUR WEEKLY NEWSLETTER For advertising and event sponsorship opportunities please call 954-377-9491 or email info 42 AUGUST 2016 A Global Force in the Information Technology Arena We are a global company with 100 Years of combined experience placing IT professionals ALL while experiencing 28 quarters of consecutive growth. Our services of staff augmentation contract to hire direct hire and retained search will help you attain your business goals. Ask us about our Resource Concierge Program 6001 Broken Sound Pky. Suite 506 Boca Raton FL 33487 561-912-9363 main office info Meet Some of Our clients Blue Cross Blue Shield WebMD Guardian Citigroup TD Ameritrade Morgan Stanley Avon Weight Watchers AUGUST 2016 43 BANKING Tops at TD Ernie Diaz leads TD Bank s rapidly growing operations in Florida BY KEVIN GALE PHOTOGRAPHY BY LARRY WOOD Ernie Diaz regional president for TD Bank in Florida actively promotes business ties with Spain as chairman of the Beacon Council but a party the bank hosted at the U.S. embassy in Madrid had particular resonance for his father. Before Diaz traveled overseas to attend the party his father told him a story a reminder of what it means to live in the United States. You are going to host an event at the house of the U.S. ambassador to Spain he told his son. The last and only time that we were there we were standing outside at 3 a.m. in the morning 49 years ago trying to get a visa to come to the U.S. Now how great it is that you are going to host an event there Indeed Diaz s business and civic career shows how he has lived the American dream. He arrived in Miami when he was 3 after being born in Pinar Del Rio Cuba and having stops in Spain and California. In his role as state leader of TD Bank Diaz has been leading one of the state s fastest-growing banks. The bank has a strong customer orientation evidenced by branches that are open daily and a best-in-Florida ranking by J.D. Power for customer satisfaction among banks. I think TD is a bit of a disrupter in many ways in a good way Diaz says. TD Bank has 10.86 billion in deposits in Florida including 1.3 billion in Broward County 1.9 billion in Miami-Dade County and 2.4 billion in Palm Beach County according to the latest FDIC data. TD Bank has grown to be one of the nation s 10 largest U.S. banks. Its name comes from its parent Toronto-Dominion which trades under the ticker symbol TD and is the 19th-largest financial institution in the world according to Forbes. Before joining TD Diaz worked with many of the most famous names in Florida banking history. While going to college he held a night job doing credit card collections for Barnett Bank and Southeast Bank where he entered the management 44 AUGUST 2016 AUGUST 2016 45 Allures for TD Bank customers include a strong commercial banking business and branches open seven days a week Ernie Diaz says training program and became a nighttime supervisor. He graduated from Florida International University only to find Southeast taken over in 1991. He worked at Terrabank for nine years and then moved on to Union Planters where he met two key mentors Adolfo Henriques and Angel Medina Jr. who now lead Gibraltar Private Bank & Trust. In 2004 Regions Bank acquired Union Planters and Diaz became the commercial real estate team leader in South Florida. He later became president of Mercantile Bank until TD Bank acquired its parent company in 2011. He likes the culture of diversity emphasized by the bank. It s something they live every day Diaz says. If you see the makeup of my team I am the poster child for diversity in Florida. Diaz also likes the emphasis on growth. We have very very strong growth compared with my competitors Diaz says. We have a convenience model that resonates in the market. People like the fact that they can walk in to any of my stores seven days a week. Couple that with a commercial banking strategy and I think that s why we are getting the results in the marketplace. While the bank has verticals in fields such as corporate and health care banking it s avoided the silo structure that some banks have Diaz says. All the Florida operations report to him and all the deposit relationships are still in the branches. The bank has 151 statewide locations two branches under construction and a few more planned to fill in market gaps Diaz says. At a time when online banking is growing quickly TD Bank finds that some demographic segments including older customers still like going to a physical branch. Diaz says They are a very important segment to us so why would you want to disrupt that TD Bank would consider an acquisition in the state as well. We have said in markets like Florida if it would help build up a geography we would look at it he says. We have done de novo [creating new branches] and we do it well. But we would be opportunistic if there was an opportunity. A map of the state s branches shows it is active in almost all the major markets but there are no branches in the Panhandle and only one branch in the southwestern part of the state a location in Naples that shares space with sister company TD Ameritrade Diaz says. Diaz will finish up his term as chairman of the Beacon Council in August. He is enthusiastic about what the public private economic development organization is focused on including capital investment job creation and talent development. Diaz likes how the council is positioning Miami as the city of the future not just the gateway to Latin America. He says It s an easy vision to embrace. Ernie Diaz Currently Regional president for TD Bank in Florida overseeing retail small business commercial and specialty banking at 170 locations Previously Market president for TD Bank in South Florida president of South Financial Group s Mercantile Bank middle market executive for South Florida at Regions Bank leader of commercial real estate team at Regions Bank Community Chairman of the Beacon Council executive board Orange Bowl committee member Education Bachelor s degree business administration Florida International University master s degree accounting Nova Southeastern University Florida-licensed CPA 46 AUGUST 2016 AUGUST 2016 47 Little Havana street corner 48 AUGUST 2016 NEW SOUTH FLORIDA NEW SOUTH FLORIDA Barlington Group Managing Principal Bill Fuller at Little Havana s Futuruma which has space for artists and businesses Barlington Group brings new tenants protects Little Havana s character BY KEVIN GALE Character Preserved Fuller. It partners with retailers and has a portfolio of 35 commercial properties in Miami with Little Havana at its core. The principals have earned credibility from local residents for helping create Miami hot spots Blackbird Ordinary and Ball & Chain. Barlington s headquarters is on the second floor of Futurama a creative workspace with 12 artist studios and five offices at 1635 SW Eighth St. Fuller and Pinilla started Barlington Group in 2004 to acquire small properties and combine them into larger tracts of land for development. Just Redevelopment in Miami has radiated outward from Brickell Avenue to downtown Overtown Midtown and the Design District. Now it seems to be Little Havana s turn. The neighborhood s Calle Ocho (Eighth Street) long has been a tourist destination as the symbol of Miami s Cuban culture but it s gaining a new round of hip places that attract visitors and locals alike. It s all about making old properties cool again as Wynwood has done rather than tearing down and starting over. A key player is the Barlington Group which is led by Martin Pinilla II and Bill east of Little Havana they are limited partners in Blackbird Ordinary 729 SW First Ave. which has positioned itself as a purveyor of craft cocktails in the Brickell area and Toasted Bagelry and Deli 83 SW Eighth St. Across the street from Toasted Barlington has a contract for a threestory 45 564-square-foot office building. It plans to spend 45 million to acquire it and turn it into retail and restaurant space. At 1030 SW Eighth St. Barlington is a partner in Brickell Mattress which has a WiFi coffee bar and a loft-like look. Fuller and partners Zack and Ben AUGUST 2016 49 Guayaba y Chocolate Bush in 2014 fostered the rebirth of Ball & Chain a live-music venue and lounge at 1513 SW Eighth St. It s at the center of the Little Havana tourist area which had a steady stream of visitors on a recent afternoon. HISTORIC ROOTS Southwest Eighth Street which is also U.S. Highway 41 was one of the original entry points into Miami via the Tamiami Trail that crossed the Everglades. It had a small downtown area by the 1930s. The Ball & Chain was a notable gambling house in the 1930s and 1940s and a performance venue for AfricanAmerican artists in the 1950s according to an account on its website. It turned into the Copa Bar in 1958 just before Cubans fleeing Fidel Castro created Little Havana. Little Havana has endured some tough times though. For example the Futurama furniture store took over the Copa space in the late 1960s but closed in the 1990s. Fuller bought the shuttered building in 2007. After a 1 million transformation the reborn Ball & Chain combines a Depression-era flavor with a Latin vibe. Music spills out to the sidewalk from the stage at the front of the bar. There s another stage that looks like a big pineapple in the back yard. In the block just east of Ball & Chain Barlington has bought the 1920s-era Azucar Ice Cream Co. Tower Hotel at 1450 SW Seventh St. with a 2.5 million renovation in the works. The hotel adds another important layer to the neighborhood Pinilla says. The hotel adds a unique product to our commercial portfolio that will act as a magnet for tourists who want to understand Little Havana like the locals. In turn these tourists will be spending more time here and more of their money in Little Havana s stores and restaurants helping it thrive for years to come. Among the new wave of businesses are Azucar Ice Cream Co. Guayaba y Chocolate and a modern take on the neighborhood s cigar-rolling heritage the Little Havana Cigar Factory. Fuller says the neighborhood has been able to attract tenants that become destinations for the city s urban core in general. It s amazing to see someone come into the neighborhood for a meeting and the next day see them with their friends or family he says. WHAT S AHEAD Barlington helped found the Little Havana Merchant Alliance and there s a steering committee to organize a business improvement district with a vote expected in January. The city is working on the streetscape along Calle Ocho and Fuller points out the location for a pedestrian promenade on 15th Avenue between Seventh and Eighth streets. For the first time in years we are seeing real dollars invested by the city in Calle Ocho he says. The Miami Trolley now has a Little Havana route which connects to the Brickell Metrorail Station. That s provides an easy way to get to Little Havana s Viernes Culturales a street festival held the last Friday of each month as well as the annual Calle Ocho Street Festival. Barlington is working on a project at 50 AUGUST 2016 NEW SOUTH FLORIDA Little Havana Northwest 27th Avenue Population 80 403 Location West of Interstate 95 and south of the Miami River to Southwest 13th Street and Median household income 24 746 Percentage below poverty level 34.7 percent Ball & Chain has been resurrected as a live performance venue Median rent 759 Percentage of foreign-born residents 68.8 percent Source Many streets are lined with low-rise walkups. Fuller says he has seen a few instances of multi-family buyers gutting the interiors of 1920s-era buildings and being able to get high rents. Frey who has his own development company called Tecela broke ground in June for what he calls the Miami version of a New York brownstone. The eight units in two buildings will range from 614-square-foot studios to 1 211-squarefoot two-bedroom spaces. The project at 769 NW First St. doesn t include on-site parking. Frey who is also an attorney and adjunct professor at the University of Miami School of Architecture helped persuade the Miami City Commission to adopt zoning that allows development of small apartment units without a parking requirement in some areas served by mass transit. His project is just a block north of Flagler Street which has two bus routes. Two Metrorail stations are a half-mile away. In many ways Little Havana which historically has used on-street parking is a model for modern urban development. gives it a score of 87 for walkability the second highest of any neighborhood in the city. 1549 SW Eighth St. next to Ball & Chain that will bring more new restaurants. Among them is John LaMarket UrbanGrill a charcoal burger concept from Venezuela and Union Beer Store a concept by David and Cici Rodriguez who started the Miami Brew Bus tours. Barlington Group is selectively choosing the tenants that will add up to the best overall neighborhood rather than maximizing profit in one particular instance says developer Andrew Frey who works with it as a consultant. Barlington has the benefit of a low-cost basis on some of its property which was as low as 50 during the recession. Fuller says 100 a square foot is more typical now. Barlington paid a premium of about 600 a square foot or 2.2 million for a house and 3 000-square-foot-retail center next to Ball & Chain. In the heart of the tourism area retail leases are 30 to 35 a square foot triple net Fuller says. Outside of that rates can be as low as 15. DENSE NEIGHBORHOOD Little Havana has a high residential density 21 117 people per square mile compared with 11 708 in the city in general. Sellers might be sensing the change in the neighborhood more rapidly than it s happening. The average median listing price is 299 000 but the median sales price is 187 000 according to Little Havana Cigar Factory AUGUST 2016 51 RESIDENTIAL REAL ESTATE RESIDENTIAL REAL ESTATE Mark Pordes Condopacolypse Now WHAT DEVELOPERS SHOULD DO AMID A SLOWING MARKET BY KEVIN GALE Miami s slowing condominium market once again is generating negative headlines in the national press Miami s Condo Frenzy Ends with Inventory Piling Up in New Towers Bloomberg Another Condo Bust Looms in Miami The Wall Street Journal Miami real estate is melting down CNBC While some of the headlines venture into hyperbole the amount of condo inventory the length of time it would take to sell all of the currently available properties in downtown Miami has been estimated at 29 months by Six months is a common benchmark when a market is healthy. I don t think we are headed to a crisis but I think we are heading toward some sort of shakeup says Mark Pordes founder and CEO of Pordes Residential Sales and Marketing which handles sales marketing and acquisitions of condos. I ve seen this movie before. Pordes has a good perspective on the current development cycle as a three-decade veteran of the South Florida real estate market. He has experience representing both condo developers and investors who have bought bulk units. Multimillion-dollar oceanfront projects are the most insulated from the downturn Pordes says. Many buyers already have homes in Miami and are upgrading. One general problem he sees is projects overly focused on one source of buyers such as Brazil Argentina or Venezuela. You sell 70 percent of your units to Brazil and Brazil goes through a shakeup like now you are going to have issues. Some developers make this mistake because they are more comfortable doing business in Latin America and are out of their comfort zone going to New York Toronto or Chicago says Pordes adding he speaks Portuguese. There are plenty of buyers in the U.S. Canada and Europe if it was promoted properly he says. We have a good base of contacts and brokers in many other areas. Pordes says he learned many lessons at the Soffer family s Turnberry Associates where he was vice president of sales for 10 years. It had a broad geographical marketing approach to national and international buyers. Pordes did a lot of work during the down market on repositioning projects including Canyon Ranch for Lehman Brothers which is now the Carillon resort in Miami Beach. In Las Vegas he is a partner with a New York hedge fund to sell the remaining 427 units at Veer Towers at CityCenter which 52 AUGUST 2016 Peninsula on the Intracoastal in Boynton Beach is 70 percent sold with mostly domestic buyers originally was an MGM project. At the Peninsula on the Intracoastal in Boynton Beach he is a partner with a local investment group as the result of a bulk purchase. Seventy percent of the units have sold Pordes says. The Peninsula is attracting mostly domestic buyers who often are downsizing from larger homes in the western suburbs. Pricing is from the mid- 300 000s to more than 700 000. Pordes likes the Palm Beach County market saying brokers are not getting the 7 or 8 percent commissions that some developers in Miami are using to boost sales. Some Miami projects also pay out two-thirds of sales commissions before projects are completed he says. Those things don t sit well with me as a veteran of the cycle Pordes says. Once one developer starts paying a higher rate brokers start asking other developers why they should bring clients to a project paying only 5 percent he says. The more brokers are paid in commission up front the less incentive they have to work with developers if problems develop near closings. So what should developers do now If their projects were launched in 2012 or 2013 and heading toward completion Pordes says they should verify their buyers can handle the third and fourth stages of deposits. For example a Brazilian might have bought four units on Brickell Avenue when the real was worth 60 cents in U.S. currency in 2012 only to find it s worth 30 cents now. Venezuelan buyers might have problems even getting cash out of the country. There are clearly a lot of people who will have an issue as the closing comes around Pordes says. When you get to the third and fourth deposit and the buyer says I don t have it are you going to default the buyer right then and there The word travels quickly. One option might be taking a unit back now putting it back on the market and working out a split on the original buyer s deposit he says. Another option is that bankers are now willing to lend to foreign and domestic buyers which wasn t the case a few years ago. Developers also should diversify their target markets. Pordes has spent a lot of time focusing on domestic buyers in such places as New York Chicago and California. He s also found buyers in Toronto for The Ritz-Carlton Residences in Sunny Isles Beach. The lesson seems to be The market is slowing but there are still buyers if you know how to look. AUGUST 2016 53 SPECIAL REPORT DIVERSITY Black Business Month Business leaders see success in South Florida but want more results BY LESLIE J. KRAFT PHOTOS BY LARRY WOOD Since marketing and media entrepreneur Jerome Hutchinson Jr. came to South Florida from Atlanta in 2006 with the goal of developing a local black business network much has changed. He and his wife Pam who died in 2007 launched Who s Who in Black South Florida a publication profiling the community s accomplished and influential professionals and entrepreneurs. But Hutchinson didn t stop there. The publication became the inspiration in 2008 for ICABA Media Group a media and marketing organization that expanded in 2015 and became simply ICABA short for International Career and Business Alliance. Today it s a 4 000-member social network that produces events directories and a magazine for black professionals. One of those events ICABA s annual Business Forum is a popular gathering for South Florida s black business community featuring speakers who are national and local entrepreneurs. A local centerpiece of Black Business Month this year s event is Aug. 26 at Broward College in Davie. Not long afterward is the ICABA Salute to Caribbean Excellence to be held Oct. 22 at The Tower Club in Fort Lauderdale. It s a black-tie tribute to the Jerome Hutchison 54 AUGUST 2016 accomplishments and contributions of individuals and organizations throughout South Florida s Caribbean diaspora. Honorees are selected from a broad cross-section of professionals and entrepreneurs from throughout Caribbean countries and the United States. The event aims to provide attendees a well-appointed environment to celebrate network and enjoy Caribbean food art and music. Attendance at events such as these includes top black professionals which has inspired Hutchinson to take his original vision global He hopes to have a half-million ICABA members in the next several years. Still he and others say they re frustrated at times by the slow progress black business leaders have made in South Florida compared to the strides made in other areas its size. He notes that despite Florida lagging only Georgia in the number of black-owned businesses South Florida cannot compare to Atlanta s success. There are a number of contributing factors why South Florida loses individuals who don t feel the environment is supportive enough of business people of Black Business Month CaribbeanAmerican owned National Black Business Month is an annual initiative to increase the number and scale of African businesses in the United States and globally. 2015 marks the 12th National Black Business Month and encourages consumers and institutions to visit at least one black-owned business on each of the 31 days of August. There are 1.9 million African-American businesses which encompasses 7 Tina Howell percent of all U.S. companies. AUGUST 2016 55 SPECIAL REPORT DIVERSITY Black or AfricanAmerican Businesses Nerd Wallet ranked South Florida the 10th best metro area nationally for black owned businesses. Key metrics were 12.4 percent of busineses were black owned and the average revenue was 49 275. The percentage with employees was 5 percent. In No. 1 Atlanta 23 percent of businesses were black owned and had an average revenue of 52 235. The percentage with employees was 4.53 percent. Nationally there were 2.6 million black or African American-owned firms nationally in 2012 up from 1.9 million or 34.5 percent from 2007 according to the U.S. Census 2015 Survey of Business Owners. color Hutchinson says. They often cite an inability to get contracts in general but ICABA is planning to conduct a survey to make a rigorous assessment of the issue to really understand the causes and work toward solving issues. While South Florida isn t the easiest place for anyone to succeed in business those who believe in themselves can do it says Tina D. Howell owner and CEO of two Wingstop franchises in Miami. Howell plans to open three more restaurants and she also is the owner and CEO of Virtual Home Care one of the nation s largest minority-owned home health agencies located in Dallas. The combined gross revenue of her businesses was approximately 7 million in 2015. South Florida is a challenge. We are a melting pot but there is a strong culture within the Hispanic community of being supportive largely to each other in business development she says. For example I might do all that I need to do in the process of getting a permit. But when I begin to engage with the government for it the person trying to help me often doesn t speak much English. Howell is good at winning challenges though. I came late to the business networking game. I didn t start with the tools to become successful in life so in the earlier part of my career I put a lot of energy into self-development says Howell who grew up in a single-parent household in west Coconut Grove. She wanted to be a doctor and received a scholarship to Florida A&M University where she earned a degree in chemistry with a minor in mathematics. Ditching her dream to become a doctor after college when she realized she didn t like biology Howell tried law school at the University of Miami and flunked out she says. But I always had this feeling that I would be successful. I thought about how I had done well making extra money in college by selling vitamins and figured that by nature I am an entrepreneur she says. South Florida is tough to navigate as a business leader of color says Garrie Harris but the challenge is not insurmountable. We re accustomed to overcoming adversity and paving our own pathways to success when there is a lack of support she says. Harris got her first taste of entrepreneurship growing up watching her father run a construction company in her hometown of Fort Myers. She launched her career with Dade Savings and Loan (now Chase Bank) where she was named the first African-American female branch manager and branch vicepresident. Fifteen years later the staffing industry piqued Harris interest and in 1995 she accepted a position with Olsten Staffing. That set the stage for a career in the staffing employment industry. In 2007 Harris and some partners formed Alpha1 Staffing Search Firm which in 2011 won the largest staffing contract ever awarded by Miami-Dade County to an African-American-owned firm. Alpha1 currently employs more 1 200 contract professionals in multiple industries. It s helpful to use challenges as a source of motivation and to connect with and support each other through community groups Harris says adding that aligning with such organizations as the Miami-Dade Chamber of Commerce the state s Minority Supplier Development Council Broward County Economic and Small Business Development has been invaluable. The connections I was able to make and the knowledge I gained significantly contributed to the growth of Alpha1 Staffing. To help aspiring leaders connect with those who are succeeding Howell often gives motivational speeches. She was Black Enterprise magazine s 2015 franchisee of the year among other honors. We are who we believe we are. We can accomplish what we believe we can accomplish. What we think is powerful and what we believe to be true is important she says. Activities that promote personal growth and development are at the top of my to-do list. I realize that I am not perfect but I m to accept what is as part of the process as I err grow and learn. 7TH ANNUAL NATIONAL BLACK BUSINESS MONTH ECONOMIC FORUM Cornerstones of Wealth When Aug. 17 2pm Workshops and Discussion 5 30pm Networking and Reception Where Urban League of Broward County 560 Northwest 27th Avenue Fort Lauderdale Topics Opportunities in South Florida s Leading Growth Industries Smart Investments Creating MultiGenerational Wealth Reclaiming Our Communities Block by Block Sponsors The Mosaic Group and The Urban League of Broward County For more information visit or contact The Mosaic Group at 561.290.6739 or events 56 AUGUST 2016 RETIREMENT PLAN EXPERTISE MATTERS Gain and retain talent with the Fortune 360 Advantage. THE360ADVANTAGE 8211 W Broward Blvd 420 Plantation FL 33324 954.800.5500 Securities are by licensed individuals offered through Investacorp Inc. a Registered Broker Dealer Member FINRA and SIPC. 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UP 60 2016 SFBW celebrated the third annual Up & Comer Awards with a packed house June 16 at The Venue in Wilton Manors. The 350 attendees enjoyed cocktails and gourmet appetizers before adjourning to the ballroom where Light Up the Night s LED robots provided a high-energy start to the awards program. The presenting sponsor for Up & Comers was MassMutual Financial Group South Florida. The gold sponsor was Ytech International and silver sponsors were Comcast Business and JM Lexus. To read the biographies of the winners who were featured in the July issue of SFBW visit http 3kewnA AUGUST 2016 COMERS & Rick John Mijares and Paul Greenberg of American Social Bar & Restaurant. Benjamin Hodas accepts his legal category award which was presented by Yamal Yidios of Ytech International and SFBW Chairman and CEO Gary Press. UP & COMERS A 2016 Lexus RC350 F-Sport greets attendees as they walk up the red carpet. Michael Barbara and Stephanie Mitrione Ryan Dinsdale and RaeAnn Mitrione. ADT s Alex Price accepts his technology category award from Comcast s Jimmy Kelly and Gary Press. Jenna Reed of the Boca Raton Chamber of Commerce accepts her award for having the most likes on Facebook. Presenting the award are Greg Zeigler general sales manager of JM Lexus and SFBW Chairman and CEO Gary Press. Raul Valdes-Fauli of Professional Bank and Mike ValdesFauli of Pinta. The Light Up the Night LED robots provide an energetic beginning. Lisa Vogt and Michelle Homoky of Celebrity Cruises. Melissa Aguilar Allison Morgan Erik Sussman Esther Francis and Sherri Hoffenberg of MassMutual Financial Group South Florida. AUGUST 2016 61 SFBW AGENDA Interiors by Steven G. put its touch on the living room of the last penthouse left at Sabbia Beach Part II Pompano is popping Officials for the Sabbia Beach oceanfront condominiums report they have a penthouse under contract for 934 a square foot which is a record for Pompano Beach. SFBW profiled the city in the December issue and the luxury residences are is a symbol of the city s revitalized beach area which has received a 32 million makeover. The beach s 16 million parking garage recently opened near Sabbia Beach. It is extraordinary that Penthouse D is under contract for the highest price per square foot in Pompano Beach history says Danny Salvatore a partner in Fernbrook Florida the developer of Sabbia Beach. The last penthouse was being listed at 5.9 million. While the price is high by historical standards in Pompano Beach it s a relative bargain in South Florida where some Miami Beach condos have gone for 3 500 a square foot and some of the new condos in Fort Lauderdale have hit 1 500 a square foot. The 19-story 68-resident condo is now 65 percent sold and the developer closed on 45 million in construction financing on June 3. Completion is expected in 2018. Arquitectonica oversaw the architecture and Interiors by Steven G. is handling the interior design. Innovation in Boca Raton Martin Hill had problems with a fussy baby during feeding time and needed a free hand so he created the Beebo a device he could drape over his shoulder to hold a baby bottle. Nicole Biscuiti wanted better workout gear for weightlifting and created the Chestee a padded top. Brian Melzer thought there was an opportunity to launch a cool line of household products and created Epoca International. The three entrepreneurs were part of the Boca Raton Chamber of Commerce Biz Pulse lunch in June at which SFBW Chairman and CEO Gary Press served as moderator. One question was how much support the panelists received from those around them when they launched their ideas. Hill said there was nothing like his product on the market and his family and friends told him it was a great idea. He got extra validation when people in restaurants saw him using the Beebo and agreed how helpful it was. Biscuiti says the original Chestee was a T-shirt that received mixed reaction. Being open to criticism allowed her to evolve the design into more of a sports bra that features padded shoulders where barbells can sit when doing squats. Melzer said he had a restaurant in New York City and was acquainted with buyers at Macy s. They told him if he came up with nine key items that Macy s would be able to sell them. He went to China to accomplish his goal. SFBW Chairman and CEO Gary Press Beebo creator Martin Hill Chestee creator Nicole Biscuiti Boca Raton Chamber of Commerce Senior VP Sarah Pearson Epoca International President Brian Melzer SFBW Managing Director Clayton Idle and Paul A. Metcalf associate director of alumni relations at Florida Atlantic University 62 AUGUST 2016 SFBW AGENDA Safeway offers a hot food bar Snow and the chairman of Cerberus Global Investments is former Vice President Dan Quayle. With that much money it s clear Cerberus can see how the initial stores do and then decide whether to proceed. A company statement said it was focusing on the initial three stores for now. See more photos of the store at Rapid entry While it s already nice to hop aboard a private jet for your travel Fort Lauderdale Executive Airport (FXE) just got a way to make it easier. FXE has added a global entry kiosk which allows preapproved low-risk Starbucks at travelers to get expedited Safeway entrance to the United States. It works by scanning their passport or resident card plus their fingertip with the Customs declaration completed online. While travelers at major airports usually are stuck in long lines in big The global entry kiosk Rival comes to Publix s home turf drafty buildings FXE opened a cozylooking customs facility last October. That s where the kiosk is. The airport which is owned by the city of Fort Lauderdale also announced it has been authorized by the Department of Homeland Security to serve as an entry point to and from Cuba. Add the two together and you can come back from Cuba and clear Customs quicker than you could smoke a Cohiba mini. Safeway the nation s second-largest supermarket chain has made its first foray into South Florida with a store in Oakland Park that looks like a cross between a Publix and a Fresh Market. It is one of three former Albertsons grocery stores that Safeway has converted in Florida. The others are in Largo (near Tampa) and Altamonte Springs (near Orlando). Albertsons and Safeway are both owned by Cerberus Capital Management which manages more than 30 billion in investments. Its chairman is former Treasury Secretary John The Customs facilty at Fort Lauderdale Executive Airport AUGUST 2016 63 SFBW AGENDA The Residences by Armani Casa were designed by renown architect C sar Pelli. The pool area looks over the Atlantic at Sunny Isles Beach Armani Casa condos get 305 million loan The Residences by Armani Casa in Sunny Isles Beach has obtained a 305 million construction loans in what is being called South Florida s biggest condominium financial deal of the year. The loan shows the continuing strength of high-end projects on the ocean this year even as some areas experience slowdowns in sales and buildups of inventory. Partners Dezer Development and The Related Group obtained the loan from Wells Fargo and the Blackstone Group. The project which expected to be finished in early 2019 is notable for the big-name architects and designers involved. Architect C sar Pelli also designed the Adrienne Arsht Center for the Performing Arts and the Petronas Towers in Malaysia. The interior is by famed Italian designer Giorgio Armani s Armani Casa. One of the keys to getting the loan was that more than 70 percent of the building s 308 residences are under contract for a total of more than 700 million in sales. That indicates sellout could be close to 1 billion. The units range in size from 1 350 to 4 160 square feet and cost between 2 million and more than 15 million. It s official Wynwood is a cool street OK many South Floridians and visitors know Wynwood is hip and cool but national real estate company Cushman & Wakefield has given it an official seal of approval. Wynwood not only makes C&W s inaugural 100 Cool 64 AUGUST 2016 SFBW AGENDA Building facades serve as works of art along Northwest Second Avenue in Wynwood Streets report but ranks it in the top 15. Wynwood meets the criteria of hip arts scene with a new and edgy retail district. Warby Parker Annex (eyewear) Shinola (watches leather goods bicycles) and Illesteva (eyewear bags and umbrellas) were some of the stylish retailers mentioned by Greg Masin senior director of C&W s South Florida retail team. Wynwood is evolving quickly he said in a news release for the Cool Streets report. Pedestrian traffic continues to increase and a soon-to-be-announced exit off of Interstate 95 at 29th Street will enhance access and further drive traffic. Office users are looking at the neighborhood but it needs more of a residential component Masin said. The Asia connection Miami International Airport is inching closer to getting the longawaited nonstop service to Asia. Republic of China (Taiwan) President Tsai Ing-wen landed at MIA on June 24 after a 16.5-hour 8 628mile nonstop charter. While MIA has regular cargo service to Asia the president s trip was hailed as the first nonstop passenger trip from Asia to the airport. The China Airlines fl ight was on a Boeing B777-300ER one of the few aircraft with the range to make the trip. Tsai made a stop on her way to the grand opening of the Panama Canal expansion. Miami-Dade Aviation Director Emilio T. Gonz lez also met recently with high-level executives from 11 leading airlines including Asian carriers China Airlines All Nippon Airways Cathay Pacific Airways Hainan Airlines and Hong Kong Airlines to discuss starting or expanding air service to Miami. Miami-Dade Aviation Director Emilio T. Gonz lez greets Republic of China (Taiwan) President Tsai Ing-wen The Wynwood Walls AUGUST 2016 65 COMMERCIAL REAL ESTATE Leasing hints at a slowdown BY DARCIE LUNSFORD Pop singer Meghan Trainor is all about that bass bout that bass but in commercial real estate it s all about the lease bout that lease. And leasing is all about absorption. That s the net difference between how much space is vacated and how much space is leased in any given quarter or year. For the past four years the region s office and industrial markets have seen a steady tide of positive absorption. While that isn t changing absorption velocity might signal that the region s leasing markets are peaking. Across the region the positive office and industrial space absorption was less in the first quarter of 2016 than in the first quarter of 2015. Is this a blip ... or a trend We might be sliding into somewhat of a recessive market says Caroline Fleischer managing principal of Cresa South Florida a corporate tenant representation firm. Our commercial real estate model is that we have a cycle every few years and we are coming off a nice cycle so everyone is just not as bullish right now. Fleischer cites a confluence of factors including presidential election concerns Britain s exit from the European Union and what the Federal Reserve will do with interest rates as the drivers of a burgeoning corporate uncertainty. Despite slower market absorption megadeals are still getting done. Bank of America for instance just inked a deal for 62 000 square feet of offices in Boca Raton s One Town Center near the Town Center at Boca Raton mall off of Glades Road. The 10-story building is probably best known as the former home of Tyco International. Further south GMMI a health care management firm leased 36 000 square feet the entire top floor in the new Pembroke Pointe midrise at Interstate 75 and Pines Boulevard. Burger King signed a lease for a 150 000-square-foot buildto-suit corporate headquarters in the Waterford at Blue Lagoon office park near Miami International Airport. But because the fast-food giant will vacate 200 000 square feet in the same area that will actually cause a 50 000-square-foot reduction in absorption when its new digs open in 2018. Generally the quarter-over-quarter reduction in office space absorption was more modest. It s the region s hearty industrial sector that took the most glaring hit to first-quarter absorption when compared to the same quarter last year. In Miami-Dade County the region s largest industrial hub year-over-year absorption fell by nearly 40 percent in the first quarter according to CBRE data. For the largest deals there may be a slight slowdown says Michael Silver first vice president of CBRE. Deals are taking longer to close. LEASING ABSORPTION Numbers in square feet INDUSTRIAL Palm Beach Q1 2016 Q1 2015 Q1 2016 125 149 Q1 2015 Q1 2016 Q1 2015 Source CBRE OFFICE 687 781 Palm Beach Q1 2016 27 344 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 49 149 96 001 97 813 241 207 305 056 332 087 Broward 286 627 351 737 924 664 Broward Miami Miami 66 AUGUST 2016 COMMERCIAL REAL ESTATE Even so Silver says the industrial market in Miami-Dade County has not peaked and he anticipates that slower deal volume in the early part of this year will be made up later in the year. I think it is a blip he says. I think we will keep pace with last year and historic absorption for Miami. The county despite a flood of new construction has still seen about 3 million square feet of positive absorption for the past three years. Similarly Broward County saw a 44 percent dip in yearover-year absorption. The momentum is still there says Chris Metzger executive director of Cushman & Wakefield. He says tight industrial vacancy means there s a shortage of new inventory which limits the ability of companies to grow and move. Palm Beach County industrial absorption dipped 48 percent year over year. Metzger compares the point we re at in the current cycle to where we were in 2006. But unlike that year Metzger and others say there isn t a cliff at the end of this cycle. Says Metzger I think it is going to be just a flattening out of the market. Freelance writer Darcie Lunsford is a former real estate editor of the South Florida Business Journal. She is the senior VP for leasing at Butters Group and is avoiding a conflict of interest in her column by not covering her own deals. The Boca Chamber and JM Lexus proudly present Join us at Boca s premier food and wine tasting party SATURDAY AUGUST 27 2016 7 00 p.m. to 10 00 p.m. 501 E. Camino Real Boca Raton GENERAL ADMISSION 75 VIP ADMISSION 120 Boca Raton Resort & Club For more information call 561.395.4433 or visit events TOAST THE MUSIC BUSINESS OPPORTUNITIES IN CUBA 14 YEARS OF MARKET EXPERIENCE - Exploring possible opportunities - Creating relationships - Learning the system of how business is conducted - Learning the business structure that is in place SERVICES - Identify opportunity in respective industry - Identify counterpart in that respective industry - Coordinate meeting with counterpart in that respective industry - Organize meeting with industry appropriate counterpart -Organizing groups for participation in trade fairs and conferences in a wide range of industries Cuba Travel Group LLC US Presence 746 W Flagler St. Coral Gables FL 33134 Ph. 786.621.5578 Fx. 786.621.5577 Info Cuba Presence ADDRESS IS FORTHCOMING Cell CubaTravelGroup AUGUST 2016 67 NONPROFIT GOVERNANCE Is Your President a Leader BY GERRY CZARNECKI There s no doubt most presidents or executive directors of nonprofits have a passion for the cause. The real question is Is that executive a leader Candidly our experience on this point is not good. Too many who get into the doing good business have a tendency to be passionate but they have little or no knowledge or experience in understanding what managing and leading is all about. Knowing the answer to that question could be the difference between your organization s success or failure. Leadership failure often results in an I would rather do it myself mindset. If that happens the president eventually will run out of hours in the day to do all the work. A boss must use his or time more wisely Leadership is part science (left brain) and perhaps more part art (right brain). So how do you know if you have a leader There are no surefire ways to know but here are some factors to consider. (None of these is an absolute test.) Does the president talk about vision and values Or is every presentation based on quantitative factors Are presentations to the board made by employees in addition to the president Or is every one done entirely by him or her Does the board have access to staff members Or are they kept at a distance Does the board feel good about its relationship with the president Or is there a degree of tension Have you seen sensitivity in the way the president speaks to the staff Or is he or she gruff and insensitive Do employees seem happy in their work Or does they show signs of fear or intimidation Do employees seem to like and respect the boss Or is there obvious tension Does the president share the credit for success and take blame for failure Or does he or she take credit for success and blame failures on the team Do employees feel empowered and responsible Or do they seem like functionaries following the boss orders Would you find it easy to work for the president Or would your styles or personalities clash For each factor if you answered yes to the first question most of the time then you might have a leader. If you mostly answered yes to the second question you might have a leadership challenge and it could be time to start paying more attention. Gerry Czarnecki is founder and chairman of the nonprofit National Leadership Institute (nationalleadershipinstitute. org) which helps boards of nonprofit organizations become strategic assets to the leadership team. His extensive background as a C-suite executive and CEO is coupled with current board leadership of corporate and nonprofit organizations. He is also chairman and CEO of the Deltennium Group. Contact him at 561.293.3726 or gmc 68 AUGUST 2016 Where Mixing Business & Pleasure is Good for Your Health T he Greater Fort Lauderdale Chamber of Commerce is committed to the economic health and growth of our community by identifying and finding solutions for our region s growing employment needs. Become a member and EXPERIENCE BETTER BUSINESS today Visit join or call us at 954-462-6000 for more information. FTLCHAMBER.COM JOIN 512 NE 3rd Ave. Fort Lauderdale FL 33301 Info 954-462-6000 AUGUST 2016 69 TECH HUB Fevered pitch Boca Raton company remaking world of thermometers BY CHRIS FLECK ARC Devices a medical technology company in Boca Raton is changing the way we monitor body temperature and other vital signs with a new wave of digital infrared no-touch thermometers. Today s standard thermometers require patients to be touched or probed in order to get a temperature reading. ARC Devices thermometers don t. Instead users place the thermometer an inch from the patient s forehead above the eyebrows and between the eyes and click a button. The patient s temperature appears on the device s screen which includes an indicator that shows green if the patient has a normal temperature orange if warm but not fully feverish and red if the patient has a fever. Because there s no bodily contact it helps minimize the risk of spreading infection when used on multiple patients. For home use ARC Devices is marketing its InstaTemp thermometer on and through retailers such as and Amazon. com for about 40. For clinical use the InstaTemp MD is more sensitive and has a larger processor designed for hospitals and medical providers to read core body temperature the gold standard of temperature measurements. It uses a proprietary sensor that unlike analog systems does not require calibration. This means it will remain consistently accurate over the life of the device. ARC Devices was founded by Irwin Gross Amos Alter and Jaap Elzas all neighbors in Boca Raton. Together they loved the idea of non-touch thermometer technology and decided to invest in developing the technology and business together. Their journey and the journey of their company is deeply rooted in Boca where the U.S. operation is headquartered. The company has used other local resources such as Florida Atlantic University to support research and software development. ARC Devices also is partnering with Citrix Systems of Fort Lauderdale to demonstrate how the Bluetooth-enabled thermometer can integrate with Citrix s Workspace Hub as an internet of things device. This would allow vitals data to be collected and securely entered into electronic medical records systems along with patient and provider information. Such a partnership would improve productivity and reduce chances of human error. A prototype of this system recently was demonstrated at a conference for the Healthcare Information and Management Systems Society where it attracted attention from numerous hospital and health care organizations. With the revolutionary technology and vision coupled with the ongoing partnerships ARC Devices is a company to watch not only in the South Florida area but nationally and internationally as well. Chris Fleck is on the board of the South Florida Technology Alliance and vice president of emerging solutions for Citrix Systems (NASDAQ CTXS) a Fort Lauderdale company that provides secure delivery of applications and data. 70 AUGUST 2016 Beauty. Intelligence. Imagination. Expand your palate with each new flavor. Be amazed at how seamlessly the courses flow. Be inspired by the thoughtfully orchestrated colors textures lighting and d cor throughout the room. Lose yourself in the moment after moment that has been created just for you. SLEventCatering Inquire further to learn more about our specialty services. P 954-917-1020 AUGUST 2016 71 SALES STRATEGIES Are You Tracking the Right Stuff BY GRETA SCHULZ I was speaking to a large CEO group when I asked a simple question What are you doing to track your salespeople The owner of a manufacturing company spoke up and said We track the amount of quotes that they send out on a monthly basis. I said OK tell me about that. Well we require all sales reps and he has sales reps around the world to put out a minimum of 20 quotes per month. I said OK why do you do that He looked at me with curiosity and said What do you mean That s how we track what they re doing and we know that if each one of them puts out 20 quotes they ll typically get six back with interest and they ll negotiate and usually close two of them. I said So you re closing two of every 20 Well not every 20 but pretty close that s pretty much our track record he said. I then asked How much time are they spending on the other 18 that they don t close He said What do you mean They don t spend any time on them. I said Who does their quotes They do. Who puts them together They do. Who sends that out or presents them to the clients They do. Who follows up They do. Then OK so have you ever tracked the amount of time they re spending on the ones they don t close And a two out of 20 ratio is 10 percent. So if you think a 10 percent closing ratio is a good idea I would make sure that you are hiring very very inexpensive sales reps and just get them to throw enough quotes out there. You certainly don t need professional salespeople because you re not looking at professionalism when you do it that way. Anybody can throw a bunch of proposals and quotes out there and see what sticks. You should not send any proposals or quotes until you actually have a conversation with somebody. It is imperative to pre-qualify every opportunity Confirm that they have issues that you know you can solve with your product or service. Discuss the investment cost so you don t spring that on them in the proposal. Understand the solutions you re going to provide. Most important know who s going to be looking at the proposal. And if they re happy with the proposal what is going to happen on the other side If your salespeople don t know those things you shouldn t be putting proposals out in the street. Depending on what kind of company you have and what you do you could be spending a lot more time and money than you think developing recommendations and proposals getting quotes putting numbers and things together. It is a huge waste of time to throw a bunch of quotes and proposals out there and keep following up on them until you either exhaust the client or the salesperson. Two out 20 is a shameful closing ratio. Your proposal should never get into the hands of anyone until You know what their issues are. You know what their needs are and have an idea of what solutions you will use to solve them. You have had a discussion of the approximate cost to solve their problem. You don t have to give the number but you had to have some level of investment discussion. You know exactly what they re going to do with the proposal if they like it. We all know what they re going to do if they don t like it. So if they do what is their process The CEO who owns the manufacturing company is a very bright man but the process he has in place for tracking his salespeople is poor. Make sure you don t show proposals to anyone until they deserve to see them. Proposals never sell. The sale should be almost complete before you make your presentation. Your presentation or proposal or quote is merely the proof statement of what you already discussed. If that s not what is happening you re doing it backwards. Greta Schulz is president of Schulz Business a sales consulting and training firm. She is a best-selling author of To Sell is NOT to Sell and works with Fortune 1 000 companies and entrepreneurs. For more information or free sales tips go to and sign up for GretaNomics a weekly video tip series or email sales questions to greta 72 AUGUST 2016 LOCATION LOCATION LOCATION Prime Fort Lauderdale Office Space for Lease Commercial Tower at Executive Airport Office Space For Lease 2101 W. Commercial Blvd. 5 Story Class A 94 350 SF Office Building with marble entry and lake views. Located 1.2 miles west of I-95 with easy access to Florida s Turnpike. Close to hotels retail and restaurants. 11 miles from Fort Lauderdale - Hollywood International Airport and adjacent to the Ft. Lauderdale Executive Airport. Ammenities include covered surface parking 24-hour building access security cameras dry cleaning service automotive detailing. Building signage available for full floor tenant. Management and securty officer on-site. Commerce Point Office Space For Lease 3511 W. Commercial Blvd. Fort Lauderdale FL 33309 Commerce Point offers office ready suites with excellent Commercial Boulevard visibility. Recently remodeled common areas. Separately metered HVAC system. Close proximity to restaurants cafes hotels financial institutions and shopping destinations. Availability of smaller suites for immediate occupancy. Excellent access to I-95 and Florida s Turnpike. Cypress Court Office Space For Lease 6360 NW 5th Way Fort Lauderdale FL 33309 Cypress Court has office ready suites available. Abundant parking 5 1000 ratio. Recently remodeled common areas. Separately metered HVAC system. Close proximity to restaurants cafes hotels financial institutions and shopping destinations. Excellent access to I-95 and the Florida s Turnpike. WILLIAM J. KAHN at 954.540-6490 AUGUST 2016 For Leasing Information contact 73 PEOPLE PASSION AND PROFITS TALENT AND MANAGEMENT Seven Steps to Leadership Success BY STEPHEN GARBER More than Motivation Successful leaders (and coaches) are more than great motivators. They are mentors teachers and yes managers. They cultivate behaviors in their people that drive passion and performance. In my years of owning and running my own businesses and having the privilege of coaching so many successful men and women I ve learned some of the traits that separate the best from the rest. LEAD BY EXAMPLE Your team notices when commitment and passion come from the top. If you want your team to go the extra mile you need to demonstrate your willingness to do the same. Great leaders set the standard for work ethic. If you behave a certain way you give them inspiration to do the same when it is positive. And permission to do the same when it s not. What example are you setting SHARE THE GAME PLAN LARGE AND SMALL The power of why is paramount. A winning team needs to have shared purpose to know the why of the organization and their part in it. When your team understands how their input effort and results support the organization s greater goals they ll be more inclined to go the extra mile and urge their teams to do the same. That needs to cascade down through strategy business plan and individual objectives. Who gives more the bricklayer or the artisan helping to build the Sistine Chapel LEAD THE PERSON NOT JUST THE EMPLOYEE Your job as a leader goes well beyond the X s and O s of skills and strategy. When you take an interest in the lives of your people you re better equipped to address their needs help them grow and cultivate a culture of excellence among your team. Meet them know them and remember them. If you cannot do so personally refer back to lead by example. Do it for your direct reports and show them that it matters for them to do the same throughout your organization. COMMUNICATE COMMUNICATE COMMUNICATE All of the technical knowledge vision plans and even connections with your team won t help you if you can t communicate it effectively. Take time to understand how each member of your team learns and then tailor your communications accordingly. The best leaders are able to deliver both criticism and praise in a way that s well received and taken to heart. And then do it again and again. KEEP YOUR EYE ON THE BALL YOU Success is a moving target. To stay relevant commit to lifelong learning and continuous improvement. Strive to develop yourself at a faster pace than your peers it s your competitive edge. Go to your industry meetings your personal specialty conventions and sometimes step out of that box to explore what other industries or specialties are doing. Did you know that drive-through banking came from fast food BE A GAME CHANGER Good leaders follow successful programs. Great leaders invent new ones. Creativity is key to your success as a leader. Remain open to innovative ideas and teaching philosophies. Stay abreast of the latest trends and technology. Take risks and drive change or be left behind. STAY HUMBLE Every leader wants to win at the game of life and business. Remember that it s your team that delivers not you. You lead they deliver. Motivation does matter. Be a great visionary and cheerleader. And these seven steps will bring you outstanding business results. Steve Garber is director of Third Level Ltd. Contact him at 561.752.5505 or sgarber 74 AUGUST 2016 TALENT AND MANAGEMENT that despite investors traditional reluctance to challenge compensation at high-performing companies one institutional shareholder told him Sometimes too much is just too much. Private companies in the public spotlight worry about suffering reputational damage from compensation matters Lamm says. Some sort of outrageous or excessive compensation is not going to play well in the newspapers. Compensation discontent can be more contentious in private companies including family businesses than in public companies he says. According to Hickey there is a trend with minority shareholders starting to question some of the compensation practices of the founders and their families at private companies. At some family-owned companies there is a founders mentality of operating by fiat he says. They may have the view that whatever they decide is by definition appropriate whether they have the ne er-do-well son-in-law on the payroll or not is their determination and they are entitled to make it. Families can forget they have fiduciary responsibilities for shareholders. To help prevent such issues Hickey has been working with a private company on different components of compensation base salary bonus and then profit-sharing. Outside independent compensation experts can be brought in to make sure practices are fair and appropriate. Another hot-button issue can be compensation clawbacks says Murphy. Let s say an executive was paid a 3 million bonus based on performance. Later on it s determined there were mistakes and the financials are restated. In some cases federal law may require the executive to pay the bonus back. Some director and officer insurance policies can help the individuals defend against having to pay the money back but typically wouldn t provide the payment to do so. However there are some policies being written in Bermuda that would pay the money back but only about 15 percent of her clients are using them. Instead many of them worry that it would be bad public perception for that sort of insurance payout to happen. There is also the question of whether an act that caused a restatement was intentional fraud Murphy says. For example a policy might cover an executive signing off on someone else s incorrect information but not if the executive committed fraud himself. A court judgment might also say insurance can t provide a repayment and there is federal legislation that seeks to prohibit insurance repayment as well. The bottom line is that the debate about compensation is far from over. Time to trade the corner office for your own little corner of the world A Transworld business advisor can get you there. Every day Transworld Business Advisors connects quality top-paying acquirers with business owners ready to sell and move on to the next stage in their careers. As the world leader in business sales franchising and mergers and acquisitions Transworld has access to a huge database of individual domestic and immigrating buyers and strategic corporations looking for the right business opportunity. And Transworld has the expertise to ensure any business sale goes smoothly. So whether you re ready to sell your business or buy an existing business or franchise contact a Transworld Business Advisor for a free consultation today. Andrew Cagnetta OWNER CEO 800.205.7605 t AUGUST 2016 75 THE FAMILY OFFICE Quests for returns lead to private illiquid investments BY JULIE NEITZEL The Alternative Over the last several years investors have been fatigued by public securities markets modest returns and high volatility. With global economic growth tepid and interest rates and inflation at historic lows public markets have produced modest single-digit returns. And consensus forward expectations don t point to meaningfully higher returns. The current state of the markets is frequently described as stay lower longer. During the days of double-digit market returns a common investment goal was to double one s money every 10 years. This could be accomplished by generating a 7.25-percent annual return. Recently most diversified public market portfolios have produced low single-digit annual returns or even negative ones pushing the double your money goal out to 15 years or longer. The conundrum for investors is how to increase overall portfolio returns in the current environment. One possibility to discuss with your financial adviser is an allocation to less-liquid private investments or illiquids. Illiquids typically include private equity private credit and venture capital funds and direct investments in real estate operating businesses early stage companies and other sectors. Given the current global interest in illiquids there is a substantial private equity industry of more than 4 000 global private-equity firms aggregating more than 2.4 trillion in capital. The ongoing growth of this industry correlates to institutional and individual investors continuing desire to generate better-than-public-market returns. Illiquids similar to public-market investments involve the possibility of losses and other risks. By definition illiquids cannot be readily sold sometimes for many years. That requires the investor to consider them as patient capital investments. In other words they typically have a longer investment period to deliver the expected higher return. Unlike a public market bond the timing of return on capital and return of capital is not typically the subject of a covenant nor pre-determined. Assessing the investment merits of illiquids is more complex as public financial information generally isn t available readily and the due diligence and financial investment analysis requires experience and skill. The documents and legal and financial structures used for illiquids are complex which can create investment structure risks. How illiquids are priced and sold is another important consideration. Typically illiquid managers require an investment of 1 million or more. Private banks and brokerage firms generally receive a fee to introduce their clients to private equity funds and other illiquids. Certain family offices have created a business of establishing investment pools for illiquids inviting outside investors to participate in their investment product. Other family offices have created exchanges such as ShareNett that allow them to directly communicate and invest alongside like-minded investors creating club deals for illiquids while regularly assessing and sharing direct investment opportunities. Some multifamily offices regularly review illiquid opportunities on behalf of each family and portfolio. As with all investment products it is essential to determine if the introducing party is being compensated for a sale of the investment and whether the investor s investment goals are aligned with the particular illiquid opportunity. When considering an illiquid investment it is critically important to have proper guidance given the relative lack of transparency and the illiquidity of your capital for 10 years or more. Notwithstanding these complexities research shows that about two-thirds of ultra-wealthy individuals are investing in privateequity funds and other direct investments. During 2015 wealthy individuals invested more than 178 billion in commercial real estate. A study from Tiger 21 revealed its ultra-high-net-worth members are increasing their private-equity allocations to 23 percent during 2016. An allocation to well-managed illiquid investments has historically delivered a premium to public-equity returns in a portfolio with a reasonable amount of risk. The sizing of the illiquid allocation is important and should be based on an investor s tolerance and financial capacity for illiquidity. Illiquids are not for every investor and should be thoughtfully considered and discussed with your advisers before you invest. Julie Neitzel is a partner and advisor with WE Family Offices in Miami and a board member of the Miami Finance Forum. Contact her at julie.neitzel or 305.825.2225. 76 AUGUST 2016 At we re experts at connecting people and businesses to the financial solutions they need to get ahead. ATTENTION Real Estate Professionals Mortgage Loan Officers Tax Preparers Financial Advisors... Turnkey Business-in-a-Box Financial Solutions for Your Business. Credit Correction Student Loan Consolidation Credit Card Debt Help Tax Resolution Loan Resources Financial Tools Visit today or call 800-810-0989 for additional information. AUGUST 2016 77 S P E C I A L M A R K E T I N G F E AT U R E MICHAEL C. FOSTER COMMON MISTAKES TO AVOID IN YOUR BUSINESS INSURANCE COVERAGE Executives even those with significant experience in insurance coverage and risk management are often reliant on their company s insurance brokers to determine the type and extent of their insurance coverage. Brokers are a valuable resource but their advice must be critically analyzed and viewed in light of a company s business activities claims history and financial position. The universe of issues to be considered in obtaining business insurance coverage could fill (and does fill) a number treatises. However my experience has identified several common mistakes you should take care to avoid. The Application Many of the questions that are asked in insurance applications relate to claims history and events that may give rise to future claims (e.g. human resources practices and procedures company financial performance business lines etc.). We are all naturally inclined to present our businesses in the best light and more importantly we often fear that disclosing too much in the application process may result in an unnecessary increase in premium. The thinking goes Why pay for an event that will never mature into a claim In my view a business insured is far more likely to be penalized for failing to disclose pertinent information (by a coverage declination and or an attempt to rescind your coverage as a consequence of a claimed misrepresentation in the application) than to be penalized for disclosing information (in the form of a higher premium) in the application process. Indeed brokers and insurance underwriters like all rational economic actors are primarily motivated by their desire to make a sale rather than pricing themselves out of a sale. My experience suggests that your broker and carrier will work with you to eliminate unnecessary disclosures and to present necessary disclosures in the light most favorable to the acquisition of affordable coverage. When in doubt err on the side of disclosure Deductibles & Limits The desire to save money on policy premium can cause businesses to set deductibles too high or limits too low. There is nothing inherently wrong with a high deductible or modest policy limits provided that your business maintains adequate reserves to satisfy the portion of any loss that will be uncovered. Your risk management and finance teams should work in tandem to determine limits deductibles and reserves and each of these items should be set after a sober review of prior claims experience and the present events and exposures unique to your business. Also keep in mind that it is easier to budget for a fixed and periodic premium payment than for claims. Directors & Officers Liability Insurance Retroactive Date Pay special attention to the retroactive date in your officers and directors ( D&O ) liability insurance. D&O insurance is written on a claims made basis that is the coverage applies to claims (generally demands for money lawsuits etc.) made and reported during the policy period. D&O insurance also often includes a retroactive date that functions to eliminate coverage for claims caused by acts or omissions that took place prior to a specified date. In my experience inclusion of a retroactive date will often be a consequence of changing insurance carriers (usually) in a worthwhile effort to save premium expense. A retroactive date can leave a dangerous hole in your coverage and should be carefully considered. Potentially Overlooked Coverage Fidelity Employee Dishonesty Coverage Several of my clients have gone without fidelity employee dishonesty coverage or set their limits for such coverage at a level that was fundamentally inconsistent with the potential financial exposure of their businesses to employee defalcation of company and or customer assets. Consider this coverage and analyze your limits if your business already has it. A good time to perform employee dishonesty coverage is during your company s annual audit when financial controls are being analyzed. If you find the holes you ll know how to plug them. Business Interruption Coverage You ve probably obtained coverage to pay for damage to your plant and equipment occasioned by a fire flood or hurricane. However you may not have considered insurance coverage for the income your business will lose during the time that it cannot operate or is rebuilding as a consequence of a disaster. This type of insurance is commonly referred to as business interruption insurance and it can be invaluable. Unique Exposures The number and type of insurable risks grows as business evolves and becomes more complex. It is invaluable to consider the exposures unique to your business and to ask your insurance broker whether a product exists to insure against those exposures. (For instance there is insurance coverage for certain types of intellectual property infringement and for cyber crime.) The takeaway here is Always ask Michael Foster is a director at Tripp Scott. Contact him at (954) 760-4931 or mcf 78 AUGUST 2016 YOUR BUSINESS CELEBRATE Celebrate with Hoffman s HOFFMANS.COM AUGUST 2016 Add your logo or a photo to our decorated Oreo cookies or grahams for a unique gift that your customers will never forget MAKE A SWEET IMPRESSION Hollywood Fort Lauderdale Weston Plantation Boca Raton Greenacres Lake Worth Palm Beach Gardens 79 PRESENTED BY FA M I LY O F R E C R U I T I N G C O M PAN I E S CALL FOR NOM INAT IONS from chairman CEO COO and president to CFO CIO CMO and HR leader. An executive in each category will be honored for Miami-Dade Broward and Palm Beach counties. SFBW s Third Annual Apogee Awards will recognize distinguished leaders in the region s C-suite signature-events apogee Please visit our website for more information and to purchase tickets. Gold Sponsors Silver Sponsors TO NOMINATE VISIT OUR WEBSITE 80 AUGUST 2016 Dr. Certified PlasticMan Daniel Surgeon Board 851 Meadows R.d. Boca Raton Fl 33486 Like Follow & Subscribe 81 AUGUST 2016 HISTORY VIEWPOINT E.W.F. Stirrup circa 1927. HistoryMiami Museum Entrepreneurial Pioneer Did you know the Bahamas furnished South Florida with many of its early residents They came looking for a new life and a chance to tame the wilderness and own their own land in the warm climate. One of the earliest pioneers was a young Bahamian named Ebenezer Woodbury Franklin (E.W.F.) Stirrup. Born in Harbour Island he joined his uncle in Key West in 1888 as an apprentice carpenter at age 15. But Stirrup didn t like giving up a good portion of his earnings so he moved out on his own to Cutler. He worked in the pineapple fields by day and took contracts to clear land at night. Sometimes he was paid for his labor in land as cash was scarce in those days. It eventually became a vast accumulation of valuable real estate. One piece of land he earned was an acre of what s now the famous Deering Estate at Cutler. At 25 Stirrup moved his family to Coconut Grove and began buying land one lot at a time until he owned much of the area. Stirrup and his wife who made money washing clothes built more than 100 homes together at night after a full day s labor providing many newly arrived Bahamians the opportunity to purchase their first home. Stirrup believed people became better citizens when they owned their homes. His own family home was on Charles Avenue where he lived with his wife and six children and it still stands today. While Stirrup was known for his real estate holdings he was also a successful businessman and became one of Miami s first black millionaires. Stirrup lost a lot of his land during the Florida economic bust in the 1920s as well as 70 000 in the Biscayne Bank failure but when he died in 1957 at age 84 he was still very wealthy. Today his name is on one of the county s elementary schools showing how he is still revered and remembered as one of the most successful pioneers in Miami s history. (Take this shortcut link to see a PDF about Stirrup s home http CUuWim) For more on the history of sports business in South Florida visit HistoryMiami s new exhibition Beyond the Game Sports the and Evolution of South Florida opening on July 15. For more information visit 82 AUGUST 2016 THE GAME CHANGER RELOCATE YOUR POINT OF VIEW. MODERN LUXURY LIVES HERE DISCOVER THE ULTIMATE CORPORATE ESCAPE--AT SEA. Celebrity Cruises will indulge your guests with luxurious accommodations globally inspired cuisine exciting entertainment engaging activities and stunning destinations. 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