Miami: Economy

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Major Industries and Commercial Activity

For most of Miami's history, its economy has been based on tourism. In fact, it was not so long ago that the city came to life only during the winter months when tourists from cold northern regions flocked to its beaches, hotels, and resorts. That phenomenon is no longer the case, as tourists visit the region throughout the year. In 2003, 10.4 million overnight visitors came to Greater Miami, infusing the local economy with $9.9 billion in direct expenses, such as hotel rooms, restaurants, shopping, transportation, and attractions, and another $5.5 in indirect expenditures in such areas as real estate, medicine, and retail.

While tourism continues to be the principal industry in Miami, the city's economy has become more diversified. Trade is increasingly vital to the economy. Its close proximity to Latin America and the Caribbean make it the center of international trade with those areas. Nearly $50 billion in total merchandise trade came through the Miami Customs District in 2002. Because many companies choose to establish their Latin American headquarters in southern Florida, Miami-Dade County is known as the "Gateway to the Americas." In 2003 approximately 1,200 multinational corporations were established in the region.

The city's international trade infrastructure is vast and varied. With an economic impact of $18.6 billion, Miami International Airport is the nation's top airport for international freight and third for international passengers. The Port of Miami, which contributes $8 billion to the local economy, ranks first among the state's containerized ports and ninth in the United States. The World Trade Center Miami is Florida's oldest international organization, and assists member companies to introduce and expand their international presence. It is also petitioning to establish Miami-Dade County as the site of the Permanent Secretariat of the 34-nation Free Trade Area of the Americas. Miami is home to more than 64 foreign consulates, 25 international trade offices, and 32 binational chambers of commerce. Two free trade zones exist in Greater Miami, the Homestead Free Zone and the Miami Free Zone, one of the world's largest privately owned and operated zones. The top imports into the Miami Customs District in 2002 were apparel and accessories; the leading exports were electrical machinery and photographic and medical equipment.

International banking is another growing segment of the economy. With total deposits of $74.3 billion in 2003, about 100 commercial banks, thrift institutions, foreign bank agencies, and Edge Act banks are located in downtown Miami, representing the largest concentration of domestic and international banks on the East Coast south of New York. Brazilian, British, Canadian, French, German, Israeli, Japanese, Spanish, and Venezuelan banks have offices in Miami-Dade County. Still, domestic banks dominate the market, led by Bank of America Corp., which has total deposits of over $7.8 billion in its 25 local offices.

Items and goods produced: apparel, textiles, books and magazines, pharmaceuticals, medical and diagnostic testing equipment, plastics, aluminum products, furniture, light manufactured goods, transportation equipment, cement, electronic components, agricultural products such as tomatoes, beans, avocadoes, and citrus fruits

Incentive Programs—New and Existing Companies

Local programs

The Beacon Council is the agency responsible for recruiting new businesses to Miami-Dade County in an effort to create new jobs. The Council's many free services include site identification; labor recruitment and training; business data and economic research; packaging local, state, and federal business incentives; and import/export assistance. The Council promotes the many advantages of doing business in Miami-Dade County, including a number of business incentive programs and a favorable tax structure. Business location incentives at the local level include Empowerment Zone and Enterprise Zone opportunities, each of which offers tax or wage credits to businesses based on the number of new jobs created. The Miami-Dade County Targeted Jobs Incentive Fund is available to companies that are on the list of industries identified by the county as desirable additions to the local economy. The Grow Miami Fund grants qualified small businesses long-term, low-interest loans ranging from $50,000 to $2 million. In 2003 the city partnered with ACCION USA to make $4 million in micro loans available to the small business community.

State programs

Enterprise Florida is a partnership between Florida's government and business leaders and is the principal economic development organization for the state of Florida. Enterprise Florida's mission is to increase economic opportunities for all Floridians by supporting the creation of quality jobs, a well-trained workforce, and globally competitive businesses. It pursues this mission in cooperation with its statewide network of economic development partners.

Among the incentive programs managed at the state level is the Economic Development Transportation Fund, which provides up to $2 million to fund the cost of transportation projects, such as access roads and road widening, required for the establishment, expansion, or retention of businesses in Florida. The state's Qualified Target Industry Tax Refund is similar to the Miami-Dade program that rewards the creation of jobs in certain industries. Florida also offers various sales and use tax exemptions for machinery and equipment purchase, electric energy, research and development, and other aspects of doing business in the area.

Job training programs

The Workforce Development Board (WDB), commonly known as Jobs & Education Partnership, is a part of Enterprise Florida. WDB provides policy, planning, and oversight for job training programs funded under the federal Workforce Investment Act, along with vocational training, adult education, employment placement, and other workforce programs administered by a variety of state and local agencies. Regional Workforce Development Boards operate under charters approved by the Workforce Development Board. The 24 regional boards have primary responsibility for direct services through a state-wide network of One-Stop Career systems.

State and local workforce development efforts are concentrated on three broad initiatives. First Jobs/First Wages focuses on preparing workers for entry-level employment including the School-to-Work and WAGES (Work and Gain Self-Sufficiency) programs. High Skill/High Wages targets the higher skills needs of employers and training workers for advancement through such programs as Performance Based Incentive Funding, Occupational Forecasting Conference/Targeted Occupations, Quick Response Training, and Incumbent Worker Training. One-Stop Career Centers are the central elements of the One-Stop system that provide integrated services to employers, workers, and job-seekers.

Development Projects

Under the leadership of Mayor Manuel Diaz, the city of Miami experienced an unprecedented level of development and private investment. New projects valued at about $12.5 billion were planned or under construction in 2004. This influx of capital resulted in a tax base that grew 15 percent during the year, attributing to a $2.3 billion dollar increase in real estate values. Two of the largest projects under development are the Midtown Miami Project, which will result in the Shops at Midtown and the Midtown Miami residential center, and a $1.5 billion commitment by a group of private investors to develop several locations in the city; combined, these two projects will result in 3.5 million square feet of residential, commercial, office, and parking space in Miami. Another significant development is the Wagner Square project, slated to break ground in 2005, which will produce residential and commercial retail units from 2.95 acres of environmentally contaminated city land.

City leaders are determined to develop all areas of the Greater Miami region, not just the downtown area. The $1 billion Midtown Miami residential project will create more than 1,500 jobs in Wynwood, an area that lost 20,000 jobs during the 1990s. Approximately $175 million in private investment will help revitalize Overtown, the poorest neighborhood in Miami. The University of Miami will bolster the region's foothold in biotechnology by constructing a 300,000 square foot Clinical Research Building along with two new wet lab facilities. The Miami International Airport launched a $4.6 billion program to renovate existing facilities and construct new ones.

In addition to attracting new business developments, Miami is focused on improving the existing environment. Mayor Diaz implemented the city's first Capital Improvement Plan, an initiative to rebuild the city's entire infrastructure by reconstructing, resurfacing, and repairing every road, sidewalk, and curb on a 12-year cycle. Operation Difference and a Quality of Life task force strive to make the city safer and cleaner by tackling garbage dumping and housing violations, along with such illegal activities as drug dealing, prostitution, and gambling. The Miami Herald reported that the city's crime rate dropped nine percent during 2004, the 11th consecutive year of decline.

The Clean Up Miami Campaign includes daytime street sweepers and litter and graffiti clean-up teams. The Adopt-a-Waterway program, the first of its kind in the nation, will improve water quality in the Miami River and its tributaries and will complement the city's $80 million dredging project that is expected to pull approximately 500,000 cubic yards of sediment from the river. Miami-Dade County's Adopt-a-Tree program distributes thousands of trees throughout the region. The Miami River Greenways Plan will develop a series of pedestrian and bicycle paths to link parks and neighborhoods on both sides of the river.

Economic Development Information: Miami Department of Economic Development, 444 SW 2nd Ave., 3rd Fl., Miami, FL 33130; telephone (305)416-1435; fax (305)416-2156; email development@ci.miami.fl.us. The Beacon Council, 80 SW 8th St., Ste. 2400, Miami, FL 33130; telephone (305)579-1300; fax (305)375-0271; email info@beaconcouncil.com

Commercial Shipping

Miami ranked 22nd among "America's 100 Most Logistics Friendly Metros" by Expansion Management magazine in 2004. The economic and logistical vitality of Miami comes in large measure from Miami International Airport (MIA). Served by more than 100 airlines, MIA is a hub of both domestic and international trade and is the primary commerce link between North and South America. In 2002 the airport transported nearly 1.8 million tons of cargo and more than 30 million passengers. MIA ranks first in the nation for international freight and third for both international cargo and international passengers. Its trade support infrastructure includes more than 300 freight forwarders and customs brokers, as well as a Cargo Clearance Center that provides 24-hour service by inspectors from the U.S. Customs Serice, Department of Agriculture, Fish and Wildlife Service, and Food and Drug Administration.

The Port of Miami, in addition to being the world's largest cruise port, has achieved dominance in international commerce; it ranks first in Florida and ninth nationally in commercial tonnage. In 2002 the port handled 8.7 million tons of cargo and 3.6 million passengers, a 5.9 percent and 7.4 percent increase over the previous year, respectively. The Miami Free Zone's principal function is importing for domestic U.S. consumption. Fifteen minutes from the seaport and five minutes from the airport, the free zone is one of the largest duty-free zones in the United States. Two major railway systems, Amtrak and Tri-Rail, link the city locally and nationally. Interstates 95 and 195 run perpendicular through the Miami region. A network of 5,640 miles of roadway provides delivery and receiving routes for the nearly 100 motor freight lines operating in the area.

Labor Force and Employment Outlook

The Miami-Dade County labor force is Florida's largest and most comprehensive, numbering over 1.1 million, of which college students and adult/vocational education students make up 100,000 each. The region's labor advantages include a large and diverse pool of Spanish-speaking and bilingual workers who contribute to Miami's expansion as a headquarters of international operations. The Beacon Council forecasts the largest employment growth sectors for the mid-to late-2000s will be professional and business services, education, health services, and construction.

The following is a summary of data regarding the Miami-Hialeah metropolitan area labor force, 2003 annual averages.

Size of nonagricultural labor force: 1,004,100

Number of workers employed in . . . manufacturing: 52,400

trade, transportation and utilities: 252,800

information: 28,400

financial activities: 67,300

professional and business services: 146,800

educational and health services: 129,900

leisure and hospitality: 92,100

other services: 42,100

government: 150,900

Average hourly earnings of production workers employed in manufacturing: $14.09 (2003 statewide average)

Unemployment rate: 5.4% (December 2004)

Cost of Living

The Beacon Council reports that Miami's 2003 cost of living, while above the national average, was lower than other major urban areas like New York, Boston, Los Angeles, and Washington DC.

The following is a summary of data regarding several key cost of living factors for the Miami area.

2004 (3rd Quarter) ACCRA Average House Price: $323,449

2004 (3rd Quarter) ACCRA Cost of Living Index: 111.5 (U.S. average = 100.0)

State income tax rate: None for personal income; 5.5 percent of net income for corporations

State sales tax rate: 6.0%

Local income tax rate: None

Local sales tax rate: 1.0%

Property tax rate: $26.23895 per $1,000 of assessed property value (2004)

Economic Information: The Beacon Council, 80 SW 8th Street, Suite 2400, Miami, FL 33130; telephone (305)579-1300; fax (305)375-0271; email info@beaconcouncil.com