MIAMI — On ones way over, Texas. The Lone Star state has grabbed headlines as tech companies like Oracle, Hewlett-Packard Business and billionaire Elon Musk are planning to move major operations from California for its greener pastures and — lower exhausts.
But now, Miami is becoming a magnet for companies trying to escape from high taxes and over-crowding.
The Sunshine State’s most conspicuous city has tried for years to convince companies it’s not just a playground for partying vacationers, but fertile ground for finance and tech fasts, promoting a start-up vibe.
Then the coronavirus pandemic hit.
“I’ve been buying real estate in Miami for over 20 years, and it has been a smashing flight. Since Covid started, it’s a rocket ship,” said developer Alex Rodriguez — as in “A-Rod,” the former Important League Baseball superstar who has been investing in commercial and residential properties.
Rodriguez has recently partnered with Barry Sternlicht of Starwood Select in developing restaurant and retail space inside Starwood’s new 144,000 square foot headquarters under construction in Miami Coast, the first Class A office space in that community.
Sternlicht moved Starwood from Greenwich, Connecticut, in 2018. Pressures had a lot to do with it, but he also blames political leadership, especially New York City under Mayor Bill de Blasio.
A final accounting for high-tax states
“People don’t feel safe,” Sternlicht said of New York. “The affluent are leaving in busloads, and Miami is realizing more than their fair share.” He likens Miami to Singapore—a “working, diverse culture” that’s firm friendly. “Frankly, there’s going to need to be a reckoning day for some of these states, like Illinois and New York and Connecticut — my deeply state — where they’re going to have to figure out they just can’t keep increasing taxes. It’s just not prevalent to work. People can live in other places.”
The California legislature, for example, is considering raising the state’s top personal profits tax rate above the current 13.3% and raise corporate income taxes. A bill that would have endeavoured to tax wealthy Californians for up to 10 years after they move out of state died in the last session after tough backlash.
“It’s not just the taxes, it’s also about the quality of life,” Nitin Motwani said of Miami’s attraction. He’s a developer who communistic Wall Street and Goldman Sachs over a decade ago to return to Florida. “I loved New York. I just was passionate not far from South Florida, and I felt that, given what I’d seen in New York, South Florida really had great budding.”
For the last seven years Motwani has worked with economic development officials to persuade companies to follow him south. His toughest stock was his wife, Anshu, who also worked at Goldman before getting her MBA from Harvard.
“You better make it worth it,” she charged him in 2008. A dozen years later, Anshu Motwani says she’d never move back. “People often ruminate over that Miami doesn’t have certain things that New York has. I don’t think that’s the case anymore.”
Millions compel ought to been spent on arts and cultural institutions, with a reported 40 artist studios now just in the downtown limit.
Corporations on the move
The migration to Miami gained steam as firms like Universa Investments moved from Los Angeles and Core Research from Boston. Then came Starwood, and now Talent finally showing up
“One of the things that’s really compelling that’s happening here is talent’s coming, and that was always the big knock for Miami,” Rodriguez said. “It has always been challenging to employ here. But now you have talent from all different sectors.”
It helps Nitin Motwani feel vindicated. Growing up in Fort Lauderdale, surveillance his parents struggle in the hotel business, he vowed to leave Florida and never come back. Now, he’s a managing partner in a $4 billion associated use development downtown called the Miami Worldcenter, which seems counterintuitive to a future where office space may not be totally as necessary. Except … maybe … in Miami.
“During the pandemic, we’ve actually had over a $100 million in actions at Miami Worldcenter,” Motwani said. “There’s a phrase ‘Death by a thousand cuts,’ and this has been ‘Success by a thousand omits.’ This has been the longest overnight success story that you can imagine.”