Chairman Nick Hood from BTG Global Network 

 

Age Concern in Miami

Someone moved Miami’s rainy season forward this year, condemning some 500 insolvency practitioners to endless humid wet dashes across lethally slippery stone courtyards at their conference at the Turnberry Isle Resort. The weather matched their grim mood as they debated the world’s economic woes; with many a mention of ‘Grexit’ and the gathering financial storm in Spain.

A motley bunch from all around the globe, they added to the 12m tourists who flock to Greater Miami each year, 56% of them US residents. Of the foreigners, over half come from South America and a third from Europe. But tourism represents less than 10% of South Florida’s $233bn economy, despite the Port of Miami being the world’s busiest cruise liner destination.

The economy is dominated by finance and commerce, with more international banks located in Miami and South Florida than anywhere else in the USA, including New York. They and their American counterparts are there to service the S American headquarters of the 1,400 multinationals, which prefer to be the US side of the border.

The banks are also heavily involved in the once booming real estate market. Prices are down currently from their 2007 peaks, but still 38% above the levels in 2000, feeding these days off strong interest from buyers from Latin America, Europe and Asia. Quality properties here remain much cheaper than their equivalent in other major cities like NYC, Washington, Chicago & Los Angeles.

The city and its environs have come a long way since it was officially incorporated as a city in 1896, with a population of just 300. It was the brain child of citrus fruit grower, Julia Tuttle who can never have imagined what she was starting, nor that it would become the base for the largest city in the world with Cuban-American plurality. Then again she could hardly have anticipated the advent and longevity of Fidel Castro. The metro area is now home to 5.5m people, of whom 70% are Hispanic.

Sadly, as the manicured golf courses of the resort hotels dwindle behind the cab and downtown beckons, the harsh realities of post-recessionary America start to intrude. Miami has the third highest incidence of family incomes below the poverty line, after Detroit and El Paso. Few of these embattled souls will find themselves enjoying the best of the glorious Floribbean cuisine, heavy on citrus juices and seasoned with a mix of hot and flavoursome spices, or else something more typically South American in eateries such as Ola at the Sanctuary.

Nor will they get to enjoy the illicit thrills of the many casinos, which seem to be trading well despite the financial downturn and halting recovery. The Malaysian gambling giant, Genting bought the old Miami Herald site last year with plans to build the world’s largest casino there, creating an immediate rush of interest in the area from their Vegas competitors.

So whither Miami as the world’s insolvency elite melt away to their financial bunkers, waiting for Eurogeddon or, less likely, some miraculous outbreak of political common sense?

The last word goes to a world weary cab driver, who lamented how old his passengers seemed to be getting. Official statistics suggest that somehow the average age of Southern Florida’s tourists is still only 43. This will surely increase, just as retirement incomes are bound to fall. So, somewhat like many of its future visitors, it could just be that Miami’s best years may be behind it.

 

By Nick Hood from BTG Global Network, exclusively for Insolvency Journal