Internet Hub Seen Sparking Development In Miamis Park West
Written by Marilyn Bowden on October 5, 2000
By Marilyn Bowden
Downtown boosters hope development of a carrier-neutral network access point in Park West will revive the central business district and create hundreds of jobs. But some warn that infrastructure and environmental issues must be addressed if a downtown telecom hub is to become a reality.
"The consensus is there will be a big spill-over effect with significant tenants coming to the market," said Edgar Jones, a vice president in the office services group at Grubb & Ellis. "In addition to some of the obvious users, the area will become a human center of the business with other providers such as attorneys and accountants serving the industry."
In Park West, now dotted with warehouses and empty parking lots, "developers may seize the opportunity to build office space," Mr. Jones said. "The question is, how quickly can they respond? The longer it takes, the more likely it is that some of the demand will be met elsewhere in the area."
City Commissioner Johnny Winton, president of downtown’s WynCo Realty Partners, says judging by what happened when major NAPs opened in Dallas and the Washington, DC, area, "over the course of the next two years we will see a transformation in the area that could potentially be unparalleled in the history of the city.
"The thing that could mess it up is poor government policy," he said. "Both the city and county are involved, but the biggest challenge is tied to the county. Delays caused by the county Department of Environmental Resources Management and the Water & Sewer Department are negatively impacting all development in the city."
Mr. Winton said he hopes to introduce a resolution at the next city commission meeting to initiate strong dialogue between city and county with a view to speeding the process "including legal steps if necessary."
While everyone pays lip service to Eastward Ho, the state’s urban infill policy, he said, "impact fees from the county and school board fly in the face of it.
"They charge the same kind of impact fees to redevelop as to do new development in the suburbs," Mr. Winton said. "So we’ve got some work to do."
The NAP of the Americas will occupy 125,000 square feet of the six-story, 700,000-square-foot Technology Center of the Americas under development by Terremark Worldwide at 50 NE Ninth St. near the Miami Arena, says Sandy Gonzalez-Levy, Terremark’s senior vice president of communications.
The rest of the building will be a telecom hotel space built to the specifications of the industry that includes such features as reinforced floors, high ceilings and built-in electrical and fiber-optic redundancy.
Global Crossing, which has taken 125,000 square feet, will be the lead tenant.
Monty Bannerman, senior vice president of Internet services at Terremark Worldwide, said construction on the building is ahead of schedule and it should open by second quarter 2001.
Jamie Dos Santos, assistant vice president at Telcordia which will manage the NAP of the Americas said in San Francisco and Chicago, where the company manages similar carrier-neutral network access points, the economic impact has been substantial.
"Property values within a certain radius tripled," she said. "Companies coming in to put out their content from the access point need to hire local folks. So there’s a great amount of training to make the shift to a workforce dealing with intellectual property. We have excellent facilities for that."
She said Telcordia is working with the city commission, the school board and local universities to develop training programs.
The telecommunications industry isn’t new to downtown. Interest in the area has been brisk since the beginning of the year well before the decision to house the NAP in the Terremark building downtown was announced, said David Garfinkle, a principal of Investment Equity Associates, which rents space at the retrofitted 200 SE First building to telecom tenants.
"The NAP will add to more of what’s already going on," he said. "Downtowns are coming back because these types of tenants like to be close to each other."
Conversions of existing properties to meet industry standards continues throughout the city. Among the larger examples are the transformation of Omni Mall to a 1.1-million-square-foot Omni Technology Center by New York-based Argent Ventures and the Codina Group’s remarketing of Miami Free Zone as Beacon CyberPort, a project that will add 200,000 square feet of space as well as retool the 750,000-square-foot property.
Brett Dill, an executive at Lightspeed Infrastructure, said telecom hubs don’t need to include a carrier-neutral network access point to attract ancillary business.
Lightspeed Infrastructure, a strategic alliance led by Swerdlow Real Estate Group, is building customized facilities for telecom companies across South Florida. The first, at Beacon TradePort in Airport West, has begun with the construction of a 360,000-square-foot building for Exodus Co.
Mr. Dill said several more are in the works for a total of 400,000 square feet. LightSpeed Center at Beacon TradePort will contain up to 2 million square feet at build-out, he said.
"There’s a private NAP by MCI out here that carries about 60% of Internet traffic," he said. "And the entire telecom population downtown is smaller than the Exodus facility alone.
"The benefits of clustering around a NAP have been minimized by the development of fiber-optic networks," Mr. Dill said. "The monumental amounts of fiber laid in the past several years make these buildings less dependent on exact locations."
LightSpeed Chairman & CEO Michael Swerdlow said he assesses connectivity, the availability of power and risk from natural disasters in selecting sites.
"That is the reason we have not focused our efforts downtown," he said. "In our opinion big content servers are better off where they don’t have to deal with employee evacuation during hurricanes."
He said the county Office of Emergency Management requires evacuation for a Category 2 hurricane in the area where the NAP of the Americas will be.
Terremark’s Mr. Bannerman said the NAP of the Americas will be 32 feet above ground. In the event of an evacuation order, the center has enough fuel to run for 11 days without any human input, he said though the steel-reinforced structure will be so sturdy that some employees might opt to stay at work to ride out a storm.