Office Space Would Be Tight At Two Proposed Ftaa Sites
Written by Susan Stabley on June 17, 2004
By Susan Stabley
Creation of a free-trade headquarters in Miami could be a magnet for other office tenants, but space near the city’s two touted sites is limited.
Promoters of Miami as the home of the proposed Free Trade Area of the Americas are pitching Watson Island and Dinner Key against bids from nine other cities in the Western Hemisphere offering a $12 million to $16 million building with 50,000 to 60,000 square feet of office space.
At issue could be bragging rights as an unofficial gateway to the Americas for the city that hosts the headquarters, called the secretariat. An added prize may come with a flurry of new jobs that could be created by the trade pact that would create a trade zone among most nations in North, Central and South America and the Caribbean. Some observers expect companies to move close to the home base of the free-trade agreement, thus boosting office-space occupancy rates.
"I think it’s going to be a magnet," said commercial real estate expert Peter Harrison of Cushman & Wakefield. He said the impact wouldn’t be to the immediate area of either site but to all of Miami-Dade County.
Miami’s office market is soft. Overall vacancy rates were 16.5% in the first quarter, according to Cushman & Wakefield – a 2.1-point decrease from the first quarter of 2003. A company report notes that the area’s economic indicators point to a rebound that follows the national economy for the office market.
Mr. Harrison said that obtaining the headquarters could result in new construction that would be "limited."
Tony Puente, vice president at CB Richard Ellis and leasing manager for SBS Tower on South Bayshore Drive, expects office occupancy to increase if the trade headquarters comes to Miami. His company has been tracking efforts from media accounts and the Coconut Grove Chamber of Commerce. His 21-story, 300,000-square-foot office tower is across the street from the Dinner Key site being proposed for the trade headquarters.
If Dinner Key were selected for the secretariat, the headquarters would replace the Coconut Grove Convention Center next to Miami’s City Hall.
The Watson Island site lies next to the site of a proposed $426 million retail-hotel-marina resort that still needs state and city approval. Miami Beach officials have raised concerns that development there would increase congestion on MacArthur Causeway.
The manmade island lies at the end of the causeway that connects the Beach to mainland Miami.
The owner of Chalk’s Ocean Airways says he has a contract to build a structure at the site suggested for the secretariat.
Though space on the 86-acre island is limited, especially with the recent additions of Parrot Jungle Island and the Miami Children’s Museum, nearby Miami Beach has an overall office-space vacancy rate of 24.9% and an inventory of 1.65 million square feet in 27 buildings. In the other direction, downtown Miami has an overall office-space vacancy rate of 17.1% and an inventory of 6.4 million square feet in 27 buildings.
To the south, the Brickell area has an overall office-space vacancy rate of 18.4% and an inventory of 5.7 million square feet in 31 buildings, according to Cushman & Wakefield.
Both sites offer venues on the water, which, Mr. Puente said, "defines Miami."
Coconut Grove may be the better location for the headquarters, he said, because the surrounding neighborhood is "more mature" while the Watson Island site is more removed and "a little out of the way" from existing office-space inventory in the downtown core and Brickell.
"The closeness is a convenience," Mr. Puente said. "Relationships are important."
Closeness can be a factor for many businesses. Doctors want to be near hospitals just as lawyers like to work close to a courthouse. "Face-to-face is still far superior to teleconferencing, which is very expensive," said Hugh Simon of Simon International, which works with US-based international companies and organizations on economic development and government relations.
"All that really comes into play," said Mr. Puente.
Construction is consuming nearby land in Coconut Grove, which has an overall vacancy rate of 16.5% and an inventory of 980,572 square feet among 11 buildings, according to Cushman & Wakefield.
"There really are no more sites. Everything is accounted for or not large enough," Mr. Puente said.
What might happen is still somewhat unknown, Mr. Puente said, because a city has not been selected for the secretariat. For now, the Miami community must band together to win the headquarters, he said.
According to Neena Moorjani, a spokeswoman with the Office of the US Trade Representative in Washington, all countries participating in the Free Trade Area of the Americas pact are reviewing applications by the 10 candidate cities – Panama City, Panama; Port-of-Spain, Trinidad & Tobago; Puebla and Cancun, Mexico; Atlanta; Chicago; Houston; Galveston, TX; and San Juan, Puerto Rico.
Colorado Springs had considered bidding but bowed out.
Pitches from the 10 cities vying for the trade headquarters can be viewed at the Free Trade Area of the Americas Web site, www.ftaa-acla.org.
Trade ministers indicated during a gathering in Miami in November that "they would take any decisions at their next meeting, which will be held in Brazil later this year," said Ms. Moorjani.
Even the amount of space and number of staff needed for the secretariat is unclear.
"It’s less certain now than a year ago," said Mr. Simon, former Florida undersecretary of state for international affairs. The working heart of the trade headquarters may develop in stages, he said. As the pact is defined, its business center may act as a place where ministers and business leaders refine negotiations. And, he said, it would "help to create the general energy as the center of where things happen for north-south trade in the hemisphere."
If Miami secures the secretariat, he said, expect "a new wave of companies from other parts of the world."