| | | | | | | |  | Resolutions - C7 E
COMMISSION MEMORANDUM |
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| | | | | | | | | TO: | Honorable Mayor and Members of the City Commission | | | FROM: | Alina T. Hudak, City Manager | | | DATE: | May 4, 2022 | | | |
| | SUBJECT: | A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE, AT ITS MARCH 30, 2022 MEETING, AND APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH PENNANTPARK INVESTMENT ADVISERS, LLC, FOR PARTICIPATION IN THE JOB CREATION INCENTIVE PROGRAM (THE "PROGRAM"), IN AN AMOUNT NOT TO EXCEED $60,000 PER YEAR, FOR UP TO FOUR (4) YEARS, SUBJECT TO FUNDING APPROPRIATION AND APPROVAL DURING THE CITY'S ANNUAL BUDGETARY PROCESS FOR EACH FISCAL YEAR DURING THE TERM OF THE AGREEMENT. |
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| | | | | | | | RECOMMENDATION
| | The Administration recommends the approval and authorization of the City Manager to execute an agreement with PennantPark Investment Advisers, LLC for participation in the Job Creation Incentive Program, in an amount not to exceed $60,000 per year, for up to four years, subject to funding appropriation and approval during the City's budgetary process for each fiscal year during the term of the agreement. |
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| | | | | | | | BACKGROUND/HISTORY
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On March 17, 2021, the Mayor and City Commission adopted Resolution 2021-31620, authorizing the Administration to create a Job Creation Incentive Program (the “Program”) for the purpose of attracting targeted industries to Miami Beach. The Program offers a performance-based financial incentive available to technology and financial services firms and headquarters relocating to or expanding in the City of Miami Beach.
The JCIP affords the city a greater competitive advantage and ability to leverage existing incentives from the State and County. The purpose of the JCIP is to strategically attract new and expanding businesses within the City of Miami Beach and to diversify the economy by strategically increasing the number of quality, high-wage jobs in Miami Beach. Program participants must create or relocate a minimum of ten (10) new, fulltime equivalent jobs with average annual wages meeting or exceeding 125% of the State of Florida or Miami-Dade County average wage, whichever is higher, at the time of application. After each annual performance period, participants are eligible to receive an incentive based on number of new and relocated employees with additional incentives for participants locating in North Beach, and those hiring Miami Beach residents and employees with education or training received at local institutions.
New-to-market companies that are recipients of the incentive may be eligible for an award of up to $60,000 per year for four (4) years. Expanding companies are eligible for an award of up to $60,000 per year for three (3) years.
On April 6, 2022, the City Commission authorized an amendment to the Program to encourage small businesses to participate and to develop a greater focus on subcategories within the targeted industries including cryptocurrency, blockchain, Web3, decentralized finance, sustainability, resiliency, hospitality, tourism, health and wellness, and arts and culture. As outlined in the program guidelines, recommendations for award of this incentive must be reviewed by the Finance and Economic Resiliency Committee (FERC) and approved by the City Commission.
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| | | | | | | | ANALYSIS
| The Administration provides a quarterly update on a number of economic development activities to the FERC. The update includes details on efforts to attract and retain businesses including communications and marketing plans, tradeshow and conference opportunities, options to leverage city assets through public-private-partnerships, and recent applications for the Job Creation Incentive Program. During the March 30, 2022 FERC meeting, the Administration recommended approval of PennantPark Investment Advisers, LLC’s (PennantPark) Program application as the firm meets the eligibility criteria.
PennantPark is an investment advisory firm focused on middle market lending, with offices in New York City, Chicago, Los Angeles, and Houston. The firm is expanding and relocating its headquarters from New York to Miami Beach. Founded by Arthur Penn in 2007, Pennant Park is an independent manager of a diverse portfolio with approximately $6 billion in assets currently under management. The firm offers investors access to middle market credit and to date, has invested over $15 billion involving over 650 transactions across a range of industries including government services, healthcare, software, technology, consumer, and business services.
PennantPark is investing in Miami Beach for the long term with a five and a half (5 1/2) year lease, with renewal options for over 5,500 square feet, at 1691 Michigan Avenue near Lincoln Road. In alignment with the City Commission's efforts to diversify the economy and encourage workforce opportunities, PennantPark intends to create or relocate approximately twenty (20) jobs over a four (4) year period, with estimated annual wages averaging $350,000. The Administration is recommending this company for the JCIP to support the growth of the financial services industry. PennantPark is also participating in the Expedited Plan Review and Permitting Incentive Program, approved by the City Commission via Resolution No. No. 2021-31619.
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PennantPark: Project Summary
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Industry and business services
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Financial services; investment management
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Location
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1691 Michigan Avenue
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Type of Office
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Headquarters
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Lease Term
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5.5-years
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Office Size
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5,537 sq ft
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Capital Investment
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TBD (to be provided by landlord)
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New or Relocated Jobs
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10 (year 1); 20 ( over 4 years)
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Average Wages
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$350,000
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Estimated annual award amount
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$11,000
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Estimated final award amount
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$ 44,000 (over 4 years)
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Economic Impact Analysis (IMPLAN)
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See Exhibit A
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On March 30, 2022, the FERC unanimously recommended approval of PennantPark’s application based on its qualifications as a new-to-market company within the targeted industries and other criteria including high-wage job creation. |
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| | | | | | | | SUPPORTING SURVEY DATA
| | The Mayor and City Commission identified the need for making Miami Beach more business and user-friendly as a key objective in the City’s 2019 Strategic Plan. Based on the 2019 Miami Beach Community Satisfaction Survey, 59.9% of businesses would recommend the City of Miami Beach to others as a place to run a business. It is anticipated that this percentage will increase over time as the economy diversifies and companies within the targeted industries relocate to Miami Beach and promote the City’s incentive programs to industry peers. |
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| | | | | | | | FINANCIAL INFORMATION
| | The fiscal impact to the City is up to $60,000 per year for four (4) years subject to funding appropriation and approval during the budgetary process for each fiscal year during the term of the agreement. |
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| | | | | | | | CONCLUSION
| | The City Commission’s efforts to market the city and attract, retain, and expand top-notch financial services and technology firms has yielded success. To continue this initiative, the Administration is recommending PennantPark Investment Advisers, LLC for Program approval. Their bold expansion to the city will have a positive impact on the business climate in furthering economic diversification. The Administration recommends the approval of the FERC recommendation to approve and authorize the City Manager to execute an agreement with PennantPark Investment Advisers, LLC for participation in the Job Creation Incentive Program in the form attached as Exhibit B accompanying this Memorandum. |
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| | | | | | | | Applicable Area
| | South Beach |
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| | | | | | | | | Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? | | Does this item utilize G.O. Bond Funds? | | | No | | No | |
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| | | | | | | | Strategic Connection
| | Prosperity - Revitalize targeted areas and increase investment. |
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| | | | | | | | Legislative Tracking
Economic Development |
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