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 SEPTEMBER 24, 2021 MEETING, AND APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH MELVIN CAPITAL MANAGEMENT LP 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 BUDGETARY PROCESS FOR EACH FISCAL YEAR DURING THE TERM OF THE AGREEMENT.

The Administration recommends that the Mayor and City Commission adopt the attached  Resolution, approving and authorizing the City Manager to execute an agreement with Melvin Capital Management LP (“Melvin Capital”) 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.

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. As one of Miami-Dade County’s top economic drivers, the City of Miami Beach has traditionally offered a robust atmosphere for business, with particular emphasis on the thriving tourism and hospitality industries. In recent years, and in the wake of natural disasters and public health emergencies, the City Commission and Administration have prioritized diversification of the local economy to increase resiliency and position the city as a healthy business destination.

With an influx of financial services and technology companies flocking to the region, on March 17, 2021, the Mayor and City Commission adopted Resolution No. 2021-31618, establishing financial services and technology as targeted industries and directing the Administration to encourage and promote the attraction of these industries in order to diversify the economy and enhance resiliency.

The Mayor and City Commission recognize the benefits of a local approach to growing these industries in consideration of the competitive regional and national market. In an effort to capitalize on the regional momentum and diversify the city’s industry clusters, the Mayor and City Commission took further action by adopting Resolution No. 2021-31619, to attract, retain and expand businesses in these targeted industries through the development of inducements and services, such as the Expedited Plan Review and Permitting Incentive Program.

Given median and average wages among the financial services and technology industries are substantially higher than median and average wages in Miami-Dade County, financial incentives related to the attraction, retention and expansion of businesses in these industries promote economic diversification, resiliency and an enhanced business climate.

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 purpose of the Program is 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.

The Economic Development Department markets and promotes the City Commission-approved targeted industry inducement and incentive programs to Chief Executive Officers, Chief Investment Officers, prospective and existing business owners, property owners, brokers, realtors, and business stakeholder groups.

After months of discussions, the City received a Program application from Melvin Capital Management LP (“Melvin Capital”). Melvin Capital is a registered investment advisory firm founded in 2014 by Chief Investment Officer Gabe Plotkin. The firm manages more than $11 billion in assets and plans to hire or relocate at least 20 employees to Miami Beach in the first year with plans to expand to 30 employees within four (4) years.

Headquartered in New York, Melvin Capital plans to open a regional office in Miami Beach. The company is already in the process of utilizing the City’s newly created Expedited Plan Review and Permitting Incentive Program for the buildout of its new offices at 1674 Meridian Avenue, a Class A Office building represented by Integra and the Constellation Group. Below is a project summary table of Melvin Capital’s relocation and job creation profile:

On September 24, 2021, the Finance and Economic Resiliency Committee unanimously recommended approval of Melvin Capital’s application based on its qualifications as a new-to-market company within the targeted industries and other criteria including high-wage job creation.

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. 

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. Funding for the Program has been requested for appropriation in the Fiscal Year 2021-2022 budget.

Given the City Commission’s goal to market the city and attract, retain and expand top-notch financial services and technology firms, the Administration is recommending Melvin Capital for Program approval. Their relocation to the city will have a positive impact on the business climate and further economic diversification efforts. The Administration requests approval for the City Manager to execute an Agreement with Melvin Capital, in the form attached as Exhibit A accompanying this Memorandum.