BACKGROUND:
As a global destination and evolving urban center, Miami Beach represents a city with great potential for new economic innovation. The City also has a need to ensure that its local economy is protected to the greatest extent possible from downturns in the local and global markets. While our local economy is not entirely tourism-based, it is clearly weighed heavily towards the tourism industry, which, in the last year alone, has been affected by multiple challenges including Zika, a hurricane, and a convention center under construction. In order to address potential economic challenges, the City might consider opportunities and methods by which it could help to diversify the local economy further and tools it may be able to employ to attract and retain new business developments. Additionally, these efforts should also expand the employment opportunities available to residents of the City, adding another layer to the potential economic benefit.
Diversification of the business base would make the local economy less vulnerable to downtowns or economic shocks within any one segment, and would assist in maintaining ongoing business activity, employment opportunities for residents, and revenues to the City. The City's economic development efforts in recent years have focused more on revitalization or enhancement of areas such as Alton Road, North Beach, and Ocean Drive. It is recommended that these efforts should expand to include more traditional economic development activities such as business attraction and retention geared towards desired and advantageous business and development types.
In addition, the City currently has no clear economic development goals or objectives other than the following limited Key Intended Outcomes (KIOs):
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Improve Alliance with Key Business Sectors, Namely Hospitality, Arts, & International Business with a Focus on Enhanced Culture, Entertainment, & Tourism.
Since the last modifications to the City’s KIOs, adopted in July 2015, the local economy has continued to change and evolve. Additional economic development goals and objectives should be formulated that may lead to a more defined economic development direction and new KIOs.
The most direct way to address this need would be through the creation of a city-wide economic development strategy plan. Such an effort would utilize a review of: existing businesses and commercial space in the City, and marketplace data along with input from the public, to explore what might be the best and most suitable industries for the City to target. Additional activities under this effort could include a strategy of potential methods to attract and retain these desired businesses. These methods could include incentives, zoning modifications or bonuses, and the identification or attraction of projects that might be eligible for grant funding from agencies such as the U.S. Economic Development Administration.
Such a strategy plan would be best implemented through the use of an outside consulting firm that could easily provide market and industry data and assist in connecting the City to established industry leaders. Key industry experts could help to define the most advantageous business types to attract given the City’s economy, workforce, commercial and office property inventory, and the regulatory environment in the City, County, and State.
For these reasons, an item referring the creation of an economic development strategy to the Finance and Citywide Projects Committee was made by the City Commission on December 14, 2016.
Shortly after this meeting, the City’s Chief Resiliency Officer (CRO) recommended that this effort be reviewed for inclusion of resiliency-related efforts. Additionally, the CRO further suggested that this effort might be enhanced by consultants from 100 Resilient Cities (100RC), a non-profit organization pioneered by the Rockefeller Foundation which assists cities around the world in becoming more resilient to physical, social, and economic challenges to which the City, as part of a triumvirate with local partners Miami-Dade County and the City of Miami, had recently become a member. At the December 16, 2016 Finance and Citywide Projects Committee (FCWPC) meeting, there was brief discussion and full support of moving this item forward and reaching out to 100RC before the item returned to the Committee. Additional discussion at the December FCWPC meeting covered topics such as incorporating other components into a comprehensive strategy such as transportation and housing.
A discussion was subsequently held with 100RC who agreed to provide assistance in determining what might be included in an effort to create an economic development strategy that would further the City’s resiliency goals. To this end, 100RC offered 10 hours of assistance from Paul Peninger, a consultant with AECOM who has expertise in urban planning and economics. Mr. Peninger provided to the City’s Economic Development Division Director a number of documents regarding economic development strategies, economic development incentives, and directed attention to documents from several other locales across the nation.
After working with Mr. Peninger, a draft RFP with a proposed Scope of Work was prepared for discussion at the April 21, 2017 FCWPC. The Committee agreed with the proposed Scope of Work and expanded it to include a task to insure the impact of housing and transportation issues on economic development are addressed. Specifically, the Committee requested that the selected consultant draw upon on-going housing and transportation efforts, including reviewing adopted studies and master plans, to formulate conclusions and recommendations for mitigation. The Committee also recommended the Commission consider a $75,000 budget enhancement for FY 2017-18 to fund the effort.
SCOPE OF WORK
An early conclusion by Mr. Peninger, the 100RC consultant, was that diversification of the business base was the only true resiliency tactic that is necessary in our economic development strategy, but there may be an opportunity to work into the strategy a program that educates business owners on resiliency issues in the City and to potentially outline a program of incentives to assist businesses in becoming more resilient, specifically citing a presentation made by the U.S. Economic Development Administration titled “Resilience and Economic Development: Moving from Idea to Action” (Attachment 2) as a guideline for the addition of these components. Mr. Peninger and staff also considered the need for clear economic development goals and objectives and other economic development related items.
After several conversations, Mr. Peninger provided a discussion draft for a Request for Proposals was crafted to include tasks such as:
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Meeting with City staff and stakeholders
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Economic base analysis and identification of targeted sectors
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Recommended incentives for business attraction to diversify the local economy and an implementation plan
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A business retention and expansion strategy
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Economic resiliency strategy
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Overall economic development goals and objectives
All of the tasks are designed to move the City’s economic development program forward keeping in mind an effort to diversify the City’s economic base, make the City economy and business community resilient, and to prepare goals and objectives.
The result of the conversations with Mr. Peninger and the Economic Development Staff is the draft RFP (Attachment 1). Mr. Peninger added that, as a result of his involvement as a 100 RC consultant to the City, his firm would not respond to an RFP if the City proceeds. This disclosure also allowed him to offer a recommendation that this project should have a budget of $75,000.
When a the draft Scope of Work was presented to the FCWPC on April 24, 2017, the Committee supported the proposed Scope of Work and requested it be expanded to include a task to review impacts of housing affordability and transportation issues on economic development (the additional task is reflected in Attachment 1).