Welcome to Brickell, Miami's "Wall Street South"
The following is a reposted Forbes article by Scott Beyer. Full credit and acknowledgment is given to the author. Photos are not part of the original article. Original article can be found here.
By now, it is common knowledge which cities are the U.S. banking capitals. Because of Wall Street, New York City remains #1, and the Bank of America headquarters has made Charlotte #2. But fly further south to Miami, and you’ll witness the emergence of another international banking center, in a neighborhood called Brickell.
This is a rapidly-growing area just south of downtown that is central to the city’s banking culture—and, increasingly, its culture at large. As recently as the 1970s, Brickell was a low-slung neighborhood with stately mansions and a handful of small banks. It remained moderately-built throughout the 1980s and 1990s, but in the last 15 years has exploded, thanks to incoming capital from Latin America and elsewhere. Since 2000, its population more than doubled to 28,000, and it is home to 53 banks. The finance, insurance and real estate industry account for 17% of jobs within the zip code. Typical firms here are ones like Pan American Finance, an advisory group that focuses on Central America and the Caribbean, or the French firm Credit Agricole.
Even more, Brickell has arguably surpassed downtown in cultural significance, transforming into a bar and restaurant zone that sustains street life well into the early morning. In fact, there is something about Brickell that much personifies the new Miami: it is rich, multicultural, and intensive, having become an “overnight neighborhood” of gleaming skyscrapers whose designs and coloration reflect the coral blue waters of Biscayne Bay.
So why did Brickell grow into this banking center? Much of it has to do with political and cultural factors that have caused growth in other Miami industries. These include conservative economic policies at state, and, to some degree, city level. Neither Miami nor Florida has an income tax, and the state’s per-capita tax rate is the nation’s 4th-lowest. Florida also has high economic freedom rates, landing tops in the nation in one study. This growth-oriented approach has extended to the land use policies for Brickell. Whereas other cities with strong demand (like San Francisco) resist new development, Miami has allowed massive housing and office growth in Brickell. A 2013 NPR report found that the neighborhood had 25-30 towers in the planning or development stages. This is evident during any weekday walk through the neighborhood, when one is as likely to find hard hats as business suits. But it is hard to imagine this growth happening in older, more regulated cities, where it can take years just to get one skyscraper approved, much less an entire neighborhood of them.
The other factor is culture. Miami is a hot-weather city with fabulous beaches, restaurants and nightlife. But Miami’s ethnic diversity has been the biggest factor in making it a financial center. The city is 70% Latino, and along with the historic Cuban population, has increasingly attracted South American expats. Two-thirds of residents speak Spanish as their first language—which matters in the global banking scene. There are, after all, numerous Latin American people and firms who have begun parking their assets in the U.S. due to turmoil in their home countries. Because of its large Spanish-speaking population, Miami is a natural place for them to do business, more than other emerging but nativist cities like Nashville, Atlanta, and Houston. Investors from Brazil, Argentina, Colombia and Venezuela have directed capital into Brickell’s banks and real estate, with an estimated two-thirds of demand for neighborhood units coming from South America. To a smaller extent, Miami attracts capital from Russia and many European countries—or less business-friendly parts of the U.S.
“Somebody said to me, ‘Give me three reasons why this will continue.’ My answer was: Maduro, Kirchner and De Blasio,” said city commissioner Marc Sarnoff to The Economist, referring to the heads of Venezuela, Argentina and New York City. By mentioning de Blasio, Sarnoff was referencing the differences in mindset between the leadership in both cities: while the liberal New York mayor entered office suggesting tax increases for the rich, Sarnoff flies around recruiting banking executives to Miami.
Brickell’s emergence thus testifies to Miami’s broader mentality towards liberalization, both economically and culturally. The city has a favorable attitude towards new people, growth, money, and construction. There is even a libertine element to this, since some of the money reputedly comes from the accounts of despots and drug cartels. But such openness has turned a neighborhood—and a city—into a global finance capital, and perhaps more importantly, an urban destination.